Opinion
No. 74-082
Decided December 24, 1974. Rehearing denied January 14, 1975. Certiorari denied March 17, 1975.
Trial court entered judgment disallowing a homestead claim of exemption and property owner appealed.
Reversed
1. EXEMPTIONS — Homestead — Creditor — No Knowledge — Recording — Immaterial — Recorded Notice — Secured Claimants' Rights. In regard to claim of homestead exemption, it was immaterial to the validity of the claim that trial court found that creditor of property owners through its inadvertence did not know of the recording of the exemption; the creditor is charged with knowledge through the recording statute; and the recorded notarized statement of the homestead exemption serves as notice of the claim to all creditors and complies with the mandate of the statute so as to secure the rights of homestead to claimants.
2. EXECUTION — Sheriff's Sale — Failure of Creditor — File Affidavit — Property Valuation — Sale Not Voided — Request of Creditor. As regards sheriff's sale of property on which homestead exemption had been claimed, the fact that the creditor had failed to file an affidavit of the value of the property prior to the sale does not authorize court to void the sale at the request of that creditor; it is only on application of the debtor that the sale may be declared void.
3. Sheriff's Sale — Creditor — Initiated Sale — Knowledge of Irregularity — Estoppel. Since, as regards sheriff's sale of property on which homestead exemption was claimed, the judgment creditor caused the sheriff to levy on the property, advertise it for sale, and sell it, and then purchased the property at the sale, and since the creditor had the responsibility to file an affidavit of valuation which it failed to do, the creditor had knowledge of the irregularity in the proceedings, but permitted or caused the sale to be made; thus it is estopped to later contest the validity of such proceedings.
4. Sheriff's Sale — Judgment Creditor — Prohibited — Bid on Property — Refuse — Pay Purchase Price. When a judgment creditor or other party makes a successful bid and purchases property at a sheriff's execution sale, it becomes a final and binding purchase subject to the statutory rights of redemption; thus, as regards sheriff's sale of property on which a homestead exemption had been claimed, the judgment creditor could not bid the property in at the sale for the full amount of the homestead exemption and then refuse to pay its bid price.
Appeal from the District Court of the County of El Paso, Honorable William E. Rhodes, Judge.
Donald E. La Mora, for plaintiff-appellee.
Raymond Duitch, for defendant-appellant.
This is an appeal from a judgment of the trial court disallowing a homestead claim of exemption. We reverse.
On April 3, 1972, Clyde M. Trees recorded a homestead on property owned by him and his wife, defendant-appellant. On April 20, 1972, plaintiff obtained a judgment against defendants Clyde M. Trees and Marlys J. Trees as guarantors of an obligation of L. J., Inc. An execution was issued from the district court on December 4, 1972, directed to the sheriff of El Paso County. The sheriff filed a notice of levy on real estate with the county clerk and recorder of said county on December 4, 1972, and served a copy of the notice of levy and seizure on the Trees on December 7, 1972. The property which defendant Clyde M. Trees and his wife, Maryls J. Trees, owned was advertised for sale by the sheriff and sold to plaintiff on January 19, 1973, in accordance with the mandate contained in the execution, for $5,000. Clyde M. Trees was present at the time of sale but made no comments as to his having filed a homestead exemption on the property. The $5,000 bid by plaintiff was not paid, but a certificate of purchase was issued by the sheriff to plaintiff, and return of sale was made by the sheriff to the district court.
Subsequently, defendant Clyde M. Trees made demand on the sheriff for the $5,000 and the sheriff in turn demanded the $5,000 from plaintiff. Plaintiff refused to pay the $5,000 bid at the sale, has never demanded a sheriff's deed to the property, and contends that the sale was void. Mr. and Mrs. Trees took out bankruptcy and the home was treated as exempt in those proceedings. Mr. Trees has now quitclaimed his interest in the property to his wife, defendant-appellant, Marlys J. Trees. She filed a motion in the original suit requesting the court to order plaintiff to pay the $5,000 owed to her. At the hearing on the motion, there was evidence introduced that she was in fact the head of the family, supported the children, and was in fact the breadwinner for the family. Clyde M. Trees quitclaimed his interest in the property in order to confirm her right to the homestead exemption.
The trial court ruled that the recorded declaration of homestead as filed was void because the owners' interest in the property was not stated and the manner in which the interest was derived was not stated in the declaration of homestead, and that, if defendants had had a valid homestead exemption, they waived the same. We disagree.
I.
C.R.S. 1963, 77-3-2, provides in part, that:
"To create such homestead the owner of the property (householder) shall record in the office of the clerk and recorder of the county where the property is situate, an instrument in writing describing such property, setting forth the nature and source of the owner's interest therein and stating that the owner is homesteading such property, which instrument may be acknowledged as provided by law."
It also provides that the spouse of the owner may homestead the property to the same extent as the owner.
The notarized statement claiming a homestead exemption states that Clyde M. Trees "the owner do by this declaration homestead the following described property . . . . " and describes the property in question by legal description. This instrument of record gave notice of the homestead as of the date it was filed.
[1] The court in its findings found that plaintiff through inadvertence did not know of the recording. This would be immaterial. The creditor is charged with knowledge through the recording statute. The omission of the source of title and the book and page of the instrument whereby title was acquired would not be of detriment to plaintiff and the insertion thereof would not give plaintiff any better notice than it already had from the recording of the homestead exemption. The recorded notarized statement serves as notice of the claim to all creditors, C.R.S. 1963, 118-6-9; see Plew v. Colorado Lumber Products, 28 Colo. App. 557, 481 P.2d 127; and complies with the mandate of the statute so as to secure the right of homestead to Mr. and Mrs. Trees.
II.
[2,3] Plaintiff asserts that the sale was void because it failed to file an affidavit of the value of the property prior to the sale. However, it is only on application of the debtor that the sale may be declared void. See C.R.S. 1963, 77-3-6(1); and also, Whitlock v. Alliance Coal Co., 73 Colo. 205, 214 P. 546; Copeland v. Colorado State Bank, 13 Colo. App. 489, 59 P. 70. Here it is the judgment creditor that desires to have the sale declared void, not the judgment debtor and owner of the homestead right. Hence, the statute in this instance does not authorize the court under these circumstances to void the sale. Moreover, the judgment creditor caused the sheriff to levy on the Trees' property, advertise it for sale and sell it, and then purchased the property at the sale, and the creditor had the responsibility to file the affidavit of valuation. When a party has knowledge of an irregularity in the proceedings, but permits or causes the sale to be made, it is estopped to later contest the validity of the proceedings. Mesa County Co-op Ass'n v. McKinney, 81 Colo. 513, 256 P. 13.
[4] Plaintiff was the successful bidder at the sale. C.R.S. 1963, 77-3-6(2), provides:
"If the successful bidder at such sale shall be a judgment creditor, said judgment creditor shall be required to pay in cash to the sheriff or other proper officer making the sale, an amount sufficient to pay the exemption plus the proper costs and expenses and shall not have the right to have such exempt amount applied toward the satisfaction of his judgment."
As stated in Continental Oil Co. v. Benham, 163 Colo. 255, 430 P.2d 90:
"When a judgment creditor or other party makes a successful bid and purchases property at a sheriff's execution sale, it becomes a final and binding purchase subject to the statutory rights of redemption."
In this instance, the bank, the judgment creditor, cannot bid the property in at the sale for the full amount of the homestead exemption and then refuse to pay its bid price.
Judgment reversed and cause remanded with directions to enter an order requiring plaintiff to pay the $5,000 bid for the property to defendant Marlys J. Trees.
JUDGE BERMAN and JUDGE KELLY concur.