No. 90-555
IN THE SUPREME COURT OF THE STATE OF MONTANA
1991
IN THE MATTER OF THE ESTATE OF
LEONARD LEROY SANDVIG, Deceased.
CHARLES E. BRENTON and ARLA MAE BRENTON,
Petitioners and Appellants,
THE ESTATE OF LEONARD LEROY
SANDVIG, Deceased,
Respondent and Respondent.
APPEAL FROM: District Court of the Fourteenth Judicial District,
In and for the County of Musselshell,
The Honorable Peter L. Rapkoch, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Malcolm H. Goodrich, Crowley Law Firm,
Billings, Montana
For Respondent:
1 XD
E John L. Pratt, Ask & Pratt, Roundup, Montana
L Submitted on Briefs: May 30, 1991
SEP 2 4 3991 Decided: September 24, 1991
Filed:
L2 S m t i t l ,
CLERK OF SUPREME COURT
S.TATE OF MOPaTANI~
Justice William E. Hunt, Sr., delivered the opinion of the Court.
Appellants Charles B. Brenton and Arla Mae Brenton appeal an
order from the Fourteenth Judicial District, Musselshell County,
denying their petition for Allowance of Judgment Debtorst Interest
in a 1929 Model A Ford automobile.
We affirm.
Appellants raise the following issues:
1. Whether the District Court erred when it held that the
operation of 5 25-13-609(2), MCA, is not automatic.
2. Whether the District Court erred when it held that
appellants waived an exemption in a 1929 Model A Ford automobile
under the provisions of 5 25-13-609(2), MCA.
On October 9, 1988, the District Court issued a writ to sell
the 1929 Model A Ford automobile to satisfy a judgment in favor of
the personal representative of the Estate of Leonard Leroy Sandvig
against appellants. The amount of the judgment was $7892.
On November 25, 1988, the Model A Ford was sold at a sheriff Is
sale for $7000. After deducting $66 for sale costs, the remaining
proceeds were paid to the personal representative of the estate.
The money was deposited in the attorney's trust account and
distributed to pay estate costs and attorney's fees. These costs
exceeded $6934 and depleted the proceeds. Appellants made no claim
of exemption under S 25-13-609(2), MCA, until after the sheriff's
sale.
On December 21, 1988, appellants executed a joint voluntary
petition for bankruptcy. The judgment of $7892 was listed as an
unliquidated debt. The bankruptcy schedules failed to list a claim
of their interest in the Model A Ford, and did not indicate any
claims against the Sandvig estate. Appellants listed the levy of
execution of the Ford as having been seized under legal process
within the year immediately preceding the filing of the original
petition. They did not claim the Ford exempt. They did, however,
claim as exempt a $900 vehicle owned by the husband. The Ford was
jointly owned.
On January 6, 1989, appellants filed pro se petitions, which
where subsequently amended, for recovery of $1200 for each
individual, together with interest at 10 percent per annum until
paid, from the Sandvig estate for their exemption interest as
judgment debtors in the Model A Ford.
On September 20, 1990, the District Court issued an order
denying appellants interest in the Model A Ford, as they had waived
such interest in light of their previous exemption in bankruptcy.
It is from this order that appellants appeal. Because the two
issues are closely related, we will discuss them simultaneously.
Section 25-13-609, MCA, grants certain personal property
exemptions subject to value limitations. The purpose of the
exemption statutes is to attempt to strike a balance between the
debtor's need to maintain a livelihood through rehabilitation while
doing as little damage as possible to the creditor's ability to
collect money. 31Am.Jur.2d Exemptions 5 4 (1989). The exemption
statutes are a personal privilege granted by the legislature.
Tetrault v. Ingram et al. (1918), 54 Mont. 524, 525, 171 P. 1148,
1149. The exemptions should not exceed the means necessary for
the support and rehabilitation of the debtor and his dependents.
To do so would create a windfall for the debtor and deny creditors
payments to which they are entitled. 31 Arn.Jur.2d Exemptions 9 4
Section 25-13-609, MCA, provides in part that:
A judgment debtor is entitled to exemption from execution
of the following:
(2) the judgment debtor's interest, not to exceed $1,200
in value, in one motor vehicle .... [Emphasis added. ]
Appellants argue that 5 25-13-609(2), MCA, is automatic and
excuses them from taking any affirmative steps to protect their
interest in the Model A Ford. We disagree.
Our codes fail to provide a specific procedure on how a
judgment debtor should claim certain property exempt. Previously,
this Court has held that a judgment debtor must take some sort of
affirmative action in order to claim property exempt.
Where a debtor owns more property of a given class than
the law exempts, it is necessary for him, in order to
secure the benefit intended to be conferred, to identify
the particular property to which his claim attaches
....
Tetrault, 171 P. at 1149. In addition, federal bankruptcy law
requires debtors to file a list of property claimed as exempt.
11 U.S.C. 5 522 (1988).
Moreover, we have noted that there is an informal procedure
which exists for a debtor to follow in order to assert his
exemption.
Frequently persons desiring to claim property as exempt
from attachment or execution file a sworn claim with the
officer making the levy, who, if he retains the property,
ordinarily demands an indemnity bond.
State ex re1 Bart01 v. Justice of the Peace Court (1936), 102
Mont. 1, 5, 55 P.2d 691, 692-93. Therefore, we hold that the
debtor is required to take certain affirmative steps to inform
creditors of an exemption.
In this case, appellants claimed an exemption for another
motor vehicle in the bankruptcy proceeding. While in bankruptcy
they did not claim an exemption in the Model A Ford, nor did they
assert a claim against the Sandvig estate.
In addition, 5 25-13-609(2), MCA, grants an exemption in only
one motor vehicle. It does not grant an exemption in all of
appellants' motor vehicles. By exempting the husband's vehicle,
appellants made their election. Granting an additional election
would create a windfall for appellants. If the statute were
automatic, creditors would not be able to determine which of the
debtor's motor vehicles would be exempt.
We affirm the District Court/.
Justice