Court Opinion

ID: 6544126
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:18:11.270473+00
Date Added: 2024-06-11T15:55:55.169898
License: Public Domain

Hughes, J., (after stating the facts.) Where money is loaned with which to purchase a homestead, upon the understanding that it will be so used, and it is so used, and a mortgage is given to the lender to secure the payment of the money loaned for that purpose, if the building constituting a part of the homestead is insured for the benefit of the owner of the homestead, and afterwards is consumed by fire, is the money due on the policy of insurance exempt from seizure on process of garnishment or execution for the debt due the lender? Article nine, section three, of the constitution of 1874, provides that “the homestead of any resident of this state, who is married or the head of a family, shall not be subject to the lien of any judgment or decree of any court or to sale under execution or other process thereon, except such as may be rendered for the purchase money or for specific liens.” Acruman’s testimony shows that he loaned the money to Barnes to be used for the purchase of the homestead property, and Barnes swears he used it for that purpose. Barnes executed a mortgage to Acruman upon the same property to secure the payment of the money loaned with which to purchase it. In some courts it is held that money loaned to' purchase property cannot be considered purchase money as between the lender and borrower, but only between the vendor and purchaser of the property. Heuisler v. Nickum, 38 Md. 270. But, in our opinion, the weight of authority and the better reason is that money borrowed of a third person with which to purchase a homestead, when it is understood between the lender and .the borrower that it is to be used for that purpose, and it is so used, is purchase money, Allen v. Hawley, 66 Ill. 164; Hamrick v. People’s Bank, 54 Ga. 502; Carr v. Caldwell, 10 Cal. 385; Nichols v. Overacker, 16 Kas. 54. “Things bought with borrowed money, borrowed with the avowed purpose of buying them, are not exempt as against the lender.” Waples, Hds. & Ex. 911; Houlehan v. Rassler, 73 Wis. 557. “The homestead is liable for money borrowed to pay a balance due on the purchase price.” White v. Wheelan, 71 Ga. 533; Middlebrooks v. Warren, 59 Ga. 232. “One who loans money to enable another to purchase a homestead cannot be defeated in collecting it by the claim of homestead immunity upon the part of the borrower.” Wahrmund v. Merritt, 60 Tex. 24; Eylar v. Eylar, 60 Tex. 315. The insurance money due the appellee, in this case was not exempt from the debt due the appellant for the thousand dollars loaned him by the appellant with which to purchase the homestead, for the loss of which the insurance money was due the appellee. The money loaned, under the circumstances, was purchase money, according to the authorities. Wherefore the decree of the chancellor holding that the money is exempt is erroneous. The judgment is reversed, with directions to enter a judgment for the appellant.