Summary
In Anchor Savings Loan Asso. v. Week (1974), 62 Wis.2d 169, 213 N.W.2d 737, a judgment of foreclosure was entered which determined that the property involved was the mortgagor's homestead.
Summary of this case from Schwanz v. TeperOpinion
No. 190.
Argued November 27, 1973. —
Decided January 16, 1974.
APPEAL from orders of the county court of Dane county: WILLIAM D. BYRNE, Judge. Vacated in part; affirmed in part; reversed in part; and proceeding remanded.
For the appellant there was a brief and oral argument by Neil J. Toman of Madison.
For the plaintiff-respondent there was a brief by Ted H. Field of Madison, attorney, and Trayton L. Lathrop and Isaksen, Werner, Lathrop Heaney all of Madison, of counsel, and oral argument by Trayton L. Lathrop.
For the defendant-respondent there was a brief by Heilprin Law Offices, S.C., and Richard A. Heilprin, all of Madison.
On motion for rehearing a brief was filed by Graff Schrank and D. G. Graff, all of Madison, for defendant-respondent David Hansen.
On March 11, 1968, Richard and Lois Week borrowed $31,500 from the Anchor Savings Loan Association and delivered to Anchor a note, secured by a mortgage in the usual form signed by Lois Week, on their home in McFarland, Wisconsin. Because of defaults, Anchor commenced an action to foreclose the mortgage in late March, 1971. The complaint alleged that the McFarland property was the homestead of the Weeks. Named and served as defendants in the action, in addition to Lois Week, were various creditors who claimed to have an interest in the property on the basis of liens. Only the defendant United States answered the complaint, alleging a tax lien. David Hansen was made a defendant but did not answer. He is a respondent in this appeal.
On May 18, 1971, the trial judge entered his findings of fact and conclusions of law, together with the judgment of foreclosure. The findings of fact recited that the real estate described in the complaint was the homestead of the mortgagor, and the judgment entered incorporated by reference that finding. A sale of the property was ordered; and on November 29, 1971, the date on which the sale was to take place, Lois Week filed an affidavit claiming a homestead exemption. Upon motions to confirm the sale, the trial judge concluded that the sale price of $32,700 was inadequate, and he denied the order for confirmation.
A second sale was set for May 8, 1972, and the sheriff was directed to give notice to the bidder on the first sale and to the parties and their attorneys. The record is barren of any objection by the mortgagor with respect to the notice for the second sale. The sheriff, by an ancillary order, was directed to conduct the sale "without further publication or posting." Thereafter, the date of sale was set for May 22, 1972.
Prior to the date of sale, David Hansen, the owner of a judgment lien, moved the court for an order denying the mortgagor's claim of a homestead exemption in the property on the ground that the exemption had not been raised by her appearance and answer to the complaint, pursuant to sec. 278.11, Stats. The trial judge held, in an order dated May 17, 1972, that the homestead exemption was waived by the Weeks' failure to so appear and answer.
On May 19, 1972, the attorney for Lois Week served a notice of appeal from the judgment of May 18, 1971, and from the order of April 20, 1972, setting aside the sale and from the order of April 27, 1972, directing the second sale. Although notices were served, none of these appeals were perfected. The second sale was held on May 22, 1972, and on July 13, 1972, the trial judge confirmed the sale to David Hansen on a bid of $44,000.
On July 18, 1972, appeals were taken by Lois E. Week from the judgment of May 18, 1971; from the order of April 20, 1972, setting aside the first sale; from the order of April 27, 1972, which ordered the second sale; and from the order of May 17, 1972, wherein the trial judge concluded that the Weeks were not entitled to a homestead exemption because they failed to appear and answer the complaint pursuant to sec. 278.11, Stats. In August, 1972, Lois Week appealed from the order of July 13, 1972, confirming the second sale and the order of July 26, 1972, disbursing the proceeds of that sale.
On December 12, 1972, pursuant to motion, this court dismissed the appeal from the judgment of May 18, 1971, and the appeal from the orders of April 20 and 27, 1972. Accordingly, the only appeals on which jurisdiction was accepted by this court were the appeals from the order of May 17, 1972, holding that the Weeks had waived their homestead exemption; from the order of July 13, 1972, confirming the second sale; and from the order of July 26, 1972, disbursing the proceeds of the second sale.
Initially we point out that the foreclosure judgment entered by the trial court on May 18, 1971, with the findings of fact and conclusions of law that were incorporated therein, is a final judgment, which was not timely appealed. This court has no jurisdiction to go behind that judgment, and the findings and conclusions are the law of the case. Bischoff v. First Wisconsin Trust Co. (1966), 30 Wis.2d 583, 592, 141 N.W.2d 188. Because that judgment is final, all the issues raised by the parties are moot.
The case comes to us in the posture of an appeal from an order which denied the right of the mortgagor to assert her homestead exemption. That order was decided on May 17, 1972, almost a year after the entry of the judgment of foreclosure. The findings of fact and conclusions of law which were incorporated in that judgment found that the entire mortgaged premises were homestead. Hence, after that judgment was entered, and not appealed, the homestead exemption was not an open question. It had been decided favorably to the mortgagor. The case is controlled by Northwestern Securities Co. v. Nelson (1927), 191 Wis. 580, 211 N.W. 798. Therein this court stated:
"An adjudication in the judgment that the mortgaged property constituted the homestead of the mortgagors would definitely, under the provisions of the statutes, have stamped the proceeds as exempt, and would have precluded the application of any of these proceeds to the payment of general judgment creditors. In other words, the surplus would belong to the mortgage debtors." (P. 584)
Once the judgment was entered in this case, finding the homestead exemption as it did, the only rights that could thereafter be asserted by any general judgment creditor would be to that portion of the surplus which was in excess of the statutory limits of the homestead exemption. In the instant case, once the foreclosure judgment was entered, the claim of the respondent David Hansen was subordinate to that portion of the surplus which was statutorily exempt as homestead and subordinate to the tax liens to which the homestead exemption does not apply.
The mortgagee's complaint alleged that the mortgaged property was homestead in its entirety. No answer was made by Hansen or by any other general judgment creditor. The homestead status of the property was undisputed and uncontested. Had Hansen or any other general judgment creditor sought to contravene the allegations of the complaint, he would have been obligated to answer and assert that there was no homestead exemption. Under the facts of this case, the mortgagor had no duty to make any assertion of homestead rights. The exemption resulted as a matter of law when the plaintiff's assertion that the property was homestead was not contested. The mortgagor's only obligation was a ministerial one of laying claim to the surplus which might remain after the sale in the satisfaction of the mortgage and the prior tax claims.
The trial judge relied, erroneously, upon sec. 278.11, Stats., which provides:
"278.11 Homestead, how sold. If any defendant appear and answer that any portion of the mortgaged premises is an exempt homestead the court shall ascertain whether such be the fact, and if so whether the part of the mortgaged premises not included in the exempt homestead can be sold separately therefrom without injury to the interests of the parties, and in that case shall direct in the judgment that the exempt homestead shall not be sold until all the other mortgaged lands have been sold."
The plain meaning of the statute is not to compel the defendant to appear and assert his homestead exemption, but only to compel him to appear and assert any claim that he might have "whether the part of the mortgaged premises not included in the exempt homestead can be sold separately therefrom without injury to the interests of the parties." This statute gives the option to the mortgagor to insist that, where a mortgage covers both homestead and nonhomestead property, the nonhomestead property be sold first. That issue was irrelevant in the instant case, since the entire mortgaged property was homestead.
A homestead exemption can be raised at any time during the course of the foreclosure proceedings, at least up until the time of sale. We said in a very recent case, Lueptow v. Guptill (1972), 56 Wis.2d 396, 404, 202 N.W.2d 255: "This court has long held that the right to the homestead exemption does not depend upon its formal exercise." Lueptow is merely one of a long chain of cases that so hold. E.g., Larson v. State Bank of Ogema (1930), 201 Wis. 313, 317, 230 N.W. 132; Martin v. C. Aultman Co. (1891), 80 Wis. 150, 154, 49 N.W. 749.
The strong public policy to protect the homestead exemption, even in the face of inaction, is demonstrated by the provisions in ch. 272, Stats., Executions. Sec. 272.21(1) provides that, when there is a levy upon the lands of any person, he can make the claim of a homestead exemption at any time before sale. Sec. 272.21(4) provides that, even where there is a failure to select a homestead, the right to a homestead exemption is not impaired, but only his right of selection.
Sec. 278.162, Stats. permits a mortgagor who has not made a claim for a homestead to first assert that right at the time of the distribution of the surplus. This court has confirmed that late exercise of the right of homestead exemption in Northwestern Securities Co. v. Nelson, supra, page 584.
By virtue of the provisions of the judgment in this case, there was no necessity for the mortgagor's assertion of the homestead exemption, and even had the judgment not found that the property was homestead, there was an assertion of right when an application was made before sale. That application, however, was superfluous in the instant case.
In proceedings after the judgment was entered and at the hearing after which the judge found that the mortgagor had failed to assert her claim in a timely fashion, there was evidence adduced from which it would be possible to conclude that, at the time the judgment lien of David Hansen was filed on June 8, 1970, the mortgaged property was not the homestead of the Weeks. The evidence could be interpreted to indicate that the Weeks had left their home with the intention of living in Grand Cayman Island. While such intention, as evidenced by their removal from their home, is a rebuttable presumption, nevertheless, as we said in Jarvais v. Moe (1875), 38 Wis. 440, 448:
"The presumption might be rebutted by circumstances and conditions surrounding the removal, or declarations accompanying it, manifesting a temporary purpose and an intention to return; but not satisfactorily by ex post facto professions, after intervening occurrences had made return advantageous. The intention which is sufficient to rebut the presumption must be positive and certain, not conditional or indefinite."
In the instant case the trial judge, because he felt the right to the exemption had not been timely asserted, deemed it unnecessary to determine whether the homestead had been abandoned or that the presumption of abandonment had been overcome. Since the judgment had declared the exemption, the issue was moot.
Hansen's time for asserting his priority against any alleged claim of homestead exemption was before the judgment of foreclosure was entered.
Viewing the record as we do from the perspective of hindsight, it is apparent that at least one of the real issues affecting the homestead exemption, whether it existed on the date of filing the judgment lien, was not tried at proceedings that led to the entry of the judgment. Had we jurisdiction over the judgment, we might well conclude that, since the real issue of the homestead exemption as it applied to the lien of David Hansen had not been tried, the judgment of foreclosure should be vacated and the matter remanded for further consideration in the interest of justice under sec. 251.09, Stats. Hansen was a party aggrieved by the judgment of foreclosure. He has made no effort to appeal that judgment, and the appeal brought by the mortgagor from that judgment was not timely. Under these circumstances, this court is without power to correct that judgment. The party aggrieved simply failed to make a timely assertion of his rights.
Additionally, on this. appeal the mortgagor asserts that the sale should be set aside because the notice was inadequate. In ordering the second sale, the trial court required that notice be given only to the parties to the action and to the highest bidder at the first sale. The sheriff was directed to conduct the sale without further publication or posting. Contrary to the assertion of counsel for the mortgagor at the oral argument, we find no objection of record to the provisions imposed by the court, this despite the fact that counsel for the mortgagor asserts that he was present. While the notice provisions did not comport with statutory requirements, the failure of the mortgagor to object upon the record constitutes a waiver. We stated in Blodgett v. Hitt (1871), 29 Wis. 169, 179, that the notice requirement is for the protection of the property owner to insure that the best possible price is obtained and that he is not unduly prejudiced by the forced sale. Freeman, in the treatise, 2 Law of Executions (3d ed.), p. 1654, sec. 286, writes:
"An objection to the form of a notice can only be made by the defendant, and cannot be successfully urged by him, unless he proceeds to take advantage of it without any unnecessary delay. The notice of the sale, being for the benefit of the defendant, may be waived by him."
Accordingly, we conclude that the mortgagor cannot now complain that the notice of the second sale was inadequate. The foreclosure judgment and the subsequent sale must stand.
The order of May 17, 1972, denying the mortgagor's assertion of the homestead right, was moot at the time it was entered, since the issue had already been decided at the time of the foreclosure judgment. Accordingly, that order is set aside as null and void. The only objection to the July 13, 1972, order confirming the second sale was a claim of inadequate notice. Because that claim was waived by failure to object to the notice provisions, that order is affirmed. The order of July 26, 1972, disbursing the proceeds of the sale, did not recognize the mortgagor's claim for the homestead exemption. Therefore, the order of July 26, 1972, is reversed.
By the Court. — Order of May 17, 1972, is vacated; order of July 13, 1972, is affirmed; and order of July 26, 1972, is reversed; and the record of the foreclosure proceeding is remanded for whatever further action consistent with this opinion the trial court deems necessary.