Vanstory v. Thornton

Bukwkll, J. :

This case comes to us upon the appeal of the plaintiff, who is the judgment creditor, and of the defendant Thornton, who is the judgment debtor. The mortgagees, who have come into the action of their own motion, since it was last before the Court (110 N. C., 10), and have been made defendants and have adopted the answer of the defendant Thornton, did not appeal.

We will first consider the refusal of his Honor to submit the issue tendered by Thornton relative to the alleged payment, in whole or part, of plaintiff’s judgment.

This issue was tendered by him with the evidence which he insisted tended to establish that such payment had been made. He did not contend that he could produce other evidence bearing upon it. It would have been an idle thing to submit such an issue, the burden of which was upon defendant, and at the same time tell the jury that defendant had no evidence to support it.

And his Honor correctly decided that the facts put in evidence did not prove that any payment had been made oil the judgment, or that it had been satisfied in whole or in part. There was no offer to prove that plaintiff had actually received from the receiver in Thornton v. Lambeth (103 N. C., 86) any money to be applied on this judgment, or that his failure to get it was due to his own fault or negligence. That receiver was appointed at the instance'of the defendant to take charge of the partnership assets (Thornton v. Lambeth, supra), and if, without any neglect on his part, the plaintiff failed to get what the judgment of the Court in that cause directed the receiver to pay him, the loss must fall on the defendant (the plaintiff there), whose duty it was to see that the money he owed was in fact paid.

The amount due to plaintiff on his j udgment being thus fixed, we come to the consideration of his exception to the judgment, which is as follows: “To this judgment the plaintiff, C. P. Yanstory, excepted, claiming that after the payment of costs his judgment for $978.20, with interest from April 1, 1887, docketed May 6, 1889, was entitled to priority over all the mortgage debts, being older,. and should be paid in full before any bf the proceeds of sale should be applied to any of said mortgages.”

And in this connection wa will also consider the defendant’s exception to this judgment, “claiming that after the payment of the costs and mortgage debts, no part of the fund arising from the sale of his homestead should be paid to the plaintiff, but the balance should be paid to him.”

The land, a sale of which is ordered by the judgment appealed from, was allotted to the defendant Thornton as his homestead in April, 1885. The relief which the plaintiff demands is that, for reasons set out in'his complaint, there should be “a re-appraisement and re-allotment of the land and improvements of the defendant, to the end that the excess of the homestead, if any, be ascertained, and be subjected to the satisfaction of plaintiff’s judgment.”.

It seems to have been conceded by the eminent counsel of the defendant that under the law as declared when this cause was here on demurrer (110 N C., 10), and the allegations of the complaint and answer, and the findings of the jury, the plaintiff was entitled to have the re-appraisement and re-allotment demanded by him. We wish, however, to expressly exclude the conclusion that a re-allotment should be decreed in suits like this one, upon the finding of tire jury that the allotted land is worth “more than a homestead”; that is to say, more than one thousand dollars. To accomplish that result, much more must be established by the plaintiff, according to the opinion filed by the late Chief Justice Merexmon in this cause (supra), to which we adhere.

Assuming, then, that the parties to this action (which, by the presence of the defendant mortgagees, has become a suit to foreclose their mortgages as well as to re-appraise and re-allot the homestead upon the demand of the plaintiff, and for the reasons set out in his complaint) have consented that a sale of the whole lot shall be made, the purchaser acquiring a title free from all of their claims or liens, and that their respective claims to the fund to be brought into court, the proceeds, of the sale, shall be measured and determined by their respective claims and liens on the land, we are required to determine how that fund shall be distributed.

This agreement, or concession, of the parties, that a sale of the whole lot shall be made without a re-allotment of the homestead of Thornton, involves, of course, the further concession or agreement that what the lot brings over one thousand dollars shall represent what the excess over the homestead would have brought if the homestead had been ro-al-lotted, and the excess had then been sold, and it also involves the further concession or agreement that the re-allotted homestead would have sold for one thousand dollars.

If, therefore, after the payment of the costs (to the pajment of which, first, no party excepts) there shall remain more than one thousand dollars, that excess will represent and stand in the place of the portion of the lot which, upon a re-appraisement, would lie outside of the homestead boundaries, and this excess of the fund over one thousand dollars (the homestead) must be applied on the plaintiff’s judgment, for it was docketed before any of the mortgages were registered, and it is a first lien on this excess (Gulley v. Thurston, at this Term), enforceable now because of the re-allotment of defendant’s homestead. The statute (The Code, §435) makes a docketed judgment a lien on all the land of the debtor in the county where it is docketed from the (late of the docketing, and the creditor may immediately enforce his lien so acquired on all the debtor’s land outside of the boundaries of the'homestead. Such are his rights. They are plain and unmistakable. No act of the debtor can change them, or in any degree impair them. To hold otherwise would be to displace, by our decision, a lien given by, the statute, and to put it in the power of a judgment debtor to deprive his diligent creditor of the fruits of his diligence.

We hold, of course, that if, after the full payment of plaintiff’s judgment, any part of this excess shall remain, it shall be applied on the mortgage debts according to their priorities.

This brings us to determine what disposition shall then be made of the homestead money, the sum which represents and stands in -the place of the newly allotted homestead, and to which none of the parties waive any of their claims or modify in any degree their legal rights.

We must first discuss the relation of the plaintiff to this fund, for it may be that the excess over one thousand dollars will not be sufficient to pay all costs and his judgment.

In some States a docketed judgment creates no lien on the homestead land, but in this State such a judgment creates a lien on all the land of the debtor, both that outside of the homestead boundaries and that within those boundaries, the only difference being that the lien on that which is within the homestead boundaries is not enforceable by execution or other final process until there has come about in some way a termination of the debtor’s constitutional exemption rights in this land, which rights, vested in him by the organic law, may be prolonged after his death for the benefit of his widow in some instances and in some for the benefit of infant children. As we have said, he cannot now enforce his lien on the homestead land, but his debtor cannot displace that lien by any act of his. It is fixed on the land by law, and this Court can only recognize and at the proper time enforce it.

We conclude, therefore, that the plaintiff has a lien on this fund ($1,000) for the payment of such part of his judgment as is not satisfied by the excess over the homestead money, but, if the other parties interested in this fund so insist, he must await the termination of Thornton’s exemption rights in this fund before he can get for his own use any part of it. When those rights have terminated, such part of this principal fund as may be necessary will he applied to the satisfaction of the plaintiff’s judgment. In the meantime it will be invested as the Superior Court of Cumberland County may direct, and the interest accruing thereon will he applied on the mortgage debts, paying the senior mortgage first and then the next oldest, and so on. Any remainder of the corpus after satisfaction of the judgment will be used to pay off any balance then due on the mortgage indebtedness. The defendant Thornton can have-no part of this fund until both the judgment and the mortgages are paid off in full. Ho loses the land outside of his re-allotted homestead, because it must be devoted to the discharge of the judgment lien thereon. He loses his right to use the homestead land or the money that stands in its place, because by proper deeds he and his wife have assigned that land to the mortgagees; thereby they acquired all his rights to this lot, his homestead estate therein, as it is sometimes called. Adrian v. Shaw, 82 N. C., 474; Simpson v. Houston, 97 N. C., 344. Therefore they take his place in relation to the fund ($1,000) which stands in lieu of the exempt land, and must he allowed to hold that place to the present exclusion of the judgment creditor.

We feel hound to follow the decisions cited above, and others of like import made by our distinguished predecessors, because rights have been acquired and contracts have been made on the faith of those adjudications. To disturb them at this late day would bring about confusion and cause injustice in many instances. We prefer to recall the dicta in Fleming v. Graham, 110 N. C., 374, which seem in conflict with those older cases.

We are not unmindful of the fact that perplexing problems will arise in the adjudication of rights in and titles to lands, to which at one time or another there has attached that peculiar right called a “homestead,” whether we adhere to the old rule laid down in Adrian v. Shaw and cases of like import or adopt the now rule foreshadowed in Fleming v. Graham, supra. One thing at least should be distinctly realized : The two rules, on principle, are in direct conflict one with the other. By the one the homestead right or estate, or exemption from execution, or “advantage,” call it by what name we will, is salable or assignable, and the purchaser can hold the land in which he has acquired this right or estate, or exemption from execution, or advantage, to the exclusion of the ordinary judgment creditor of his assignor or seller till that right or estate, or advantage, or exemption from execution, “is over.” By virtue of the assignment (usually made in the form of a deed to the land itself, the greater including the less) he gets into the shoes of the homesteader, to use a homely expression. He has bought the privilege of so standing, the privilege of personating before the law and the judgment creditor the “homesteader” himself, quoad the homestead land. ,And we think that the assignability of this right, as contradis-tinguished from the land itself, has been distinctly recognized by all the decisions of this Court until that of Fleming v. Graham, it is true that there has been .much discussion as to the name that should be applied to this new creation of the law. Justice Dick called it in Poe v. Har die, 65 N. C., 447, “the estate in the homestead,” “a determinable fee,” and called its counterpart “the reversionary interest,” the two constituting all the estate of the owner of the land. Chief Justice Pearson called it “the homestead estate,” and its counterpart “the reversion,” and notably in Jenkins v. Bobbitt, 77 N. C., 385, though in Littlejohn v. Egerton, 77 N. C., at page 384, he had spoken of the “homestead right” as a quality annexed to land whereby an estate is exempted from sale under execution for debt. Justice Bynum, in Bank v. Green, 78 N. C., 247, defined it as “ no new estate,” but only “a determinable exemption from the payment of his debts in respect to the particular property allotted to him.” And the same Court in Hill v. Oxendine, 79 N. C., 331, distinctly recognized the “homestead” as distinguished from the “reversionary interest,” and with equal distinctness conceded the assignability of each of these rights or interests separately.

Chief Justice Smith, in Markham v. Hicks, 90 N. C., 204, approved the definition or description contained in Bank v. Green, supra, and called attention to the “inadvertent expressions” which had been used in defining the right under discussion; but there was no intimation from him in that case that it was not assignable.

Chief Justice Merriiion, in the case of Jones v. Britton, 102 N. C., 166 (on page 169), speaks of this quality of exemption as an “advantage” which can pass by proper deed from the homesteader to his vendee of the land, and in unmistakable language recognizes that this “advantage” — ■ this exemption from sale, limited contingently' — may be acquired and held by the vendee of the land to the postponement of the rights of the judgment creditor. He there emphatically approved the rule laid down in Adrian v. Shaw, supra, by Justice Ashe, which had been approved with even greater emphasis by Chief Justice Smith on the rehearing of the latter case (84 N. C., 832).

And in Lane v. Richardson, 104 N. C., 642, it is said of homestead land that liad been sold by the homesteader that it “ retained the quality of the homestead exemption in the hands of the purchaser.”' In Long v. Walker, 105 N. C., 90, the cases of Wyche v. Wyche, 85 N. C., 96, Barrett v. Richardson, 76 N. C., 429, and Lowdermilk v. Corpending, 92 N. C., 333, are cited with approval, and the principle that in this State what is there again called, the “ rever-sionary interest” in the homestead land may be owned by one person while the homestead interest or estate is held by another, is distinctly recognized.

In Waples on Homestead and Exemption, p. 299, it is said: “There maybe a suspended judgment lien on a homestead; as when the statute allows judgments to be docketed against it but prevents their enforcement during the-time the homestead remains exempt, yet allows execution afterwards. Meanwhile, the exemptionist may sell the land on which the benefit rests, subject to the judgment but also protected for the time being by the suspension of the lien. The purchaser acquires this protection with the land so far as the homestead extends with the land.” In support of this the learned author cites Jones v. Britton, supra; Rankin v. Shaw, 94 N. C., 405; Markham v. Hicks, 90 N. C., 204 ; Wilson v. Patlon, 87 N. C., 318, and Hinson v. Adrian, 86 N. C., 61.

It is not our privilege to consider the choice between these two rules (that of Adrian v. Shaw and Jones v. Britton establishing the assignability of the homestead estate or right, or advantage, and the one proposed in Fleming v. Graham denying that assignability) as a new question. If such was the case we might find much perplexity in the consideration of the Constitution, which seems to provide for a sale by the homesteader and his wife of the homestead lands, and the statute law, and'the decisions of this Court, which beyond all question make a docketed judgment a lien on the homestead land, a provision that is in force in few of the States except this. It may be said in this connection, however, that it would be difficult for one to see what value or efficacy there would be in a power of sale, if the exercise of the power brought to the. purchaser only the poor privilege of witnessing an execution sale of his newly acquired land. And in truth it matters not so much what we call as how we protect and enforce this “right” or “estate.” It may be that inadvertent expressions have been used iu the effort to adapt the nomenclature of the common law to a matter unknown to that system of jurisprudence. But through all the decisions of this Court down to the case of Fleming v. Graham, supra, will be found, we think, upon careful examination, a clear recognition of the fact that this “ advantage,” as Chief Justice Mebrimox aptly (‘ailed it, is assignable, and that the purchaser of the land from the homesteader may hold that “ advantage.” Therefore when we affirm Adrian v. Shaw, Simpson v. Houston, and cases of like import, we are but affirming Jones v. Britton, decided so late as 1889, and, as we think, we go counter to no decision or dictum in the Reports of the decisions of this Court, except what is said in Fleming v. Graham, supra.

If there is to be any present division of this fund between the parties, it must be a matter of arbitration or agreement among themselves, for the Courts have no rule by which to determine what exemption rights are worth in cash, their present value, the length of their duration depending on too many contingences.

The case of Leak v. Gay, 107 N. C., 468, so far as it decides or seems to decide that the lien of a docketed judgment on the debtor’s land, whether on an allotted homestead or not, can be displaced by a junior mortgage, is overruled.

The fund arising from a sale of the lot described in the pleadings must be disposed of ■ in accordance with this opinion, unless otherwise agreed by all the parties in interest.

•Judgment modified. In plaintiff’s appeal there is error. In defendant’s appeal there is no error.