| Vt. | Oct 15, 1877
Lead Opinion
The opinion of the court was delivered by
The Homestead Act, Gen. Sts. c. 68, declares in s. 1, that “ the homestead of every housekeeper or head of a family, consisting of a dwelling-house, outbuildings, and the land, used in connection therewith, not exceeding five hundred dollars in value, and used or kept by such housekeeper of head of a family as such homestead, shall, together with the rents, issues, profits, and products thereof, be exempt from attachment and execution, except as hereinafter provided.” Sec. 2 provides that when an execution is levied upon the real estate of which such homestead may be a part, or upon such part of such homestead as may
The question raised in this case may be stated hypothetically thus: M conveys to H an estate composed of White Acre and Black Acre lying together as one property. H, at the time of the conveyance, pays one half the purchase-money, and executes his notes secured by a mortgage upon the whole property, to secure the balance of the purchase-money. C, a creditor of H, whose debt is contracted after H’s purchase, obtains a judgment upon his debt, and levies his execution upon the land pursuant to the statute. In making the levy, H chooses White Acre as his homestead, and the appraisers value it at five hundred dollars, and set it off to H by metes and bounds as his homestead, and set off Black Acre to C. Subsequently C is compelled to pay off the
It is quite true that the Homestead Act is to have a liberal construction, to effectuate its purpose to provide a home for the family of debtors ; but at the same time it is to be remembered that it is in derogation of the general policy of the law, which subjects the property of debtors to the just claims of their creditors; and it is to have operation and effect so far and so far only as the Legisislature has determined. The act does not confer a title to the land upon the homesteader. His title, or tenure, is that conferred by his grantor. But the act impresses upon the use and possession of the estate a quality and character that fortifies it against the assaults of certain creditors, and makes it inalienable by- the homsteader in the usual way.
The underlying title to the land is left open to such subjection to the paramount right of the original vendor as vests in him by the general law ; and if his lien is evidenced by a mortgage executed at the time of the conveyance, it could not be devested by legislative action. Gunn v. Berry, 15 Wall. 610" court="SCOTUS" date_filed="1873-03-31" href="https://app.midpage.ai/document/gunn-v-barry-88645?utm_source=webapp" opinion_id="88645">15 Wall. 610.
In considering the claims of anterior creditors and the' creditor to whom the purchase-money is due, it is a wrong use of language to call the estate a homestead. No homestead exists against such claims ; but the estate, like other attachable property, may be seized by such creditors without let or hindrance. In the case supposed, M, the mortgagee, holds the notes of H. and the mortgage security in addition, to secure the payment of the purchase-money. He can, without doubt, sell or assign the notes and' mortgage for value, and the assignee would succeed to all his rights as against any claimed homestead right in H. Pratt v. Bank of Bennington, 10 Vt. 293" court="Vt." date_filed="1838-02-15" href="https://app.midpage.ai/document/pratt-v-bank-of-bennington-6572038?utm_source=webapp" opinion_id="6572038">10 Vt. 293; Keyes v. Wood, 21 Vt. 331" court="Vt." date_filed="1849-02-15" href="https://app.midpage.ai/document/keyes-v-wood-grant--co-6574089?utm_source=webapp" opinion_id="6574089">21 Vt. 331. M might bring his action at law on his notes, and subject the estate to his judgment as a privileged debt. It has been held in sister States, that a third person, paying the vendor the purchase-money of the homestead estate at the homesteader’s request, and after he is in possession, upon a promise of the homesteader to secure such payment by a mortgage of the homestead, — may, upon the home
An attaching creditor of land encumbered by a mortgage, is entitled to redeem the land from such mortgage; and if he thereby pays a debt that another party should pay, it is equivalent to a request from such other party to make the payment. Such creditor, in equity, stands as an assignee of the mortgage debt, and is entitled to keep the debt on foot, with its securities, against the party obligated to pay it. “ One who levies on the equity of redemption of a mortgagor and pays off mortgages to which his levy is subject, becomes, by such payment, the assignee in equity of the mortgages, and is entitled to all the rights of the mortgagees in the premises.” Warren v. Warren, 30 Vt. 530" court="Vt." date_filed="1858-02-15" href="https://app.midpage.ai/document/warren-v-warren-6576398?utm_source=webapp" opinion_id="6576398">30 Vt. 530; 20 Vt. 388" court="Vt." date_filed="1848-03-15" href="https://app.midpage.ai/document/downer-v-fox-6573904?utm_source=webapp" opinion_id="6573904">20 Vt. 388; 20 Vt. 403.
In the case supposed, Black Acre, levied upon by O, was chargeable in common with White Acre, with the burden of M’s mortgage. The levy had the effect to sever the equity of redemption into two parts ; but after the severance, White Acre and Black Acre sustained the same relative relation to the mortgage debt as before. The doctrine of the case of Lyman v. Lyman, 32 Vt. 79" court="Vt." date_filed="1859-05-15" href="https://app.midpage.ai/document/lyman-v-lyman-6576707?utm_source=webapp" opinion_id="6576707">32 Vt. 79, that where there are successive conveyances at different times of parts of an equity of redemption, the purchasers must redeem in the inverse order of their conveyances, does not apply to the case. The set-off of the homestead, and the set-off of Black Acre on the execution, are simultaneous acts, resulting from the same proceeding, and the burden of M’s mortgage is not, as between H and C, shifted. It presents the not unusual case of a burden resting upon two distinct parcels of land; and in such cases, equity compels each parcel to its just contribution towards the
Section 3 of the Homestead Act declares that in case the estate in which the homestead exemption exists is encumbered by an outstanding mortgage, the boundaries of the homestead shall be fixed, and the levy shall then proceed as in cases of mortgages resting upon distinct parcels of land. We have no statute defining the procedure in levying executions upon distinct parcels of land encumbered by a common mortgage; but it is clear that the levying creditor is entitled to take the interest of his debtor in each parcel, and that interest is each parcel, charged with its proper share of the mortgage debt. The creditor could not take one parcel and compel the burden of the mortgage upon the other. Here the law says to C, you shall not levy upon White Acre— that parcel shall be kept for the family home of H. But the law goes no further. It does not declare that C shall hot only be restricted to Black Acre, burdened with its equitable share of M’s debt, but in addition thereto it shall be burdened with H’s share of the same debt.' Such a construction practically declares that not only shall White Acre be exempt from levy, but if it happens to be unpaid for, C must furnish the money to give H an indefeasible title to the land in which the homestead is claimed, thus practically saying that Black Acre also is to be exempt.
The evident purpose of the Legislature was, to leave each distinct parcel to stand as the creditor finds it; otherwise there is little sense in directing a procedure as in case of a mortgage upon “ parcels ” instead of a “ parcel ” of land. All the provisions of the act indicate the purpose of the Legislature to restrict the homestead right to a specific part of the real estate not exceeding the limited value.
It is not to be understood, however, that the existence of an indefeasible title to the land as against everybody, upon which the exemption may be superimposed, is essential, to vest the right in the homesteader. It has been held otherwise. Morgan v. Stearns, 41 Vt. 398" court="Vt." date_filed="1868-11-15" href="https://app.midpage.ai/document/morgan-v-stearns-6578703?utm_source=webapp" opinion_id="6578703">41 Vt. 398; Doane v. Doane, 46 Vt. 485" court="Vt." date_filed="1874-02-15" href="https://app.midpage.ai/document/of-doane-v-doane-6579895?utm_source=webapp" opinion_id="6579895">46 Vt. 485. As against junior creditors, any title that could be taken on execution is an
In the case supposed, the payment of half the purchase-money was a payment pro tanto of the price of Black Acre as well as of that of the homestead, and the mortgage for the balance was made by the homesteader himself a common incumbrance upon both parcels. There is little justice now in his attempt to give his deed a different operation.
This view of the act makes no inroads upon the protection which the Legislature intended to throw around the family home of debtors. The creditor only gets in satisfaction of his debt, the interest of his debtor in Black Acre ; Ms debt is satisfied by his levy upon that parcel, and cannot be, directly nor indirectly, enforced against White Acre. When C pays M’s debt that H, by contract, is personally obliged to pay, he pays, not as a volunteer, but by compulsion ; he pays, not because he is a creditor seeking to enforce his own debt, but as a surety forced to pay another man’s debt, for the payment of which his land is pledged. Such involuntary payment by a surety never, in equity, extinguishes the debt, but keeps it on foot in favor of the surety against his principal, and subrogates the surety to all the securities held by the payee. C, then, in compelling the homestead to contribute,
0 may enforce M’s debt in the same manner that M could, and hence may proceed by a foreclosure of the mortgage, to compel the homestead to discharge M’s debt in the proportion which its value bears to that of the whole property.
The decree of the Court of Chancery was in accordance with this view, and the same is affirmed, and the cause remanded.
Dissenting Opinion
dissenting. I am unable t'o concur in the decision of this case, and have thought the question involved of sufficient practical importance to demand an expression of my views. The question for consideration is, whether a homestead which exists in an equity of redemption can be charged with its proportionate share of the mortgage in favor of a levying creditor whose debt is of that character that it cannot be levied on the homestead. The homestead exemption has been held to be humane in its character and policy, and as applying to all cases which come fairly within the spirit and equity of the statute establishing it. True v. Estate of Morrill, 28 Vt. 672" court="Vt." date_filed="1856-03-15" href="https://app.midpage.ai/document/true-v-estate-of-morrill-6575959?utm_source=webapp" opinion_id="6575959">28 Vt. 672; McClary v. Bixby, 36 Vt. 254" court="Vt." date_filed="1863-08-15" href="https://app.midpage.ai/document/mcclary-v-bixby-6577577?utm_source=webapp" opinion_id="6577577">36 Vt. 254. A full homestead of the value of five hundred dollars exists in premises occupied as such of which the occupant is seised of an undivided half as tenant in common. McClary v. Bixby, supra.- In the language of Kellogg, J.: “ The homestead right is a right to be set out of the estate of the husband or head of a family, and is treated as an exemption of so much of his estate as is included within it, for the benefit of his widow and minor children after his decease. It does not become a fixed and definite estate in the land until it is ascertained and set out. Before it is ascertained and set out, it is nothing more than a contingent or inchoate right — a conditional lien or incumbrance upon the title or estate of the husband in favor of his wife and minor children. Howe v. Adams, 28 Vt. 541" court="Vt." date_filed="1856-03-15" href="https://app.midpage.ai/document/howe-v-adams-6575916?utm_source=webapp" opinion_id="6575916">28 Vt. 541; Davis & Wife v. Andrews, 30 Vt. 678" court="Vt." date_filed="1858-08-15" href="https://app.midpage.ai/document/davis-v-andrews-6576451?utm_source=webapp" opinion_id="6576451">30 Vt. 678. We think that it was intended by the statute that the lien or incumbrance of the homestead right should be attached to and limited by the interest of the husband in the common property, or, in other words, that it should be attached, not to the land, but
The decision of the court in the case at bar, to my mind, practically repeals the various provisions of the statute, as well as the former decisions of this court which I have cited. Let us put the doctrine held to a practical test. Six housekeepers or heads of families, A, B, C, D, E, and E, each possess $500, and invest it in the purchase of premises, and occupy them as homesteads. A purchases premises of the value of $500, B of $1000, C of $2000, D of $8000, E of $4000, E of $5000. The last five respectively give back a mortgage for the balance of the purchase-money, and each subsequently contracts a debt of $500. Under the doctrine held by the court in this case, A. can hold his homestead free from attachment and levy of execution, and his creditor is remediless ; B can hold $250 of his, and his creditor can take the other $250; C can hold $125 of his, and his creditor can take the other $375 ; D can hold $83-| of his, and his creditor can take the other $416f; E can hold $62¿- of his, and his creditor can take the other $437¿-; E can hold $50 of his, and his creditor can take the other $450. I cannot yield my assent to a construction of the provisions of the Homestead Act which, in its practical application, makes the execution of a mortgage of the premises in which the right exists, whether by the husband to secure part of the purchase-money, or by the husband and wife to secure some other debt, a yielding of a part of the same to the creditors of such husband, against the plain provisions of the first section of the act, and of the act of 1865, and which makes the homestead right when existing in an equity of redemption of the value
I do not think that it follows that a person who is so related to the premises that he is entitled to redeem a mortgage, is therefore entitled to be subrogated to all the rights of the mortgagee in enforcing the mortgage. Whether a mortgage will be kept on foot, and to what extent, in the hands of a party who has redeemed it, is determined by the equities which attach to the mortgage in the hands of the redeeming party. Suppose premises are subject to a first and a second mortgage, and a creditor levies on the equity of redemption, and is obliged to redeem the first mortgage to prevent a foreclosure, ordinarily, equity will not keep the first mortgage on foot in the hands' of such redeeming party against the second mortgage, but treat his redemption of the 'first mortgage a payment thereof, the same as if the payment had been made by the mortgagor. So if A, being the owner of 100 acres of land, mortgages it, and then sells B the north half, on B’s agreement to pay off the entire mortgage, when B has even been compelled to pay the mortgage to save his half of the premises from foreclosure, equity will not keep the mortgage on foot in his hands, subrogate B to the rights of the mortgagee, and allow B to compel A to pay him the whole or one half the mortgage debt, or lose his half of the premises, and simply because B had no right to enforce the mortgage against A’s half of the premises. If in such case A should pay off the mortgage to save his half of the premises from being foreclosed, equity would keep the mort
Again, A, being the owner of 100 acres of land, places it under a mortgage, and conveys by deed of warranty the north half to B ; 0, being a creditor of A’s, levies on the south half. Can there be any doubt but 0 must take the south half, burdened with the whole mortgage, and that, if he is compelled to pay the whole mortgage to save a foreclosure of his half, he cannot hold and set it up against B’s half of the premises ? I think not; and manifestly because it would be inequitable to allow him to do so, inasmuch as he would have against B only such rights as A would have had. If 0 can enforce the mortgage against B’s half under such a state of facts, a levying creditor has greater equities than a purchaser for value.
In the case at bar, the orator has no right to take the defendant’s homestead on his debts, by which alone he becomes interested in the premises. When, therefore, he compels by his levy on the equity of redemption the severance, and, so to speak, the concentration of the homestead interest, which theretofore had existed in the equity of redemption of the whole premises, into a given and circumscribed portion of the same, I think he acquires no equitable rights against the severed and specific homestead that he did not have when the homestead interest existed in the whole equity of redemption; and as he could not touch that interest when existing in the whole equity of redemption, he may not touch it now that it is severed and concentrated into a specific portion of the premises. As before the severance he could only take what remained of the premises after satisfying the mortgage and homestead interest, so now that the homestead interest is severed, he may not touch only what remains of the balance of the equity of redemption after satisfying the mortgage and homestead. Hence, by redeeming the mortgage, he only lifts the burden that, as between him and the defendant, it was his duty to lift; and it would, as I think, be inequitable, as well as work a practical repeal of the statute, and annul, in effect, the decisions cited heretofore made by this court, to allow him to set up
Iam authorized to say that Judge Dunton, though not a member of the court when the case was last heard, having examined it, concurs in the substance of the views I have expressed.