Saul v. Bowers

Hill,. J.

(After stating the foregoing facts.)

The controlling question in this case is whether or not the clause in the notes given by the defendant, Bowers, purporting to convey the “ homestead and exemption” to J. Saul & Co., and set out in the foregoing statement of facts, is sufficient to vest the title to the exemption in J. Saul & Co. It is contended by S. E. Vandiver that the transfer to him after the setting aside of the exemption by the referee in bankruptcy to Bowers on May 3, 1922, which was subsequent to the transfer to J. Saul & Co., was a valid transfer. It was in the following language: “I, J. E. Bowers, for and in consideration of $1,400.00, the receipt whereof is hereby acknowledged, have this day bargained, sold, transferred, and assigned unto S. E. Vandiver, all my right, title, and interest in and to my homestead and exemptions, and the articles named therein, to wit [naming specifically the articles set aside], the same being the property claimed by me as exempt under the laws of the State of Georgia, in that certain bankruptcy proceedings wherein I have been adjudged a bankrupt.” The contest, therefore, is between Vandiver, the last assignee, and J. Saul & Co., the assignee in the first assignment.'

It is settled in this State that the title to an exemption set apart to a bankrupt by a court of bankruptcy is in the bankrupt, and can be alienated and sold by him. Pincus v. Meinhard, 139 Ga. 365 (2), 373 (77 S. E. 82). When an exemption is set apart to a bankrupt by the referee in bankruptcy, the title remains in the bankrupt precisely as it was before. Broach, v. Powell, 79 Ga. 79, 81, 82 (3 S. E. 763). And see, to the same effect, cases cited in-the Pincus case, supra, Taylor v. Williams, 139 Ga. 581 (77 S. E. 386); Strickland Hardware Co. v. Fletcher, 152 Ga. 445 (110 S. E. 229). If, therefore, the title remains in the bankrupt after the setting aside of the exemption by the referee in bankruptcy, so that the bankrupt can assign it, it follows that the title was in the bankrupt before the exemption was so set aside. The question then resolves itself to this: was the assignment of the homestead and exemption, made prior to the time the exemption, was set aside by the referee in bankruptcy, such a bare com tingeney or possibility that it can not be the subject of transfer *454and sale, under the Civil Code (1910), § 4117? That section declares that “A bare contingency or possibility can not be the subject of sale, unless there exists a present right in the person selling, to a future benefit.” In the case of Tribble v. Anderson, 63 Ga. 31, 54, Judge Bleckley said: “As to the waiver of homestead which the instrument contains, that is not needed by Anderson for his protection if the debt was untainted, or if being tainted it was purged; If he is in a situation to need it, he can take no benefit from it; for while the waiver of homestead is not a conveyance, it is enough in the nature of a quitclaim title to be subject to the general rule ordained by statute against passing any kind of title to property for a usurious purpose or as part of a usurious contract. The homestead right is a right in property, and to waive it in favor of a creditor is substantially the same thing as to convey it away — the same, certainly in respect to putting the debtor in the power of the creditor.”

And in Broach v. Powell, supra, it was held: “ An express waiver of homestead in mortgaged premises, contained in a mortgage deed, is a renunciation of the homestead right, whether the right could be asserted at the time of executing the deed or not. Hence, such a waiver by a single man will bar his claim of homestead when he afterwards marries.” In delivering the opinion of the court in the Broach case, the same learned judge said this: “That the waiver of a homestead bears some analogy to a quitclaim is true: Tribble v. Anderson, 63 Ga. 54, 55; but is there any reason why there may not be a valid quitclaim, renunciation, or relinquishment of a contingent, the same as of a vested, interest? If it be that a quitclaim can operate only where some estate is in esse at the time it is executed, then there certainly can be no quitclaim to a homestead by waiver at all; for before the homestead is allowed the homestead estate is not in being, and after it is allowed there can be no waiver. The moment the homestead right becomes a complete vested right, it is no longer waivable, for nothing will vest it short of securing the homestead. Harris v. Glenn, 56 Ga. 94. Up to that stage the right, no matter how perfect the conditions for its exercise may be, is a mere grace or privilege, and it may be purged or renounced as well under incomplete conditions as under complete ones. Were this not so, a general waiver of homestead under the constitution of 1877 would be effectual only when *455made by heads of families, etc., and only as to property owned by them at the time of making the waiver. The creditors of unmarried men would be at the mercy of the matrimonial instinct, and all creditors would have to take the hazard of being excluded by a claim of homestead from resorting for payment to the future acquisitions of their debtors. For, to complete the conditions-for asserting a homestead right, property is no less necessary than family; and if waiver could not anticipate the acquisition of a family, neither could it anticipate the acquisition of property. We were pressed in the argument with the case of Benedict v. Webb, 57 Ga. 348, but that case has no application to the question. True, there was a future marriage and from that marriage the court said there resulted a new homestead right, a right other than the one that had been set up and allowed in the previous proceeding. But why did the new right result from .the second marriage? Simply because there had been no waiver of homestead whatever. If there had been, as there is in the present case, a waiver of ‘ all right to homestead/ the decision ought to have been, and doubtless would have been, directly the reverse of what it was. An express waiver of homestead in mortgaged premises, contained in the mortgage deed, is a renunciation of the homestead right, whether the right could be asserted at the time of executing the deed or not. Hence, such a waiver by a single man will bar his claim of homestead when he afterwards marries.”

In the case of Strickland Hardware Co. v. Fletcher, supra, this court held that “A voluntary bankrupt has an assignable interest in the property claimed by him in his petition as exempt under the constitution and homestead laws of this State; and he may assign the property in good faith to an existing creditor before the property is set apart by the trustee in bankruptcy, and therefore before the exemption is confirmed by the referee in bankruptcy.” In delivering the opinion of the court Mr. Justice George said: “ It is true that the bankrupt might have withdrawn his claim to the property, and his right to have the property set apart as exempt might have been defeated in certain circumstances by his creditors; but we can not admit that the bankrupt’s interest in the property claimed by him as exempt under the constitution and laws of this State, prior to the setting aside of the property by the bankruptcy court, is a bare contingency or possibility which *456can not be tbe subject of a sale under the Civil Code of 1910, § 4117. The title of the bankrupt in the property is more nearly analogous to a defeasible title. He may by his own act divest himself of title; or his right to have the property set apart by the bankruptcy court may, in certain circumstances, be defeated. As we have seen, however, the bankrupt prayed that certain property be set apart to him as exempt, and the property was set apart to the bankrupt as prayed. In these circumstances a court of equity will give effect to the assignments, unless fraudulent as against creditors.”

Even if it be conceded that at the time of the transfer by Bowers to Saul & Co. in the notes, Bowers had no such title and interest in the homestead and exemption that he could convey, when he subsequently did acquire such interest and title by the setting aside of the exemption by the referee in bankruptcy, it would inure to the benefit of Saul & Co. In Martin v. S. A. L. Ry., 139 Ga. 807 (77 S. E. 1060), where a strip of land was conveyed, extending each side of and at right angles to the center of the track or road-bed of said line, as the same may be located and established by the party of the second part, upon and over any and all lands of the party of the first part, situated in the county aforesaid [Gwinnett] and in the corporate limits of the town of Lawrence-ville, and, in case of high banks or deep cuts, such additional width as may be necessary, etc., this court held that “ The description of the land referred to in the deed set forth in the statement of facts was indefinite until the grantee located its road-bed through the lands of the grantor in the town of Lawrenceville. As soon as that was done, the description became definite, and applied to a strip of land of only such width as was then occupied by the railroad bed and cuts and fills.” So, in the instant case, when the exemption was set aside by the referee in bankruptcy, the description of the property became definite.

A general waiver of a homestead is sufficient as a waiver (Civil Code (1910), § 3413); and if a general waiver of a homestead is good, we see no good reason why the transfer or assignment of a homestead is not good. But here the assignor expressly transfers, assigns, and' conveys “ to the owner of this note a sufficient amount of my . . homestead and exemption to pay this note in full, principal and interest, attorneys fees and costs. *457I, or we, hereby request and direct the trustee to deliver to the owner of this note a sufficient amount of property or money claimed as exempt to pay off the amount so allowed on this debt.” We are of the opinion that this assignment is not a bare contingency or possibility, but that the assignor is conveying what the law makes certain, and that is- $1600 of his property under the constitutional homestead, or certain specified property which is named in the statutory homestead. It will be-observed, moreover, that the bankruptcy' proceedings took place within a few weeks after this first transfer; and while the Vandiver transfer does assign certain specified property, the first transfer conveys a sufficient amount of the homestead and exemption to pay the note in full, and the maxim of the law, id certum est quod certum reddi protest, applies, that is certain which can be rendered certain; and it can be easily ascertained what homestead property is, or may be, set aside to the applicant for homestead or exemption. Besides what has been said above, it does not appear that the debt, if any, owing by Bowers to Vandiver was based on a note with waiver of homestead, or whether it was upon an open account;, and as against this debt we are of the opinion that the waiver of homestead, together with the transfer of whatever homestead or exemption right Bowers had at the time of the execution of the Saul note, is superior to the sale of the exemption set aside subsequently by the referee in bankruptcy. It will be observed that the contest here is not between two creditors with waiver-of-homestead notes, but between a creditor of the bankrupt holding homestead-waiver notes and the transfer of the homestead property, and an assignee of the exemption set apart by the referee in bankruptcy. The purpose of the law in authorizing a debtor to waive his right to homestead and exemption was to give his creditor the right to collect his debt as against that homestead; but if the second assignee in the present ease, who has no waiver of homestead, so far as the record discloses, should prevail over the first assignee, the effect of such holding would be to say that the waiver of the homestead by the debtor and also the transfer of his homestead rights would defeat the creditor who has g-uarded against just such a contingency as the present by taking a waiver-of-homestead note and also a transfer of the homestead rights of the debtor. Furthermore, it does not appear from the *458record that Vandiver is a creditor at all, but merely a purchaser of the exemption which had been previously transferred to J. Sanl & Co. Both the plaintiff and defendant in error argued the case here on the sole issue as to whether the transfer in the Saul notes is valid. As stated in a brief offered for defendant in error, “the sole and novel question is whether or not the above-stated clause in the notes payable to J. Saul & Co. has any legal effect, so as to vest title to the exempt property ‘in the assignee, the said J. Saul & Co. If so, it is conceded that J. Saul & Co. are entitled to have the exempt property applied to their indebtedness.” The trial judge held that the clause in the notes, which sought to transfer the homestead .and exemption of the debtor to J. Saul & Co., was invalid and without legal effect; but to this conclusion we can not agree, and we are of the opinion that the clause in the note referred to above was valid and sufficient to convey the property in controversy to J. Saul & Co.; and therefore the trial judge erred in refusing the injunction prayed for.

Judgment reversed.

All the Justices concur, except Beclc, P. J., dissenting.