Court Opinion

ID: 9574898
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:09:27.006449+00
Date Added: 2024-06-11T12:47:23.898882
License: Public Domain

*359MR. JUSTICE ANGSTMAN:
I dissent.
I agree with the general statements in the foregoing opinion showing the practical operation of the Carey Land Acts.
Though their operations are somewhat involved the problems before us are comparatively simple. Plaintiff has acquired a large part of the “water stock” and lands to which it is appurtenant through foreclosure or through deeds in lieu of foreclosure brought about by the failure of settlers to meet the payments on the water stock.
Is plaintiff still obligated to sell the lands or water stock thus acquired to any particular class of persons and within a definite time and in lots of 160 acres or less to any one person ? I think not.
I agree generally with what is said by my associates as to the purposes of the Carey land grant and particularly that the plan was to populate the land with actual settlers. I agree too that this purpose should not be frustrated by any strained construction of the statute.
My position, however, is that the statutes provide the method and means of achieving the desired purposes so far as thought necessary by the legislature and that it is not within our province to rewrite the statutes, however confident we might be that we could improve upon them.
The statutes which we have before us limit applications for the settlement of such lands to 160 acres to any one person. Sec. 81-2115, R. C. M. 1947.
After a purchaser has paid in full for any part of the land the board executes and delivers a deed in the name of the state to the purchaser. See. 81-2116, R. C. M. 1947.
The contract treating of the time when patent shall be issued to the settler provides: “When proof is furnished to said board that the applicant is settled upon the land and has cultivated one-eighth thereof, and complied with the law and regulations, said board will patent said land to said settler.”
*360The one to whom the deed is issued - so far as the statutes are concerned may do with the land thereafter as he pleases. He may sell it to his neighbor who already has his 160 acres. He may do this whether he has completed the installment payments on his water stock or not. He may mortgage it to whomsoever he pleases, subject to the lien hereinafter referred to. Valier-Montana Land & Water Co. v. Ries, 109 Mont. 508, 97 Pac. (2d) 584; R. C. M. 1947, sec. 81-2118.
Had the legislature not intended this to be so, it would have said so. Instead of imposing any restrictions on the right of disposal the legislature expressly provided for a lien, sec. 81-2118, R. C. M. 1947, and in so doing provided that the company “holding or owning said lien may foreclose the same in the same manner as mortgages of real' property are foreclosed. ’ ’
A foreclosure sale passes all the right, title and interest in and to the mortgaged property which the mortgagor possessed at the time the mortgage was executed, Williard v. Campbell, 91 Mont. 493, 11 Pac. (2d) 782, including the right, of course, to sell the property without restriction as to acreage, price or otherwise.
The legislature might have imposed restrictions or limitations upon the rights acquired at such a sale, but it did not. It might have required the deed to contain covenants running with the land, but it did not see fit to do so. Under our statute the only covenants which run with land are those specified in the law, and those incidental thereto. Sec. 58-305, R. C. M. 1947. I find no provision in the law that permits a holding that we have before us by any stretch of the imagination a covenant running with the land. The only covenant contained in the deed which my associates seem to rely on is that, “This conveyance is executed pursuant to authority conferred by the laws of the state of Montana and by the laws of the United States known as the ‘Carey Act’ approved August 18, 1894, and amendments thereto, relating to the reclamation of arid lands. And it is expressly provided and covenanted that the water right acquired under the provisions of said laws to all of the lands herein conveyed shall attach, and be appurtenant, to said lands, and shall be for*361ever afterward transferable only therewith." I see nothing in that covenant that is capable of being used ■ as a' basis for a judicial declaration that it constitutes a covenant running with the land.
To encourage actual settlement of the land by dirt farmers, the legislature specifically provided, sec. 81-2118, R. C. M. 1947, that when the lien holder becomes the purchaser, if the lands and water rights are not redeemed, by the original owner within twelve months after the sale, “then at any time within three months thereafter any person desiring to settle ■ and use such lands and water rights may apply to the purchaser at such foreclosure sale to redeem such land-and water rights * * Why did the legislature limit the right of any intended settler to redeem within fifteen months after the foreclosure sale if the purchaser is obligated to sell to a settler after the fifteen-month period ?
There is no restriction placed by statute upon the type of settler who may redeem within the fifteen months. The legislature did not restrict the right of redemption to those only who would not hold more than 160 acres. In fact no restrictions whatever are placed by the statute upon what the purchaser at foreclosure may do with the property. No restrictions were placed upon those who might be purchasers at a foreclosure sale.
It is conceivable that on some foreclosures someone other than the lien holder may become the purchaser. Certainly in such eases the purchaser does not take the land and water rights burdened with any obligations to sell to anjr particular class or in lots of 160 acres or less. There is nothing in the statutes that suggests a different rule when the lien holder becomes the purchaser. The statutes do not even intimate the existence of any covenants that run with the land and certainly no covenants were contained in the grant of the land and those are the only covenants contemplated by our statutes. Orchard Homes Ditch. Co. v. Snavely, 117 Mont. 484, 159 Pac. (2d) 521.
The fact is the legislature contemplated that after foreclosure or deeds in lieu thereof and. after the period of redemption has *362expired the purchaser at the foreclosure sale stands in the; shoes of the original settler for all purposes.
In North Side Canal Company, Ltd., v. Idaho Farms Co., 60 Idaho 748, 96 Pac. (2d) 232, 238, the court had before it this identical question and said: “No * * * restrictions are placed by the statute * * * on what the purchaser at foreclosure [the construction company] may do with the property after he receives the sheriff’s deed and the period of redemption has expired * *
The court in that case further said: “Appellant takes the position that respondent now owns and holds the land and appurtenant water rights the same as any other purchaser at foreclosure proceedings. Respondent frankly takes the stand that it is in a different position than any other purchaser at such foreclosure proceedings, basing such contention on the claimed continuation of its lien under section 41-1726, I. C. A., until it is paid in money in full for the original contract cost of construction and that it owns and holds the land and appurtenant water rights not in complete satisfaction of its contract construction costs but as a kind of trustee merely for resale.” (Emphasis supplied.)
The court answered that contention by saying: ‘ ‘ The trustee status of the construction company as claimed by respondent (if any) certainly does not exist after foreclosure (or receipt of deed in lieu thereof). * * * The statute does not hint at repeated recapturing and resales or extending the lien beyond foreclosure.”
The court in that case further said:
“Respondent further argues it may hold the land and water for resale only and may not sell at any increase over the original price. No such restrictions are placed by the statute, section 41-1735, I. C. A., on what the purchaser at foreclosure may do with the property after he receives the sheriff’s deed and the period of redemption has expired, and statutes compelling a construction company to sell its water within any time limit do not apply after purchase at foreclosure or by deed. * * *
*363“Nothing in the statutes indicates in the slightest that respondent, after its purchase at foreclosure of its lien (or deeds acquired in lieu of foreclosure) retains its lien or occupies any different position than any other purchaser after sheriff’s deed has issued.”
The same court reaffirmed the holding in the later ease of In re Robinson, 61 Idaho 462, 103 Pac. (2d) 693.
To the same effect is North Side Canal Company v. Idaho Farms Co., 9 Cir. 107 F. (2d) 481.
Contention is made that the Idaho case is different from this since the relief asked in that case was different from the relief asked here. That circumstance is of no moment. The fact is that the identical legal question was before the court under statutes practically identical and was squarely passed on. It is idle to suppose that the Idaho court would take any different view of the same questions were they raised in the same manner that they are raised here. Appellate courts are quite resourceful but it is inconceivable that they have sufficient ingenuity to justify contrary statements on the same legal question because of the circumstance that the questions were posed in different ways.
It cannot be contended that either Congress or the state of Montana would be misled in any way were we to sustain the conclusion reached by the trial court and which I think is the correct conclusion under the laws and the contracts before us. When Congress enacted the amendment authorizing the creation of a lien on the lands and water rights it knew what it was doing. It knew that once the doors were open for a lien there existed the possibility that the lands would ultimately fall into the hands of large owners. It fully understood and contemplated these results as is made plain by the summary of discussion in the House of Eepresentatives. in 3 Kinney on Irrigation and Water Rights, 2nd Ed., sec. 1323, p. 2397, where he says: “In the discussion in the House upon the amendment, referred to in our note, it was distinctly pointed out that this amendment, in the form in which it finally passed, would neces*364sarily result in the acquisition, by wealthy individuals and corporations of large bodies of land, to the exclusion of the settler. This result was practically conceded by the friends of the measure, but it was also pointed out that in no other manner could the law be made to operate beneficially, and that in any event the desert lands which were then practically worthless would become valuable to the States, even though held by large corporations, and that the States and the citizens would not be damaged by the reclamation of these then worthless lands even if the large corporations and wealthy individuals were given a lien upon them for the money advanced by them for the construction of the works.”
Kinney gives as reference for his statement 28 Cong. Record, pp. 622 et seq. This was evidently a clerical error as the pertinent material is found on pages 6222 et seq.
The other question is, may the acquisition of the water stock through foreclosure or deeds in lieu of foreclosure be construed as a “sale” so as to be counted toward the 90% completion provision of the contract between plaintiff and the state of Montana. I would answer in the affirmative as did the trial judge. There had been a sale of the water stock, else the state would not have issued a patent to the land.
My associates say that the transaction here was not a sale within the meaning of section 7581, R. C. M. 1935, now section 74-101, R. C. M. 1947, because the situation is comparable to a contract for sale with title reserved in the seller and rely upon the case of State ex rel. Malin-Yates Co., v. Justice of Peace Court, 52 Mont. 133, 149 Pac. 709. That ease had to do with a conditional sale contract of personal property where title was reserved in the seller.
The water rights in question here are by the patents issued to the settlers made appurtenances to the land. That which is appurtenant to land is real property. Sec. 67-207, R. C. M. 1947.
Before foreclosure or deed in lieu thereof the title to the land and water rights was i^i the settler, for the contract between plaintiff and the settler constituted a purchase and sale of the *365water stock, and the agreements constituted mortgages as between the construction company and the settler and this court has so held.
In Valier-Montana Land & Water Co. v. Ries, supra [109 Mont. 508, 97 Pac. (2d) 588], this court said: “It is apparent from the contracts annexed to the amended complaint and mentioned in the findings, that the transactions constituted present purchases and sales of the stock and water rights, that the water right immediately became inseparably appurtenant to the lands mentioned, and that the agreements constituted mortgages as between the parties.”
Certainly the conclusion that there was no sale of the water stock finds no basis in fact or law. The water stock was “paid for” within the meaning of the contract by foreclosures or deeds taken in lieu of foreclosure.
In North Side Canal Company v. Idaho Farms Co., supra, the court expressly so held by saying: “Bespondent calls attention to the fact that section 41-1726, I. C. A., does not limit the lien to time of foreclosure, but gives one until payment. Payment, however, in case of default is, under sections 41-1728 to 41-1735, I. C. A., inclusive, accomplished completely by foreclosure or deed in lieu thereof.” The statutes there considered are practically the same as section 81-2118, B. C. M. 1947.
I think the decree entered by the Hon. C. B. Elwell was right and that it should be affirmed.
Behearing denied March 29, 1950.
Certiorari in the Supreme Court of the United States denied October 5, 1950.