Vannatta v. McClintock

SpaldiNG, Ob. J.

Tbis is an appeal by the plaintiff, Ely Vannatta, from a judgment entered by tbe district court of Pierce county on tbe 3d of January, 1912, in an action to determine adverse claims to tbe north half of tbe southeast quarter of section two, and tbe northwest quarter of tbe southwest quarter and the southwest quarter of the northwest quarter of section one, in township 153 north of range 74 west, in Pierce county, North Dakotá. The judgment quieted title in the plaintiff and appellant, Yannatta, as against all the defendants except the respondent, W. D. MeClintock. It was adjudged that he held a valid and subsisting lien by mortgage upon the premises, prior and paramount as an encumbrance thereon, to the right, title, estate, and interest of the plaintiff, Yannatta, and the judgment contained the usual provisions and directions for foreclosing such mortgage. None of the defendant lien holders appealed, and the contest lies between the plaintiff-appellant, Vannatta, and the defendant-respondent, W. D. MeClintock, and only the judgment roll is before us, the question be'ing whether the findings of fact sustain the judgment.

Without setting out such findings in detail, it is sufficient to say that it appears that one George Goetz was the head of a family dependent upon him for support, which family included his wife, Barbara Goetz, at all times material to a consideration of this case; that on the 20th of August, 1900, Goetz made a homestead filing and entry upon the premises in controversy, and on about the same day entered into possession thereof and took up his residence thereon with his family in a dwelling house situated upon said premises; and that such residence continued up to and until some time- in the month of April, 1907, when they voluntarily quit possession thereof and removed their residence therefrom, and had no intent to return thereto, and voluntarily abandoned any homestead right or claim therein or thereto. No declaration of homestead in said premises was ever made or recorded; that on or about the 18th day of November, 1905, said Goetz made final proof upon said premises, and on that day received a final receiver’s receipt from the receiver of the appropriate United States land office therefor, which receipt was recorded in the office of the register of deeds of Pierce county, North Dakota, on December 28th, 1905; and the United States patent therefor was delivered to Goetz on the 30th of June, 1906, and recorded on the 17th of November, 1910. On or about the 17th day of December, 1904, said Goetz executed and delivered a mortgage on said premises to the McHenry County State Bank, containing the usual covenants of warranty, and duly executed. This mortgage was duly recorded in the office of the register of deeds of Pierce county on December 24th, 1904. Barbara Goetz, wife of tbe mortgagor, did not join in the execution of such mortgage, no part of it has ever been paid, and on or about the 19th of April, 1910, the defendant, W. D. McClintock, became and still remains the owner and holder of said mortgage through an assignment thereof duly executed and recorded in said register of deeds’ office on the 16th of August, 1910. This is the mortgage held to be a valid lien on the premises described, and on which the decree of foreclosure was entered.

The other defendants are holders of liens of various and differing kinds and dates, claimed to be inferior to the title of appellant, and the lien of respondent’s mortgage. No consideration need he given their claims as they have not appealed. On the 15th of December, 1905, said Goetz and his wife, Barbara, executed and delivered to the Merchants Bank of Kugby a mortgage on the same premises to secure the payment of a debt, and such mortgage was recorded in the office of the register of deeds of Pierce county on the 20th of December, 1905. On the 21st day of December, 1907, the last-mentioned mortgage was foreclosed by sale, duly advertised, and the premises sold to one J. G. McClintock, and recorded in the office of the register of deeds on the 28th of December, 1908.

On or about the 21st of December, 1908; one Hublou, a subsequent lien holder, regularly redeemed said premises from such foreclosure sale and received a certificate of redemption, which was recorded in said register of deeds’ office on the 21st of December, 1908. No further redemption having been made from such sale, a sheriff’s deed for the premises described was, on the 27th of February, 1909, executed and delivered to ITublou and duly recorded on the same day, and said Hublou thereafter, by warranty deed, conveyed said premises to the plaintiff, Vannatta, which deed was,- on the 14th of August, 1910, duly recorded in the office of the register of deeds.

It is apparent from these findings that the question to be determined here is as between the two mortgages, the one first in point of time and of record being executed by the husband alone, and the subsequent one by both husband and wife, and both mortgages given while Goetz and wife were in possession of and. residing upon the premises under the homestead laws of the United States. Many interesting questions are presented in the briefs. In support of the de-cisión of the trial court, it is contended that this was not a state home■stead, mainly because Goetz had acquired, at the time respondent’s mortgage was executed, no estate or interest in the premises constituting a foundation, under our state homestead law, for the homestead right of exemption; that it is only such an estate or interest as can be levied upon that the law is intended to protect, hence it was unnecessary in any event for the wife to join in the execution of a mortgage. It is further contended that in case it did constitute a homestead under the state law, and was therefore exempt, the subsequent abandonment M it as a homestead validated the mortgage, if invalid at the time it was given; and that such validation relates back to the execution and delivery of the mortgage. Most exhaustive and' ingenious arguments are made in support of these propositions, but from our consideration of this appeal we deem it wholly unnecessary to determine' these questions.

In srrpport of the judgment it is contended, and we think correctly, that the appellant, as the successor in interest of Goetz, the mortgagor, cannot maintain this action as against the mortgage held by respondent. This contention rests upon the provisions of our statute, found in § 5054-, Rev. Codes of 1905. For a complete understanding of it we quote §§ 5052, 5053, and 5054. Section 5052 provides that “the homestead of a married person cannot be conveyed or encumbered unless the instrument by which it is conveyed or encumbered is exe cuted ... by both husband and wife.”

Section 5053 was enacted in 1895, and reads: “No action, defense, or counterclaim founded upon a right of homestead in property heretofore conveyed or encumbered, otherwise than as provided by the law in force at the time of the execution of such conveyance or encumbrance, and for which no declaration of homestead shall have been filed previous to the taking effect of this section, shall be effectual or maintainable, unless such action is commenced, or such defense or counterclaim interposed, on or before the 1st day of January, 1900; provided, nevertheless, that such limitation shall not apply if the homestead claimant was, at the time of the execution of such conveyance or encumbrance, in the actual possession of the property claimed, and had not quit such possession previous to the Commencement of such action or the interposing of such defense or counterclaim.”

It will be noticed that this section only 'placed a bar upon actions, defenses, and counterclaims brought or interposed on or before the 1st day of January, 1900, but in 1905 the legislature enacted § 5054, which reads as follows:

“No action, defense, or counterclaim founded upon a right of homestead in property conveyed or encumbered prior to the taking effect of this article, and since the taking effect of § 5053, otherwise than is provided by the law in force at the time of the execution of such conveyance or encumbrance, and for which no declaration of homestead shall have been filed previous to the taking effect of this article, shall be'effectual or maintainable, unless such action is'commenced, or such defense or counterclaim interposed, on or before the 1st day of January, 1906; and no action, defense, or counterclaim founded upon a ■ right of homestead in property hereafter conveyed or encumbered, otherwise than as provided by the law in force at the time of the execution of such conveyance or encumbrance, and for which no declaration of homestead shall have been filed previous to the execution of such conveyance or encumbrance, shall be effectual or maintainable, unless such action is commenced, or such defense or counterclaim interposed, within two years after the execution of such conveyance or encumbrance; provided, nevertheless, that such limitation shall not apply, if the homestead claimant was, at the time of the execution of such conveyance or encumbrance, in the actual possession of the property claimed, and had not quit such possession previous to the commencement of such action, or the interposing of such defense or counterclaim; and provided, further, that this section shall not in any way affect claims to the homestead which may have become barred under the provisions of said § 5053.” •

This section took effect as a law July 1st, 1905, a little over six months after the recording of respondent’s mortgage, and five and a half months prior to the giving of the mortgage under which appellant holds. Appellant’s mortgage was given sixteen days prior to the 1st of January, 1906, when the limitation provided by § 5054 became operative. This is a statute of limitations on actions like the one in the case at bar. It was intended to meet just such cases as this, and to render it impossible for the owner of the premises or his successor in interest to maintain title, or sustain a defense or counterclaim, against tbe bolder of a mortgage or title under a conveyance or mortgage which the wife had not joined in executing. Let us examine this with relation to the statute. It applies to an action, defense, or counterclaim founded upon a right of homestead. The action brought by plaintiff is, as against ,the respondent, predicated or founded upon a claim of a right of homestead in .Goetz and wife in the property to-which the appellant is the successor in interest. Next, it was encumbered prior to the taking effect of the article; that is, prior to July 1st, 1905, and it was encumbered otherwise than as was provided by law in force at the time of the execution of the mortgage held by respondent. No declaration of homestead was filed previous to the taking effect of the law, or at all. The action was not commenced before the 1st day of January, 1906, and incidentally the action was not commenced within two years after the execution of respondent’s mortgage; and, finally, while the party under whose homestead right appellant claims to be relieved from the mortgage was in possession when respondent’s mortgage was executed and delivered, and had quit possession previous to the commencement of this action. How could the facts more nearly fit all the provisions of a statute? Every element essential to bar the defense is here found to exist, and we deem it unnecessary to discuss it further, and particularly because this court has only recently fully considered and passed upon the purpose and effect of this statute, and held it to be a statute of limitations applicable in such case. See Justice v. Souder, 19 N. D. 613, 125 N. W. 1029. See also Styles v. Theo. Scotland & Co. 22 N. D. 469, 134 N. W. 108. As to power of legislature to pass statutes of limitations, see Adams & F. Co. v. Kenoyer, 17 N. D. 302, 16 L.R.A.(N.S.) 681, 116 N. W. 98; Gilbert v. Ackerman, 159 N. Y. 118, 45 L.R.A. 118, 53 N. E. 753.

No question of notice of a change in the statute of limitations seems to us in the case. The law was in force five months and a half prior to the execution and delivery of the mortgage under which appellant holds, and the original holder was thereby informed that if it took the mortgage it would be barred from making any claim iinder it as against the respondent’s mortgage, unless he asserted it by action, counterclaim, or defense before the 1st of January, 1906. It had five and a balf months’ knowledge of tbe law before taking this mortgage, and it took subject'to tbe limitation thereby imposed.

J. G. IVIcClintock, who bought under the sheriff’s sale on the foreclosure, purchased December 21st, 1907, and he had knowledge of the law from July 1st, 1905, until the date of his purchase; and Hublou, who redeemed December 21st, 1908, was possessed of the knowledge an additional year; and appellant, who took the deed under which he holds from Hublou August 14th, 1910, had almost ten months’ longer notice of the law than had Hublou. This action was not commenced until January 31st, 1911. It is simply a case of parties acquiring property after a statute of limitations has been enacted, and does not involve any question of property rights existing prior to- its enactment as to appellant. When the second mortgage was taken, and when appellant acquired title under it, the mortgagee and appellant took their' chances on facts occurring which would make the statute operative against them.

The argument that § 5054 cannot be construed to give validity to a'prior void mortgage is answered in Justice v. Souder, supra. The logical effect on the rights of appellant need not be analyzed or considered. His remedy, if any, was with the legislature. The application of this section is so patent to the case before us, and its construction by this court so recent that we deem it unnecessary to enter into any further discussion of the subject. Our conclusion is reached without reference to the question of any right of Goetz to a state homestead exemption in a homestead taken under the laws of the United States, on which he had not made final proof. It is assumed for the purposes of this decision 'that it was exempt under the state homestead laws. Neither have we investigated to determine whether the right to assert a claim as against a mortgage not executed by the wife, when the mortgaged property was a homestead, is personal to those claiming a homestead interest in it; as the homestead exemption has been construed by this court it is possible that such right is not transferred by conveyance, and that therefore the holder under a foreclosure sale of a subsequent mortgage is not in position to assert title as against a mortgage in which the wife did net join.

The judgment of the District Court is affirmed.