Gordon v. Deavitt

Watson, J.,

dissenting:

I am unable to concur in the opinion and the decree in this case.

In the opinion of the majority, the case is considered and determined upon the basis that defendant Deavitt stands as the owner of a subsequent mortgage executed by Truman R. Gordon, alone, on so much of the premises covered by the mortgage from Truman R. Gordon and his wife, the oratrix Hattie M., to the Capital Savings Bank and Trust Company, as is outside of the homestead parcel. Whereas the facts stated in the first part of the majority opinion show, as do also the allegations in the bill, that before any proceedings were instituted by the bank to foreclose its mortgage, Deavitt, by virtue of an assignment to him of the mortgage from Truman R. to David L. Fuller, and by decree foreclosing the same, allowed to become absolute, was, and hitherto has been, the sole and absolute owner of the equity of redemption of that portion of the premises covered by the bank’s mortgage not of the homestead. This makes Deavitt by operation of law such owner by purchase. Perry v. Ward, 82 Vt. 1, 71 Atl. 721.

*70The case before us then may be correctly stated thus: Real estate owned by the husband,, which included his homestead and other land, was mortgaged to the bank by the joint deed of husband and wife to secure his debt. By purchase-defendant Deavitt became the sole and absolute owner of the equity of redemption in that portion of the premises other than the homestead. In proceedings then brought by thebankto foreclose-its mortgage, the husband and wife and Deavitt being made parties defendant therein, a decree was rendered for the bank,, fixing a time in which the defendants might redeem.

Within the time thus allowed, the wife, to protectherinterest. in the homestead, redeemed by paying the amount of the decree- and costs. Claiming to be subrogated to the rights of the bank by reason of such payment, she now seeks to have a homestead set off, and that the burden of the entire mortgage be placed upon the other land to the exoneration of the homestead. A decree to this effect was rendered below, and the same (with modifications not necessary to mention) is affirmed by a majority of this Court.

By P. S. 2553, no homestead nor any interest therein can be conveyed by the owner thereof, if a married man, except by way of mortgage for the purchase money, unless his wife joins-in the execution and acknowledgment of such conveyance. By P. S. 2555, the joining of the wife in a mortgage of such homestead can have no other effect than to bar her claim to the homestead as against such mortgage. Is not this latter provision, of the statute (which has been in force since 1865) tantamount to saying that as against such mortgage her claim to the homestead shall be barred?

In Lamb v. Mason, 50 Vt. 345, decided in 1877, the homestead and other property lying together as one property were-mortgaged by the homesteader for part of the purchase money. Later an execution against him, in favor of a creditor whose-debt was contracted after the purchase of the homestead, was levied upon the land. The homestead was set off to the debtor,, and the rest of the property was set off to the execution creditor. Subsequently the latter was obliged to pay the whole of the-mortgage, and the question before the Court was, whether he could compel the homestead to contribute. Barrett, Chancellor,. *71rendered a decree below ordering contribution by the owner thereof, or failing, that he be foreclosed. The case was heard in this Court before Judges Pierpoint, Royce, Redfield, Ross and H. Henry Powers. The decree was affirmed upon an opinion by Judge Powers, the Court saying it presented the not unusual case of a burden resting upon two distinct parcels of land; and that in such cases equity compels each parcel to its just contribution towards the discharge of the common burden. Judge Ross dissented, and his opinion was approved by Judge Dunton who was not a member of the Court when the case was heard. Later the case of Devereaux v. Fairbanks, 50 Vt. 700, was heard at a session of this Court in Windsor County before Judges Pierpoint, Redfield, Ross, Powers and Dunton. That was a petition for foreclosure. The first mortgage, executed by the homesteader, was for the purchase money. The petitioners having subsequent mortgages (not signed by the wife of the mortgagor) and attachments on the premises, paid the first mortgage, took a transfer of the notes and mortgage, and became the owners thereof. The mortgagor by answer and by cross-bill alleged that the mortgage covered the homestead claimed by him under the statute and occupied by himself and wife, and their minor children; that the petitioners became the owners of the premises, worth $2500, by foreclosure of another mortgage against him, subject to his homestead right therein; and praying that the first mortgage, if held to cover the homestead, be apportioned between the two properties. The facts thus alleged stood admitted on the record by demurrer to the cross-bill. The petitioners, denying such right of apportionment, sought to enforce the full amount of the mortgage against the homestead. It was held by a unanimous Court) the same judge writing the opinion, that the case was identical in principle with Lamb v. Mason; that “as between the petitioners and the defendant, each owns a parcel of land upon which rests a common burden. In equity, each parcel must contribute ratably to its discharge;” that the estate of the petitioners was obligated to pay its equitable share of the debt, and to that extent they paid what they were bound and ought to pay; that in addition thereto, they paid what the homesteader was bound and ought to pay, and that the latter sum might be charged upon the homestead; but *72that they could no more compel the homesteader to give them an indefeasible title to the residue, than could the homesteader compel them, under like circumstances, to give him such title to the homestead parcel. At the February term, 1888, of this Court in Windsor County, the case In re Worcester’s Estate, 60 Vt. 420, 15 Atl. 336, was heard before Judges Ross, Veazey, Taft, and Tyler. At the time of the intestate’s (the homesteader’s) death the real estate of which he died seized, consisting of his home farm and a pasture, was encumbered by a mortgage executed by himself and wife, amounting to $1,093.27. The premises were sold by order of probate court, the widow consenting, — the farm for $1330, and the pasture for $150. The statute then was, that at the death of the husband the homestead should pass to and vest in the widow or minor children, or both, if such there were, who took the same estate therein of which he died seized, without being subject to the payment of his debts, unless charged thereon in his lifetime. R. L. sec. 1898. It was held by an undivided Court, Judge Taft writing the opinion, that the consent by the widow to the sale of the real estate did not bar her of such right in and to the homestead as she took upon the decease of her husband; and, on the authority of Lamb v. Mason and of Devereaux v. Fairbanks, it was further held that the homestead was under the burden of bearing its proportion of the mortgage debt. Thus by the decisions in these three cases the rule requiring ratable contribution by the homestead became the settled doctrine in this State, and it has so remained without modification, except that its application is now somewhat limited by statutory provisions of more recent enactment, as follows:

At its first session after the decision in the last of said cases was handed down, the Legislature, presumably with knowledge that such doctrine had been so established (State v. Rutland R. R. Co. 81 Vt. 508, 71 Atl. 197), enacted No. 74 of the Laws of 1888. By that act, the statute, in respect to the levy of executions on real estate of which a homestead is a part, was amended by adding a provision, that in making such levy only such portion of the mortgage as is in excess of the appraised value of the real estate, aside from the homestead, shall rest on the homestead. By the same act, section 1906 of the Re*73vised Laws, which reads thus: “If such homestead or lands therein are mortgaged by the joint deed of husband and wife, the joining of the wife in such mortgage shall have no other effect than to bar her claim to such homestead,” was amended by adding at the end of said section the following words: “And if said mortgage includes lands other than the homestead and the owner of the homestead dies, the lands other than the homestead, included in said mortgage, shall be first sold by the executor or administrator and applied on the mortgage, and only the residue shall rest on the homestead unless the whole is ordered to be sold by the probate court, in which case the avails shall be apportioned in accordance with this act,”

The language of the amendatory act is too plain to be misunderstood. By that act the doctrine of contribution, as established by the three cases named, was limited in its application so as to require the parcel of land other than the homestead to be exhausted in the payment of the common mortgage before resort can be had to the homestead parcel (1), when the former is taken by an execution creditor of the homesteader; and (2) when the homesteader dies, and the homestead passes under the statute to his widow. These instances are expressly mentioned, and to that extent the matter of contribution is now controlled by the same statutory provisions. P. S. 2546, 2555. But the law applicable during the lifetime of the owner of the homestead, as between the homestead parcel and the residue of the mortgaged premises, the equity of redemption in the latter being owned by the homesteader’s grantee without assumption of the mortgage debt or any part thereof, remains unchanged. If the Legislature intended that the act of amendment should apply during the lifetime of the owner of the homestead as well as after his death, why were not the provisions thereof made of general application in this respect, instead of the restrictive one therein specified? Such intention, however, is negatived by the act itself, under the rule, often applied in the interpretation of statutes, that the mention of one thing implies the exclusion of another. Sherwin v. Bugbee, 16 Vt. 439; Hackett v. Amsden, 56 Vt. 201; In re Conditional Discharge of Convicts, 73 Vt. 414, 51 Atl. 10, 56 L. R. A. 658. It follows that the case at bar is unaffected by the Act of 1888, and that *74the cases of Lamb v. Mason, Devereaux v. Fairbanks, and In re Worcester’s Estate are controlling.

It is held by the majority, however, that there is an inequality of equities, and consequently the rule of contribution does not apply. But an examination of the question does not sustain this position. When the husband is the general owner of the real estate^ the wife has only a contingent or inchoate right in the homestead. No part of the title is vested in her. Subject to such conditional’ interest in favor of the wife, the whole legal interest and title-are in the husband. Howe v. Adams, 28 Vt. 541; Davis v. Andrews, 30 Vt. 678; Thorp v. Thorp, 70 Vt. 46, 39 Atl. 245. In Jewett v. Brock, 32 Vt. 65, it is said that this homestead exemption is nothing more than an inchoate lien upon the estate of the husband in her favor, and is subject to contingencies. In McClary v. Bixby, 36 Vt. 254, 84 Am. Dec. 684, it is said to be a conditional lien or incumbrance upon the title or estate of the husband in favor of his wife and minor children. In Abell v. Lathrop, 47 Vt. 375, one question was, whether the wife and minor children were properly joined with the husband in equity proceedings for the protection of the homestead against a mortgage thereon by the sole deed of the husband. It was held that they had a right of occupancy in the homestead, and were properly-joined with the husband in a bill brought to arrest proceedings which threatened such occupancy. And in Heaton v. Sawyer, 60 Vt. 495, 15 Atl. 166, it was held that the wife takes this contingent or inchoate right through her husband, the head of the-family, because of her relation to him.

The wife’s interest being thus defined by the numerous-decisions of this Court, upon what equitable basis is the oratrix in this case entitled to the exoneration of the homestead from the common burden? There can be no doubt that for the-protection of her homestead interest,, thus defined, she had a. right to pay the decree and regard the transaction as an equitable assignment of the mortgage to her, and the lien thereof as kept alive so far as necessary for her protection against the-owner of the premises outside of the homestead. Mr. Pomeroy says that in general, whenever the redemption by a person interested in the premises “operates as an equitable assignment of the mortgage to himself, he can keep the lien of it alive as. *75security against others who are also interested in the premises and who are bound to contribute their proportionate shares-of the sum advanced by him, or are bound, it may be, to wholly exonerate him from and reimburse him for the entire payment.” 3 Pom. Eq. Jur. sec. 1221; Wheeler v. Willard, 44 Vt. 640; Danforth v. Smith, 23 Vt. 247.

However, the right of the oratrix to contribution or, if it may be, to the exoneration of the homestead, does not depend upon the rights of the mortgagee, which passed to her by the equitable assignment (see Charmley v. Charmley, 125 Wis. 297, 103 N. W. 1106, 110 Am. St. Rep. 827), but “necessarily depends upon the equities subsisting between all those persons who have an interest in the premises subject to the mortgage, and who therefore have a common, but not necessarily an equal, interest in being relieved from the burden of the mortgage.” 3 Pom. Eq. Jur. sec. 1221. And further in Note-2 to the same section, the author says: “The nature and extent of the liability to contribute are primarily independent of the mortgagee, and depend upon or are controlled by the equities subsisting between the various parties interested in having the mortgage redeemed, which equities primarily arise from their several relations with the mortgagor, or from their dealings with each other.”

Is there, as held by the majority, such an inequality of equities in the circumstances of the case under consideration as takes it out of the general rule of equity requiring each separate portion of the fund to contribute ratably to the discharge of the common burden, and creates in favor of those interested in the homestead a right of exoneration as against the owner of the other property? From the holding in Heaton v. Sawyer that the wife takes her contingent or inchoate right in the homestead through her husband, because of her relation to him, it must follow, logically, that her right of homestead is no greater, and is no more to be protected against a mortgage by their joint deed than is his. By signing the deed she waived her right of homestead as against that mortgage — to use the implied language of the statute, her claim to the homestead as against that mortgage was barred. Consequently under the mortgage each of the two properties was primary security in equity. *76They stood alike with reference to the mortgagor and with reference to each other — their equities were equal. The husband had a right by his sole deed to convey the equity of redemption in the parcel not of the homestead, but in so doing he could not increase the burden of the incumbrance upon the homestead parcel. And since the purchaser of such equity of redemption took and holds it subject to the common mortgage, but without assuming its payment, the two properties alike continue to be primary securities for the mortgage debt, the same as before, and the equities among the several persons interested in the mortgaged premises are equal. In Witherington v. Mason, 86 Ala. 345, 5 South. 679, 11 Am. St. Rep. 41, the court said: “When she (wife) voluntarily signs and assents to a mortgage of the homestead by the husband in the manner required by the statute, it loses its character of homestead as against the mortgagee, and becomes subject to all his rights and remedies. The homestead is not secondarily liable. * * * * As the husband, to whom the homestead belonged, and in whose favor the exemption is created, has no right to compel the mortgagee to exhaust property other than the homestead before resorting to the latter, a fortiori the wife who derives the benefit of the homestead exemption only through the right of her husband, has no such right.” Searle v. Chapman, 121 Mass. 19; Hall v. Morgan, 79 Mo. 47.

Moreover, the consequences of the result reached by the majority are most inequitable. It must be borne in mind that the mortgage debt is the debt of the husband, the homesteader, for the payment of which no one else is personally liable. By placing the entire burden of the mortgage on that portion of the premises outside of the homestead, as the majority do, the homestead parcel is made free and clear of incumbrance for the benefit of, not the wife, for she will still have only an inchoate interest therein, but the husband who is the owner thereof, and who is himself the sole debtor and liable for the whole mortgage debt; and he tomorrow may abandon the homestead, sell it, and pocket the money.

If it be said that with only a contribution by the other property the oratrix is not fully protected, because she still has not been repaid the proportionate share resting upon the *77homestead parcel, the complete answer is, that no reason exists why the payment of such proportionate share may not be enforced by her against the latter in the same manner as the other proportionate share is enforced against the former. She can enforce the payment of the ratable share of either only by way of the mortgage lien kept alive in equity for her benefit. Charmley v. Charmley, 125 Wis. 297, 110 Am. St. Rep. 827, 103 N. W. 1106.

Therefore, I think that by the settled law of this State, and upon principle, the homestead parcel and the residue of the property should each bear its proportionate share of the sum paid by the oratrix to redeem the mortgaged premises; and that the decree should be reversed and cause remanded with mandate accordingly.

Rowell, C. J., dissenting: I agree to the views expressed by Judge Watson.