Jacobson v. Pope Talbot , 214 Cal. 758 ( 1932 )

I dissent. The majority opinion rests upon the, to me, false reasoning that, because the Barkers could have declared a valid homestead on the property at any time before they sold it to Jacobson, and thereby have relieved the property from the lien of respondents' attachments, but did not do so, the appellant, who purchased the land subject to the lien of the attachments, may do what the respondents' debtor failed to do and, by making a declaration of homestead subsequent to his buying the land, accomplish that very object. "The object of the homestead law is to protect the homesteader and those dependent upon him or her, in the enjoyment of a domicile not exceeding $5,000 in value, and to this end a liberal construction of the law and facts will be indulged by courts. When the object has been accomplished courts will not suffer this salutary statute to be used as a shield behind which those who would deal unjustly with creditors may find refuge." (Marelli v. Keating, 208 Cal. 528 [282 P. 793].) The effect of the majority opinion, if it is to be the law, is to subject claims like those of respondents to defeat through the operation of two or more homesteads, each of the value of $5,000, as I shall presently demonstrate. It was never intended by the legislature, in enacting the laws relating to homesteads, to make possible any such situation. (Waggle v. Worthy, 74 Cal. 266, 268 [5 Am. St. Rep. 440, 15 P. 831].)

A declaration of homestead creates no new or additional title. It only attaches certain privileges and immunities to such title as may be held at the time the declaration becomes effective. The homestead claim is impressed upon the title subject to such rights as are known to be held by other parties. (Smith v.Bangham, 156 Cal. 359 [28 L.R.A. (N.S.) 522, 104 P. 689].) When the Barkers sold the land to appellant, they conveyed it subject to the respondents' liens. The transfer, subject to the attachments, did not interfere with the rights of attaching creditors. (Martinovich v. Marsicano, 150 Cal. 597, 600 [119 Am. St. Rep. 454, 89 P. 333].) Did the appellant's subsequent declaration of a homestead on the property have the effect of destroying the rights of respondents under their respective attachments? In my opinion it did not. While it is generally true that a declaration of homestead relieves and discharges the property from all claims and liens, other than those excepted by section 1241 of the Civil Code, it is my view that this exemption has application solely to claims and liens acquired by creditors of the declarant, and does not relate back to destroy claims and liens against the former owner of the property arising and attaching prior to the declarant's acquisition of title, and as to which his title was subject.

I grant that "it is the policy of the homestead law to protect the home against enforcements of the debts of the declarant" (italics mine), as the majority opinion declares. "It is true that it is the policy of the law to favor homesteads to a certain extent, for the protection and preservation of homes and families. But there is a limit beyond which this policy should not be allowed to control. It should not be invoked for the purpose of establishing a new application and interpretation of a statute, contrary to its true meaning and in the face of a long-established understanding and usage based on its true meaning." (Weber v. McCleverty, 149 Cal. 316, 318 [86 P. 706].) The majority opinion does not cite, and I do not believe there can be found, a single case in which it has been held that it is the policy of the homestead law to protect a home against claims incurred by persons other than the declarant. In the state of Washington the laws permit homesteads to exempt property against the lien of judgments. In a case differing from this, in that it deals with a probate homestead, the Supreme Court of that state said: "At the time the appellants acquired the property in question, it was subject to the lien of the judgment against Mrs. Smith. It cannot be that they by subsequently filing a declaration of homestead could defeat a lien upon the property which existed at the time they acquired title. We know of no case holding that one not a judgment debtor and who takes the property subject to the lien of a judgment or mortgage can subsequently file a declaration of homestead and defeat such lien." (Pratt v. McInroe, 155 Wash. 239 [283 P. 1089, 1091].)

In going through the decisions of this court, we find such expressions as "not to withdraw from the reach of creditors property of the debtor"; "be protected against creditors" — from the context apparently referring to creditors of the declarant. (Maloney v. Hefer, 75 Cal. 422, 425 [7 Am. St. Rep. 180, 17 P. 539]; Bullis v. Staniford, 178 Cal. 40, 45 [171 P. 1064].) Such I believe to have been the generally accepted theory of the homestead laws of the state from the beginning. This court had such an understanding fully in mind when it said: "The instances and extent in which and to which the homestead is liable to be subjected to the demands of creditorsof the homestead claimant (italics mine) are clearly and explicitly provided in the Civil Code," citing sections 1240 and 1241. (Beaton v. Reid, 111 Cal. 484 [44 P. 167].)

I offer the following illustration of what may readily be done if the majority opinion is to be accepted as the proper interpretation of the homestead law of this state: A, the head of a family, owns two pieces of real estate, each with a dwelling-house thereon, the value of each piece of property being $5,000. He resides with his family on one parcel, on which he has declared a valid homestead. The other parcel is unencumbered. B extends credit to A on a contract to the extent, say, of $2,000, without security. There is read into the contract between them the fact that A's homestead is exempt from execution and therefore cannot be relied upon in any way as security for the debt he owes B. B relies upon the unencumbered property of A as security for his debt, which fact, I believe, ought to be as much a part of the contract as the fact of A's right to his homestead exemption. A refuses to pay B the amount of his indebtedness, and B files an attachment on the property not exempted by the homestead, which proceeding constitutes the one specific mode provided by the legislature by which to acquire a lien upon the property of a debtor against whom a cause of action exists arising out of a contract. (Anderson v. Goff, 72 Cal. 65, 70 [1 Am. St. Rep. 34, 13 P. 73].) Ordinarily, and in due course, the obligation not being paid, the lien of B's attachment will be merged into a judgment. Before that is accomplished, however, A sells the attached property to C, who takes possession with notice of the claim and lien of B, occupies the property with his family, and proceeds to declare a homestead thereon. Such declaration by C, if the majority opinion states the law, would serve to enable A, through the instrumentality of C, to withdraw from B the only property of A upon which B, in the course of his dealings with A, had the right to rely as security for the payment of A's debt to him. Such is not the "benign object of the statute". (Maloney v. Hefer, supra.) In this connection, see, also, Kemp v. Enemark, 194 Cal. 748, 753 et seq. [230 P. 441], discussing cases in which the rights of creditors are declared paramount to those of the owner of the homestead. In my opinion, the case at bar falls within that category.

Curtis, J., concurred.