Court Opinion

ID: 4012774
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:17:14.627161+00
Date Added: 2024-06-11T12:12:35.978156
License: Public Domain

My views concerning this case coincide with those expressed by Mr. Justice Blume, except as hereinafter indicated.
The chief contention of plaintiff in error appears to be based upon the provisions of sections 6881 and 6889 of the Comp. St. of Wyo. 1920, as applied to the facts of this case. The sections of the older compilation of our statutory law will be used herein, as the points for decision arise under transactions occurring before they were superseded by the Wyo. Rev. *Page 182 
St. 1931. The section first cited provides:
"If the homestead held prior to the death of the decedent be returned in the inventory appraised at not exceeding twenty-five hundred dollars in value, the court or judge must, by order, set it off to the persons in whom the title is vested by the preceding section. If there be subsisting liens or incumbrances on the homestead, the claims secured thereby must be presented and allowed as other claims against the estate. If the funds of the estate be adequate to pay all claims against the estate, the claims so secured must be paid out of such funds. If the funds of the estate be not sufficient for that purpose, the claims so secured shall be paid proportionately with other claims allowed, and the liens or incumbrances on the homestead shall only be enforced against the homestead for any deficiency remaining after such payment."
The second reads:
"All claims arising upon contracts, whether the same be due, not due, or contingent, must be presented within the time limited in the notice, and any claim not so presented is barred forever; provided, however, that when it is made to appear by the affidavit of the claimant, to the satisfaction of the court, or a judge thereof, that the claimant had no notice as provided in this chapter, by reason of being out of the state, it may be presented at any time before a decree of distribution is entered."
The record inter alia shows the following: That the plaintiff in error and her husband executed certain promissory notes representing an indebtedness on their part to John W. Hay of $225,000, and secured the same by mortgage deed, dated January 28, 1921, containing a power of sale and conveying, among other lands, the premises in dispute; that the mortgage deed thus executed by plaintiff in error and her husband contained an explicit waiver and release *Page 183 
of "any and all rights, benefits, privileges, advantages, and exemptions, under and by virtue of any and all statutes of the State of Wyoming providing for the exemption of homesteads from sale on execution or otherwise"; that Hay, under date of March 24, 1924, assigned said mortgage deed to the American National Bank of Cheyenne, the assignment recorded March 26, 1924, reciting that on that date there remained due an indebtedness of $70,000; that the husband of plaintiff in error died, plaintiff in error qualified as the executrix of his last will and testament, and an inventory of the property of her deceased husband was filed June 15, 1921, in the District Court of Fremont County, Wyoming, wherein it was stated concerning the property in controversy, "Lots 17  18, block 24, town of Riverton, Wyoming, this is residence and homestead — $5,000," the appraisers thereby fixing the value thereof at the sum last mentioned; that there was proof made that no claim of any kind was ever presented against the estate or to plaintiff in error as executrix, either by the American National Bank of Cheyenne, or by John W. Hay, aforesaid; that on June 2, 1924, the mortgage above mentioned was foreclosed through the exercise of the power of sale therein contained; that on December 19, 1924, a foreclosure deed was issued to the American National Bank of Cheyenne, thus furnishing the basis of the title under which defendant in error asserts its rights as grantee of the bank.
The gist of the contention made for plaintiff in error seems to be that, inasmuch as the claim for the indebtedness secured by the mortgage as detailed above was never presented to her as executrix of the estate of her deceased husband, the mortgage foreclosure and the deed issued pursuant thereto were void so far as they undertook to affect the two lots *Page 184 
above mentioned, valued at $5,000. Camp v. Grider,62 Cal. 20, and other California cases are cited in support of the view.
In that state, it is held that section 1475 of the Code of Civil Procedure, similar to our section 6881, supra, and from which ours was patterned, "has to do exclusively with homesteads declared during the lifetime of the spouses. The law has not seen fit to make the same provision as to probate homesteads." In re Huelsman's Estate, 127 Cal. 275, 59 P. 776; 1 Ross' Probate Law and Practice 510; Bancroft's Probate Practice 1270, and cases cited. In other words, when the survivor's title to homestead property must be fixed and defined by the operative force of a probate court order or decree and not through the act of the parties themselves, the statute requiring the presentation of a claim secured by a lien or incumbrance may not be invoked. The first sentence of section 6881, supra, speaks only of a homestead properly selected by the parties "prior to the death of the decedent" and returned in the inventory "at not exceeding $2,500." Nothing remains to be done by the court in such case except to assign it "to the persons in whom the title is vested." The section then continues with the requirement as to presentation of claims secured by liens or incumbrances which is relied upon here. It is obvious that, so far as its literal phraseology is concerned, this requirement is readily applicable to a homestead property as defined in the first sentence of the section.
What is the situation when the parties have, as in the case at bar, failed in their lifetime to select property worth not exceeding $2,500, but have made their home on property worth, for example, as here, double that sum? Under such circumstances, the *Page 185 
provisions of section 6882 of the Comp. St. of Wyo. 1920 (now section 88-3002, Wyo. Rev. St. 1931) necessarily have to be invoked which require the action of appraisers to admeasure the homestead, defining its metes and bounds — in short, selecting it — and this action reported to the court for its approval or, if the premises cannot be divided without material injury, then the court may make an order of sale thereof, and the proceeds, only, of the property are divided. It would seem that the procedure contemplated in section 6882 is akin to the establishment of the probate homestead referred to in the California cases and concerning which, as we have seen, the law relative to presentation of claims secured by liens or incumbrances is not applicable. There is no provision made in the section last mentioned for their presentation as there is in section 6881. It is apparent that section 6882 deals only with a right to have a fixed statutory amount of property or money selected by the court for the party entitled thereto, and not, as section 6881, with a specific piece of property definitely selected by the parties themselves. The logical conclusion is that, even under the view taken by the courts of California when that is applied to the homestead right involved here, it was unnecessary to present the claim for indebtedness secured by the mortgage aforesaid to the executrix of the Delfelder estate.
The foregoing conclusion, it seems to me, fairly harmonizes with what this court has said in Jones v. Losekamp, 19 Wyo. 83, 114, P. 673, 676, when the homestead exemption was only $1500, where the following language was used:
"We do not overlook * * * the further provision of our probate law, that if the homestead is returned in the inventory appraised at more than $1500, the appraisers *Page 186 
must determine whether the premises, (not the homestead), can be divided without material injury, and if they find they can be thus divided they must admeasure and set apart to the parties entitled thereto such portion of the premises, including the dwelling house, as will amount in value to $1500, giving the metes, bounds and full description of the portion set apart as a homestead. * * * It is apparent, therefore, that where these statutes speak of the homestead as being of greater value than $1500, they mean the premises occupied or claimed as such, and not the homestead exempt from forced sale, or to which the restriction upon disposition applies."
Concerning the case of Bank of Woodland v. Stephens,144 Cal. 659, 79 P. 379, where expressions in the nature of dicta may be found which hardly can be reconciled with what is said in Jones v. Losekamp, supra, it may be noted no question arose there concerning the exercise of a power of sale either in a trust deed or a mortgage, the foreclosure of the mortgage was by court action, and the mortgagee raised no question as to the ruling of the trial court in declining to allow a foreclosure on the property finally set off under the homestead right. The only question decided, which might be in any way pertinent to the matter at bar, was that a mortgage which was foreclosed by action need not be presented under section 1475 of the California Code of Civil Procedure, so far as it concerned property in excess of the statutory value of the homestead right. Nothing was said either, nor was it involved, touching a situation where the property could not be divided without material injury, and a sale became necessary in consequence.
Indeed, it is not easy to perceive how section 6882, supra, would operate if the claim presentation requirement and the clauses following it in section 6881 be deemed applicable to the homestead right with which section 6882 deals. Suppose the creditor in *Page 187 
this case had undertaken to comply with section 6881. In such event, it must have presented to the executrix the claim secured by the mortgage "on the homestead." But the mortgage covered the claimed and occupied "premises" which, as said in Jones v. Losekamp, were not the homestead of the parties executing it. The only claim which could have been presented was the creditor's claim of indebtedness secured by mortgage upon lots 17 and 18, aforesaid, together with a large amount of other property. The amount of the claim secured by mortgage "on the homestead" could not be stated as other property also was integrally covered by the lien. The only way in which the amount due under the mortgage on these premises could be ascertained would be by first foreclosing the mortgage on and sale of all the property in excess of the statutory exemption value. Where is the authority to be found in the law for foreclosing a mortgage in piece-meal fashion? Where the property could not be divided without injury, how could the creditor determine the excess property on which the foreclosure might proceed?
Section 6882 provides for a sale of the premises by the court if they cannot be divided "without material injury." Nevertheless, logically, under the doctrine of Jones v. Losekamp, supra, the California and other courts, and under the authority given by the statutes of this state governing mortgage foreclosures, the creditor is the party vested with the right to sell that part of the premises over and above the value of $2,500. The query at once suggests itself, who would have the right to make the sale? Assuming, however, that a sale were made under the section 6882, the proceeds of the premises are required to be distributed to "the parties entitled thereto"; yet section 6881 declares that where the funds of the estate are insufficient to *Page 188 
meet the mortgage indebtedness on a homestead, a proportionate amount shall be paid on it from the general assets of the estate and the secured claim "shall only be enforced against the homestead for any deficiency remaining after such payment." How could this mandate of the statute be carried out? These are only a few of the difficulties to be met with if section 6881 is regarded as applicable to the situation with which section 6882 undertakes to deal. Many others could be suggested. It seems apparent that the two sections should be regarded as legislating concerning separate matters.
It is noteworthy that the courts of California have definitely excepted deeds of trust containing powers of sale and including homestead property from the operation of section 1475, supra, (2 Bancroft's Probate Practice 1268; Athern v. Ryan, 154 Cal. 554, 98 P. 390; Weber v. McCleverty, 149 Cal. 316, 86 P. 706) and do not require the claim for indebtedness which they secure to be presented to the executor or administrator. And this is so, although concerning the trust deed in that state, the Supreme Court of California has said, in Sacramento Bank v. Alcorn, 121 Cal. 379, 53 P. 813, 814:
"Indeed, under the decisions it is practically, though not in legal effect, little more than a mortgage with power to convey. The legal title passes but it conveys no right of possession, and the trustor may remain in possession, and, until the execution of the trust, may maintain an action to recover possession even when the trust deed is silent upon the subject of possession. Tyler v. Granger, 48 Cal. 259. Notwithstanding the deed of trust, the trustor may file his declaration of homestead, and hold the premises as such against his creditors who are not secured by the trust deed or some valid lien. King v. Cotz, 70 Cal. 236, 11 P. 656. Notwithstanding the trust, the trustor may devise or transfer the property subject *Page 189 
to the trust. Civ. Code § 864. And the devisee or grantee acquires a legal estate against all persons except the trustees and persons lawfully claiming under them. Id. § 865. And, when the purpose of the trust ceases, the estate of the trustees also ceases. Id. § 871. Under these decisions and statutes, it would seem that, while we must say that the title passes, none of the incidents of ownership attach, except that the trustees are deemed to have such estate as will enable them to convey. So limited such a trust has all the characteristics of a power in trust."
So far as the distinction made, as grounded upon the transfer of the legal title, is concerned, every lawyer is familiar with the doctrine that an absolute deed, when given to secure a debt, is regarded generally as a mortgage and so amounts to a mere lien in this state. Again, in More v. Calkins, 95 Cal. 435, 30 P. 583, 29 A.S.R. 128, discussing the effect of a trust deed containing a power of sale, the court also said:
"The instrument which the plaintiff seeks to have set aside is a trust deed. It conveyed to defendant Calkins the legal title to the property described, upon the trusts which it declares, and conferred upon him the power in execution thereof to sell the property thus conveyed, and transmit the legal title to his grantee. Koch v. Briggs, 14 Cal. 257 (73 Am. Dec. 651); Bateman v. Burr, 57 Cal. 480; Thompson v. McKay, 41 Cal. 221. It is not material that in this case the conveyance was made directly to Calkins, who was a creditor, and not to a third party. Whether the conveyance is to be treated as a mortgage or as a deed of trust must depend upon its essential character, as shown by its terms, and not whether the grantee is a creditor whose debt is to be paid out of the proceeds to arise from the execution of the trust which is declared. In Thompson v. McKay,41 Cal. 221, the deed was upon a trust to sell or lease the premises conveyed, and, after making certain deductions, to apply the proceeds to the payment of a promissory note executed by the grantor in favor of the grantee, and the court said, in declaring the legal *Page 190 
effect of this deed: `That the deed from Gowen to Hill conveyed the fee, and that Hill had the power, in execution of the trust, to transmit the legal title to a purchaser is too plain for debate.' The death of the grantor did not operate as a revocation of the power of sale contained in the deed under consideration, or in any manner limit the effect of the deed, and, this being so, the failure to present to the administrator of deceased the claims secured by it furnishes no ground for a court of equity to cancel the deed. Whitmore v. Savings Union, 50 Cal. 146. As the deed made by plaintiff's intestate requires no judicial foreclosure, and the powers and trusts therein declared are in full force, it follows that sections 1493 and 1502 of the Code of Civil Procedure, prescribing the time within which claims must be presented against the estate of a deceased person, and section 1500 of the same Code, allowing an action for foreclosure of a mortgage, without presentation of such claim, only `when all recourse against any other property of the estate is expressly waived in the complaint,' have no application to the case before us, and the right of the defendant to execute the powers conferred by the deed, and apply the proceeds arising therefrom to the payment of the debts and charges named in the deed, is not dependent upon a compliance with these sections."
Sections 1493, 1502, and 1500 of the California Code of Civil Procedure referred to in the excerpt last above given are substantially identical with sections 6889, 6897, and 6895, Wyo. Comp. St. 1920. The doctrine of the last case seems not to have been departed from by later decisions, for in the case of In re Thurnell's Estate, ___ Cal.App. ___, 19 P.2d 14, 18, this language is found:
"The declaration of trust having granted to the bank the power of sale of the property upon default in the payment of the notes, the death of one of the grantors did not operate as a revocation of that power of sale nor in any manner limit the effect of the instrument. There was no necessity to present any *Page 191 
claim against the estate as a prerequisite to the exercise of said power of sale. The provisions of section 1493 of the Code of Civil Procedure, requiring the filing of claims against the estate of a deceased person, and of section 1500 of the Code of Civil Procedure, prescribing the conditions under which actions may be maintained to foreclose mortgages or liens upon the property of estates, have no application to the right of a trustee to sell property under a power of sale contained in a trust deed. More v. Calkins, supra."
Under these authorities, it would seem reasonably to follow that, as no judicial foreclosure is required under a mortgage with a power of sale therein, i.e., no action in court need be brought to secure its execution, no presentment of the claim for indebtedness secured thereby, under section 6881, was necessary.
The section last mentioned provides for the presentation of claims secured by liens or incumbrances upon the homestead "as other claims against the estate." No penalty for failure to present is prescribed in this section and we must look to sections 6889 and 6895 of Wyo. Comp. St. 1920, the statutes dealing with the general presentation of claims against estates, to determine what this is and what method of enforcement of the mortgage is prohibited if the claim is not presented. The first of these sections last referred to declares that "any claim not so presented is barred forever" and the other prescribes that no holder of any claim against an estate shall maintain any action thereon unless the claim is first presented to the executor or administrator," and then states an exception which demonstrates that necessarily the two sections must be construed together. Section 6897, Wyo. Comp. St. 1920, relating to the presentation of claims involved in actions pending at the time of the death of the decedent, also provided *Page 192 
as the penalty for its infraction that "no recovery shall be had in the action." In other words, the only consequence affixed by law for failure to present claims to the executor or administrator is that the remedy by action shall not be maintained against him or the estate. An examination of the California cases will disclose that in interpreting sections 1475 and 1476 of the Code of Civil Procedure of that state (similar to §§ 6881 and 6882 supra) the only remedy referred to as barred is that by action.
The method of foreclosure of a mortgage through the exercise of a power of sale "is not in any sense a suit or action." 41 C.J. 922 and cases cited. Even if section 6889, supra, be regarded as an absolute statute of limitations, this court has already intimated, in State ex rel. Avenius v. Tidball, 35 Wyo. 496, 252 P. 499, 504:
"That it is generally held that a statute of limitations governing acts or suits to foreclose mortgages has no application to proceedings of foreclosure under a power of sale in a mortgage or trust deed. 41 C.J. 944. The trust deed and mortgage in the case at bar appears to provide for the power of sale by the trustee, and it would seem that the rights of bondholders in this respect could hardly be curtailed by the court in a proceeding where they are compelled by it to file their claim with it or with the receiver." In this connection, also, it may be recalled that the
Supreme Court of California, in Bull v. Coe, 77 Cal. 54,18 P. 808, 812, 11 A.S.R. 235, has said:
"It cannot be contended that the failure to present a claim as to the debt extinguished it, and that the lien, being a mere incident to the debt, expired with it; because, although a claim which is not presented becomes `barred,' it is not `extinguished.' Whitmore v. Savings Union, 50 Cal. 149." *Page 193 
It is noteworthy, too, that the Legislature of California has, itself, guarded against the operation of section 1475, supra, as that section had previously been construed by the courts, first, through an amendment enacted in 1917, reading:
"Provided, that it shall be the duty of any executor or administrator, within sixty days after the first publication of notice to creditors, to notify in writing the record holder of any such lien or encumbrance upon real property subject to a declaration of homestead of the death of the testator or intestate, and unless so notified, the rights of the holder of such lien or encumbrance shall not be affected by his failure to present such claim as hereinabove required. (Amendment approved May 21, 1917; Stats. 1917, p. 783.)"
And, second, in 1931, by repealing the entire section and reenacting in its stead the following:
"If there are subsisting liens or encumbrances on the homestead, and the funds of the estate are adequate to pay all claims against the estate, the claims secured by such liens and encumbrances, whether filed or presented or not, if known or made known to the executor or administrator, must be paid out of such funds. If the funds of the estate are not sufficient for that purpose, the claims so secured shall be paid proportionately with other claims allowed, and the liens or encumbrances on the homestead shall only be enforced against the homestead for any deficiency remaining after such payment."
Statutes  Amendments to the Codes of California 1931, ch. 281, § 735. The Legislature of the State of Arizona has pursued somewhat the same course by adopting substantially the 1917 amendment mentioned above. See Arizona Civil Code 1913, § 873, as amended by Session Laws 1921, p. 435.
As heretofore related, plaintiff in error, in executing the mortgage upon the property here in controversy, *Page 194 
voluntarily affixed her signature to the statement therein that she waived and released "any and all rights, benefits, privileges, advantages, and exemptions, under and by virtue of any and all statutes of the State of Wyoming providing for the exemption of homesteads from sale on execution or otherwise."
(italics mine). It would certainly seem that thereby she, in substance, contracted that she unconditionally waived the benefit of any statute of this state which would prevent the sale of the property mortgaged to realize the indebtedness secured because of its asserted homestead character, in consequence of failure to present the same to the personal representative of either of the parties. The language is certainly broad and comprehensive enough to be so understood. It is germane to the purpose for which the parties were contracting, i.e., to secure the repayment of the money loaned. Sections 6881 and 6882, supra, were in existence at the time the mortgage was signed and the money loaned, and the parties can fairly be regarded as making their agreement with reference thereto.
In 29 C.J. 883, it is said:
"The power of alienation is an incident of the ownership of the property independent of the homestead law, and the directions and prohibitions of the constitutional or statutory homestead provisions as to the alienation are mere restrictions upon this antecedent power. Hence, where there is neither constitutional nor statutory prohibition as incident to the right of ownership, the owner of the homestead may sell or encumber it either in whole or in part; and the sale or transfer, when evidenced by a proper conveyance, will be as valid as if the property had not been set apart as a homestead."
There are no special restrictions applicable only to the rights defined by section 6881 and 6882, supra. Section 4625, Wyo. Comp. St. 1920, provides: "When *Page 195 
the grantor or grantors in any such deed or mortgage for the conveyance of any real estate desires to release or waive his, her or their homestead rights therein, they or either of them may release or waive the same by" doing as was done in the mortgage involved here. The rights arising under said sections 6881 and 6882 unquestionably must be grounded upon the fact that plaintiff in error and her husband were, at the time of execution of the mortgage, presently living upon the land affected. Even if these rights be regarded as, in part, inchoate at the time the mortgage was executed by plaintiff in error and her husband, the general rule should control that when a mortgagor is without interest, a subsequently acquired title will inure to the benefit of the mortgagee by virtue of the conveyance contained in the mortgage. 1 Jones Mortg. § 679. Especially is this so when the mortgage, as here, contains the usual covenants of warranty with their attendant consequences. 41 C.J. 478, § 395.
In the recent case of United States Building  Loan Ass'n v. Stevens, ___ Mont. ___, 17 P.2d 62, 63, the statute provided:
"The purchaser of lands at mortgage foreclosure or execution sales is not entitled to the possession thereof as against the execution debtor during the period of redemption allowed by law while said execution debtor personally occupies the land as a home for himself and his family."
A mortgage which contained the following stipulation: "In case of foreclosure the mortgagor hereby expressly waives any claim of homestead and all right of possession of the mortgaged premises during the period allowed by law for redemption," was foreclosed and a decree was entered having among its provisions that the purchaser at the foreclosure sale should *Page 196 
be entitled to possession of the premises during the statutory period. The trial court declined on motion to eliminate this provision. On appeal, the sole question presented was to the validity of the specific waiver of the right to possession, as recited above. It was contended on behalf of appellants that, "The section permitting occupancy * * * is undoubtedly in the nature of a homestead. It gives him * * * time within which to adapt himself to his new circumstances," and "a homestead right cannot be waived by contract in advance of occasion for asserting such right, such contract of waiver being against public policy. Holding the waiver valid and affirming the decree below, the reviewing court said:
`We point out that we recognize the fact that other courts have held advance general waivers in executory contracts void as contravening public policy. See Bunker v. Coons, 21 Utah, 164, 60 P. 549, 81 Am. St. Rep. 680; Weaver v. Lynch, 79 Colo. 537, 246 P. 789, 47 A.L.R. 299, and note appended to the report of this last case; and 11 R.C.L. p. 543.
"A mortgage of the exempt property, being specific, whether it be a homestead or personal property, has the effect, to say the least, of a waiver of the exemption. This may be uniformly done if the statutory restrictions are complied with. See sections 6949 and 6950, Rev. Codes 1921; 11 R.C.L. p. 544; 13 R.C.L. p. 621; and Bunker v. Coons, supra.
"We think it is reasonably deducible from the decisions in other states that wherever a claimant, with full knowledge of his right to withhold any specific piece of property or right from forced sale, and of the consequences of a relinquishment of that right, executes a contract based upon consideration, which describes the specific property or right affected, and agrees to dispose of such property or right, whether it be by relinquishment or conveyance, he will be bound by his contract. See Moran v. Clark, 30 W. Va. 358, 4 S.E. 303, 8 Am. St. Rep. 66, and cases cited and discussed; and 25 C.J. p. 110. * * * *Page 197 
"The mortgage containing the express waiver was signed by both husband and wife. The specific right was identified, and we must assume that the mortgagors knew of their right to possession and intended to waive it. The written contract imports consideration. On any theory the parties had the right to enter into the contract before us. Being such a contract as the parties might rightfully make, it is our duty to enforce it, even though it may be that they now think they made a bad bargain. Viers v. Webb, 76 Mont. 38, 245 P. 257. A contract is not invalid because it turns out to be unreasonable, dangerous or burdensome. Lawson v. Cobban, 38 Mont. 138, 99 P. 128."
So in the case at bar, the mortgage containing an express waiver was signed by both plaintiff in error and her husband. The specific right was identified by positive reference to "any and all" laws of this state dealing with the exemption of homesteads. As already suggested, it is but fair to assume that the mortgagors knew of whatever rights they might have under sections 6881 and 6882, supra, and intended to waive them.
Finally, it may be assumed that mortgages have been foreclosed upon homesteads through the exercise of a power of sale in this state without the presentation of any claim, under section 6881, supra, it not being generally supposed, hitherto, that such presentation was required as a prerequisite to the execution of the power of sale created by the mortgage contract. In such event, titles to real estate will be unsettled by holding that a presentation of the claim is necessary before the execution of the power can be had, even confining the holding to the case where there are assets in the estate which might be applicable to the debt. I do not think the statute requires such a conclusion generally, and certainly not when *Page 198 
applied to the facts at bar, and fear that more harm than good will flow from it.