Bashore v. Adolf

This cause was first heard at the Pocatello, September, 1924, term, and the opinion of the court, with the specially concurring opinion of McCarthy, C. J., was filed October 31st thereafter, which affirmed the judgment of the lower court, upon the authority of Ruddy v. Rossi, 248 U.S. 104,39 Sup. Ct. 46, 63 L. ed. 148, 8 A.L.R. 843; overruling Ruddy v. Rossi,28 Idaho 376, 154 P. 977.

A rehearing was allowed, and appellants, with counsel who appeared amici curiae, have exhaustively reargued the case, but no further argument has been made on behalf of respondent, his counsel having removed from the state. The court reverses its former decision. I think it due to the late Justice Dunn, and McCarthy, C. J., to state the reasons for the conclusions reached.

The action was to quiet title and cancel two mortgages respondent had given upon his homestead entry; the first to appellants, the Adolfs, for $2,800, for a second-hand threshing-machine; the second to Mulhall, for $265, for a team of horses. The two transactions were separate and distinct. Respondent assigned as a reason for these mortgages being invalid, that they were given upon unpatented government land which he had occupied as a homestead entry but had not resided thereon a sufficient time to earn a patent; that he had been erroneously informed that he had an interest in this homestead that he could mortgage, but upon learning that such was not the case he tendered a return of the property for which the mortgages were given and asked that the mortgages on his homestead be canceled. Appellants separately demurred, generally and specially, their demurrers were overruled, and they separately answered and cross-complained, setting up their separate mortgages and prayed for a foreclosure and sale of this homestead to satisfy the indebtedness. Therefore, the only question presented by this appeal is: Can this debt, secured by mortgage given by a homestead entryman prior to patent being earned, be enforced against such entry?

The former opinion held this homestead entry was not liable under the provisions of U.S. Rev. Stats., sec. 2296, to the satisfaction of a debt contracted prior to the issuance of patent; also that, under U.S. Rev. Stats., sec. 709, U.S. Comp. Stats. 1916, sec. 1214, 5 Fed. Stats. Ann., p. 724 (Jud. Code. sec. 237, as amended), this court in deciding such question is a court of intermediate jurisdiction and its decision is controlled by the decision of the United States supreme court.

In Ruddy v. Rossi, supra, the federal supreme court, among other things, said:

"Decision of this cause requires us to consider the meaning and validity of sec. 4 of the act (Rev. Stats., sec. 2296, Comp. Stats., sec. 4551) which provides:

" ``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.'

"Plaintiff in error made preliminary homestead entry of designated land within the state of Idaho August 6, 1903; submitted final proofs October 4, 1909; obtained final receipt and certificate November 12, 1909; final patent issued 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 original proceedings were begun to declare asserted liens invalid and a cloud upon the title. The court below held the first judgment unenforceable against the land, since it represented indebtedness which accrued prior to final entry. It further held the second judgment could be so enforced, as it was based upon debts contracted after final entry, at which time the homesteader became legally entitled to his patent. (Ruddy v. Rossi, 28 Idaho 376, 154 P. 977.)

"The language of sec. 4 is clear, and we find no adequate reason for thinking that it fails precisely to express the lawmakers' intention. . . . . and it is settled that Congress has plenary power to dispose of public lands. (United States v.Gratiot, 14 Pet. 526, 537, 10 L. ed. 573, 578.) . . . . The judgment of the court below must be reversed."

Notwithstanding the late pronouncement of the federal supreme court, overruling this court upon a question that is essentially the same, this court now says:

"The great weight of authority sustains the validity of a mortgage given by a homestead entryman as a voluntary lien or waiver of the exemption of the statute, that the statute was intended to protect the entryman against involuntary liens and is not a limitation upon his voluntary control over it."

The great weight of authority referred to consists of decisions of the federal Land Department and decisions of state courts that, with one exception, were decided prior to the Ruddy-Rossi case. It is not perceived how decisions of the land office or of the state courts can be authority against a holding of the United States supreme court, which court alone can speak with finality on the question. It therefore becomes important to consider how that court has construed U.S. Rev. Stats., sec. 2296, sec. 4 of which reads:

"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."

The opinion in the instant case holds that the words used in the federal statute, "any debt or debts," does not include any debt secured by mortgage and that, because the debt in the Ruddy-Rossi case was not secured by mortgage, the decision has no application to the question here presented. That is to say, this court now holds that when the United States supreme court said: "The language of sec. 4 is clear and we see no adequate reason for thinking that it fails precisely to express the lawmakers' intention," it intended to say, or did in legal effect say, the language of this section is clear and it will precisely express the lawmakers' intention by interpolating therein, after the words, "any debt or debts," the additional words, "except debts secured by mortgage." I see no "adequate reason for thinking" the language used in the Ruddy-Rossi case intends to interpolate this exception and exclude from the terms of this statute, debts secured by mortgage. On the contrary, by all the rules of construction, the words, "in any event," followed by the words, "any debt or debts," are comprehensive enough to include all events and all classes of debts.

It is further said that the purpose which Congress had in view in passing this statute was to promptly dispose of public lands and bring about their permanent occupation and development. I think, however, it would be difficult to give any substantial reason why under the terms of this statute, a debt voluntarily contracted for food or clothing for an entryman's family cannot be enforced against his homestead by ordinary process, and can be enforced against it for a debt contracted for worthless second-hand machinery, because he had been induced to believe that he had a right to mortgage such homestead. Nor am I able to see why such a construction of this statute in any manner tends to aid in carrying out the purpose of Congress in its endeavor to secure the permanent occupation and development of its public lands.

However, the important and only serious consideration that should influence this court in the determination of this question is to follow the construction given to this statute by the United States supreme court in the Ruddy-Rossi case. This court cannot make a distinction between the class of debts that it thinks should be or should not be within the terms of the statute, unless the court of ultimate conclusion indicates a purpose to make such distinction, which I think it has not done in the Ruddy-Rossi case. I cannot better state the reason upon which the former decision was based than was done by McCarthy, C. J., in his specially concurring opinion, written upon the former hearing, wherein he said:

"Appellant asks this court to follow the line of state decisions which distinguish between a voluntary and an involuntary lien in construing U.S. R. S., sec. 2296. However, the question is concededly a federal one. So far as I am aware the Supreme Court of the United States has not passed squarely upon it. There is a dictum in Hafeman v. Gross, 199 U.S. 342,26 Sup. Ct. 80, 50 L. ed. 220, at 224, which might be considered an implied approval of the doctrine of the state courts. Subsequently the Supreme Court of the United States decided Ruddy v. Rossi, 248 U.S. 104, 39 Sup. Ct. 46,63 L. ed. 148, 8 A.L.R. 843. As stated in the majority opinion in the instant case, the decision in Ruddy v. Rossi gave the statute a literal construction, overruling a long line of state decisions which had given it a liberal one. It is true that in Ruddy v.Rossi the Supreme Court interpreted the word 'patent,' whereas in this case we are called on to interpret the words 'shall in any event become liable to the satisfaction of any debt.' No reason appears for adopting a different rule of construction in the two cases. Applying to the language in question the literal rule of construction adopted in Ruddy v. Rossi, it appears that to hold valid a mortgage on a homestead given before the issuance of the patent would be making the land liable to the satisfaction of a debt contracted prior to the issuance of the patent which the statute forbids 'in any event.' For the above reasons I feel constrained to concur in the majority opinion."