Frick Co. v. Ketels

The opinion of the court was delivered by Valentine, J.: The Frick Company, a corporation, holding a mortgage upon all the real estate of Knut Ketels, including his homestead occupied by himself and wife and family, and the company prosecuting an action in the district court of Douglas county to foreclose such mortgage as against all such real estate, attempted, without the consent and against the will of the mortgagors, Ketels and wife, to release the mortgage of record as to that portion of the real estate not included in the homestead, and moved the court to dismiss its foreclosure action as to that portion of the real estate, so that it might proceed in its foreclosure action as against only the homestead, which motion the court overruled and required the Frick Company to proceed in its foreclosure action as against all the mortgaged property, and rendered a judgment requiring that the Frick Company in satisfying its foreclosure judgment should first exhaust all the mortgaged property not included in the homestead before resorting to the homestead, although such a procedure might leave Ketels7 other creditors who were asking for a marshaling of the securities, without any security for their debts. This attempted release and dismissal above mentioned were originated for the purpose that Frick & Company, another corporation, different from [532] the Frick Company, might enforce a judgment lien which it had against the land which the Frick Company desired to release. This judgment lien extended only to the property not included in the homestead, and was also inferior and' subsequent to the mortgage lien. We do not think that the court below committed any error in its aforesaid rulings. (Butler v. Stainback, 87 N. C. 216, 220; Wilson v. Patton, 87 id. 318, 324; Dickson v. Chorn, 6 Iowa, 19; Foley v. Cooper, 43 id. 376; Bartholomew v. Hook, 23 Cal. 277; McLaughlin v. Hart, 46 id. 638; Brown v. Cozard, 68 Ill. 178; McArthur v. Martin, 23 Minn. 74; Ray v. Adams, 45 Ala. 168; Marr v. Lewis, 31 Ark. 203; Colby v. Crocker, 17 Kas. 527; La Rue v. Gilbert, 18 id. 220.) Mr. Freeman, in his work on Executions, uses the following language: “ The more reasonable view is, that the equity of the homestead claimants to retain their home is at least equal to that of their creditors to have it sold, and therefore that chancery will not aid the latter by compelling the judgment creditor to first resort to the homestead. Perhaps a more difficult question is, may one who has a lien on homestead and other property be compelled by the homestead claimants to first resort to the latter? On- the one side, it is insisted that the right to compel a marshaling of assets never existed in favor of judgment debtors, but only in behalf of persons claiming under them, and that the creation of the lien by the homestead claimants was, in effect, an agreement on their part that the lien-holder might at his discretion sell any of the property which was subject to such lien, and that such agreement precludes such claimants from exercising any control over such discretion. But homestead laws should be liberally construed, and no intention should be presumed, nor should any interpretation be indulged which is at variance with the natural and obvious purpose of the parties. The claimants, in the absence of any expression of a contrary intent, should be presumed to intend no further peril to their homestead than necessity demands, while he who received a mortgage from them should be regarded as obtaining a mere security for his debt, and not the right to employ that security in such a mode as to needlessly imperil the homestead. Hence a mort [533] gage on a homestead and other property may fairly be interpreted as a waiver of the homestead right only so far as may be necessary to secure the debt; or, in other words, as a stipulation that the homestead may be sold, if the other property proves inadequate to satisfy the mortgagee’s demand. Under this interpretation, the homestead claimants are entitled to compel the sale of the other property in preference to the homestead, and need not submit to the sale of the homestead until the other securities have been exhausted, without fully discharging the debt.” (2 Freeman on Executions, §440.) It is also said in the case of Wilson v. Patton, supra, among other things as follows: “Lest it may be supposed we have overlooked the point raised in the argument before us with regard to marshaling the fund, we take occasion to say, that in our opinion that rule of equity has no application to a case where the homestead is involved. It is a ‘consecrated right’ granted by the constitution, and is an equity superior to all other equities.” See also the reasoning in the case of Colby v. Crocker, 17 Kas. 530, et seq. If anything is said or decided in the case of Chapman v. Lester, 12 Kas. 592, contrary to the views herein expressed, the same is hereby overruled. But this decision is not in conflict with that, as the following language, used in the opinion of the court in that case, will show, to wit: “It may also be proper to say that we do not deny that a court of equity may in a decree of foreclosure of a mortgage upon a homestead and other property, direct that the homestead be the last property offered for sale by the sheriff.” We think no error was committed by the court below. In our opinion where a mortgage upon the homestead and other real estate is being foreclosed, the mortgagor has the right, as against the mortgagee and all other creditors and lien-holders whose rights are not prior or superior to those of the holder of the mortgage, to require that before the homestead shall be resorted to for the purpose of satisfying the mortgage debt, all the other mortgaged property shall first be exhausted. The judgment of the court below will be affirmed. All the Justices concurring.