Vincent v. Vineyard

MR. JUSTICE PIQOTT, after stating the case, delivered the opinion of the Court. The error assigned is that the district court adjudged the mortgage of Vincent to be a lien superior to the judgment of Dellinger, whereas the judgment should have been ranked superior to the mortgage and next below the homestead exemption of $2,500. The single question,^ therefore, is whether the lien of the docketed judgment attached to the land selected as a homestead for its value over $2,500, the amount of the homestead exemption. Dellinger contends that the judgment became a lien upon the land on the 1st day of April, 1892, when it was docketed, and remained such lien ever thereafter, subordinate only to $2,500 worth of the land, and this contention is founded upon section 307 of the First Division of the Compiled Statutes of 1887, and section 1197 of the Code of Civil Procedure of 1895, which are, in substance, the same, each providing that “from the time the judgment is docketed it becomes [or “it shall be — 213 — come”] a lien upon all [or “the”] real property of the judgment debtor not exempt from execution in the county, owned by him at the time, or which he may afterward acquire, until the [or “said”] lien ceases [or “expires”]. The lien continues [or “shall continue”] for six years, unless the judgment be previously satisfied.3 ’ Prior to July 13, 1895, the value of the homestead did not exceed the amount of the homestead exemption, and counsel on both sides invoke the provisions of the Civil Code of 1895 and agree that the statutory enactments in force in 1892, when the judgment was docketed, are (with the exception of section 307, supra) not necessary to be considered. No objection is made to the application of the homestead law of 1895 to the judgment docketed in 1892. We quote the following sections of Title V, Part IV, Division H, of the Civil Code of 1895: “Sec. 1670. The homestead consists of the dwelling house in which the claimant resides, and the land on which the same is situated, selected as in this title provided." .“Sec. 1693. Homesteads may be selected and claimed: (1) Consisting of any quantity of land not exceeding one hundred and sixty acres used for agricultural purposes, and the dwelling house thereon and its appurtenances, and not included in any town plot, city, or village; or, (2) a quantity of land not exceeded in amount one-fourth of an acre, being within a town plot, city or village, and the dwelling house thereon and its appurtenances. Such homestead, in either case, shall not exceed in value the sum of two thousand five hundred dollars." “Sec. 1701. The declaration of homestead must contain: * * * (2) A statement that the person making it is residing on the premises and claims them as a homestead. (3) A description of the premises. (4) An estimate of their actual cash value. " “Sec. 1703. From and after the time the declaration is filed for record the premises therein described constitute a homestead. Upon the death of the person whose property was selected as a homestead, it shall go to his or her heirs or devisees, subject to the use of the widow during her life, - if — 214 — the property selected as a homestead, before selection, belonged to the husband; and subject to the use of the husband during his life, if the property selected as a homestead before selection belonged to the wife. And in no case shall the homestead be held liable for the debts of the owner, except as provided in this title. ’ ’ By subdivision 3 of section 1679 the petition for an appraisement of the homestead levied upon for the enforcement of certain judgments must show that “the value of the homestead exceeds the amount of the homestead exemption.” From these sections it is clear that the homestead consists of the real property described in the declaration of homestead, although its value exceeds $2,500, — in other words, the homestead attribute or character is impressed upon all the property described in the declaration. Section 1673 declares that the homestead is exempt from execution or forced sale-except as is provided in Title V, Part IV, Division II, of the Civil Code. Under what circumstances may it be subjected to sale on execution? Section 1674 provides that the homestead is subject to execution or forced sale in satisfaction of judgments obtained before the declaration of homestead was-filed, and which constitute liens upon the property therein described, but that no judgments obtained before July 1, 1895, shall constitute liens upon the property. By this section the homestead may be sold under an execution issued upon a judgment rendered and docketed after July 1, 1895, and before the filing of the declaration of homestead, and the entire proceeds must, if necessary for that purpose, be paid in or toward the satisfaction of the judgment lien; in such case there is no homestead exemption, for the section do.es not-recognize its existence. Express language excludes from the benefit of this section judgments obtained prior to July 1, 1895; though docketed, they are not liens upon the real property described in the declaration of homestead, whatever its-value. This inevitably results from the fact that the property so described is, regardless of its value then or afterwards, the-homestead. The homestead is not $2,500 worth of the realty — 215 — described in the declaration; on the contrary, it is the realty so described. The only limit is in respect of the area, which must not exceed the statutory size. (Yerrick v. Higgins et al., 22 Mont. 502, 57 Pac. 95.) The judgment, having been obtained prior to July 1, 1895, was not a lien upon the homestead; consequently the latter is not liable, by virtue of anything contained in section 1674, to execution sale in satisfaction of the former. Judgments other than those constituting liens upon the homestead may be enforced by a compliance with sections 1678-1689. In these sections the homestead exemption is recognized, and provision made whereby the excess in value of the homestead in fact may be subjected to the demands of creditors. Section 1678 provides: “When an execution for the enforcement of a judgment obtained in a case not within the classes enumerated in section 1674 is levied upon the homestead, the judgment creditor may apply to the district court of the county in which the homestead is situated, or a judge thereof, for the appointment of persons to appraise the value thereof.’ Upon an application, supported by a verified petition to the district court or its judge, showing that an execution has been levied upon the homestead, the name of the homestead claimant, and that the value of the homestead exceeds the amount of the homestead exemption, the judge, after proof of notice to the claimant, and of the facts stated in the petition, must appoint appraisers to value the homestead; if from their report it appears that the land can be divided without material injury, the judge must order the appraisers to allot the claimant so much of the homestead as will amount in value to the homestead exemption, and the execution may then be enforced against the remainder of the , land. But if it appears that the land exceeds in value the amount of the homestead exemption, and that it cannot be divided, the judge must order its sale under execution, at which sale no bid less than §2,500 shall be received, and the proceeds to the amount of the exemption must be paid to the claimant, and the remainder applied on the execution. Until — 216 — the value of the homestead is so ascertained to be in excess of $2,500, the entire property covered by the declaration of homestead, whatever its worth, remains exempt from sale on execution, and therefore the lien of a docketed judgment cannot attach. The levy of execution initiates the right to maintain proceedings for an appraisement and sale under the statute. The foregoing interpretation is in harmony with that announced in Barrett v. Sims, 59 Cal. 615; Lubbock v. McMann, 82 Cal. 226, 22 Pac. 1145; and in Sanders v. Russell, 86 Cal. 119, 24 Pac. 852. The legislative assembly of Montana adopted sections 1670-1703 of the Civil Code of 1895 from California, in whose Civil Code they appear as sections 1237-1265. (Yerrick v. Higgins, supra.) In transplanting the homestead law of California to Montana, reference to community property was eliminated, the value of the homestead exemption was reduced to $2,500, and a limit upon area fixed; and section 1241 of the California Civil Code was changed by the addition of the words, “but no judgment obtained before this Code takes effect shall constitute such lien, ” so that section 1674, supra, differs in this respect from the last named section of the Civil Code of California, of which it is otherwise a copy. In Barrett v. Sims, supra, the supreme court of California interpreted the sections under consideration before the adoption of them by this state. That interpretation is conformable to the intent of the statutes. The case of Macke v. Byrd, 131 Mo. 682, 33 S. W. 448, 52 Am. St. Rep. 649, is also in point. In that state the lien of judgment impresses the “lands, tenements, and hereditaments liable to be sold upon execution;” and the homestead act declares that real property coming within its protection is exempt from attachment and execution. After deciding that, as between a judgment creditor and his debtor in possession of a homestead within the statutory size and value, the judgment is not a lien on the homestead property, the court inquires whether the lien reaches the surplus value. The court holds that, if the property claimed as a homestead exceeds in value — 217 — the homestead exemption, the excess must be ascertained, and the true homeatead set apart, before the excess can be subjected to sale on execution; and, therefore, that the lien of a judgment cannot attach to the surplus value of the homestead until ascertained by admeasurement of the homestead exemption. We are aware that the courts of several states have decided that judgment liens impress the value of the homestead in excess of the homestead exemption. Most of the decisions have been upon statutes so different from those contained in the Civil Code of Montana that we do not regard them as persuasive in this jurisdiction. A suggestion is made that the plaintiff should have been required to satisfy the amount of his mortgage debt out of the $2,500 paid into court as representing the homestead exemption of the Vineyards. A sufficient answer to this suggestion seems to be that the mortgage operated as a waiver of the homestead exemption in favor of the mortgagee and those claiming under him, which waver did not inure to the benefit of other persons. The mortgagors did not agree that the debt owing to Dellinger might be satisfied out of the exemption. The willingness to secure the payment of Vincent’s demand by mortgaging the homestead, and thereby waiving the exemption, cannot be deemed to evince a like disposition in respect of Dellinger. The entire homestead is subject to sale in satisfaction of judgments obtained on debts secured by mortgages on the premises recorded before the filing of the declaration of homestead (subdivision 4, Sec. 1674); the Vincent mortgage is within this statute but the homestead exemption of $2,500 is beyond the reach of such a judgment as Del-lingers. Vincent had the right to release the homestead exemption from the lien of his mortgage, and retain it upon the surplus of the homestead; had he done so, no right of Del-linger would be invaded, for all Dellinger could have seized by his execution was the remainder of the surplus after the satisfaction of Vincent’s mortgage debt. To compel Vincent to resort first to the homestead exemption would be to subject — 218 — it indirectly to the payment of Dellinger’s judgment, and thus, contrary to the intent of the parties to the contract embraced in the mortgage, the waiver would practically be construed as having been made in favor of Dellinger. Section 3772 of the Civil Code does not confer upon Dellinger the right which he asserts. The mortgage of Vincent having been executed and recorded prior to the acquisition by Dellinger of any lien upon the real estate selected as a homestead, it follows from the views expressed that the judgment of the district court must be affirmed, and it is so ordered. Affirmed. Mr. Chief Justice Brantly, being disqualified, took no part in the foregoing decision.