Kinzer v. Stephens

Deemer, J. 'The case involves a construction of section 2985 of the Code, which reads as follows: “Upon the death of either husband or wife the survivor may continue to possess and occupy the whole homestead until it is otherwise disposed of according to law * * * but if there be no survivor, the homestead descends to the issue of either husband or wife according to the rules of descent, * * * and it is to be held by such issue exempt from any antecedent debts of their parents or their own, except those of the owner thereof contracted prior to the acquisition.” Under this section we have held that the legal title of the homestead upon the death of the owner descends to the heirs of such owner, subject to a right, of occupancy in-the surviving husband orwife (Burns v. Keas, 21 Iowa, 257), and that the heirs hold the homestead free from the debts of their ancestor, and also hold it exempt from their own debts contracted before the death of their ancestor, even though they do not take possession of and occupy the homestead (Kite v. Kite, 79 Iowa, 491.) The exemption is not because-of any right the heirs have in the property, but because of the homestead right of their ancestor; hence occupancy by the heirs is not essential to the exemption. Johnson v. Gaylord, 41 Iowa, 362; Baker v. Jamison, 73 Iowa, 698. From this it fpllows that even a nonresident heir is entitled to hold his share exempt from his debts. Maguire v. Kennedy, 91 Iowa, 272. Geo. W. Stephens owned a homestead at.the time of his death, which occurred May 10, 1384. He ltfc surviving his widow, Hannah, and six children, one of whom is defendant W. W. Stephens. The widow continued to occupy the homestead'until her death on June 16, 1901. Both George W. and Hannah Stephens died intes [349] tate. Kinzer recovered bis judgment against W. W. Stephens October 1, 1888, but it does not appear when the «debt on which judgment was obtained was contracted. On the 23d of November, 1901, the surviving heirs of ¡George W. and Hannah Stephens sold the homestead to garnishee Frank Pugh, and the money sought to be sequestered in this case is that part of the purchase price belonging to defendant Wm. W. Stephens. The trial court rendered judgment against the garnishee, holding-that the proceeds from the sale of the homestead were not exempt in the hands of the heirs or their vendees. Defendant Wm. W. Stephens has never occupied the premises, and makes no claim to the proceeds thereof because the property was his homestead. Nor does it appear that this defendant was intending to change homesteads by investing the proceeds of the one inherited from his ancestor in another. The sole question in the case, then, is, are the proceeds of such a homestead as we have described exempt from the debts of an heir? It is fundamental that, in the absence of statute, proceeds of exempt property, resulting from a voluntary sale thereof, are not exempt. And ik Is just as well .-settled that such proceeds from £«> 'involuntary sale, damages to the property growing oat of a tort, or the resultant ■of other involuntary substitution of non-exempt for exempt property, is exempt, at least for a reasonable length of time. Friedlander v. Mahoney, 31 Iowa, 311; Harrier v. Fassett, 56 Iowa, 264; Thompson on Homesteads & Exemptions, sections 745, 746; Kaiser v. Seaton, 62 Iowa, 463; Mudge v. Lanning, 68 Iowa, 641; Blum v. Light, 81 Tex. 414 (16 S. W. Rep. 1090); Reynolds v. Haines, 83 Iowa, 342; First Nat. Bank of What Cheer v. Willie, 115 Iowa, 77; Haskins v. Hanlon, 72 Iowa, 37; Kirby v. Giddings, 75 Tex. 679 (13 S. W. Rep. 27). To meet this situation,., several states have provided for the exemption of the pro-. ceeds of a voluntary sale pf exempt property. .See statute [350] cited in Watson v. Saxer, 102 Ill. 585; Hewitt v. Campbell 54 Wis. 583 (12 N. W. Rep. 45). We have no such statute;: hence -the general rule obtains, and, as the sale in this case was voluntary, the proceeds are not exempt. With the policy of the law we have nothing to do. It may be that under this construction the homestead acquired by descent from an ancestor is of no great value to an heir who is so* unfortunate as to be in debt when he acquires his right, thereto, and that the legislature should provide for an exemption of the proceeds for a reasonable length of time, or for certain purposes; but it is not our province to euro hardships, real or'apparent, in the law. as it is written»Appellants’ counsel rely on Reynolds v. Haines, 83 Iowa, 342; Kaiser v. Seaton, 62 Iowa, 463; First Nat. Bank of What Cheer v. Willie, 115 Iowa, 77. None of these cases-are in point. In Reynolds' Case the question involved was the right to the avails of insurance upon exempt personal property. There was no voluntary disposition of the property in that case. The money due on the policy stood' in place of the property destroyed and was acquired in invitum. In the Kaiser Case, the money was the proceeds of a railway right of way through the homestead acquired by condemnation proceedings, which were also in invitum. ” We expressly said in that case, “Whether the proceeds of a voluntary conveyance by the husband would be exempt, we do not determine.” The case was made to turn expressly on the thought that the right of way was compulsorily taken. The question here presented was not involved in the What Cheer Bank Case, and the language-used in argument must be construed with reference to the-facts recited in the opinion. It does not appear whether the sale in that case was voluntary or involuntary. The-inference is that it was involuntary, for the proceeds were-in the hands of the executor of the ancestor’s estate. At-any rate, the funds were held not exempt. In Kite Kite, 79 Iowa, 491, also relied upon by appellants, the351 ■proceeds were the' result of a partition sale which was ■also in invitum, Moreover, the exact question here presented was not involved in that case. It is argued that there is no distinction between a voluntary sale or partition of the property and a sale by referees under an order of court in a partition proceeding. But it must be remembered that there was no voluntary partition of the property among the heirs. They joined in a deed of bargain and sale to the garnishees, each selling his-interest in the property for an agreed price, with the intent, it is true, of securing the proceeds for his own use, but without any purpose, so far as this record discloses, of reinvesting the same in exempt property. Proceeds from the sale of exempt homestead property are prima facie liable for debts, and are exempt only when shown to be the proceeds of a homestead, sold with the intention to use the proceeds in the purchase of another home. First Nat. Bank of Davenport v. Baker, 57 Iowa, 197; Paine v. Means, 65 Iowa, 547. Had there been a voluntary partition of the property, and an allotment to each tenant in common of a specific part of the property in severalty, it may be that this interest would be exempt, for there would in such case be much reason for saying that there had been no disposition of the property. But where, as in this case, there was no partition, but a voluntary sale, the rnle as to voluntary partition does not apply. There is, however, a manifest distinction between a voluntary partition and one made by a court at the instance of one or more of the co-proprietors regardless of the wishes of the remaining owners. Freeman on Oo-Tenancy (2d Ed.) section-394. Where land is sold by order of court for any purpose, it is a general rule that the character of the property is changed only so far as may be necessary to accomplish the particular purpose in view. This is a familiar illustration of the doctrine of conversion and reconversion. Delafield [352] v. Barlow, 107 N. Y. 535 (14 N. E. Rep. 498); McCombs v. Howard, 18 Ohio St. 436; Cahn v. Person, 56 Miss. 360. This is not true as to property voluntarily sold. In such case there is a manifest intent to convert the property into personalty, and the proceeds do not partake of the nature of the realty, unless, of course; there be some trust in the land, or other equitable ground for attaching to the proceeds the character or nature of the article sold., Benjamin v. Doerscher, 105 Iowa, 391, lends support to our conclusions in this case. The trial court was right in holding the garnishee liable, and its judgment is therefore aeeirmed.