Opinion
October Session, 1947. Motion for Rehearing or to Transfer. Denied November 26, 1947.
1. — Exemptions. A corporation is a "person" within statute providing that any person holding a judgment against another who is about to leave the state may have execution issued against property and effects of such person and that no exemptions shall be allowed execution debtor.
2. — Exemptions — Homestead. Under statute, judgment debtor loses all exemptions whenever he seeks to move his property out of the state, and there is no exemption in favor of a previous homestead, but he loses even his homestead exemption if he seeks to put proceeds of sale thereof beyond reach of his creditors, and whether judgment debtor personally has gone from the state before execution was issued is immaterial.
3. — Constitutional Law. The court has the duty to execute the laws as it finds them and as the Legislature has written them.
Appeal from the Circuit Court of Lawrence County. — Hon. Emory E. Smith, Judge.
REVERSED AND REMANDED.
James E. Sater, Monett, Missouri, Attorney for appellant.
The respondent admitted that, at the time of the garnishment, and for along time prior thereto, he was a resident of the State of Michigan, and that he intended to transfer the garnisheed funds to that state. The testimony shows that the respondent had abandoned the homestead. The circumstances of the sale, and the terms thereof are inconsistent with the thought of reinvestment in a homestead. Klotz v. Rhodes et al., 240 Mo. 499; Kaes v. Gross, 92 Mo. l.c. 656; Sorrell v. Bradshaw 222 S.W. 1024; Duffey v. Willis 99 Mo. 132. In the case of Klotz v. Rhodes, supra, the court said: "So, too, his conduct may be such that in the law he will be presumed to have abandoned the idea of reinvesting the proceeds of a homestead in a new homestead. Such is the case at bar." The selling of the homestead to be paid for whenever the purchaser "could" certainly is an an abandonment of the right of reinvesting the proceeds of a homestead in a new one, and such terms are wholly inconsistent with the thought that a new homestead would be acquired with the proceeds. In the Klotz case, supra, the court also said: "While the law allows a person to sell one homestead and purchase another, which other shall be as fully exempted as the first, yet there being no time fixed by the statute for this reinvestment, the law steps in and fixes a reasonable time, as the date for the act of reinvestment and reoccupancy. It is also true that what is a reasonable time for such act of reinvestment and reoccupancy is dependant somewhat upon circumstances, yet it cannot be said that six years with no excusing circumstances, is a reasonable time." Certainly, under the terms of this sale, indefinite as they were, with no set time for payment, the respondent would not be given a reasonable time to invest the proceeds. In the case of Duffey v. Willis, 99 Mo. 132, the court said: "The question of abandonment is one of fact, and each case must, in a great measure, rest upon its own particular facts. The right of a homestead exemption ceases to exist when the occupant leaves the premises with a view of acquiring a residence elsewhere, and with no intention to return. The intention to return must be formed at the time of the removal from the premises in order to preserve and continue the homestead exemption." This rule will apply with equal force to the right to invest the proceeds of one homestead in another homestead, and the terms of the sale clearly show no intention at the time of the sale to reinvest the proceeds in another homestead. In Kaes v. Gross, supra, l.c. 655, The Supreme Court said: "The removal of a family from the homestead constitutes a prima facie case of abandonment, and raises a presumption against the claim of homestead, which must be rebutted before such claim can successfully be asserted." The operation of the statute in respect to homesteads is restricted to residents of the state, and it has always been the policy of the law that non-residents or those intending to change their residence from the state, have no exemptions. State Bank of Eagle Grove v. Dougherty, 167 Mo. 1: In this case the Supreme Court said: "The right of homestead is purely a creature of statute and such statutes can have no exterritorial force, and must be construed to apply to homesteads within the State of the enactment. "When the proceeds of the homestead in Iowa were invested in a homestead in Missouri that homestead was not exempt from execution for the debt in question, which existed before the homestead was acquired." The weight of authority supports the rule just announced. This rule is announced also in Corpus Juris Secendum, Volume 40, page 540, Section 00, as follows: "Where a debtor may and does exchange his homestead for another, the new homestead stands in the place of the old homestead, and is liable or exempt, as the case may be to the same extent as was the homestead for which it has been substituted. The rule, however, has no application in respect to a homestead purchased with the proceeds of a prior homestead where such proceeds have been subjected to an intervening use, or to a homestead purchased in another state." From this rule, it necessarily follows that the proceeds deposited in the bank, owned by a non-resident, and intended to be transferred to another state, are subject to levy. Asi de from the question of abandonment of the homestead, the respondent, being a non-resident of the state at all of the times involved in this controversy, is not entitled to exemptions. The policy of the law is that all exemptions are extended to its citizens only. The legislature recognized this policy and enacted Section 1400, Revised Statutes, 1939, which is as follows: "Any person holding or who may hereafter hold a judgment against another, who is about to leave the state, may have an execution issued against the property and effects of such person, or any part thereof, sufficient to satisfy said judgment and all cost that has accured or may hereafter accrue. In enforcing such execution no exemptions shall be allowed the execution debtor." Exhibit 1, executed by all the heirs of the deceased wife, is inconsistent with the theory that the money, being on deposit was for the purpose of reinvestment in a homestead, and provides: "we hereby acknowledge receipt of the payment to us $1,472.71 which is the balance of a checking account in the name of Mrs. Florence Ball," and the money was directed to be given to the respondent herein, and the exhibit further recited that there were no debts or obligations against the said Florence Ball. This Exhibit clearly estopped the estopped the respondent from claiming the funds are exempt from garnishment.
Gardner Gardner, Monett, Missouri, Attorneys for respondent.
Proceeds from the sale of a homestead are exempt from execution where it is the intention of the seller to invest such proceeds in another homestead and such action is taken within a reasonable time. Sec. 616, Mo. R.S. 1939; Martin v. Cox, 199 S.W. 185; State ex rel. Schneider v. Hull, 74 S.W. 888, 99 Mo. App. 703; Zollinger v. Dunnaway 78 S.W. 666, 105 Mo. App. 36. Abandonment of a homestead is a question of intention. Removal of household goods during temporary business venture or rental of property from month to month is not abandonment of the homestead. Pocoke v. Peterson, 165 S.W. 1017, 256 Mo. 501; Duffey v. Willis 12 S.W. 520, 99 Mo. 132. Leaving the state during the Civil War because of unsettled conditions did not amount to an abandonment of the homestead. Leake v. King, 85 Mo. 413. Voting outside the state does not constitute abandonment. Snodgrass v. Copple, 111 S.W. 845. An intent on the part of the person owning the home to leave the state is no ground for attachment of a debtor's homestead. Davis v. Land 88 Mo. 436. Under the evidence, there was no abandonment of the homestead in this case and even at the time of the trial, all of the proceeds from the sale of the homestead were not available for reinvestment in another homestead. Within ten days after a portion of the proceeds of the sale became available to respondent, he contracted for another homestead. Such a period cannot be held unreasonable. Rights under the attachment writ issued during that period are judged as of the time of issuance. Caldwell v. Renfroe, 73 S.W. 340. There can be no fraudulent conveyance of homestead property as far as creditors are concerned since they have no interest in that property. Davis v. Land, supra. Also, it is not necessary that the owner of the homestead claim the same since the homestead exemption provided for by statute is complete without any action on the part of the owner to claim it. Keene v. Wyatt, 63 S.W. 116; Vogler v. Montgomery, 54 Mo. 577, 584. Homestead laws are prompted by benevolent intentions and are to be liberally construed to protect the head of the family from creditors. Vogler v. Montgomery, supra. Although the case cited under point No. 2 by appellant on page 8 of its brief is distinquishable under the facts, the doctrine there enunciated conflicts with the benevolent purpose of the homestead laws as stated in the Vogler case, supra, and conflicts with respectable authority in Vermont and Texas. Keyes v. Rines, 37 Vt. 260 (approved in Cameron v. Abbot, 258 S.W. 562, 564, Texas.) Strawn Mercantile Co. v. First National Bank of Strawn 279 S.W. 473 (Texas). Since the rule announced in the case cited by appellant is so harsh, the Courts can soften its effects by requiring clear showing of the abandonment of a homestead or an abandonment of an intention to re-invest the proceeds from the sale thereof in another homestead. There is no such evidence of abandonment.
There is no question in this case but that, at the time the execution and garnishment were issued, Claude Ball, the respondent, and his former wife were indebted to appellant in a judgment of the Circuit Court of Lawrence County, Missouri, in the sum of $706.44, together with interest thereon and all the costs of suit. It is further undisputed that appellant caused an execution on such judgment to be issued, and the First National Bank of Monett, Missouri, had been served with a garnishment on such execution and funds in a sum greater than the amount of said judgment, interest and costs were found in such bank and deposited in the name of respondent.
Respondent filed in the Circuit Court of Lawrence County a motion to quash such garnishment. This motion was sustained and plaintiff appealed to this Court.
It seems that respondent and his then wife had a home in Verona, Missouri, and claimed and regarded it as a homestead. This homestead was sold in 1944 to respondent's stepson, Clarence Lee, although no money was paid thereon until 1945, when Lee paid a substantial sum.
Respondent had no account in any bank and such proceeds, from time to time, were deposited by Lee in garnishee bank in the name of respondent's then wife. Shortly after the death of respondent's wife, all the heirs of respondent's deceased wife joined in an assignment to respondent of all the account in garnishee bank, which had previously been in the name of such deceased wife.
Respondent and his then wife had lived for a period of time in Michigan, and had returned to Missouri to live and, about the time of her death, respondent and his then wife decided to remove permanently to the State of Michigan.
It is a fair inference from all the evidence that respondent, and his then wife, intended to use the proceeds of the sale of the Missouri homestead for the purchase of a home in Michigan. It was, perhaps, on this account, in justice to respondent, and recognizing that such proceeds really belonged to respondent and were to be so used, that the heirs of respondent's deceased wife willingly assigned such deposit to him. In fact, and shortly after his wife's death, respondent had made a deposit on a home in Michigan, and it is a fair inference from the evidence that respondent intended to use the proceeds of the sale of the Missouri homestead for the purchase of a home in Michigan, and to claim the latter as his homestead in Michigan.
While appellant made several assignments of alleged error in its brief, to the effect that homestead laws have no extra-territorial effect or application and that the evidence does not show any intention on the part of respondent to establish a homestead in Michigan, Section 1400, Revised Statutes Missouri, 1939, (R.S.A. Sec. 1400) seems to us to present an insuperable obstacle to the action sought to be taken by respondent and to the sustaining of the action of the circuit court in quashing such garnishment. Section 1400, Revised Statutes Missouri, 1939, is as follows:
"Any person holding or who may hereafter hold a judgment against another, who is about to leave the state, may have an execution issued against the property and effects of such person, or any part thereof, sufficient to satisfy said judgment and all cost that has accrued or may hereafter accrue. In enforcing such execution no exemptions shall be allowed the execution debtor."
It seems to us that the provision "In enforcing such execution no exemptions shall be allowed the execution debtor," absolutely precludes respondent from asserting any exemption, even a homestead claim, against such judgment when he "is about to leave the state."
Respondent brushes this statute aside by asserting that appellant has cited no authority that it is a "person" who can claim the benefit of such statute, and by asserting that the statute does not apply anyhow, unless the debtor "is about to leave the state," since respondent had already left the state before the execution was issued.
The position of respondent is that he had the right to sell his Missouri homestead, when he intended to use the proceeds of such sale for the purchase of a homestead in another state. But what is this Court to do with said Section 1400, which says that no exemptions shall be allowed when the execution debtor is about to leave the state? Does the execution debtor have even a homestead exempt when he is about to leave the state? Does it not rather seem that exemption of a homestead is only permitted by Missouri law so long as the execution debtor remains a citizen of Missouri, and, as soon as he decides to leave Missouri, he no longer has the protection of Missouri laws from his debts?
Respondent's suggestion that appellant was not a "person" within the meaning of Section 1400, cannot be sustained in view of Laws of 1943, page 416, which authorizes a corporation to sue in any court in this state, and the numerous definitions of a corporation as a person found in our statutes (Laws of 1939, page 4620, and in 31 Mo. St. Ann. page 718). A corporation must therefore be held to be a "person," within the meaning of Section 1400, Revised Statutes Missouri, 1939.
The plain meaning of Section 1400, Revised Statutes Missouri, 1939, is that any judgment debtor loses all exemptions, whenever he seeks to move his property out of the state. The statute makes no exceptions in favor of a previous homestead. We must hold that the judgment debtor loses even his homestead exemptions, if he seeks to put the proceeds of a sale thereof beyond the reach of his creditors.
The Court does not make the laws. Its plain duty is to execute the laws as it finds them and as the Legislature has written them. (15 C.J., page 726, and Mosely v. Empire Gas and Fuel Co., 313 Mo. 225, 281 S.W. 762.)
The Legislature had the right to make a homestead exempt from execution, so long as the judgment debtor establishes and keeps his homestead in Missouri. It had the equal and undoubted right to say that the judgment debtor could have no such exemption, if he tries to remove any of his property from the state and put it beyond the reach of his creditors.
So it makes no difference what respondent's intentions were in going to another state. We cannot hold that it makes the slightest difference whether or not respondent had personally gone from the state before the execution was issued. It is the property of the judgment debtor, about to be taken beyond the reach of his creditors, and not his personal presence, that destroys his exemptions. No other construction of Section 1400 Revised Statutes Missouri, 1939, is possible.
So far as we can ascertain, the Courts of Missouri have never construed that section, which has been the law of Missouri since it was amended over thirty-eight years ago. (Revised Statutes Missouri, 1909, Section 2257.)
The trial court had no right to quash the garnishment, under the circumstances in this case, and, in so doing, it manifestly committed error. The judgment must therefore be reversed and the cause remanded to the circuit court for further action in that court in harmony with this opinion. It is so ordered. Fulbright, P.J., absent. Vandeventer, J., concurs.