Schumann v. Davis

Wiest, J. Dell Morey recovered a judgment in justice’s court against John Curtis, had the same certified to and entered as a judgment in the circuit court and upon return of execution nulla bona, obtained an order under the provision of section 13378, 3 Comp. Laws. 1915, and thereunder required the judgment debtor to appear and make discovery concerning his property. Upon that hearing the circuit judge made a finding that the amount due upon the judgment was $102.96 and that Jennie Davis had property belonging to and was indebted to John Curtis in funds not exempt from execution. Thereupon plaintiff herein, as receiver of the property of John Curtis, brought this suit to recover funds of the judgment debtor in the hands of defendant. Defendant under the plea of the general issue gave notice that whatever funds she had received from John Curtis came out of his exempt property and in consideration of her giving him a life lease of certain property, for his homestead, and denied the jurisdiction of the court to appoint a receiver to recover exempt property, and claimed the finding made that she had funds belonging to Curtis was void. The issue came on for trial in the Allegan circuit and upon findings of fact the court entered [22] judgment in favor of defendant, holding that the money paid to the defendant by Mr. Curtis was for a homestead and derived from his previous homestead, and therefore exempt. Exceptions to the findings were duly filed by plaintiff and the case is brought here by writ of error. It appears that John Curtis was charged with the crime of murder and engaged Clare E. Hoffman, an attorney, to defend him, and to enable the attorney to make necessary investigation and to insure his fees and to take care of the matter of his defense, Mr. Curtis, on the 8th day of September, 1918, conveyed certain real estate, which he had up to that time occupied as a homestead, to Elizabeth I. Clemens, sister of Mr. Hoffman. Mr. Morey had knowledge of this conveyance and after it was made he performed services for Mr. Curtis in connection with the latter’s defense. After Mr. Curtis was acquitted of the crime charged he filed a bill to have the deed to Mrs. Clemens declared to be a mortgage, and an adjustment was reached under which Curtis was paid $988.48, and the bill was dismissed. The amount due Mr. Morey from Mr. Curtis was not paid by Mr. Hoffman for the reason that the account was disputed. Mr. Curtis paid defendant, Jennie Davis, out of the money he received from the homestead property he had conveyed to Mrs. Clemens, the sum of $900 for a life lease of certain premises, upon which he resided at the time suit was brought, and which he claimed as his homestead. If the court was right in holding that the money used by Mr. Curtis in purchasing the life lease was exempt for that purpose then there is no occasion to consider the other assignments of error. The purpose of the statute in exempting a homestead is to permit a debtor to have something beyond the reach [23] of Ms creditors; it is for the protection of debtors; others do not need. it. Mr. Morey was never more than a creditor of Mr. Curtis, and he properly fixed his legal status as such when he brought suit and recovered judgment. No equities are involved here and none can be worked out under the form of action adopted by Mr. Morey. It should be observed, however, that Mr. Morey could not have brought any other form of action. If Mr. Curtis sold Ms homestead with the intention of purchasing another by way of life lease, he would have, under the law,- a reasonable time in which to perfect Ms plan, and after the sale of the homestead and during a reasonable interval pending the purchase of another, debts contracted by Mm would stand no better than if incurred after the acquiring of the new homestead, unless he fraudulently gained credit by holding out that his means of payment were not exempt. Conceding that Mr. Morey understood the homestead had been put up to pay expenses, and expected to be paid by Mr. Hoffman out of the same, and was not paid because of a disagreement between himself and Mr. Curtis as to the value of his services, that did not constitute Mm a beneficiary of the fund so as to impress, it with a trust in Ms favor. Mr. Morey was no more than a creditor of Mr. Curtis and the record does not warrant a finding that Mr. Curtis fraudulently gained credit by holding out that Ms means of payment were not exempt. Did Mr. Curtis lose his homestead rights in the property or in any fund arising therefrom by deeding the property to Mrs. Clemens? In considering this question there must be kept in mind the purpose of the conveyance. Mr. Curtis was charged with a serious crime and in order to enable him to make his defense it was necessary for him to employ his home [24] stead rights, so far as necessary, and this he had a right to do, without losing his right of exemption. While it is true that the permanent appropriation of the homestead to an inconsistent use is an abandonment thereof, yet, when the purpose of Mr. Curtis is considered, it must be found to have been to preserve his liberty and, therefore, in line with the use and enjoyment of a homestead when again free, followed by an actual devotion of the remains of the fund to a homestead purpose at the earliest moment available. We are not impressed with the claim of plaintiff that the conveyance to Mrs. Clemens created a trust fund and constituted Mr. Morey a beneficiary upon his performance of services and fastened his claim upon the fund so as to follow the same and rise superior to the exempt character thereof. We are fully persuaded that the avails from the homestead realized by Mr. Curtis were exempt if used for new homestead purposes, and being so used by him placed the same beyond the reach of plaintiff, and the circuit judge very properly entered judgment for defendant. The funds returned to Curtis came within his exemption, and Mr. Curtis had a right to use the same in purchasing the life lease. Cullen v. Harris, 111 Mich. 20. The life estate purchased constituted a homestead. Bakker v. Fellows, 153 Mich. 428; Crouse v. Michell, 130 Mich. 347. The judgment is affirmed, with costs to appellee. Steers, C. J., and Moore, Fellows, and Stone, JJ., concurred with Wiest, J.