Lamb v. Mason

The opinion of the court was delivered by

Powers, J.

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 *349be in excess of the value thereof created in s. 1, the housekeeper or head of a family shall have the right to designate and choose the part thereof to which the exemption shall apply, not exceeding the limited value; and upon such designation and choice, or in case of a refusal to designate or choose, the appraisers on such levy shall fix the location and boundaries of such homestead to the amount of five hundred dollars in value, and shall then proceed with the levy of such execution upon the residue of such real estate, as in other cases. Section 8 provides that in case such homestead or real estate is encumbered by mortgage at the time of any such levy of execution, the value and location of such homestead shall be fixed as provided in s. 2, and thereupon such levy shall proceed in the same manner as in the case of mortgages existing upon distinct parcels of land. Section 7 provides that such homestead shall be liable to attachment and levy of execution upon all causes of action existing at the time of acquiring-such homestead, which time is declared to be the time the deed of the land in which the right exists is filed for record in the town clerk’s office. A subsequent section forbids the alienation of the homestead by the owner, if a married man, except by way of mortgage to secure the purchase-money. All debts, then, existing against the claimant of the exemption before he acquires the homestead, and the debt contracted for its purchase, are left enforceable against the estate, the same as though no homestead act had ever been passed.

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 *350whole of M’s outstanding mortgage. Can C compel the homestead to contribute to the payment of M’s mortgage ? We think he can.

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.

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; Keyes v. Wood, 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*351steader’s refusal to execute such mortgage, enforce his lien upon the land, against which the defendant could not assert a homestead exemption. Magee v. Magee, 51 Ill. 500; Austin v. Underwood, 37 Ill. 438; Lassen v. Vance, 8 Cal. 271; Carr v. Caldwell, 10 Cal. 385. So, if there be an agreement between the vendor and purchaser that the purchase-money shall be paid to a third person, no homestead exemption can be asserted against such assignee. Pinchain v. Collard, 13 Texas, 333; Hamrick v. People’s Bank, 54 Ga. 52.

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; 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, 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 *352discharge of the common burden. Stevens v. Cooper, 1 Johns. Ch. 425; Adams Eq. (6 Am. Ed.) 543.

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; Doane v. Doane, 46 Vt. 485. As against junior creditors, any title that could be taken on execution is an *353indefeasible title. But the vendor’s lien sustains an entirely different relation to the estate. No exemption does or can attach to the homestead in favor of the occupant against the lien of the vendor when enforced by any person acquiring it by lawful means. The homestead in the case supposed is not, before its bounds are fixed, an undivided interest or estate in White Acre and Black Acre viewed as one common property. It is an unsevered part of the common property, the general outline and location of which is as well known and designated before as after its appraisal and location in the mode pointed out in the statute. It can only be selected and located in that part of the property covered by the buildings, and cannot be selected in isolated lands not used therewith. True v. Morrill, 28 Vt. 674. The residue of the common property is left by the act wholly unaffected by the creation of the exemption. Creditors may deal with the homesteader upon the faith that all his interest in the residue is available for their security.

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, *354is enforcing M’s debt, against which, as we have seen, no homestead right can be asserted.

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.