7 Mont. 206 | Mont. | 1887
Lead Opinion
This was an action of ejectment. Respondents, in their answer, disclaimed as to a part of the premises, and set up homestead exemption as to the remainder. Appellant, in his replication, denies the right of respondents to homestead. Trial by the court, sitting instead of a jury. Judgment for defendants, and appeal in error by plaintiff.
There seems to he no dispute about the facts. Those material to be noticed are as follows, to wit: William H. Babcock conveyed an undivided half-interest in fee-simple to the disputed premises — a house and lot — to respondent, Will F. Davis, June 3, 1881; said Babcock having the fee-simple title to the whole of it prior to that time. Respondents, Will F. Davis and Ollie I. Davis, were intermarried May 27, 1883, and began to occupy said house and lot as their home October 10, 1883, and made formal declaration of homestead November 17,1883, and had it duly recorded. Nelson Story commenced suit against W. H. Babcock and Will F. Davis, as partners, under the firm name and style of Babcock & Davis, and sued out an attachment, and had it levied on said house and lot November 28,1883. Said Nelson Story recovered judgment in said suit September 26, 1884. Appellant, Lindley, purchased of Story this judgment. Execution was issued October 1, 1884, and the lot sold and purchased by appellant, who took a sheriff’s deed. Babcock & Davis were partners in the business of loaning money and selling real estate. They executed partition deeds in severalty of their real estate June 3, 1884, by which respondent Will F. Davis became the sole owner in fee-simple of the house and lot in controversy, but after the levy of the attachment, November 28, 1883. While Babcock and Davis were partners they held the title to this house and lot, not in their firm name of Babcock & Davis, hut in their individual names, as tenants in commoh. After Davis became the sole owner
The sole question, then, is, Did the court err in finding that the respondents were entitled to a homestead exemption under the foregoing state of facts? The rights of the appellant relate to the time of the inception of the lien of the attachment. The respondents, in their claim of a homestead, must stand or fall upon the title of the respondent Will F. Davis to an undivided half-interest in the premises in controversy at that time. We are met upon the threshold of this discussion with this question: What are the-interests of respondent Davis in the premises in controversy? Were they partnership property? If so, must they not be regarded as a part of the capital stock of the concern, and as personalty? We find the doctrine upon this subject very clearly stated in the case of Hewitt v. Rankin, 41 Iowa, 35, — Beal estate held by a partnership is to be. regarded as the property of the firm, as to the creditors and all persons dealing with it, when necessary to protect their rights. The partner is to be regarded in such cases as holding only an interest in the stock or capital of the partnership, which is personal property. If the business of the firm be in opergution, or there be outstanding liabilities against them, the partu ers have not an interest in its lands or other assets
The conversion of real property into personalty is a device of equity, in order to effectuate the settlement of partnerships. The rule ceases when the partnership is settled and its debts are paid. The partners then hold their real estate as tenants in common, relieved of any trust in behalf of the partnership. The weight of American authorities sustains this doctrine. Freeman on Co-tenancy and Partition, sec. 118. If the decision of this case rested upon the doctrine above stated, then the respondents cannot be allowed a homestead, for this exemption cannot be carved out of personal property. The fact that tenants in common are also partners does not of itself invest the realty with any of the characteristics of personalty; nor is the fact that it was paid for out of partnership money decisive of the question. Copartners may withdraw realty from the partnership for the purpose of holding it severally; and in this event they become simply co-tenants iff such land. Freeman on Co-tenancy and Partition, sec. 114.
In this case, Babcock & Davis built the house with partnership money, in the years 1880 and 1881, and lived in it. In May, 1883, Davis married, and October 10, 1883, moved with his wife into this house, for the purpose of making it his home. On November 11th following, he filed- his declaration, claiming it as his homestead, and had it duly recorded. This, we take it, was a public withdrawal of this house and lot from the partnership assets, and a dedication of it as a homestead. Babcock, by his silence at least, consented to it, and in June, 1884, in confirmation of what had already been done, he executed a deed of his undivided half to Davis. We thinkj
This case was heard at the last term of this court, and reversed; the court holding that the respondents were not entitled to a homestead. 6 Mont. 458. The learned justice who wrote the opinion placed the decision upon the ground that our statute granting the homestead exemption was taken from the California act, and the courts of that state had held that a tenant in common in land was not entitled to the homestead exemption. They had so held before the passage of our act, and this was a sufficient evidence of what the legislative will was in the passage of our act. This court, however, before adjournment, granted a rehearing of the case, and vacated the order reversing it, and continued it until this
There is much similarity between our statute and that of California. Our section 313 is common to both the California and Minnesota statutes; but there are material matters about which they widely differ. The only measure of the homestead is its value under the California act. The homesteader is entitled to five thousand dollars' worth of realty, no matter where situated, or for what purpose used. Under our act, if the homestead is land used for agricultural purposes, and not in any town plat, city, or village,-160 acres are allowed, provided its value' does not exceed two thousand five hundred dollars; or if it is a lot in a town plat, city, or village, then it must not exceed one fourth of an acre, and its value must not exceed two thousand five hundred dollars. The homesteader may take his choice of the farm in the country, or the lot in town, the value being the same. These are precisely the provisions of the Minnesota statute, except the former cannot exceed eighty acres, and instead of one fourth of an acre in town, it says one lot. The attention of the court was not called to
A late senator, in advocating in the United States Senate the adoption of a general homestead law, said: “ Tenantry is unfavorable to freedom. ’ It lays the foundation of separate orders in society, annihilates the love of country, and weakens the spirit of independence. The tenant has in fact no country, no hearth, no domestic altar, no household god. The freeholder is the natural supporter of a free government, and it should be the policy of republics to multiply their freeholders, as it is the policy of monarchies to multiply their tenants.”
The homestead exemptions are not in derogation of the common law; hence this is no reason why they should be strictly construed. By the common law, a man could only have satisfaction of goods, chattels, and the present profits of land, but not of the lands themselves. 3 Bla. Com. 418; Thompson on Homestead and Exemption Laws, secs. 2 et seq. We think our statute should be liberally construed. Our statute provides that “ a homestead consisting of any quantity of land, not exceeding 160 acres, used for agricultural purposes, and the dwelling-house thereon, and the appurtenances to be selected by the owner thereof, and not included in any town plat, city, or village; or, instead thereof, at the option of the owner, a quantity of land not exceeding in amount one fourth of an acre, being within a town plat, city, or village, and the dwelling-house and its appurtenances, owned and occupied by any resident of the territory,” etc.; “provided said homestead shall not exceed in value the sum of two thousand five hundred dollars.” Rev. Stats. 101, sec. 311. It will be seen that the homestead is dedicated to the owner; the language of the statute being “owned” and “occupied” by any resident. To aid us in arriving at its meaning, we
As already stated, the courts of California have held that tenants in common are not embraced by this term “ owner.” The first case in which this doctrine was held is that of Wolf v. Fleischacker, 5 Cal. 244; and upon this, and this alone, all the others are founded. Kellersberger v. Kopp, 6 Cal. 564; Bishop v. Hubbard, 23 Cal. 514; Elias v. Verdugo, 27 Cal. 419; Seaton v. Son, 32 Cal. 481, and Carroll v. Ellis, 63 Cal. 441. The reason given for all these decisions is thus briefly laid down in the case of Wolf v. Fleischacker, supra, to wit: “The statute did not contemplate that homesteads should be carved out of land held in joint tenancy or tenancy in common, because it has not provided any mode for their separation
There is no pretense that the word “ owner ” cannot be applied to a tenant in common. There is no pretense that he cannot lawfully occupy all and every part of the premises, to the exclusion of all the World except his co-tenants; but it is a plea of want of adequate means to set apart the homestead, and the inconvenience of it. We cannot see the force of these reasons. Why cannot 160 acres, or the fourth part of an acre, more or less, of the value of two thousand five hundred dollars, more or less, be as easily set apart to a co-tenant as well as to the owner of the entirety? To meet this very construction, the legislature of California, 1868, passed an act extending the homestead exemption to joint tenants or tenants in common; but made no provision whatever for carving the homestead out of such interests, leaving them to be set apart under the same provisions of law which the court said are not adequate. Stats. Cal. 1867-68. The California court, having announced, in the case of Wolf v. Fleischacker, the doctrine that a tenant in common could not take homestead exemption, applied it to a case in which the husband and father, his wife‘and child, were tenants in common, and living on the land so held as their homestead, and denied them this exemption. In another case a head of a family, supposing that he had a good title to all of his land, lost his homestead exemption because it turned out that his title was defective to one undivided eighteenth of it. And in still another case, the head of a family sold an undi
In commenting upon the above reasons, the supreme court of Minnesota said: “In setting off the homestead between the claimant and his creditor, the rights of third persons are not considered; nor does it matter that a portion selected by and set off to the claimant,, as between him and the creditor, may, in a subsequent controversy between the claimant and some third person, be lost forever. The object of the statute is not to vest in the claimant an assured title to the portion set off, but to protect that portion from levies and sales under judgments. When there is the requisite ownership and occupáncy in that portion set off, it cannot be material that such ownership and occupancy may be subsequently defeated, as by foreclosure of a lien already attached, or re-entry for condition broken, or the like.” Kaser v. Haas, 27 Minn. 409.
The setting apart of the homestead, as between the debtor and his creditor, does not affect the rights of the co-tenant. His title to his undivided interest, and his right of entry and joint occupancy with the homesteader, are not impaired; but because he may enter and occupy the homestead with him, seems to us a very unsatisfactory reason to be given for depriving the debtor of his home. Nor can we see that any change whatever is made in the relations of the co-tenants to the realty owned by them by setting apart to one of them a homestead therein. The homesteader gets only his interest in the land, subject to all the rights of the other tenant, and with all the risk of losing his improvements upon partition. But what concern is this .of the creditor? The law will not presume that the tenant, enjoying his homestead exemption, will usurp the rights of his co-tenant, and thus produce litigation and inconvenience.
“The fact that a homestead claim might savor of such an assumption of an exclusive right as is inconsistent with the rights of the'other co-tenant, and that the maintenance of such claim might interfere with proceedings for partition, form no very satisfactory reason for denying the exemption. If the rights of the other co-tenant are threatened or endangered, he alone bhould be permitted to call for protection and redress. The law will not sanction any use of the homestead in prejudice of his rights. But as long as his interests are respected, or so nearly respected that he feels no inclination to complain, why should some person having no interest in the co-tenancy be allowed to avail himself of the law of co-tenancy for his own, and not for a co-tenant’s, gain? The homestead laws have an object perfectly well understood, and in the promotion of which courts may well employ the most liberal and humane rules of interpretation. This object is to assure to the unfortunate debtor, and his equally unfortunate but more helpless family, the shelter and influence of home. A co-tenant may lawfully occupy every parcel of the lands of the co-tenancy. He may employ them, not merely for cultivation, or for other means of making profits, but may also build houses and barns, plant shrubs and flowers, and surround himself with all the comforts of home. His wife and children may, of right, occupy and enjoy the premises with him. Upon the land, of which he is but a part owner, he may, and in fact he frequently does, obtain all
We are supported in these views by tho following authorities: Tarrant v. Swain, 15 Kan. 147; Kaser v. Haas, 27 Minn. 406; McClary v. Bixby, 36 Vt. 258; Thorn v. Thorn, 14 Iowa, 54; Lozo v. Sutherland, 38 Mich. 169; Horn v. Tufts, 39 N. H. 478; Greenwood v. Maddox, 27 Ark. 660.
Let the case be affirmed, with costs.
Dissenting Opinion
(dissenting). The former decision in this case, reported in 6 Mont. 453, was based upon the theory that our homestead laws were taken from the laws of California, and were therefore to be interpreted in harmony with the decisions of California prior to the time of their adoption. Although some of the sections closely resemble certain provisions of the laws of Minnesota, I am still of the opinion that the whole spirit of our exemption laws is based upon the laws of California. Upon that point, reference is made to the former decision. In basing that decision upon the well-known rule of interpretation'of statutes, I was governed by the desire to throw as little doubt as possible upon the exemptions elsewhere provided for by our code, and by the firm conviction that the decisions of California were sound in principle, and in accord with the current of authorities. Even though our homestead laws were taken from those of Minnesota, the decisions of that court cannot be said to be binding upon us, because they were not rendered until after our legislature had adopted the sections above referred to.
It is also a well-known rule of law that partnership real estate may stand in the name of one partner, or it may stand in the name of each of the partners. In either case the firm would own the1 real estate, if it came within the rule of law which makes real assets belonging to the partnership. Babcock himself recognizes that rule in his testimony. Speaking of the deed from himself to Davis, dated June 3, 1881, he says: “ Davis virtually owned a half-interest in said premises before a deed was given for it.” So there can be but little importance in the fact that the property stood in the name of the copartners. In whatever way it stood, it was firm property. In the first part of the prevailing opinion, the deed from Babcock is described as though it was a conveyance to Davis of a half-interest in the premises in dispute only, — a house .and lot. It was in fact a conveyance of an interest in a much larger tract of land; it comprised all the land of the partnership. Davis & Babcock were partners in the business of buying and selling real estate. This made the property partnership property. This is conceded by the learned chief justice, who also states the rule of law to be that a homestead cannot be carved out of real estate owned by partners as partnership property; but he states that the property was withdrawn from the partnership by consent, and that then the partners became co-tenants merely.
I presume that undoubtedly partners may withdraw
I wish to carefully examine these facts:—
(a) Why should not Babcock &' Davis occupy their firm property when there are no other tenants for it? We will see that, just prior to the marriage of Davis, a certain Mr. Bogert was occupying the property.
(b) The fact that Mr. Davis and family moved into the house was not necessarily adverse to the claims of the partnership. Davis merely became a tenant of the property; was liable for rent to the firm as landlord, upon an implied agreement to pay the reasonable rent therefor. See Lindley on Partnership, *652, note; Stoughton v. Lynch, 2 Johns. Ch. 209.
(c) The recording of the declaration is not shown to have been known to Babcock, who therefore had no actual notice thereof. That notice was dated November 17, 1883, and the attachment -under which plaintiff claims was levied on November 28, 1883, 'so that his silence was only of eleven days’ duration, and as we shall see, it was the silence of ignorance, and not acquiescence. Neither can it be said that Babcock had constructive notice of the declaration of homestead, — •
(cZ) As to Babcock’s acquiescence. He, as we have just seen, had neither actual nor constructive notice of the filing of the declaration. Neithér did he have any notice that Davis was even living on the place with his family. Babcock testifies as follows: “Mr. Bogert occupied it when I went away, which was in January, 1883, and Mr. Davis occupied it when I came back. I think I returned in January, 1884.” It will be seen, then, that when Babcock left the country, Davis and family did not occupy the house, and that before his return the attachment was filed. Neither was the deed a confirmation of Davis’s act, either as to Babcock or his creditors. In the first place, it was subsequent to the lien of the attachment. In the second place, it was, 'according to Davis, a partition deed between the partuers, given upon the dissolution of the partnership. I cannot, therefore, see any joint act or consent .of these partners by which the property in question was separated from the partnership property prior to the attachment; and following the rule stated in the prevailing opinion,.that homsteads cannot be had in real estate owned by partners, I am of the opinion that the judgment should be reversed. But there may have been such a withdrawal by Davis. The fact that Davis and family lived there would be presumed to be in furtherance of the partnership, there being nothing overt in the act; and, as we have seen, he would be tenant, and the firm would be his landlord. But the filing of the declaration was a direct attempt, unknown to his partner, done in his partner’s absence, to withdraw that property from the firm assets, giving no consideration therefor to the partner.
According to most of the authorities, a partner in
In either case, however, the act of the partner would constitute a dissolution of the partnership, and in the latter case, the entire property would be held as assets until the claims against the firm had been satisfied.
If the filing of the declaration of homestead claim was a withdrawal of that much property from the firm assets, it was a dissolution of the partnership, because it was done without the .consent of the copartner, and was an act against the interest of that partner. The property was not held by an innocent purchaser, and was therefore held for the benefit of the creditors, was still firm real estate, subject to the claims of the creditors. Therefore, upon that ground, I think the case should be reversed.
I am also of the opinion that our statute does not contemplate the claim of a homestead by a co-tenant or by a joint tenant. The argument of the authorities holding the contrary doctrine seems to be founded upon the fact that the statutes do not say a “ sole ” owner; neither do they say a “co-owner,” “co-tenant,” or “joint tenant.” As a matter of fact, where two people own real estate, they are not called “co-owners” or “joint owners,” or even “ owners.” They are called “ co-tenants,” — “joint tenants,” in legal phraseology, — and the word “ owner” is never used to define them.
A and B are co-tenants. If it is held that A can have a homestead because A owns the property, with equal propriety it can he said that A can have a homestead in the land which B owns, or because B owns it. ' As a
It is a useless task to try to reconcile or to cite the authorities upon this question. Mr. Thompson, in his work on homesteads and exemptions, in a note to section 180, has made a collection of authorities upon either side. ■Those states declaring that the homestead cannot be had in property held by co-tenants are Massachusetts, California (before a statute giving the express right), Wisconsin, Michigan, Louisiana, to which may also be added Missouri and Nevada. Those holding the contrary doctrine are stated to be Vermont, Iowa, Texas, New Hampshire, Arkansas, to which may be added Kansas and Minnesota. The learned chief justice cites 38 Mich. In that case the so-called co-tenants were coparceners; they were man and wife. But it will be seen that elsewhere, in Amphlett v. Hibbard, 29 Mich. 298, the court held that
There is one more point in this case. It is admitted by a majority of the court that plaintiff’s right accrued upon the levy of the attachment, and that no subsequent act of Babcock’s could deprive the plaintiff of his right to Babcock’s interest. It certainly cannot be held that Davis, by filing his declaration of homestead, could deprive his co-tenant (or partner) of his right to one undivided half of the property. Davis, in his declaration, claims only “ an undivided one half interest in said premises.” The plaintiff, therefore, had certainly an undivided one half interest therein; was and is at least a co-tenant of Davis, and could not be excluded therefrom. The complaint, the answer, and the evidence show that Davis occupied the premises to the exclusion of the plaintiff, who is at least a co-tenant. The demand necessary, as between co-tenants, is alleged in the complaint, a„nd not denied by the answer. In fact, the answer claims the right to the exclusive possession of the property. The findings of the court below practically admit that the defendant does withhold the property from the plaintiff. The judgment of the court below denies all right to the plaintiff, and this court affirms that judgment. Where one co-tenant is deprived of his possession by his co-tenant, and his demand to be admitted is refused, he may bring ejectment against his co-tenant. See Freeman on Cotenancy and Partition, secs. 290 et seq., and cases cited.
It would seem to me that the judgment in this case deprives the plaintiff of his property (at least one undivided half of the premises) without due process of law, which is carrying the doctrine of homestead rights to an extent somewhat beyond the authorities cited in the