Stark v. Morgan

• Citation: 73 Kan. 453,85 P. 567
• Decision Date: 07 April 1906
• Docket Number: 14,561
• Parties: C. M. STARK et al., as Partners, etc., v. H. M. MORGAN et al
• Court: United States State Supreme Court of Kansas

85 P. 567

73 Kan. 453

C. M. STARK et al., as Partners, etc., v. H. M. MORGAN et al

No. 14,561

Supreme Court of Kansas

April 7, 1906

Decided January, 1906.

Error from Graham district court; CHARLES W. SMITH, judge.

Cause is reversed and remanded.

SYLLABUS

SYLLABUS BY THE COURT.

1. MORTGAGES--Not an "Alienation." A mortgage in this state, being merely security for a debt, conveys no title and is not an "alienation" within the meaning of section 2291 of the Revised Statutes of the United States.

2. MORTGAGES--Public Land--Homestead Claimant--Validity. A mortgage upon government land made by a claimant holding under the homestead act prior to final proof, for the purpose of procuring money to improve the land, or for any purpose, provided it is not intended thereby to transfer the title in evasion of the statute, is not void nor in violation of the homestead laws.

3. MORTGAGES--After-acquired Title--Mortgagor Estopped. A homestead claimant who executes a mortgage under such circumstances, and afterward procures the title to the land from the government, will be estopped from defeating, by his own act, the enforcement of the lien created by the mortgage. His after-acquired title inures to the benefit of the mortgagee.

4. MORTGAGES--Cases Overruled. The doctrine of Brewster v. Madden, 15 Kan. 249, and such portions of the opinion in Mellison v. Allen, 30 Kan. 382, 2 P. 97, as follow that case, disapproved.

Rex V. Wilcox, for plaintiffs in error.

George W. Jones, for defendants in error.

PORTER J. All the Justices concurring.

OPINION

PORTER, J.

This suit was brought to foreclose certain mortgage liens upon land which, at the time the liens were created, was government land occupied by the defendants under a homestead entry, and before final proof thereon. Defendant Morgan and his wife executed two written agreements, dated February 1, 1892, and November 28, 1892, respectively, which were promises to pay for certain fruit-trees to be planted upon the land in question, and were in effect mortgages upon the land. The agreements were acknowledged and recorded. The answer of the defendants raised the following defense:

"And for a second defense defendants aver and say that said debt is not a lien upon the southeast quarter of section 2, township 8 south, range 25 west, Graham county, Kansas, because they say that at the time of the execution and delivery of the written contract declared upon and the creating of the debt the title of said land was in the United States of America, defendants having made homestead entry upon it and were occupying it under the United States homestead law, and at the time of the execution and delivery of said contract and the creating of the debt they had not made final proof under the United States homestead law, and did not do so until on or about September, 1894."

A demurrer to this defense was overruled, a trial was had, and the court gave judgment against the defendants for $ 1600, the amount of the indebtedness, but denied the lien and ordered plaintiffs' mortgages canceled. Of that part of the judgment denying plaintiffs' lien and directing the cancelation of the mortgages plaintiffs complain.

From the statement it appears that but one question is raised: Are the mortgages valid liens upon defendants' land? The provisions of the homestead act require the applicant at the time the original entry is made to make affidavit "that his entry is made for the purpose of actual settlement and cultivation, and not either directly or indirectly for the use or benefit of any other person." (Rev. Stat. U.S. § 2290.) On final proof he is required to make affidavit "that no part of such land has been alienated, except as provided" therein. (Rev. Stat. U.S. § 2291.) The exception mentioned relates to transfers for church, cemetery, school or railroad purposes. Section 2296 provides that no lands acquired under the homestead act "shall in any event become liable to the satisfaction of any debt contracted prior to the issuing of the patent therefor."

Defendants in error rely upon Brewster v. Madden, 15 Kan. 249, and Mellison v. Allen, 30 Kan. 382, 2 P. 97. In the former case the question considered was whether a mortgage given by a preemptor prior to the entry of the lands was void. The preemption act of September 4, 1841, required the claimant prior to his entry to make oath that he had not, "directly or indirectly, made any agreement or contract, in any way or manner, with any person whatsoever, by which the title which he might acquire from the government of the United States should inure in whole or in part to the benefit of any person except himself." (Rev. Stat. U.S. § 2262.) It also provided that "any grant or conveyance which he may have made, except in the hands of bona fide purchasers, for a valuable consideration, shall be null and void." The court, speaking by Mr. Justice Brewer, construed the preemption act to mean that congress intended by this section that when title passed to the preemptor it should pass perfect and unencumbered, and the mortgage was held to be void. This is recognized as the leading case in support of the doctrine announced. We believe it has never been followed except by this court in Mellison v. Allen, supra. The reasoning of Brewster v. Madden has been denied and the case overruled by most of the other courts. That case relied upon the case of McCue v. Smith et al., 9 Minn. 252, 86 Am. Dec. 100, which was decided in 1864, and which was expressly overruled in Jones et al. v. Tainter et al., 15 Minn. 512, decided in 1870, five years before Brewster v. Madden. In overruling McCue v. Smith et al. the Minnesota court said:

"It is true that in McCue v. Smith et al., 9 Minn. 252, 86 Am. Dec. 100, and in Woodbury v. Dorman, 15 Minn. 338, it was held that a mortgage made in pursuance of an agreement such as appears in this case was void in the hands of the original mortgagee, and as against persons claiming under the mortgagee not being bona fide purchasers, and unquestionably the court below was justified by those cases in holding the mortgage here void in the hands of Tainter. In the case of Woodbury v. Dorman (in which one member of the court dissented), an application was made immediately after the filing of the opinion for a reargument by the appellant, who claimed that this court had fallen into error in holding a mortgage, given under circumstances similar to those presented by this case, void; and although a reargument was denied for reasons peculiar to that case, the majority of the court in denying the same took occasion to express their dissent from the holding in that case, and to announce that they should feel at liberty in future to reexamine the question there determined. The majority of the court think that the question ought not to be passed over in the case at bar, regarding it as one which affects interests of too much importance and extent to permit them to sanction by silence or acquiescence what they deem a mistaken view of the law. In McCue v. Smith et al., which was followed in Woodbury v. Dorman, it was held that such mortgage was void under the thirteenth section of the preemption act of September 4, 1841. . . . In the opinion of the majority of this court, a simple agreement, by a person proposing to apply for and enter land under the act of September 4, 1841, to execute a mortgage to secure the payment of money furnished him with which to pay for such land, is not such an agreement as is referred to in the provision just quoted from the preemption act. It is not an agreement by which the title to be acquired--that is to say, the fee--should inure, in whole or in part, to the benefit of any person other than the preemptor; on the contrary, the presumption is that a mortgagor intends to pay the mortgage debt, and discharge his land from the encumbrance of the mortgage, so that his title shall not inure to the benefit of the mortgagee. . . . But the result is not important. The question is, Was there any contract or agreement by which the preemptor fixed this result? Did the preemptor contract or agree that the title to be acquired--that is to say, the fee--should inure to the benefit of another? In other words, Did the preemptor contract or agree to do anything which, when done, would pass the title, in whole or in part, to another, so that the preemption would, as to such whole or part, be a mere conduit of the title? We are clear that no such contract or agreement is fairly to be inferred from a simple agreement, made before preemption, to secure the whole or a part of the purchase-money by a mortgage upon the premises to be preempted. The mortgage contemplated by such contract, or agreement, is but a security (as this court has often held), and its execution does not have the effect of making the title acquired by the preemptor, to wit, the fee, inure, in whole or in part, to the benefit of another." (Pages 514-516.)

The only other case cited and relied upon in Brewster v. Madden is Warren v. Van Brunt, 86 U.S. 646, 22 L.Ed. 219. There the question of the validity of a mortgage was not in any way involved. The contract held illegal was one by which the preemptor contracted before final proof to sell an interest in the land, which contract was, of course, in violation of the spirit and letter of the law. The court held that "an entry of the public land by one person in trust for another being forbidden by statute, equity will not, on a bill to enforce such a trust, decree that any entry in trust was made." (Syllabus.)

The case of Mellison v. Allen, 30 Kan. 382, 2 P. 97, was decided in 1883. The opinion in that case is also by Mr Justice Brewer, and follows and approves Brewster v. Madden, supra. The land involved was a...