DocketNumber: No. 7,249.
Citation Numbers: 37 P.2d 555, 97 Mont. 453
Judges: MR. JUSTICE ANGSTMAN:
Filed Date: 6/26/1934
Status: Precedential
Modified Date: 1/12/2023
I dissent. This case is a demonstration of what may result from following an erroneous precedent, and what is almost sure to happen when a court pays more attention to its opinions construing a statute than it does to the statute itself. As a result of either fault, the court will be fortunate if it escapes the barbed shafts of just criticism. *Page 460
The governing statute is section 8267, Revised Codes 1921, and it is couched in language "so plain, simple and direct that it would appear to construe itself," as Mr. Justice Holloway said inMorrison v. Farmers' Traders' State Bank,
In the Morrison Case it was said that the purchaser of real property subject to a mortgage does not assume any personal liability for the debt secured thereby. The statement is indubitably correct; he does not assume liability for the debt unless he agrees to do so.
The facts are simple. The bank's mortgage was given on January 14, 1922, to secure the payment of one promissory note for $600, and five in the sum of $1,000 each, all dated January 14, 1922, due one year from date, and bearing interest from date at the rate of ten per cent. per annum. On October 14, 1924, the mortgagors Gutensohn and wife executed to *Page 461 the bank a note for $600 due on or before six months from date, with interest at ten per cent. per annum, and on May 14, 1926, they executed to the bank a note for $4,412.50, due on or before six months after date, bearing interest from date at eight per cent. per annum. The record made by filing the mortgage on January 19, 1922, remained unchanged. While it appears in the evidence that the note dated October 14, 1924, was a renewal of the original $600 note, and the note of May 14, 1926, was a renewal of the balance due upon the five $1,000 notes, no notice of the fact was given to the public or others interested. In other words, so far as third parties were concerned, the mortgage secured the original notes and none other.
Mary E. Gutensohn was a creditor of Peter G. Gutensohn, one of the mortgagors, when the mortgage was given and continued to be. On October 31, 1930, her administrator obtained judgment against P.G. Gutensohn for $6,541. On December 27, 1930, Peter G. Gutensohn, signing his name P.G. Gutensohn, Mary M. Gutensohn, his wife, and Agnes M. Gutensohn, in lieu of the judgment executed and delivered to Dickinson, as administrator, promissory notes aggregating the amount of the judgment with accumulated interest, and executed and delivered to Dickinson, administrator, a real estate mortgage, which was filed for record in the office of the county clerk on May 14, 1931. The amount of the indebtedness upon this mortgage at the time of the trial was wholly unpaid except the sum of $390.
Construing section 8267 in the Morrison Case, Mr. Justice Holloway declared it a statute of limitations and not a part of the general recording statutes or in pari materia with them. None of these declarations have ever been denied in any decision of this court, save impliedly in Reed v. Richardson, post, which will be referred to later on in this opinion.
At all times section 8264, providing for the extension of a mortgage by joint act of the parties "pursuing the formalities required in the case of a grant of real property" was in effect. In O.M. Corwin Co. v. Brainard,
In Vitt v. Rogers,
In the Morrison, Corwin and Vitt Cases the reasons which caused the enactment of section 8267 were explained in more or less detail, with especial reference to that provision of the section which requires the mortgagee "to state in the renewal affidavit the date of the mortgage, when and where recorded, the amount of the debt renewed thereby, and the amount remaining unpaid, and that the mortgage is not renewed for the purpose of hindering creditors of the mortgagor or owner of the land." Note the special reference to creditors.
We declared unequivocally in Pereira v. Wulf,
In Skillen v. Harris,
This obvious point was adverted to in Turner v. Powell,
In Hastings v. Wise,
The second case of Hastings v. Wise,
Jones v. Hall,
In Reed v. Richardson,
On the contrary, upon the vital point in question here, the doctrine of the Morrison Case that section 8267 is a statute of limitations, is not a part of the general recording statutes, *Page 465 and is not even in pari materia with them, stands unchallenged and indisputably is a correct construction of section 8267. Not in any case before this court, until now, have the rights of "creditors" been involved. Upon the lapse of eight years and sixty days after the maturity of the debt, secured by the mortgage of record, the property is subject to the demands of a creditor, unless the affidavit of extension under section 8267 has been filed, and no court has any right to declare the contrary in the face of this valid statute, which is plain and unequivocal upon its face. As to creditors the mortgage is good for eight years and sixty days and no longer, unless the required affidavit be made.
If the mortgagee does renew the mortgage it is imperative that the affidavit shall show the amount remaining unpaid. He must let the world know how much of the indebtedness has been paid and how much the mortgage secures. Moreover, he must show that the mortgage is not renewed for the purpose of hindering, delaying or defrauding creditors of the mortgagor or owner of the land.
At any time a creditor may cease to be a general and become a special creditor by following the ordinary processes of the law. He may secure his debt by a judgment which, when docketed, becomes a lien upon the real property. The judgment lien, over which he has control and which he can foreclose by execution as soon as the mortgage is at an end, is not in anywise affected by actual or constructive notice of the mortgage. He does not weaken his position by extending the debtor further time by accepting a mortgage upon the property, for notice does not affect his status.
At this point, what are the facts? Dickinson, as administrator, had judgment on October 31, 1930. The lien of the bank's mortgage expired on January 14, 1931, unless vitalized by the affidavit required by section 8267, on or before March 15, 1931. The bank did not file the affidavit. Within the sixty-day period Dickinson took a mortgage in lieu of the judgment lien. This mortgage was not placed of record until May 22, 1931. The bank's mortgage was then dead, except *Page 466 as between the immediate parties thereto. But on the very day the administrator filed his mortgage of record the bank brought this suit. Can it be possible that while notice was immaterial to the administrator while he held his vantage point as a judgment creditor, he lost it when he indulgently extended the debtor more time by accepting a mortgage upon the land instead of holding his judgment lien, and this upon the hypothesis that notice, immaterial while he was a judgment creditor, became material when he took the mortgage? If this be true, the administrator's acceptance of a mortgage from the judgment debtor made the bank's moribund mortgage superior to the administrator's for all time, regardless of action by the bank. A mere statement of the facts reduces the majority opinion to an absurdity.
The statute plainly controls the case and demands an affirmance of the judgment. The erroneous precedents, if politeness requires they be called precedents, should be disregarded.