Roby v. Bismarck Nat. Bank

• Decision Date: 09 June 1894
• Parties: ROBY et al. v. BISMARCK NAT. BANK et al.
• Court: North Dakota Supreme Court

4 N.D. 156

59 N.W. 719

ROBY et al.

v.BISMARCK NAT. BANK et al.

Supreme Court of North Dakota.

June 9, 1894.

Syllabus by the Court.

1. Where the purchase of real estate is evidenced by contract only, and the purchase price is not paid, and the vendor retains the legal title as security for the unpaid purchase price, he holds a lien upon the property by virtue of the contract, and not simply the vendor's lien that exists in equity where the vendor has parted with the legal title without payment.

2. Where realty thus purchased is used as a homestead, and subsequently, at the request of the purchaser, the vendor executes and delivers to the wife of such purchaser a warranty deed to the land, and the wife, at the same time and as a part of the same transaction, executes and delivers to the vendor a mortgage on the land, to secure the unpaid purchase money, such mortgage is valid, although not signed by the husband.

3. The fact that said mortgage also secures other indebtedness of the husband to the grantee in the mortgage does not invalidate this mortgage so far as it secures the unpaid purchase money of the homestead.

Appeal from district court, Morton county; W. H. Winchester, Judge.

Action by Charles E. Roby and others against the Bismarck National Bank and others. Judgment for defendants, and plaintiffs appeal. Affirmed.

E. C. Rice, for appellants. Louis Hanitch and F. V. Barnes, for respondent bank.

BARTHOLOMEW, C. J.

The plaintiffs and appellants brought this action to foreclose a mortgage upon certain realty in the city of Mandan. Thomas J. Mitchell and Sarah E. Mitchell, the grantors in said mortgage, and various other parties interested in said realty, including the Bismarck National Bank, were made defendants. The bank alone made defense. From the unquestioned findings of fact we learn that on and prior to July 8, 1881, the firm of C. S. Weaver & Co. owned the realty in question; that said firm was composed of C. S. Weaver and R. S. Munger, and the realty was held in the individual names of the said partners. On said July 8, 1881, said firm entered into an agreement with said Thomas J. Mitchell to sell to him the said premises for an agreed price, only a small portion of which was paid at the time, and the balance was evidenced by interest-bearing notes, executed by Thomas J. Mitchell to C. S. Weaver & Co. To secure said notes, the legal title to said realty was retained by C. S. Weaver and R. S. Munger in trust for C. S. Weaver & Co. At the time of said purchase, Thomas J. Mitchell and Sarah E. Mitchell were husband and wife, and in October, following, they, with their children, moved into a house located on said premises, and so continued to occupy the same as their homestead until some time in the year 1888. That, in 1883, C. S. Weaver & Co. were succeeded by a corporation known as the “Weaver Lumber Company,” to which all of the assets of the firm were duly transferred, including the said notes given by Thomas J. Mitchell as the purchase price for said realty. On December 4, 1884, the said Weaver Lumber Company, at the request of Thomas J. Mitchell, procured from C. S. Weaver and R. S. Munger a warranty deed for said premises, running to said Sarah E. Mitchell, which deed was duly delivered to the grantee; and at the same time, and as a part of the same transaction, the said Sarah E. Mitchell executed and delivered to said lumber company a mortgage on said premises, to secure a note then and there given by Thomas J. and Sarah E. Mitchell to said lumber company, and which said note included the balance then due on the purchase-money notes and certain other advances then made by the lumber company to Thomas J. Mitchell. This mortgage was signed by Sarah E. Mitchell only. Both the deed and the mortgage were duly recorded. In 1886 the lumber company foreclosed this mortgage by advertisement, and procured a sheriff's certificate of sale; and, being largely indebted to the defendant the Bismarck National Bank, the lumber company assigned said certificate to said bank as partial security for said indebtedness. On July 19, 1888, the bank procured a sheriff's deed upon said certificate, and on the same day the Mitchells surrendered possession of the premises to the bank, and it has at all times since been in possession. In March, 1885, and after the mortgage to the lumber company was of record, Thomas J. and Sarah E. Mitchell executed and delivered to plaintiffs a mortgage upon the same homestead property, to secure a valid indebtedness, and the mortgage contained a covenant that the premises were free of all incumbrances except such as appeared of record. It was to foreclose this mortgage that this action was brought. On these facts the trial court held that the mortgage executed by the wife alone upon the homestead premises constituted a valid lien to the extent that such mortgage secured the purchase price for said premises, and no further, and gave plaintiffs and the Mitchells 90 days in which to redeem from this sale under said mortgage, by paying the balance of the purchase price, with accumulated interest, less the net rent received by the bank. No such redemption having been made within the time granted, on motion final decree was entered in favor of the defendant the Bismarck National Bank, in accordance with the announced conclusions of law, and from that decree this appeal is taken.

The appellants assign and argue but one error, which is thus stated by counsel: “The evidence and pleadings show said lot four [the premises in question] to have been a homestead, and the mortgage under which the bank claims was not jointly executed by Sarah E. Mitchell and Thomas J. Mitchell, was void, and in it the bank had no equity as against plaintiffs' claim.” We do not think this assignment is good. It is true that the homestead rights will attach to land held under a contract of purchase. It attaches to the purchaser's equity in the land, whatever that may be. Myrick v. Bill, 5 Dak. 167, 37 N. W. 369, and cases cited. But there are certain burdens which adhere to the homestead as effectively as to nonhomestead property. Where a sale of land is evidenced by a contract only, and the purchase price has not been paid, and the vendor retains the legal title, the parties occupy substantially the position of mortgagor and mortgagee. The vendor has a lien for his purchase money by virtue of his contract, and a lien which the vendee cannot, by conveyance or otherwise, affect or impair, and which can be extinguished only by payment...