Opinion ID: 1109835
Heading Depth: 1
Heading Rank: 2

Heading: were the bakers entitled to a homestead exemption of $15,000?

Text: Miss.Gen.Laws Ch. 323, Sec. 5 (1970), was approved April 6, 1970, effective July 1, 1970. Among other things, the act increased the homestead exemption from $5,000 to $15,000. The act provided: Section 7. Nothing in this act shall affect any execution or attachment upon which levy has been made and under which an execution sale or attachment is pending at the time of the effective date of this act, but such execution or attachment may proceed in all respects according to the law prevailing at the time such levy or attachment is made. Section 8. This act shall not affect any matter in any court of this state that is pending at the time this act takes effect. Sections 7 and 8 of the act indicate that the legislature recognized that it could not enlarge the exemptions of property from liability to existing creditors thereby impairing the obligations of contracts prohibited by the federal and state constitutions. [1] It is firmly settled that any law which materially increases the amount of exempt property withdrawn from liability for the debts of the owner of the property impairs the obligation of existing contracts and is, as to existing creditors, unconstitutional because an exemption may not be applied retroactively. Odom v. Leuhr, 226 Miss. 661, 85 So.2d 218 (1956); Johnson v. Fletcher, 54 Miss. 628 (1877); Lessley v. Phipps, 49 Miss. 790 (1874). We held in Odom that the landowner in that case was entitled to the increased exemption because the judgment in question was not obtained until after the effective date of the increase in the homestead exemption. Odom did not involve an existing contract but was an action for damages for a tort committed by the landowner. Although the cause of action accrued and suit was filed in Odom before the effective date of the increased homestead exemption, we held this fact did not bring the case within the prohibition of the federal and state constitutions against the legislature passing a law impairing a contract. Odom reaffirmed the rule stated in Johnson v. Fletcher, supra , that the execution rights of a judgment creditor become fixed when he obtains his judgment and the legislature cannot increase the exemption as to existing debts. In this case, all of the judgments were obtained and enrolled before July 1, 1970, the effective date of the amendment increasing the homestead exemption, except the claim of Atlas Brick Company. The judgment in favor of Atlas Brick Company was rendered July 17, 1970, in the Circuit Court of Lamar County. The judgment recites that it was a suit on a promissory note and that personal service of process was had on the defendant, Mason Baker, returnable to a prior term of the court. The claim of Atlas Brick Company was pending on the effective date of the act increasing the homestead exemption so the increased exemption did not apply. (Section 8, supra. ) We therefore conclude that the $5,000 exemption which existed before the amendment was applicable to the claims of all the judgment creditors and the chancellor erred in holding that the landowners were entitled to a homestead exemption of $15,000.