Case Name: WALLACE BASHORE, Respondent, v. M. L. ADOLF, L. K. ADOLF and A. B. MULHALL, Appellants
Court: Idaho Supreme Court
Jurisdiction: Idaho
Decision Date: 1925-07-03
Citations: 41 Idaho 84
Docket Number: 
Parties: WALLACE BASHORE, Respondent, v. M. L. ADOLF, L. K. ADOLF and A. B. MULHALL, Appellants.
Judges: Wm. E. Lee, Budge and Givens, JJ., concur.
Reporter: Idaho Reports
Volume: 41
Pages: 84–98

Head Matter:
(July 3, 1925.)
WALLACE BASHORE, Respondent, v. M. L. ADOLF, L. K. ADOLF and A. B. MULHALL, Appellants.
[238 Pac. 534.]
Maurice M. Myers, for Appellants.
W. A. Beakley, for Respondent.
Ray Agee, Amicus Curiae.
Richards & Haga, Amici Curiae.

Opinion:
TAYLOR, J.
— This action was brought by respondent to quiet title to lands and to cancel two mortgages which he had executed thereon. The lands are conceded to be the homestead entry' of respondent, made under the laws of Congress. The mortgages were executed before final .proof or final certificate or patent. He is admitted now to be the owner in fee, and claims that these mortgages are void and a cloud upon his title. Appellants demurred to the amended complaint for failure to state a cause of action. This demurrer was overruled, whereupon appellants separately answered and cross-complained, setting up their respective mortgages, and asking for a foreclosure thereof and the sale of the lands to satisfy the mortgage indebtedness. Respondent thereupon moved to strike appellants' answers and cross-complaints, and for judgment on the pleadings. The court granted the motion to strike, and granted respondent judgment on the pleadings, canceling the mortgages in question. This appeal is from that judgment.
Counsel are agreed that the only question involved herein is whether a mortgage given by a homestead entryman in good faith, prior to patent, is valid as between the parties thereto. A decision of this question will be decisive of the five errors assigned by appellants.
Counsel for respondent relies upon Ruddy v. Rossi, 248 U. S. 104, 39 Sup. Ct. 46, 63 L. ed. 148, 8 A. L. R. 843; Williams v. Sherman, 36 Ida. 494, 212 Pac. 971, and U. S. Rev. Stats., sec. 2296 (U. S. Comp. Stats. 1916, sec. 4551; 8 Fed. Stats. Ann., p. 575). The opinions in Ruddy v. Rossi, supra, and Williams v. Sherman, supra, must be considered and construed in the light of the rule that they are authoritative only on the facts on which they are founded. General expressions must be taken in connection with the case in which those expressions are used.
"There is a pronounced line of demarkation between what is said in an opinion and what is decided by it . . " (State v. City of St. Louis (Mo.), 145 S. W. 801.)
See, also, Cohens v. Virginia, 6 Wheat. (U. S.) 264, 5 L. ed. 257; 15 C. J., p. 941, sec. 332.
This court, in Ruddy v. Rossi, 28 Ida. 376, 154 Pac. 977, held that a homestead entry is liable to satisfaction of a judgment upon a debt contracted after issuance of a final certificate and before patent, upon the doctrine of the relation of the patent back to the date of the certificate. The supreme court of the United States (Ruddy v. Rossi, 248 U. S. 104, 39 Sup. Ct. 46, 63 L. ed. 148, 8 A. L. R. 843) reversed that case.
U. S. Rev. Stats., sec. 2296 (U. S. Comp. Stats. 1916, sec. 4551, 8 Fed. Stats. Ann., p. 575), with relation to homestead lands, provides:
"No lands (ac) quired under the provisions of this chapter shall in any event become liable to the satisfaction of any debt contracted prior to the issuing of the patent therefor."
The debt involved in Ruddy v. Rossi, supra, was not secured by a mortgage, but the date of contracting it after final proof and before patent made the issue as to its being within the act. That case sets at rest all controversy over the meaning of the words of section 2296, "prior to the issuing of the patent therefor," by holding that the actual issuance of the patent is meant. The liability therein under consideration was one which the courts have treated and discussed as an involuntary liability, one created by law, not by the voluntary act of the homesteader. It is decisive only as to such "involuntary liability," the only kind involved in that ease.
The court recognized the protection of the act as creating an "exemption," saying:
" . It wrns proper to create the designated exemption," the purpose of which, in the opinion of the court, was "promptly to dispose of public lands and bring about their permanent occupation and development," and "to convert waste places into permanent homes."
If, as experience has demonstrated since the adoption of the homestead act, the power of a homestead entryman to mortgage his homestead entry has contributed, or will contribute, materially to the purpose of Congress "promptly to dispose of public lands and bring about their permanent occupation and development," and "to convert waste places into permanent homes," it may, with as much reason, be contended that Congress did not intend to prohibit or make void the voluntary act of a homesteader in mortgaging his homestead entry for the purpose of securing funds to assist him in the occupation and development of his homestead. By any other construction given to the act, that prohibition would be accomplished.
The only question before this court in Williams v. Sherman, 34 Ida. 63, 199 Pac. 646, s. c. 35 Ida. 169, 205 Pac. 259, 21 A. L. R. 353, 36 Ida. 494, 212 Pac. 971, was the right of a purchaser under judgment foreclosing a mortgage executed by a homestead entryman upon unpatented land to a writ of assistance and to possession of the homestead premises, the foreclosure having been had, sale made and sheriff's deed issued prior to final proof or patent. There was not presented in that case any question as to the estoppel of the mortgagor to claim title by reason of his after-acquired title inuring to the benefit of the mortgagee, for in that case there was as yet no after-acquired title; he had not received patent. While that ease does discuss the validity of a mortgage made by a homestead entryman upon unoccupied public land, long prior to his homestead entry, that which was really decided therein is best stated in the last paragraph of the opinion on petition for rehearing, wherein this court said:
"We therefore adhere to our conclusion that the mortgage executed . in so far as it pretended or attempted to affect the NE. % of sec. 13 . . which was a part of the unsurveyed public domain of the United States, to which and in which the grantors had neither title nor color of title, conveyed to the grantee no interest whatever and was a nullity; that the subsequent proceedings had to foreclose said premises, . together with the subsequent order of sale and attempted sale thereunder, were void and of no force or effect whatever, the court not having jurisdiction of the subject matter because of it being the property of the United States government; . and that respondent's interference with their possession, after they established the validity of this homestead entry, was a naked trespass without color of authority."
C. S., sec. 6361, provides as follows:
"Title acquired by the mortgagor subsequent to the execution of the mortgage inures to the mortgagee as security for the debt in like manner as if acquired before the execution. ' '
This rule has been held to apply to title acquired under the homestead laws, although the title was in the United States when the mortgage was given. (Lohman State Bank v. Grim, 69 Mont. 444, 222 Pac. 1052; Selway v. Daut, 67 Mont. 262, 215 Pac. 646; Weber v. Laidler, 26 Wash. 144, 90 Am. St. 726, 66 Pac. 400; Stark v. Duvall, 7 Okl. 213, 54 Pac. 453; Stewart v. Powers, 98 Cal. 514, 33 Pac. 48; Christy v. Dana, 34 Cal. 548; Kirkaldie v. Larrabee, 31 Cal. 455, 89 Am. Dec. 205; Adam v. McClintock, 21 N. D. 483, 131 N. W. 394; Spiess v. Neuberg, 71 Wis. 279, 5 Am. St. 211, 37 N. W. 417; Blanchard v. Jamison, 41 Neb. 244, 15 N. W. 212.)
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 rule is correctly stated in 32 Cye. 1084:
"The exemption under consideration is designed merely to protect the settler from a forced sale under execution on a debt contracted prior to the time designated, and does not preclude him from borrowing money and voluntarily creating a lien on the land by way of mortgage to secure the same, or prevent the enforcement of such a mortgage."
This has been the holding, also, of the Land Department of the United States in an almost unbroken line of decisions. (First State Bank v. Durand, 69 Mont. 184, 222 Pac. 434; Stark v. Morgan, 73 Kan. 453, 9 Ann. Cas. 930, 85 Pac. 567, 6 L. R. A., N. S., 934; Watson v. Voorhees, 14 Kan. 328; Fuller v. Hunt, 48 Iowa, 163; Hafemann v. Gross, 199 U. S. 342, 26 Sup. Ct. 80, 50 L. ed. 220; Lohman State Bank v. Grim, supra; Weber v. Laidler, supra; Stark v. Duvall, supra; Kirkaldie v. Larrabee, supra; Adam v. McClintock, supra; Spiess v. Neuberg, supra; Protection of Transferees and Mortgagees Under the Homestead Laws, 48 L. D. 582.)
Guaranty Savings Bank v. Bladow, 176 U. S. 448, 20 Sup. Ct. 425, 44 L. ed. 540, directly recognized the right of a mortgagee of a homestead, to notice of cancelation of the homestead entry of the mortgagor thereof, under the provisions of section 7 of the act of March 3, 1891 (26 Stats, at L. 1095, 1098, chap. 561).
The practical administration of the federal statute by the Land Department, while not controlling the courts in their interpretation, is entitled to respectful consideration.
"The practical construction given to an act of Congress, fairly susceptible of different constructions, by one of the executive departments of the government, is always entitled to the highest respect . especially when important interests have grown up under the practice adopted. (Bates Refrigerating Co. v. Sulzberger, 157 U. S. 1, 34, 15 Sup. Ct. 508, 39 L. ed. 601; United States v. Healey, 160 U. S. 136, 141, 16 Sup. Ct. 247, 40 L. ed. 369.)" (Webster v. Luther, 163 U. S. 331, 16 Sup. Ct. 963, 41 L. ed. 179.)
" . . . . The practical construction given to an act of Congress fairly susceptible of different constructions, by those charged with the duty of executing it, is entitled to. great respect, and, if acted upon for a number of years, will not be disturbed except for cogent reasons." (McLaren v. Fleischer, 256 U. S. 477, 41 Sup. Ct. 577, 65 L. ed. 1052.)
Other courts, as well as the Land Department, have construed the decision in Ruddy v. Rossi, supra, as not affecting the validity of a mortgage given by a homestead entryman prior to patent, or overturning or reversing the decisions of the great majority of courts and of the Land Department theretofore rendered.
"Section 2296, Bevised Statutes, has been quite generally held by the courts, as well as by the Land Department, not to invalidate a mortgage or other incumbrance of his land, given by a homesteader, to secure money with which to improve his land, 'or for any other purpose not in itself tending to impeach his bona fides,! even though the debt was contracted before the issuance of patent to the homestead." (Lockwood v. Lounsbury, 48 L. D. 637)
See, also, Protection of Transferees and Mortgagees Under the Homestead Laws, 48 L. D. 582.
The supreme court of Montana, in First State Bank v. Durant, supra, says of Ruddy v. Rossi, supra:
"The case was not one to test the validity of a mortgage given upon a homestead which had not yet ripened into. patent — a voluntary transaction founded upon even-handed dealings between the homesteader and the mortgagee, as in the present ease. Counsel is therefore wrong in thinking that the decision impinges in the least upon the consistent holdings of the Land Department of the government or of the courts."
The rule established by the great weight of authority before the decision in Ruddy v. Rossi, supra, together with the interpretation of that decision by other courts and the Land Department that it has not reversed such holdings, as well as the adherence to the rule by other courts in decisions rendered since the decision of Ruddy v. Rossi, although without direct comment thereon or reference thereto (Wright v. Walker (Wyo.), 225 Pac. 75; Thomas v. Wisner, 66 Colo. 243, 180 Pac. 744), seems to us to be reasonable. We therefore answer the only question presented herein, that a mortgage- given in good faith -by one who has made homestead entry on the public lands of the United States, prior to the issuance of his final receipt or patent, is valid as between the parties to the mortgage after the patent has been issued.
The judgment of the lower court is reversed and the cause remanded for further proceedings in accordance herewith. Costs awarded to appellants.
Wm. E. Lee, Budge and Givens, JJ., concur.