Case Name: THOMPSON, Respondent, v. HART, Administrator, et al, Appellants
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1918-03-26
Citations: 40 S.D. 288
Docket Number: File No. 4125
Parties: THOMPSON, Respondent, v. HART, Administrator, et al, Appellants.
Judges: 
Reporter: South Dakota Reports
Volume: 40
Pages: 288–297

Head Matter:
THOMPSON, Respondent, v. HART, Administrator, et al, Appellants.
(167 N. W. 161.)
(File No. 4125.
Opinion filed March 26, 1918.
Rehearing denied June 1, 1918.)
1. Mortgages — Foreclosure—Defense, Use as . Homestead — Nonliomestead Recital, Effect As Declaration.
In a suit to foreclose a realty mortgage, the defense being that the property was the family homestead, and that mortgage was not concurred by mortgagor’s wife, held, that a recital in the mortgage to the effect that the premises “have never been used or occupied as a homestead by the grantor or any member of his family, nor are they at the present'time so used or occupied,” was intended as and was a declaration by mortgagor that the premises were not then impressed with homestead character.
2. Same — Foreclosure—Mortgage Recital of Non-homestead Character of Realty — Ignoring Recital, Fraud on Mortgagee By.
In a suit to foreclose a realty mortgage, the defense being that the property was the family homestead and that mortgage was ■ not concurred in by mortgagor’s wife, held, that- to ignore a recital in the mortgage to the effect that the property was not and had not been occupied as a homestead 'by grantor or family, would amount to a fraud on the mortgagee.
3. Homestead — Mortgage Foreclosure — Defense of Family Homestead, Wife’s Non-concurrence — Wife’s Intention, Evidence, Sufficiency.
Where, in a suit to foreclose a realty mortgage, the interest represented by mortgagor’s deceased wife interposed the defense that the property was the family homestead and that mortgagor’s wife did not concur in the mortgage, held, that evidence of statements made by both mortgagor and his wife, showed that prior to mortgagor’s death 'both husband and wife intended that another piece of realty owned by the wife, which was free from debt, should be selected as a homestead, which intent was carried out by the wife after husband’s death when, with the family, • she removed to and occupied said other pro-perty as her home; that such election cannot he changed by those now claiming as heirs of the mortgaged estate. Held, further, that notwithstanding evidence of many declarations by mortgagor, tending to show he regarded a new house in course of construction when mortgage was executed, as his homestead, trial court did not err in determining that the mortgaged premises were not then the family homestead.
4. Evidenc© — Homestead, as Defense to Mortgage Foreclosure on Wife’s Interest — Wife’s Subsequent • Statements, Effect re Validity of Mortgage.
While the statements of the wife of a mortgagor of realty, made subsequent to giving of tbe mortgage, would not make a void mortgage valid, yet such statements, to the general effect that subsequently to the execution of the mortgage and of her husband’s death, she with the family, removed to and occupied another property of her own as her home, are convincing evidence that the latter place, occupied by herself and family, was in fact their homestead, and that the newly-erected and heavily incumbered house standing upon the mortgaged -premises, was not their homestead.
5. Attorneys — Professional Conduct — Testimony of, re Merits of Client’s Cause — Bar Association Code of Professional Ethics— Cautionary Suggestion.
In view of the record on appeal before the Supreme Court, involving lengthy testimony by an attorney concerning the merits of a client’s cause on trial, attention of the State Bar is drawn by the Court to Sec. 19, Code of Professional Ethics, as adopted by American Bar Association, and by South Dakota State Bar Association; same relating to and laying down ethical rules which should govern counsel in giving, and in refraining from giving testimony concerning merits of the client’s cause on trial.
Whiting, P. J., and McCoy, J., dissenting.
Aipipaail from Circuit Court, Clay ‘County. Hon. Robert B. Tripp, Judge.
Action by M. D. Thompson, against Edwand M. Hart, as administrator of the estate of Erick Nylien, deceased, P. J. Bowman administrator of the estate of Christina Nylen, deceased, and others, to foreclose a mortgage on realty. From a judgment for plaintiff, amid' flrom an order denying a new trial, defendants appeal.
Affirmed
Bogue & Bogue, for Appellants.
Payne & Olson, for 'Respondent.
(2) To point two off the opinion, Respondent cited: Jensen v. Griffin, (S. D-.) 144 N. W. 119, 50 R. R. A. N. S. 1128; Waples’ Homestead and Exemption, p. 392.
(3) To point three off the opinion, Appellants cited: Clark v. Ervam®, 6 S. D. 244; Kingman v. (TCallaglian, 4 S. D. 628; Gallagher w. Keller, 87 Tex. 472, 29 S. W. 647.

Opinion:
GATES, J.
Action to foredose a real estate mortgage. Defense: That the property was tire family homestead and the mortgage was molt concurred ia by the mortgagor's wife. Judgment awarding fone'closure. Eromi the judgment and an order! denying ,a new trial, defendíante appeal.
The mortgage was given in January, 1915, at which time a dwelling ¡house 'was in process of erection upon the premises toy Mr.. Nylen, the mortgagor. The premise® were not occupied until May, 1915, when Nylen and hi>s family moved in. Nylen died in August, 1915, but the family continued to occupy the premises until 'about October 1, 1915, when they removed to the premises hereinafter referred to as the cottage. Mrs. Nylen died in December, 19x5. The mortgage contained the following provision:
"The ¡above-described premises have never been used or occupied as a homestead by the grantor or any member off his family, nor are itílxey at the present time so used or occupied."
That recital was clearly intended to be and was a 'dteciauatiion by Mr. Nylen that the mortgaged premises were not then impressed with, the homestead character. Granting that but for that provision there Is ample evidence in the record to justify a finding, if the court had so found, that it was the intention of Mr. Nylen to u®e the premises as a homestead when the building should be completed, it would, so far as -he is concerned, amount to a fraud on the mortgagee to allow that prevision of the mortgage to be ignored.
Granting that such provision was not binding upon the owner's wife, let us see what her intention was. Peter Olson, one off plaintiff's attorneys, furnished the principal evidence on that subject. Mrs. Nylen was and had been for years the owner of a 'home, referred to as tire cottage. After the death of Mr. Nylen she moved from the mortgaged property to this cottage and remained there until her death. Mr. Olson testified as follows :
"I had -a 'conversation with Mrs. Nylen relative to toh property on or (about the 19th day of December, 1914, during the time when .this house was under construction, at our office. She told me that Mr. Barton, of the Thompson Dumber Company, had declined to give Mr. Nylen further credit, and she was crying, and she stated that they were so heavily in debit that they >wed! all oven- town; that she was ashamed! to go -down town; that Mr. Nylen was very careless about his business, and1 that he would receive statements and would! throw itfa-em on lilis dlesk land they wouldn't be opened, and that he had several checks upon -his 'desk that he failed to cash; and that she was becoming very much concerned about him. She stated that she wanted him to sell all of bis properties, amid apply the proceeds oif the sales in payment of toe debts .and to satisfy the creditors. I had a conversation w'ito Mrs. Nylen 00 the 29th day of November, 1915, at her home. I was there at her home. That is toe property which was in her name, where shle lived at toe time of her death. That is the cottage referred to. I was there on professional business about 12 days before her dealto, and this conversation occurred1 while I was there on professional business. I was there on behalf of John Hanson,-and I talked with Mrs. Nylen about John Hanson's business, and was not there as .an attorney for Mrs. N\ylen, and was not consulted by her in any way. I called on Mrs. Nylen .and told her that I had been sent to. her at toe request of Mr. Hanson and Informed1 her that he bad a claim against toe property involved in this action for wages, and material that he had furnished in the construction of toe blouse, and I told her that toe -time was about to expire, and! that if he was going to enforce toe lien that he would have to begin his action, but that before he began the action that he wanted me to see -her and ask her if she wouldn't pay it, and I told her that, and she stated tihalfc due did not want to pay it; stated that she wanted Mr. Hanson to have toe money but that he would have to foreclose his mechanic's lien, tolat there was already a mortgage on toe property, and that toe mortgage w'as held! by Mr. Thompson, and that Mr. Hansom and Mr. Thompson would have to fight it out among; themselves, as to whether or not the lien would be established. She stated that she would make no defense whatever. She stated that she would make no claim against the other property; that she would make djoi redemption from the mortgage; that the mortgages were so big that if was all that the property was worth., and then she went on to relate that she and Mr. Nylen had always understood/ that this was to be their home in case of an emergency of that sort, and that she had moved to- that holme and was satisfied with that and other .property she haldl. She stated the property where she Was living was to be her home. She stated in that conversation that they 'should have moved to that .place in the first place; that she was never contented at the new home; that they did not have enough to furnish it."
Testimony 'offered on behalf of plaintiff revealed the following facts: Abouit the time the mortgage was given Nylen offered to exchange Ids house for one owned' by Mr. Vanneman, and he offered! to rent it to Vanneman. A little later, in response to an inquiry from Vanneman as to whether be wtoiuild rent it to Mr. Colton, Nylen salid he was uncertain whether he would rent it or not. Mr. Barton testified that as .an officer of the Thompson Lumber Company he had sold material to Nylen for the construction tolf this house with -the agreement that the house was to be sold when he had an ojppor'toniity and the proceeds applied upon the debit. He farther testified that Nylen told him, about the time Nylen moved into the house, that it was for sale, and that at any time he Could sell it he would move out; ithat in 1914, when Nylen wanted further credit, he told witness that "the only property that was considered as a homestead, that is considered exempt, that he would! not trade In, was the house that she bought in her nlame — [the cottage]." Witness further testified that in August, 1914, Mr. Nylen stated tblat (the cottage) was to be the homestead, and be considered it the only homestead, that is, the only property that hie w'cluld not sell or trade; tire other properties were to be considered his assets on the strength of these other properties he wanted credit; that the credit thereby 'obtained wds later paid out of the .proceeds oif the mortgage in suit. Wit ness further said that in October, 1914, he -heard Nylen say that (the cottage) was Mb homestead.
M>r. Anderson testified):
"During the month of January, 1915, I had some talk with Mr. Nylen regarding negotiation of a loan from- Mr. Thompson. In negotiating that toan 'hie executed three mortgages, I believe —four. He made a loan tiren frota Mr. Thompson. I prepared tíre mortgages. Exhibit A -which you now show me is on© of the mortgages I prepared. I had a coniversaltion with Mr. Nylen at the time as to what properties he -owned, and as to what property he 'claimed' as his homestead. I called Mr. Nylen into the bank to get a1 settlement from him for amounts that he owed' to the Thompson Lumber Company, the Thompoon-Lewii'S Company, and to the D. M. Inman Company, in order to find out -what I could take as security. I had to ask him what properties he -owned, -anldl what I -could include in the mortgages. He owned at that time tire building next to the bank, tíre -houise; that Mr. Vannetoan lliveisi in, the house that was then under construction south -of the- Vamranran house, and an interest in the, building now occupied- by the Ketchum -garage, and besides these. properties I knew they -owned the cottage. I don't know, where it is located or anything about that, but I knew they owned! the hlotu-se that John Nylen -was living in at that time. I asked Mir. Nylen if that could be included, and he said that was ini his wife's name, -and couflidhft be included, because it was their homleisitead, but the other properties could be included in the mortgage, and I took mortgage ora the other properties for M. D. Thomipslora. Mr. Nylen asked if wie wouldn't take the properties- and sell them. He used that exipnession to 'sell' them foir him -and apply it toward his indebtedness, or have me see Mr. Thompson and have him take the properties."
Mr. Hart testified:
"I have had- Conversations with Mr. .Nylen -regarding what property he claimed' as his homestead in Vermillion. In,the conversation -had during the fall of 1914 he asked me if I could find him a buyer for these properties. Ele did not claim any right in this particular property involved- in this aotion as a homestead. The conversation was that the}'- owned the cottage and considered; that a property on which they could fall back in* case reverses came to him or the family. I asked1 him if he cared to sell that property which was in the name of Mrs. Nylen, and he did not give me -a definite answer. I asked him if $3,000 would buy it, and he gave me rather an evasive answer on that, and I asked him what would) buy it, and he said1 he would let me know. Hie came in perhaps a day or two afterward, and said that he did) not care to sell that property; that he and his family bad talked it over and they intended to keep that; the balance of it he would sell. He said something might happen to him, and T want a home where the family can go back and be taken care of.' In using the word ihiolmestead" Mrs. Nylen said she had the home that they could go' back to. That was after Mr. Nylen's death and before I wais appointed1 administrator of his estate. It was right after the death of Mr. Nylen. From the conversation I gathered that she understood the mortgage Covered the four properties, but not her own home. She hoped tire properties would sell for enough to satisfy the indebtedness. Ait the time we had this conversation after the death of Mr. Nylen nothing was said except that «he had thialt home to go back to. After I was appointed administrator she called at the bank and said that she thought she would go: back to the cottage; that the house was larger than they needed, and that it would be much more economical to live in the cottage. She at that time repeated that statement; that she hoped the properties covered by the mortgages would! satisfy he indebtedness in full."
From the 'statements made by both Mr. and Mrs. Nylen as .shown by the evidence, it seems clear that piriolr to his death bath had in mind and intended1 that the cottage whi'ch was free from debt should, be selected as the homestead, and that this intent was carried out by her after tire husband's death, when, with the family, she removed to and occupied the cottage as her home. That election should not be permitted', to be changed' by those who are now claiming as heirs of the estate.
In spite of the evidence offered in behalf of defendants as to many declarations made by Mr. Nylen to workmen, friends, and' acquaintances, tending to show that he regarded the new house las his homestead1., we are unable to conclude that the trial court erred! in its dateirmiinatioo that the premises in suit were not tine family homestead at the time the mortgage was given. While it is -true- thalt the statements of • Mrs'. Nylen made 'subsequent to the giving of the mortgage would not make a void mortgage vailitf, yet isuich statements a-re convincing evidence thalt her own cottage, owned and occupied -by herself and family, was in fact their homesteald1, -and that the newly erected and heavily incumbered house wias not their homestead.
In- view df the record' in this case, we -deem it an opportune and hitting -occasion to call the attention oif the members of the bar of thiisl state -to section 19 of the Code oif Professional Ethics a® adopted) by the American- Bar AssOelilation, and- by lire South Dakota State Bar Association. See, also, Costigan on Legal Ethics, 448, 297, note; 1 Mold. Am. Law, 33. We do not wish-.to be understood as intimating that there is any general disregard of this -section by the bar of (this state; blu,t it nevertheless ha*s been disclosed in a few cases that counsel have failed to comply with its very salutary provisions.
The judgment and order appealed from are -affirmed.