Smith v. Bangham , 156 Cal. 359 ( 1909 )

I dissent. It does not appear from the record whether or not the declaration of homestead was made prior to the twenty-sixth day of February, 1906 — the date upon which appellant notified respondent that he elected to buy the property; but under the rule favoring a construction in support of the regularity of a judgment we may assume that Mrs. Bangham had filed her declaration of homestead before appellant signified his willingness to pay seventeen thousand dollars for the property. If, therefore, she could not make a valid declaration of homestead, the only thing which prevented her from doing so was the option for which plaintiff had paid the price of one dollar. In other words, to find that the declaration of homestead was ineffective we must hold that the option which the purchaser might ignore and surrender without the loss of more than the trifling sum of one dollar, was sufficient to deprive this woman of a right given her by the law under the constitution of California. (Art. XVII, sec. 1.) It may be that after the acceptance of all of the terms of a sale contemplated under the provisions of a contract of this kind and the offer of an adequate price, the wife of the owner of the property, if she knew all of the facts, would be powerless to declare a valid homestead upon it; but we are not here confronted by such a state of facts. Suppose that instead of sixty days, a period of ten years had been named as the time within which the option of purchase might be exercised. Might a husband by the simple device of giving such an option deprive his wife for a term of years of the right of securing a homestead given her by statutes passed under the solemn mandate of the constitution? Such a result, it seems to me, was never contemplated.

In the opinion of the majority of the court, great reliance is placed upon the authority of People's Street Railway Co. v.Spencer, 156 Pa. St. 85, [36 Am. St. Rep. 22, 27 A. 113], to the effect that when an option to purchase is exercised the right to buy the property relates back to the date of the original contract so as to cut off intervening rights acquired by those having knowledge of the option. That was a case not involving any interpretation of the law relating to homesteads. The facts there considered showed that there had been a conveyance of property as security for a loan, but that the grantor took a lease for a nominal sum and an exclusive option of repurchase for the amount of the loan and interest. The court treated the transaction as one in which the railroad company never surrendered its equitable estate and held that upon the repayment of the loan with interest, the company's title became effective as of the date of the option. It was held that upon payment of the loan and interest the railroad company became the owner of the land as it was at the date of the original agreement "or of the insurance money which stood pro tanto in its place." The case is so dissimilar to the one at bar that I cannot see its appositeness.

Section 1238 of the Civil Code gave Mrs. Bangham the right to declare a homestead upon her husband's property. This, I submit, existed independently of any adverse equitable title which she was not by statute compelled to recognize as paramount to it. I cannot subscribe to the doctrine expressed in the main opinion that: "The fundamental basis upon which all of these decisions must rest is the proposition that (except where the contrary is expressly declared by statute), a declaration of homestead is subject to all rights in the property known by the person filing the declaration to exist." The code does not declare the instances in which a homestead is not subject to execution and forced sale, but does enumerate the four kinds of judgments whichare superior to it. (Civ. Code, sec. 1241) All other kinds of judgments not enumerated are ineffective because not specified in the statute and the inference is inevitable that without the barrier of the statute, no unexecuted judgment could avail against a homestead. By parity of reasoning we should deduce the rule that the homestead must prevail against all liens not by statute made superior to it.

Mr. Justice McFarland in Ontario State Bank v. Gerry, 91 Cal. 94, [27 P. 531, 532], said: "But the doctrine that unrecorded deeds and mortgages are good except as against subsequent purchasers for a valuable consideration does not apply to homesteads. Rights to homesteads are defined by the provisions of the code which directly deal with that subject. `The doctrine bearing upon conveyances made to hinder, delay or defraud creditors has no application to the creation of a homestead.' And a declaration of homestead is not a `conveyance' as that word is used generally in the code." And again in the same opinion, he says: "There is no question here about the morality of the transaction. It is simply a matter of statutory provision." In the case of Lee v. Murphy, 119 Cal. 364, [51 P. 553], the homestead defeated the lien of an unrecorded mortgage of which the wife who declared the homestead had actual notice and this significant language is used in the opinion: "I have not overlooked the equitable considerations so persuasive in this case and so ably presented by counsel for respondent, but they all proceed from the assumption that the case is one for the application of general principles of equitable cognizance, whereas it is hedged in and controlled entirely by legislative enactment." In Warner v. Warner, 144 Cal. 615, [78 P. 24], a homestead on the husband's separate property was held good as against an antenuptial agreement wherein the wife had promised not to claim her husband's property "either as heir or otherwise." In Simonsen v. Burr, 121 Cal. 582, [54 P. 87], it was decided that the question of fraud of creditors cannot be raised as against a homestead which one of the spouses had the right to declare.

Following the rule that a contract is to be construed most strongly against the person seeking to sustain it, I am still of the opinion that the contract in the case at bar was properly held to be unfair because under its terms plaintiff would be enabled to postpone indefinitely performance on his part, and I wish to repeat the language used as follows in the opinion heretofore rendered in Department Two: "While the contract provides that the option must be exercised by written notification prior to February 26, 1906, it also contains this language: `Upon such notification within such time I agree ondemand to grant, sell and convey said real estate to said W. Scott Smith, etc.' The contract further provides that Bangham shall within ten days after notification furnish a certificate of title; that thereafter Smith or his assigns shall have `reasonable time' to examine said certificate; and that `said notification and the furnishing of said certificate of title within said reasonable time showing title as aforesaid, shall bind the said W. Scott Smith or his assigns to purchase said real estate on said terms.' Conveyance by Bangham `on demand' being one of said `terms,' the option might if enforced, result in giving plaintiff the power to hold the land indefinitely, subject to his privilege of purchase and without the expenditure of a dollar, by the simple expedient of omitting to demand from Bangham a conveyance of the title. The lower court properly declined to enforce the specific performance of a contract so inequitable and one in which the consideration was so inadequate. (Civ. Code, sec. 3391, subd. 1.) It follows also that such a contract being of but little more dignity than a nudum pactum, would be no obstacle to the declaration of a homestead by Mrs. Bangham on her husband's property. As the court found appellant suffered no detriment other than the payment of one dollar for the option, judgment in his favor for that sum on the second count was proper. (Civ. Code, sec. 3306)"

I am of the opinion that the judgment of the lower court should be affirmed.

Lorigan, J., concurred in the foregoing dissenting opinion.