First State Bank v. Durand

222 P. 434, 69 Mont. 184, 1923 Mont. LEXIS 248
CourtMontana Supreme Court
DecidedDecember 8, 1923
DocketNo. 5,340
StatusPublished
Cited by5 cases

This text of 222 P. 434 (First State Bank v. Durand) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First State Bank v. Durand, 222 P. 434, 69 Mont. 184, 1923 Mont. LEXIS 248 (Mo. 1923).

Opinion

MR. JUSTICE COOPER

delivered the opinion of the court.

This action was brought by the plaintiff bank to foreclose two mortgages executed by Frank Durand and Arthur Durand, respectively, on lands embracing their respective homestead entries, situate in Granite county, given to secure the joint note of Frank Durand, Arthur Durand and Oscar Durand in the sum of $8,000. In their separate answers Arthur Durand and Frank Durand admitted the execution of the note and the mortgages, but each pleaded his discharge in bankruptcy as a bar to the action. Oscar Durand admitted the signing of the note, but likewise pleaded his discharge in bankruptcy. Frank and Arthur Durand affirmatively alleged that the debt created by the note and mortgage was contracted prior to the making of final proof upon their respective homesteads, and that the mortgages were void under the provisions of section 2296 of the United States Revised Statutes (U. S. Comp. Stats., sec. 4551). The district court rendered judgment foreclosing the mortgages of Frank and Arthur Durand, and absolved all three of the defendants from personal liability for any deficiency which a sale of the mortgaged property should fail to satisfy.

In an agreed statement the following facts were stipulated: That because of their discharge in bankruptcy no deficiency judgment could be lawfully entered against either one of the three defendants; that the lands mortgaged by Arthur Durand embraced his homestead; that he made final proof thereon [187]*187October 18, 1920, received final certificate, and patent was issued to him November 10, 1921. By the same stipulation it was agreed that Frank Durand made final proof on October 18, 1920, received final certificate, and that patent was issued to him December 22, 1921. It was also agreed that the three Durands were copartners engaged in farming and stock-raising in Granite county; that $4,000 of the $8,000 included in the note was used by the partnership in making payment for the purchase of real estate adjacent to their homestead, and that the other $4,000 was used to purchase stock cattle for the partnership, and that none of it was borrowed for the purpose of enabling either Frank Durand or Arthur Durand to secure patents to their homesteads; that when the mortgage was executed by Arthur Durand he had not proceeded far enough to entitle him to final certificate under the rules and regulations of the Land Department or under the laws of the United States, nor was Frank Durand entitled to final certificate at the time he executed and delivered his mortgage to the plaintiff; that, when Frank Durand signed the mortgage covering his homestead, Arthur Durand was a member of the American Expeditionary Forces in France; that upon his return to the United States the latter signed the note and executed the mortgage upon his homestead; that the note was a joint obligation of the partnership and liona fide. The appeal is from the’ judgment.

The only question argued by counsel necessary to a decision in this case is this: Can the lands covered by the mortgages of Frank and Arthur Durand be subjected to the payment of the note, and the mortgages foreclosed? This question has been decided adversely to counsel’s contention by the Land Department of the United States many times. The point was exhaustively discussed by Mr. Finney, First Assistant Secretary of the Interior, in 48 Land Dec., at page 583. He says: “All the decisions of the department since the incumbency of Secretary Teller have been to the effect that such mortgage or deed of trust is not an alienation within the scope [188]*188of the homestead statute, or forbidden by the spirit of the law. (Larson v. Weisbecker, 1 L. D. 409; Mudgett v. Dubuque & Sioux City R. R. Co., 8 L. D. 243; Kezar v. Horde, 27 L. D. 148.) It is true that the case of Larson v. Weisbecker, supra, decided by Secretary Teller, arose under the pre-emption law and involved the construction of section 2262, Revised Statutes; but the spirit and intent of the pre-emption and homestead laws in this respect are the same, and section 2290, Revised Statutes, as amended by section 5 of the Act of March 3, 1891 (26 Stat. 1095), was made substantially to conform to the language of section 2262.” The courts of many of the states have reached the same conclusion, as will be seen by the cases cited in the opinion in the above case and hereinafter. But for the earnest insistence of appellants’ counsel that the late decision in Ruddy v. Rossi, 248 U. S. 104, 63 L. Ed. 148, 8 A. L. R. 843, 39 Sup. Ct. Rep. 46, had turned the current of opinion and overruled all former holdings of the courts and of the Land Department, the question now presented would-have been regarded as settled, at least until the supreme court of the United States makes a contrary ruling.

The facts in the Buddy Case, as stated in the opinion, were these: Ruddy made preliminary homestead entry of designated land within the state of Idaho, August 6, 1903, submitted final proof October 4, 1909, and obtained final certificate November 12, 1909, and patent August 26, 1912. In 1914 two judgments were obtained against him — the first upon indebtedness incurred prior to November 12, 1909; the second upon debts contracted subsequent to that date and prior to patent. Executions were issued and levied upon the homestead; and thereupon the proceeding under review was begun to declare the asserted liens invalid and a cloud upon the title. The Idaho court held the first judgment unenforceable against the land, since it represented indebtedness which had accrued prior to final entry. It further held the second judgment could be enforced, as it was based upon debts contracted after final entry, at which time the homesteader became legally en[189]*189titled to his patent. A reference to the case as it is reported in 28 Idaho, at page 376, 151 Pac. 977, discloses that before final receipt was issued, and also between the date of its issuance and the receipt of the patent itself, Rossi advanced to Ruddy, the homesteader, various sums of money. In two actions, one upon a promissory note, and the other upon an open account, he secured judgments. The homestead was attached before judgment, and an execution after entry of judgment levied upon it. The action appealed to the United States supreme court was brought by Ruddy to remove the cloud created by the judgments in the two cases and the levy of the attachments and executions. The question answered by the court was this: “Did Congress have power to restrict alienation of homestead lands after conveyance by the United States in fee simple?” Section 2296 (U. S. Comp. Stats., sec. 1551) reads as follows: “No lands acquired under the provisions of this Act shall in any event become liable to the satisfaction of any debt or debts contracted prior to the issuing of the patent therefor.” After referring to former decisions of that court, the opinion concludes: “Acting within its discretion, Congress determined that, in order promptly to dispose of public lands and bring about their permanent occupation and development, it was proper to create the designated exemption; and we are unable to say that the conclusion was ill founded, or that the means were either prohibited or not appropriate to the adequate performance of the high duties which the legislature owed -to the public.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Butte Miners' Union No. 1 v. Anaconda Copper Mining Co.
118 P.2d 148 (Montana Supreme Court, 1941)
Phoenix Mutual Life Insurance v. Brainard
265 P. 10 (Montana Supreme Court, 1928)
Burnett v. Taylor
252 P. 790 (Wyoming Supreme Court, 1927)
Bashore v. Adolf
238 P. 534 (Idaho Supreme Court, 1925)
Lohman State Bank v. Grim
222 P. 1052 (Montana Supreme Court, 1924)

Cite This Page — Counsel Stack

Bluebook (online)
222 P. 434, 69 Mont. 184, 1923 Mont. LEXIS 248, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-state-bank-v-durand-mont-1923.