Bailly v. Farmers' State Bank , 35 S.D. 122 ( 1915 )

SMITH, P. J.

Appeal from, the circuit court of Roberts county. Action to cancel a deed and to recover possession of real estate. The complaint alleges that on or about the 22d day of July, 1903, one Charles E. Bailly, was seised as owner in fee simple, and was in- possession of premises -occupied by himself and family as a homestead; that Chas. E. Bailly died July 22, 1903, and left surviving him his wife, Inez Bailly, and seven sons and two -daughters, all minors, two- of whom are since deceased; -that about the 26th of January, 1905, Inez Ba-il-ly executed and delivered to the Reservation State Bank of Sisseton an instrument purporting to be a warranty deed, conveying to said-bank the premises -described; that said conveyance was- without -consideration, and that the property was the homestead -of Inez Bailly and her minor children at the time said deed was executed; that the defendant, without right or title, took possession, under said deed, and has held possession -since, to the plaintiff’s damage in t-he sum of $815.

The defendant Farmers’ State Bank, among" other things, alleged by way of counterclaim! that prior to the time Charles E. Bailly, deceased, became owner of the property, it was subject to a mortgage executed by Charles T. Roberts and his wife, former owners, to -the Union Savings Association of Sioux Falls, S. D., for $250, which mortgage was dated May 1, 1903, and filed for record May 22, 1903; that default was made in the conditions of said mortgage, and it was foreclosed, and the premises sold to the Union Savings Association, June, 3, 1905, for the sum of $319.35, and a certificate of sale delivered and recorded June 3, 1905; that the certificate of sale was outstanding and the premises unredeemed on or about the 29th of May, 1906, when the defendant bank, to protect its interest in said premises, tinder said deed, and at the request of Inez Bailly, paid to the Union Savings Association the sum of $341.40, to redeem from said sale, and the further -sum of $51.38 for faxes .paid by the Union Savings Association, subsequent to- foreclosure, making a total of $392.78' paid in redemption of the .premises, and that the Union Savings Association, on June 1, 1906, made and delivered to the defendant bank a certificate of redemption, whereby it canceled and discharged said sale and -certificate thereof, but did not cancel or discharge the mortgage given 'by Charles T. Roberts and wife, but that the Union Savings Association did deliver to the defendant bank the mortgage and note executed by them, and said defendant has ever -since held the same as security for all indebtedness of Inez Bailly; -that the amount of said redemption and taxes was included in- a note for $500 executed- by Inez Bailly to the defendant bank on June 28, 1906, and with the understanding and agreement with her that the acceptance of said note should not be any waiver of said defendant’s right to be -subrogated to the rights of the Union Savings Association, for the amount paid for redemption and taxes. The defendant bank demands- a decree, that it be subrogated to -the rights of the Union Savings Association, and -of foreclosure of said mortgage, and p-rays for general relief.

The plaintiff Dan Bailly, a minor, brings this action, in which he is joined by Chas. H. Bailly and Edward Bailly, adult heirs of Chas.. Bailly, deceased. The widow and other children, having refused to- join as -plaintiffs, are made defendants. Trial was to the court.

At the trial .-the defendant bank introduced a large amount of evidence covering the matters above referred to, and at the close of the trial requested finding's thereon; which were refused by the trial court. This refusal is assigned as error. The only findings made by the trial count were, in substance, that Chas. EBailly, at the time of his death, was owner and in possession of the premises-, which were occupied by himself and family as a h-omestead; that he died on the 22d day of July, 1903, leaving the widow and minor heirs; that about July, 1903, the widow, Inez Bailly, departed from -the h-omestead, and left her minor children, and on or about the 28th of January, 1905, made, executed, and delivered to the Reservation State Bank, now the Fanners’ State Bank, the warranty deed referred to; that at the time said deed was executed Inez Bailly was not the owner of the property, but the same was the homestead o'f herself and minor children, and is now their homestead; that the defendant bank took .possession of said premises May 24, 1909, and since that time has retained the same; that the value of the use of said premises is the sum of $448; that demand was made for possession by the minor children, which was refused. •

As conclusions of law, the courts finds that the deed executed by Inez Bailly is null and void, and should be canceled, and that Dan Bailly, Louis Bailly, Arthur Bailly, and Inez Bailly, minor children of Chas. E. Bailly deceased, are entitled to possession of the premises, and to a judgment against' the defendant bank for $448, with interest amounting to $59.64.

Appellant assigns as error, among other things, the failure and refusal of the trial court to make findings upon the facts and issues presented by the pleading’s, and error in entering judgment for the value of the use and occupancy of the homestead. The latter assignment will -be first considered.

The Political Code provides.:

Section 3231: “Upon the death of either husband or wife, the survivor may continue to possess and occupy the whole homestead until it is otherwise disposed oif according to law; and upon the death of both husband and wife the children may continue to possess and occupy the whole homestead' until the youngest becomes of age.”

Section 3232: “S’uch homestead shall descend according to the law of succession as provided by the Civil Code, unless otherwise directed or disiposed of by will, and shall be held exempt from any antecedent debt of the parent, and if it descends to the issue of either husband or wife, it shall be held by such issue exempt ' from debts of such husband or wife,” etc.

The trial court, as .a conclusion of law, found that-tire deed from Inez Bailly to the Reservation State Bank, now the Farmers’ State Bank, was void. If this conclusion was based on section 3217 of the Political Code, which makes a conveyance by the owner of a homestead invalid unless both husband and wife concur in the conveyance, the conclusion was clearly erroneous.

[1] The homestead right provided for by the general law is wholly statutory, and is a right which cannot, in any respect pass by succession. The land in which the owner has a homestead interest may be conveyed by deed or pass by will, or under the statutes of succession. But the homestead interest does not pass as an incident to the land; and, if the party accquiring such property becomes vested with a homestead interest founded on the title so obtained, it vests by reason of possession and use and occupancy as a homestead, under the general statute. The source of the title is immaterial. Under the general homestead law, the children, as such, do not have or acquire 'any interest in the homestead property belonging to the parent. In this case the wife became vested with a one-third interest in the property upon the death of the husband, as tenant in .common with the children, who also became vested with a two-thirds interest as heirs, of their deceased father.

[2] But die general homestead right ceased to exist upon his death, except as. is given by section 3231, supra. Did the children acquire any homestead right under that section? ‘We think it •clear that they did not, except an inchoate right to an eventual homestead, provided their mother should remain in possession until her death, and such death should occur prior to the majority of the minor children.

By section 3231, however, the Legislature, in effect, has said that neither the deceased spouse nor the adult heirs shall deprive the surviving spouse of a homestead right in what had formerly been the family homestead. Yet it leaves to the surviving spouse the power to determine whether or not such homestead right shall be retained or abandoned. This was exactly the same power that rested in the parents before the death of either.

[3] If the surviving spouse so. desires and elects, the homestead right may be preserved ’and passed on for the benefit of the minor children, upon, his or her death. On the other hand, the surviving' spouse may entirely abandon tire homestead, as was done by the mother in the case before us. This being so, section 3217, Pol. Code, has no application whatever to a conveyance by the surviving spouse of the interest she acquired by the descent statute from the deceased husband. The deed of Inez Bailly was therefore valid and effective to convey an interest in the homestead .property, and the trial court erred in holding it void and of no effect.

[4] By her deed the defendant bank became vested with her one-third interest in the homestead property, for the purposes for which such conveyance was made. Under this deed, the defendant bank, as it had a right to do, took possession of the homestead property, thereafter holding the same as tenant in common with the surviving children, and became liable in a proper way to account to them for their share of the rents and profits.

[5] In this connection it becomes necessary to consider the alleged error of the trial court in failing and refusing to malee findings and conclusions upon issues presented by the pleadings and the evidence in the record.' These issues relate to the mortgage executed .by Charles T. Roberts and wife, former owners of the premises, to* the Union Savings Association of Sioux Falls, and to which the premises were subject when Charles E. Bailly, deceased, took title to the homestead property. Upon default and foreclosure of this mortgage, the defendant bank, at the request of Inez Bailly, the surviving widow, to protect its interest under the deed from her, paid to the Union 'Savings Association the sum of $341.40, to redeem from' said sale, and the further sum of $51.38 for taxes paid by the Union Savings- Association, a total of $392.78, in redemption of the premises, inconsideration of which the savings association delivered to the bank the mortgage and note, with the agreement and understanding that it should become subrogated to the rights of the savings association. The neglect and refusal of the trial court to make findings of fact and conclusions of law upon the issues touching the right of the defendant bank to subrogation were prejudicial error for which the judgment and order of the trial court must be reversed.

The trial court also erred in awarding the plaintiffs a judgment in the sum of $448 against the 'defendant bank, the whole value of the use and occupancy of the premises. If the facts are as alleged by defendant, it was eldarly entitled to be subrogated to the rights of the Sioux Falls Savings Association.

[6, 7] Both the wife and the surviving children acquired their titles from the deceased, Charles E. Bailly, subject to the incumbrance, and therefore, as against their respective shares, the indebtedness was a charge upon -the property superior to the title acquired by all of them. The bank, as tenant in common, under its deed from' Inez Bailly, had a dear right to apply on her indebtedness, her share of the rents and profits. But the bank, although in lawful possession of the property, did not, as mortgagee, have the night, as ag'ainst the other tenants in common, to appropriate their shares of rentals in payment of such indebtedness. They had not in any manner conveyed or transferred to the bank their interest in these rentals, a-s the mother had done by her deed, and they had a night to the rentals of the mortgaged property precisely as their ancestor, the mortgagor, would have bad. But, in the absence of a demand by the children for their shares of rents ’ and profits, the defendant bank, as tenant in common, had a perfect right to apply 'the same upon any indebtedness which affected the whole title, as well as the interest of the bank, in which case it would follow that the children would be entitled to a .judgment only for their share of any excess of the rents and profits over and above the whole amount of such indebtedness, at the time the action was begun.

[8] This court is without power to make or enter findings of fact either for or against appellant, or to adjudicate appellant’s rights without findings on controverted facts. For that reason the cause must be remanded. Lyon v. Plankinton Bank, 15 S. D. 400, 89 N. W. 1017; Craigo v. Craigo, 22 S. D. 417, 118 N. W. 712.

The order and judgment'of the trial court are therefore reversed, and a new trial granted, to the end that the rights of all parties may be properly determined in accord with the views herein expressed.