Lead Opinion
Opinion
In this case we consider whether defendants in a foreclosure action have waived their right to appeal a trial court judgment ordering an execution sale of their homesteaded property by accepting the amount of their homestead exemption from the sales proceeds. We conclude that defendants have not waived their appeal right. .
In 1967 defendants recorded a valid declaration of homestead on their real property in Lake County. Thereafter plaintiff, having recovered-a judgment against defendants in the sum of $42,366.54, caused a writ of execution upon the judgment to be levied on the homesteaded property. Pursuant to Civil Code section 1245 et seq., plaintiff then had the property evaluated by three appraisers. Based on their reports, the trial court found that the value of the property was $93,096. The court
Defendants appealed but, because they were unable to post the appropriate undertaking pending appeal, they could not prevent the execution sale which occurred on January 27, 1975. At the sale plaintiff, the only bidder, purchased the property for $84,000. From the proceeds and pursuant to Civil Code section 1256 the sheriff tendered defendants the amount of their homestead exemption, which amount they accepted.
Before it could be heard plaintiff moved for dismissal of the appeal on the ground that, having accepted its fruits, defendants were estopped from seeking appellate review of the judgment. We now consider this motion.
At stake are the concurrent preferred rights of appeal and of homestead. We stated in Slawinski v. Mocettini (1965)
Similarly, the law favors homesteads. They are constitutionally authorized (Cal. Const., art. XVII, § 1), statutorily enacted (Civ. Code, § 1240, and liberally protected. (Thorsby v. Babcock (1950)
Plaintiff’s motion has the support of a decision of this court, Turner v. Markham (1907)
We now reexamine the Turner holding in light of the conjunction of appeal and homestead principles, and consider in particular certain recognized exceptions to the rule of appeal waiver as they bear on the homestead law. We will conclude that, while these principles and exceptions are not directly applicable to the present case, together they provide a compelling rationale for the rule that the acceptance of homestead benefits from the proceeds of an execution sale does not, standing alone, constitute a waiver of the right to appeal from a judgment ordering that sale. This rule assures a more equitable recognition of the legitimate interests of both creditor and debtor.
A waiver of the right to appeal a judgment is implied in a variety of situations. (See 6 Witkin, Cal. Procedure (2d ed. 1971) Appeal, §§ 133-146, pp. 4129-4142.) We consider two of them.
First, as a general proposition, one who accepts the benefits of a judgment cannot thereafter attack the judgment by appeal. In Estate of Shaver (1900)
As is so often the case, however, application of the rule has generated a number of equitable exceptions, A waiver is not implied, for example, in those cases in which appellant is concededly entitled to the accepted benefits, and his right to them is unaffected by the outcome of the case on appeal. (Estate of Hubbell (1932)
While the parties agree that defendants are entitled at the least to the equivalent of the amount they accepted, that is, $15,000, the value of their homestead exemption, the foregoing severability exception to the general waiver rule is not directly applicable. The judgment is not truly severable for if defendants were to prevail on appeal, this sum would have to be returned to plaintiff in exchange for the homesteaded property. (See Mathys v. Turner, supra,
Second, a waiver will be implied where there is voluntary compliance with a judgment, as when the judgment debtor satisfies the judgment by making payment to the prevailing party under its terms. (See Code Civ. Proc., § 1049; Hellman Commercial T. & S. Bk. v. Alden (1929)
The forfeiture exception to the general waiver rule has particular application to the present case because, as a practical matter, defendants may lose the right to the homestead exemption to which they are concededly entitled if they do not accept the exemption funds before exhausting their appeal rights. This possibility occurs because Civil Code section 1257 extends to the funds the homestead protection for a period of six months only. A rule declaring that a debtor is deemed to have waived his appeal rights by the acceptance of his homestead exemption proceeds thus presents a debtor with a dilemma. To appeal he must reject the exemption proceeds. If, as,is most likely, resolution of this appeal consumes more than six months, then the judgment debtor’s homestead protection will have lapsed and other creditors will have access to the funds. We have said that the purpose of section 1257 is to permit the exemption holder to purchase with the funds another home which may then be selected and protected as a homestead. (Thorsby v. Babcock, supra,
By forcing an option upon him, application of the waiver rule under such circumstances may thus require a debtor to sacrifice his homestead rights in order to,preserve his appeal rights. The possibility of this result invites the invocation of the forfeiture exception to the waiver rule.
In Turner v. Markham, supra,
We note in passing that it is arguable that if the defendants here, rather than accepting, had chosen to return the homestead proceeds to the sheriff or to the court pending appeal and they had lost on appeal, their right to those funds may still have been protected. (See, Note, Homesteads: Exemptions: Proceeds of Voluntary Sale (1951) 39 Cal.L.Rev. 444, 446-447.) One appellate court has indicated that the six months period does not begin to run under section 1257 until the homestead claimant “obtains payment” of the proceeds. (Chase v. Bank of America (1964)
No valid purpose is served by forcing a debtor to choose between his right to appeal and his homestead rights where the creditor’s interests may be fully protected. In the matter before us, irremediable injury to plaintiff may be avoided while preserving defendants’ appeal and homestead rights. Defendants themselves suggest that any order on appeal favorable to them be conditioned on the return to plaintiff of the amount of the exemption proceeds theretofore paid to them. This
The payment of these claims, of course, was of direct and immediate benefit to defendants. While they did not request plaintiff to make these payments, neither can it be said that plaintiff acted as a volunteer. She had a right in this case to execute her judgment against the property pending the appeal since defendants did not obtain a stay of execution by the posting of an undertaking pursuant to former Code of Civil Procedure section 945. Her execution could not be completed until she discharged the liens outstanding against the property. (See Civ. Code, § 1256; Viotti v. Giomi (1964)
Normally the offer of a return of the benefits of a judgment which were accepted does not invalidate the waiver. (Schubert v. Reich, supra,
We do not reach, here, the substantive issues which defendants raise on appeal, leaving to the Court of Appeal the appropriate resolution of them in the light of our conclusion that the right to appeal has not been waived.
The motion to dismiss the appeal is denied.
McComb, J., Tobriner, J., Mosk, J., and Clark, J., concurred.
Dissenting Opinion
I dissent. The majority, confronted with the settled rule that the acceptance of the benefits of a judgment constitutes a waiver of any appeal, attempt to circumvent it by creating a special exception for homesteads. The exception is grounded on the premise that “at stake” are two rights favored by the law—the right of appeal and the right of homestead. (Majority opn., ante p. 113.) This of course is quite meaning
Actually then the above rights are not “at stake” at all in the instant case. The single, simple question before us is whether defendants by accepting the amount of their homestead exemption have brought themselves within the above waiver rule and the case of Turner v. Markham (1907)
In the instant case, plaintiff recovered judgment against defendants in the sum of $42,366.54 and to enforce the judgment caused a writ of execution to be levied on defendants’ real property already subject to their declaration, of homestead. This property was evaluated by three appraisers (Civ. Code, § 1245) and eventually the trial court filed its “Decision and Orders on Application to Subject Homestead Surplus to Execution.” This decision, covering six pages in the clerk’s transcript, after detailing the procedure followed and finding “that the net value of the homesteaded property over and above all liens and encumbrances substantially exceeds the homestead exemption of $15,000” ordered “that the homesteaded property be sold under execution . . . [and] that the proceeds of said sale shall be applied ... in the following order of priority: first, to the discharge of the liens and encumbrances ... second, to the defendants to the amount of $15,000.00 ... .” It is noteworthy that this decision was a unitary disposition of the matter before the court and that the order for payment of $15,000 to defendants is an inseparable part of the judgment. Since the decision was unfavorable to them, defendants appealed. However defendants did not stay enforcement of the judgment by giving an undertaking and the sale of the property on execution proceeded. Nevertheless despite their appeal, defendants
It is long and well established law in this state that ordinarily a party may not accept the benefits of a judgment and then proceed to attack that judgment by appeal.
It is clear that by accepting pursuant to the trial court’s decision the amount of their homestead exemption from the proceeds of the sale on execution, defendants accepted the benefits of the judgment and thereby under the above rule waived their right of appeal.
To elude this result, the majority attempt to bring this case within exceptions to the above rule. Clearly none of them is pertinent. Nonetheless the majority, although conceding that the so-called severability and forfeiture exceptions are not “directly applicable,” construe them as providing a “compelling rationale” for jettisoning the waiver of appeal rule where a homestead is involved. This position becomes further obscured by the majority’s express finding that the judgment in the present case is not severable.
To support this last position, the majority reason as follows. If in order to proceed with his appeal a judgment debtor were required to refuse to accept from the proceeds of the sale the amount of his homestead exemption, he would risk forfeiture of the exemption which continues to
Of course the simple answer to the above rationale, as indeed- the majority seem to recognize, is that under section 1257, the amount of the homestead will be free from creditors for a six-month period after the debtor has actual possession of the proceeds. (See Thorsby v. Babcock (1950)
Since neither the forfeiture exception nor any other exception is apposite, the case at bench remains squarely within the established rule of waiver of appeal. Moreover, our opinion in Turner v. Markham, supra,
Faced with this formidable precedent which they neither overrule nor disapprove, the majority attempt to distinguish Turner from the case at bench. The attempt fails. The only basis advanced for distinguishing the cases is the insolvency of the judgment debtor in Turner. By inference, the majority would have us believe that the present judgment debtors are solvent. The facts belie such a conclusion. Defendants were unable to satisfy the original judgment. The record shows that in addition to liens and encumbrances totalling $25,437.23 existing on the homestead property, defendants owed $6,104.41 to B. L. Noonan, $424.53 to the Retailers Credit Association, $1,308.66 to Anderson & Perkins, Inc., $238.66 to J. Lee, $130.54 to Lake County Collections, and $124.29 to Oroville Credit Bureau. In his declaration in support of opposition to motion to dismiss appeal, defendant-appellant Edward F. Brown stated “I had no money to purchase a bond to stay these proceedings.” In oral argument before this court, counsel for plaintiff stated.that defendants
The general rule that one who accepts the benefits of a judgment is estopped from pressing an appeal is firmly established. The case now before us clearly does not come within any of the recognized exceptions to this rule. This court in a factually indistinguishable case has specifically applied this rule in the homestead context. Therefore reason compels a conclusion that defendants, having accepted the amount of the homestead exemption, cannot proceed with their appeal. Fairness demands the same conclusion. Defendants’ property on which they had declared a homestead, after being sold on execution, remained subject to redemption within 12 months from the date of the sale. (Code Civ. Proc., § 700a et seq.) During this period of redemption, defendants under the law were entitled to remain in possession of the property (Code Civ. Proc., § 706; see 5 Witkin, Cal. Procedure (2d ed. 1971) Enforcement of Judgment, § 98, p. 3464)—a circumstance the majority choose to ignore.
In sum, in the instant case defendants have accepted the benefits of a judgment. They have made their choice and under existing California
Wright, C. J., concurred.
Notes
This rule of election is similarly the established rule in other jurisdictions. (See Note,
Clearly the severability exception does not apply. To come within this exception the party must be entitled to the benefits of the judgment in the event of a reversal on appeal. (See Estate of Hubbell (1932)
Section 1257 provides: “The money paid to the claimant is entitled, for the period of six months thereafter, to the same protection against legal process and the voluntary disposition of the husband, which the law gives to the homestead.”
As previously noted, the majority do not dispute the validity of the general rule of waiver of appeal. Rather they find the general rule of Turner to be inapplicable to the homestead context. This is a strange conclusion in view of the fact that Turner was a homestead easel Furthermore, in the only other homestead case reaching our appellate courts involving the appeal of an order for execution sale and the acceptance of a homestead exemption, Turner was followed without question. (See Pickens v. Coffey, supra,
The majority’s effort to distinguish Turner on the solvency of the judgment debtor must stem from a promise by the judgment debtor to repay the $15,000 exemption upon reversal. This is no basis for a conclusion of solvency. Moreover, reliance on a promise to repay as a rationale for invalidating the waiver of the right of appeal is contrary to existing law. (See Schubert v. Reich (1950)
The execution sale in the case at bench took place on January 25, 1975. During oral arguments before this court, it was revealed that the judgment debtor was still in possession of the homestead.
Defendants have elected to accept the fruits of the judgment. Therefore I need not reach the issues of remedies had they chosen the alternate course of appeal. However, should the occasion arise where a debtor, having declined to accept from the proceeds of the execution sale the amount of his homestead exemption, prosecutes the appeal and wins a reversal of the order of sale, I am in agreement with the majority that our courts have broad powers to order restitution so as to restore all parties to the status quo ante. (See Code Civ. Proc., § 908.)
