M. Schneider & Bro. v. Bray

Opinion by

Willie, C. J.

It is well settled in this State that independent of the provisions of the 16th Art. and 52d Section of the Constitution of 1876, the surviving husband or wife is entitled to hold the homestead after the death of the other spouse, so long as such survivor may choose to occupy it.

Blum v. Gaines, 57 Tex., 119.

Kepler v. Straub, 52 Tex., 574.

By the above cited section of our constitution, occupancy is expressly required only as against the right of the descendants of the *198deceased husband or wife, to have the property partitioned and their interests set apart to them.

In this case there is no question but that the appellee as surviving wife was entitled to the homestead occupied by herself and her deceased husband at the time of his death, so long as she choose to reside therein; nor is there any controversy between herself and the descendants of her husband as to her exchange of it for another homestead. The controversy is between herself and her creditors, whose, debts accrued subsequent to the exchange, as to her right to have the new residence exempted as against an attachment and execution sued out in satisfaction of such debts. The precise question thus raised is for the first time before this court for decision.

Exchanges made of exempt for other property, are classified by the books into two kinds, voluntary and involuntary, and in reference to each of these, general principles are laid down which are generally concurred in by a majority of the American court's, where questions in reference to such exchanges have been raised.

In reference to the first class, it is held by several courts that where a debtor voluntarily exchanges property specifically exempt from execution for property not exempt, he cannot claim exemption for the property received in exchange.

Thompson on Homesteads, Sec. 745.

Andrews v. Raum, 28 How., Pr., 128.

Friedlander v. Mahony, 31 Iowa, 315.

Scott v. Brigham, 27 Vermont, 561.

Edson v. Groak, 22 Vermont, 18.

Wygent v. Smith, 2 San., 185.

The reason of this general rule is well stated in the last case, and is generally adopted and acted upon in the others. This is in effect that “the law designates the species of property it exempts, and does not allow the debtor to choose for himself in respect to the species or kind of property to be exempted. To allow this would be to substitute the choice of the debtor for the provisions of the statute. When the exempt property is voluntarily sold and converted into money or other property not a,Iso exempt, the right is gone.”

The reason thus given for the rule, proves the rule itself to be that if the property received in exchange is of the class or character not exempt by law, it is subject to execution. It also establishes the converse principle that if the property received in exchange is *199of the species exempted by law, it will not be subject to execution for the debts of its new owner.

This is illustrated by the cases cited above, in which the rule has been enforced.

In the case of Wygant v. Smith, a soldiers bounty which was exempt was exchanged for horses and harness which were not exempt.

In Friedlauder v. Mahony, policies of insurance exempted by the laws of Iowa, were exchanged for merchandise .subject to execution, and so with the rest.

In all of which oases the unexempted property acquired in the exchange was held liable to execution.

Applying this rule to the articles exempt by our owti constitution, should the horses, oxen, cows, furniture, farming utensils, tools of trade, &c. exempted, be exchanged for money, merchandise or the like, the property thus acquired not being of the classes exempted by our laws, would bo subject to execution for the new owner’s debts. On the other hand, if horses, cows, furniture, &c. should be received in exchange not beyond the limit prescribed by law, they would not be subject to such execution. A man may exchange his horse for another, or for five head of cattle, if he has none, or his tools of trade for others that suit him better, and no one would think of having such newly acquired property levied on under execution against him. Is the homestead any exception to the general rule on this subject? And if not, why may not a surviving wife holding one by an undoubted right exchange it for another and hold the latter exempt from execution for her debts ?

In making the exemptions, our constitution and statutes selected articles, most certainly, contributing to the ease, comfort and independence of the family. They allow the family a home and its furniture, horses and cattle to labor for them and contribute to their sustenance, and the tools of trade for the head of the family to use in making a support. Should any of these articles become useless, decayed, or not of so much service as would others of the same species, the law does not compel the owner to keep them, but he may exchange them for others of more service to him. Otherwise the beneficent effects of the law, would be in a great measure defeated. And so with the homestead. The houses may become untenable and the owner unable to repair them or build others in their *200place. The land may be barren and the owner unable to make a living for himself or family upon it. He may find a place where he could pursue his trade or calling with profit, which he cannot do at his then homestead. The law will certainly not prohibit him from exchanging his home for more comfortable quarters; his barren, for productive land, or fasten him to a place where he must starve, under the penalty that, if he exchanges for the comfort and sustenance of himself and family, h« shall sacrifice his home to creditors. And so in the present case we find a woman living all alone at a homestead where she is separate from neighborsrwho could comfort and protect her in her loneliness, and where she can make nothing for her support and must, if she depends on her own exertions, eventually starve, but who has an opportunity to exchange this rural homestead for one in a town, and receive in addition, a small amount of money; who can probably make a livelihood in the town, and will at least have protection and society there. Is she not to bo allowed to make such a desirable exchange ? We do nob think the law contemplated any such strict confinement to any particular home, provided the new one was within the limit of the exemption, as it was in this case. Creditors have lost nothing by it, for there is no more property withdrawn from their reach than there was before the exchange was made.

In cases of involuntary exchange of property, the newly acquired article becomes exempt whether it was of a class originally protected Irom execution or not; as in a case where the exempt property is destroyed by fire, the insurance money received from it is exempt, whereas, money received upon a voluntary sale would not be; and in such cases it makes no difference whether the article destroyed he a piece of personalty or a dwelling house upon the homestead.

Thompson on Homesteads, Sec. 784.

This has been decided in our own State. See Fay v. Cameron, 55 Texas, 58.

Whilst our decision in this case is not put upon the ground that the exchange of homesteads was involuntary, it might not be considered an altogether voluntary act when a woman iu the situation of the appellee, was compelled to make the exchange in order to secure a support, which she could not possibly make at the homestead that she then occupied.

*201The decision of the court below did not, as appellant supposed, overrule any of the Texas cases cited in the brief.

The case of Whittenberg v. Lloyd, 49 Texas, 633, was made to turn upon the point that the lots in Waxahachie exchanged for others in the same place were not, at the time of the exchange, the homestead of the defendant, but had been previously stripped of their homestead character by abandonment. Besides the property received in exchange was not a homestead either by residence or destination. If the court had intended to hold that the property received in exchange for a homestead was not exempt, there was no necessity for argument to show that the property exchanged was not a homestead. The statement made by the court that it had been held that when exempt property has been voluntarily sold or exchanged the proceeds are not exempt, must bo taken with the qualification attached to it by the very authorities cited to sustain the statement, viz: Where the exchange is for articles not in themselves exempt^ such as money, merchandise, &c. So as to the expression that legislation will be required to sustain the broad doctriue that property received in exchange for exempted articles is itself exempt, evidently refers to property which is not in itself subject to execution, for that was the character of the property treated of by the court. In Wolfe v. Buckley, the court would not have resorted to the fact that there had been an exchange of homesteads, if it had actually considered Mrs. Buckley the head of a family, for that in itself would have exempted the property claimed as a homestead from execution. But the court evidently did not rely upon the claim that her step-grand children living with her constituted her the head of a family, and evidently laid great stress upon the fact that the place in controversy was bought with the proceeds of a former homestead.

It may be added, too, that if those children, whose father was living and bound for tbeir support-, constituted Mrs. Buckley the head of a family, there is no reason why the appellee’s own grandchildren, whose father was living, and who were- residing with her at her urban residence, (as the facts seem to indicate) should not have constituted her the head of a family and given exemption to the homestead as in the case of Wolfe v. Buckley.

It may be added that so enlightened a court as that of Wisconsin holds that money due a debtor from the purchaser of his homestead *202as a part of the consideration therefor, and which the debtor designs in good faith to apply to the purchase of another homestead, are not liable to garnishment. Watkins v. Blatchinski, 40 Wisc., 347. This was of course a voluntary exchange.

The court in deciding the case, in referring to the decisions from Vermont and other New England States, dismisses them with the remark that the courts of those States generally hold to a strict construction of the exemption laws, whereas, the Wisconsin courts have uniformly construed them liberally.

The Texas courts have usually adopted the latter rule in their construction of such laws; and in the case of Whittenberg v. Lloyd, supra, intimated strongly in favor of the Wisconsin doctrine.

Mr. Thompson, too, in his work on Homesteads, Sec. 757, in commenting upon the case, says: “ The restriction of the rule to involuntary sales of exempt property has been denied in Wisconsin as it respects the homestead.” He explains the decision by saying that in Wisconsin a debtor is empowered by statute to sell and convey his homestead without subjecting it to the demands of creditors; that this would be a barren right if the proceeds of the sale cannot be protected while in transition from one homestead to another. He admits that the view is calculated to promote the object of the homestead laws, and that it is applicable in States where a judgment lien does not attach to the homestead so as to prevent the owner and wife from alienating it. It is needless to say that this rule obtains in our own State. If the money in a transition state is to be protected, much stronger is the reason for protecting the homestead acquired by a direct exchange.

For the purposes of this case, it is sufficient to say that under all the facts to be found in the record, we think the appellee’s town homestead was protected from the levy of the attachment sued out by appellants, and the judgment below is affirmed.