Howell v. Bush

Campbell, J., delivered the opinion of the court. The Chancellor, having determined that Mr. Howell is entitled to homestead exemption, erred in subordinating his claim in this respect to the deed of trust executed by Howell in February, 1874, without the joinder of his wife. There can be no question of the right of the holders of the deed of trust to subject the property as to its value in excess of $2,000, the maximum of a homestead exemption. That was settled in Bank of Louisiana v. Lyons, 52 Miss. 181. But upon the facts of this case as disclosed hy the record, the appellees did not acquire the rights of the holder of the deed of trust executed by Howell for the purchase-money of the land. Bush, Patty & Co. paid the money which extinguished the claim against Howell for the balance of purchase-money; but the deeds of trust which secured that were cancelled, and there was no agreement or understanding between the parties that Bush, Patty & Co. should stand in the place of the seller of the land. On the contrary, a new deed of trust was executed by' Howell to secure Bush, Patty & Co. the performance of the [440] contract be bad made with them, and .the original deeds of trust were entered satisfied and cancelled. Thereupon, on motion by H. L. Jarnagin, Sen., Thomas Christian and S. W. Foote, for the appellees, and a showing that the case was prematurely submitted, on a call of the docket not peremptory in their absence, occasioned by erroneous information, and decided without their briefs being filed, the judgment was recalled, and the case remanded to the docket for argument. J3. Dismukes and Beverly Matthews, for the appellants. 1. The policy of homestead laws is discussed in Mosely v. Anderson, 40 Miss. 49; Thoms v. Thoms, 45 Miss. 263, 274; Campbell v. Adair, 45 Miss. 170 ; Parker v. Dean, 45 Miss. 408. It has been characterized by the courts of other States as beneficent, 4 Cal. 23, 26 ; as liberal, wise and benevolent, 1 Iowa, 441, 512; 41 Miss. 127; and as humane in its character, 28 Vt. 674. The leading object is to protect and preserve a home, not for the husband alone, but for him and his wife and children, 1 Iowa, 512 ; 6 Iowa, 30; a place where they may live in society beyond the reach of financial misfortunes and tbe. demands of creditors, 11 Iowa, 106; 7 Micb. 506; 15 N. Y. 492. The beneficent provisions are especially designed to guard the wife and children against the neglect, the misfortunes, and improvidence of the father and husband. 4 Cal. 23, 26 ; 15 Texas, 176 ; 7 Texas, 13, 20; 30 Yt. 759. The children equally with the wife are within its benefits. 12 Cal. 327; 6 Iowa, 30; 34 N. H. 392; 21 Ill. 178; 23 Ill. 536; 33 Miss. 464. The design is to protect citizens and families not simply from destitution, but to foster those feelings of independence so essential to the maintenance of free institutions. 18 Texas, 413. Colonel Benton believed that tenantry was unfavorable to freedom, and tended to establish separate orders in society, and that the freeholder was the natural supporter of free government. Thirty Years’ View, vol. i. 103, 104. Macaulay has drawn a fine picture of a youth, with sunburnt brow, stepping from his dwelling, which is his ca'stle, upon the soil, which is his freehold. [440] Bush, Patty & Co., as assignees of the note for purchase-money secured by deed of trust, would have had a claim on the property paramount to the claim of homestead exemption. But they do not occupy that position. They are independent creditors, strangers to the original transaction, who took a new security, and did not rely on the former, but had it extinguished. They cannot now shift their position, but must stand on their chosen security. Being executed by the husband alone, it is void as to the homestead, i. e. $2,000, but is valid as to the excess; and the Chancery Court, in dealing with it, should proceed in analogy to §§ 2136, 2137, of the Code, as far as may be conformable to the course of procedure in chancery. The value should be ascertained by a commissioner, and sixty days allowed Howell in which to pay the excess; failing in which, sale should be made, and $2,000 paid to Howell, and the remainder, as far as necessary, applied to the claim of Bush, Patty & Co. Decree reversed and cause remanded. 2. Of what does the homestead consist ? It is the dwelling-place of the family, where they permanently reside. 4 Cal. 26. It includes the entire lot upon which the debtor resides, whatever else may be there, and for whatever else it is used. 58 Ill. 425; 4 U. S. Dig. n. s. 342, §,12. A house is exempt, though a portion be used and constructed to be used as a brewery, In re Tertelling, 2 Dillon C. C. 339; 4 U. S. Dig. N. s. 342, § 13; or a store, 1 Mich. N. P. 210; 30 Texas, 440; or a country hotel, 8 Allen (Mass.), 575. 3. How is it alienated ? Only in conformity with the act .of 1873, p. 78. Under constitutions and statutes «which provide for the exemption of the homestead from forced sale by legal process, and that it shall not be alienated without the joint consent of husband and wife, a sale or mortgage by the husband alone is void. 5 Kansas, 239; 2 U. S. Dig. N. s. 341, § 21; 37 Texas, 625 ; 5 U. S. Dig. sr. s. 399, § 49; Williams v. Starr, 5 Wis. 534; 9 Iowa, 509 ; Richards v. Chace, 2 Gray, 383. The homestead right of the family is peculiarly favored by the courts, and to make an operative conveyance the mode pointed out by the statute must be strictly pursued. 6 Cal. 73 ; 23 Ill. 536 ; 58 Ill. 425; 2 Dillon C. C. 290. The statute of 1878 prescribes the mode of alienation, and if that be not pursued the instrument is not valid as to any one. A court of equity can administer no. relief. 1 Story Eq. Jur. § 177. 4. Will the court subrogate Busb, Patty & Co. to the rights of Mrs. Bevill? If the relation of vendor had remained, it was a personal right, and incapable of assignment. 25 Miss. 88; 44 Miss. 247. The acceptance of a deed of trust direct from Howell to Bush, Patty & Co. is fatal to the claim of sub-rogation. Myers v. Fstell, 48 Miss. 872. Thomas Christian, S. L. Jarnagin, Sen., and Foote Foote, for the appellees. 1. That the homdstead law is beneficent in its character is not. denied. But while the law is kind to the unfortunate, it is also just. It gives every head of a family a homestead, where it is paid for; but not otherwise. Code 1871, § 2142. No property is exempt from execution where the purchase-money forms, in whole or in part, the debt on which the judgment is founded. Equity follows the law. Wilie v. Broohs, 45 Miss. 542, 551. The statute is a guide to a Court of Chancery. Nor is any distinction made, in our State or sister States, between money due the vendor and money due a third person who has advanced it to pay the vendor. 2. .Our law requiring the wife’s signature to' a conveyance of the homestead is copied from the statutes of other States, by whose courts they have been repeatedly construed. Where we have a statute copied from that of another State, we will adopt the construction given to it by the court of the State from which it was derived. Kansas, California, Texas, Iowa and Illinois are some of those States. In California, where one purchased a homestead, taking a deed in fee, but borrowed from a money-lender the means to pay the purchase price, giving a mortgage on the land to secure the same, without the signature of his wife, the land was held bound, although the same argument was urged to defeat the mortgagee which is made in this case. Lassen v. Vance, 8 Cal. 271. In Barnes v. Gay, 7 Iowa, 26, the court said: “ The insuperable difficulty is that Barnes had never paid for the land, while the petitioner’s claim [for homestead] is against those who stand in the place of the vendor.” In Illinois, money may be borrowed to pay the purchase price of a homestead, and secured by a mortgage on the property in which the wife does not join, notwithstanding the statute. Austin v. Underwood, 37 Ill. 438. And generally, where the mortgage is given for money borrowed to pay the vendor, the homestead exemption cannot be set up against it. Christy v. Dyer, 14 Iowa, 438 ; Curtis v. Root, 20 Ill. 53 ; Farmer v. Simpson, 6 Texas, 310 ; Skinner v. Beatty, 16 Cal. 156; 2 Allen, 390; Billon v. Byrne, 5 Cal. 455; Swift v. Kraemer, 13 Cal. 530 ; McGee v. MeCee, 51 Ill. 500; Allen v. Hawley, 66 Ill. 68 ; 5 Nev. 233; Nichols v. Overacker, 16 Kansas, 58 ; White v. Shepperd, 16 Texas, 163, 172; Tucker v. Brake, 11 Allen, 145. 3. Two of the decisions cited are parallel with the case at bar, and, based upon natural justice, equity and law, are conclusive of this controversy. The first is Swift v. Kraemer, 13 Cal. 526. Reválk, an unmarried man, mortgaged a piece of his property, and then married. Afterwards, he borrowed money from a third party, and with it paid off and satisfied the old mortgage. To secure this money he gave the third party a new note, secured by a new mortgage on the property, but in the new mortgage his wife did not join. On his attempt to defeat the claim because the new security was inoperative, the court held that, in equity, the transaction was an assignment of the first, not the creation of a new incumbrance. The other case is Carr v. Caldwell, 10 Cal. 380. Vermule having bought the property occupied as a homestead, partly on a credit, and given a deed in trust to secure the purchase-money, it was advertised for sale. On the sale day he borrowed money from Carr, applied part of it to pay off the trust-deed, and a few minutes afterwards executed to Carr, as security, a mortgage on the same property, without his wife joining. Vermule died. His widow claimed the homestead; and Carr filed his bill to foreclose the mortgage. Judge Baldwin says: “ Can it make any difference in equity whether the first debt be renewed, or another debt — if it be another — for the same sum created, to raise money to pay off the first ? A clear title to the homestead could not vest until the payment of the purchase-money.” 4. In the case at bar, the execution of the deed and the making of tbe deed of trust to secure the purchase-money were simultaneous, and in equity would be considered as one act. A conveyance in fee, and at the same time a mortgage of the land by the vendee back to the grantor or to a third party, to secure the purchase-money in whole or in part, will not vest the title in the vendee. 4 Kent Com. 39; Maylurry v. Brien, 15 Pet. 21; 1 Sandf^Ch. 76; 4 Leigh, 30; Stowe v. Tifft, 15 Johns. 458 ; 4 Mass. 30 ; 6 Texas, 303; 14 Mass. 352. Equity will overlook the form to get at the substance, the very right and justice of the case. In some cases it will consider that done which ought to be done, and in others that to be in existence which at law would be considered as dead. An incumbrance will be adjudged to be alive or extinguished as best subserves the purposes of justice and the actual intentions of the parties. 1 Barb. 396, 397 ; 1 Green Ch. 336 ; Bernheisel v. Bir-man, 22 Wall. 170; Hudson v. Loomis, 18 Iowa, 416 ; Bice v. Wheeling, 5 Wend. 597; 2 Gratt. 389; Miller v. Wach, Sax. Ch. 204. Campbell, J., delivered the opinion of the court. This case was submitted on a former day, without brief or argument for the appellees, and an opinion was delivered and decree reversed. Upon application by counsel for the appellees, and a sufficient showing, the judgment was recalled and the case reinstated upon the docket for argument, and it was afterwards submitted upon briefs of counsel on both sides ; and we have re-examined the case, with the aid of a very elaborate argument, containing numerous references, by counsel for the appel-lees. The case was considered before with direct reference to the precise question so earnestly argued by counsel for the appellees. The general principle contended for by counsel was assumed as incontrovertible, and so well settled and understood as to relieve us from either stating it or citing authorities. That principle is, that, as a general rule, a mere change in the form of the evidence of indebtedness will not operate to discharge a lien given to secure a debt, unless it is apparent that the parties intended to extinguish the lien. Whenever it is clear that the creditor still intended to retain it, his right is not affected by a mere change of the instrument, [445] which is the evidence of the debt, as the debt itself is the thing for which the lien was given; and a court of equity will keep an incumbrance alive or consider it extinguished as will best serve the purposes of justice and the actual and just intention of the parties. This has long been settled law, and has been repeatedly announced in this State; but the facts in this case do not indicate any thing dike a design to keep the first incumbrance alive. On the contrary, the parties do not seem to have looked to that as constituting an available lien to the appellees. The facts negative any such intention, and show clearly that the appellees did not loóle to securing the rights of assignees of the note for purchase-money, but to a new security. The legal title to the lot was in Howell. It was subject to a dee.d of trust for balance of purchase-money. A new deed of trust was given by Howell to strangers to the former transaction, and the old one extinguished. There was no intention' to keep it alive. It was not relied on, and, therefore, was can-celled.' It was not done by fraud or mistake, but honestly and intentionally, for the purpose of getting it out of the way. True, it was done ignorantly as to the law requiring the joinder of the wife to make the new deed of trust valid as against.the homestead right; but that does not alter the fact that the parties did not intend to heep the former deed of trust alive, but to cancel it, and rely exclusively on the new one taken. Where parties capable of contracting make their own arrangements, and there is neither fraud nor mistake of fact, equity will not interpose to thwart their designs or change their agreements. It will not make contracts for parties. We are not disposed to favor “ homestead rights ” at the expense of law or justice, but are satisfied with the conclusion announced before. A petition for reargument was then filed by W. L. Nugent, for the appellees, in which he made an elaborate argument, citing Austin v. Underwood, 37 Ill. 438 ; Qurtis v. Root, 20 Ill. 518 ; 7 Iowa, 26 ; 14 Iowa, 428, 527'; Thompson v. Lee, 8 Cal. 275 ; Dillon v. Byrne, 5 Cal. 456; 49 Miss. 164. Decree accordingly. Reargument denied.