Dreutzer v. Bell

By the Court, Cole, J. The evidence in this case clearly shows that the respondent, Bell, with his family, for five years previous to, and. up to the time of the conveyance to Putnam — which is mentioned in the pleadings and testimony — had occupied and resided upon lot 2, and the north portion of lot 3, and that at the time of the commencement of this action, he still resided upon those premises, having his dwelling home and outhouses thereon; and that he claimed the premises as his homestead. In view of these facts, the only question we have to consider is, was the benefit of the homestead exemption law lost and forfeited by Bell and wife conveying the homestead to Putnam, and by Putnam and [117] wife conveying the same back to Mrs. Bell. We shall assume, what is pretty evident from the testimony, that those conveyances were voluntary, and that nothing really valuable passed from Putnam to Bell, or from Mrs. Bell to Putnam, at the time they were made and executed. From the whole case it abundantly appears, that the object of the parties in making these conveyances was, to vest the legal title of the homestead in Mrs. Bell, under the impression, or idea, that by so doing, it would be more secure from the creditors of Bell. This was certainly a mistake, as the homestead, by the law of this state, is not subject to forced sale on execution, or any other final process of a court, and therefore could not be reached by those creditors. It appears, however, that the respondent thought otherwise; and supposing that a direct conveyance of the homestead by him to his wife would be invalid, but that it might be conveyed to a third party, and by that person re-conveyed to his wife, thus placing the property in a better situation, as respects his creditors, than it would be had the title remained in him. Although he has never ceased to occupy the premises as his homestead — always has claimed it as such — still, the question presented by the record is, whether by the idle and entirely unnecessary means which he resorted to for the declared purpose of securing the same to himself and family, he has deprived himself of the benefit which the law gave him. It is insisted by the counsel for the appellant, that these conveyances were made with the intent and design of defrauding creditors; and that whether they are fraudulent or valid, so far as the exemption of the property was concerned, the homestead was liable to seizure and sale by the creditors, as soon as the conveyances were made. It is not very clear to our minds, how these conveyances can be said to be fraudulent as to the creditors of Bell. Suppose they had never been made, could the creditors have seized and sold the [118] homestead? Certainly not. Undoubtedly, when a debtor conveys away property which the law subjects to the payment of his debts, for the purpose of putting it beyond the reach of his creditors and the process of a court, then equity will treat such a conveyance void, and will lay hold of the property, and deal with it as though the title remained in the grantor. This is familiar doctrine. But that is not this case. Here, it must be admitted that the creditors could not sell the homestead had the title remained in Bell. Does the circumstance that the title has passed around into his wife, place them in a better situation in respect to it, than when the whole legal and equitable estate was in him ? We cannot see that it does. Some stress is laid upon the language of the statute, which declares that a homestead, consisting, &c., “ owned and occupied by a resident of this state,” &c., shall be exempt. It is insisted that the word “ owned ” is used in a restricted sense in this statute, and means the person having both the legal and equitable title to the homestead. This construction of the law appears to us to be too narrow and restricted. It has not been supposed that a person who had mortgaged his homestead was not an owner thereof within the meaning of the act. In the case under consideration, the respondent, Bell, is the actual owner of the property. The entire equitable estate is in him, although the legal title may be vested in his wife. It is true, the appellants contend, that for the purpose of passing the title from Beil, the conveyances were good and effectual, but as respects the creditors, were void. But, as already observed, the entire case shows that the object in making the conveyances was, to vest the title to the homestead in Mrs. Bell, under the idea, that the respondents would be more fully and completely secured in the enjoyment of it than though such conveyances were not made ; and although the parties acted under a mistake as to the necessity for the conveyances, still we do not think because [119] they made this mistake, it should be attended with the consequences which the appellants contend for. We see no error in the judgment of the circuit court, and it must therefore be affirmed.