Court Opinion

ID: 7108990
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:24:09.982522+00
Date Added: 2024-06-11T16:13:40.402749
License: Public Domain

Deemer, J.
(dissenting).. — What is uroperty that maybe held exempt from execution by the head of a family, when the debtor, if a farmer, holds two- or more teams, by the use-of which he habitually earns a living? Prior to the enactment of section 2906 of the Code of 1897, the statutes of" the state presupposed a levy or an attempted levy of" an execution before the debtor was required to make-a selection of exemptable property. Property that is exempt,,, dr that may be selected as exempt when execution is sought; to be levied thereon, is property that “may be exempt from execution.” It will be noticed that the statute says property that “may be -exempt from execution,’* not property that may be exempt from mortgage. Áí waiver of the benefit of exemption laws made contemporaneously with the contract or debt is of no validity. Curtis v. O’Brien, supra; Bank v. Honnold, 85 Iowa, 352. Of course, in the absence of statute-, a debtor may mortgage either exempt or exemptable property. Whether or not property covered by a mortgage may be held exempt from execution must be referred to the exemption statutes, for there is-*452no other method of determining what may be held exempt from execution. The act under consideration has reference •to a voluntary conveyance by him who, under the exemption ¡statutes, may claim the property as exempt. As said by the supreme court of- Ohio in the case cited by the majority: '“The only reasonable construction of the law is to¡ prohibit the husband from disposing of any property, without the •consent of the wife, which would have been exempt from sale if an execution had been levied thereon, and he had in good faith insisted upon all the exemptions secured to him by the ■statutes. If an execution had been issued and levied on the Torses and harness sold by him to defendants, and he had in -good faith insisted upon the exemption secured by this act, it is manifest that the officer would have been obliged to -deliver them to him.” In dealing with homestead exemptions, which may comprise any forty acres of a given tract the owner may select, we have uniformly held, where the -debtor owns more than one forty, that a mortgage executed •by the husband alone, on any part or the whole of the land is void, and that the making of the mortgage does not of Itself constitute either a-n election or 'a selection. Goodrich v. Brown, 63 Iowa, 247; Woolcut v. Lerdell, 78 Iowa, 668; Barnett v. Mendenhall, 42 Iowa, 296, and cases cited. The Tomestead right is said to extend to every part of the land. When one of two or more articles of the same- class may be. exempt, the right to claim the exemption extends to all •articles,, any one of which may be selected. There is more reason for applying the rule to personal than to real property, for the debtor may at any time plat the homestead, ’but there is no statutory method for making a binding selection of personal property that will preclude the debtor from making his selection when execution is about to he levied. 'The majority opinion says that a debtor may waive his (exemptions, and cites some cases to establish the rule. They tall relate, however, to waiver after execution has been issued, ¿and to a time when the debtor is compelled to act, or lose his *453exemption. It may be assertéd with entire confidence, I. think, that no case is to be found that holds that the debtor is bound by any statement, written or oral, as to what property he will select when execution is issued, or that he will! waive his exemptions before he is called upon to act. As ha® been seen, his agreement to do so when the debt is contracted! is contrary to public policy and void. There may be eases-where the debtor is estopped, but I have seen none that hold; that making a mortgage on property that may be exempt, or declaring in any other manner that he will select certain property, is conclusive on the question 'of selection.
Stress is placed on the provision of the statute saying; that the mortgage or incumbrance is of no validity “as to sucia exempt property only.” I do not think the proper interpretation is placed on this clause. It says “such exempt property,” referring back to the previous clause. What is it thfifr. is thus referred to ? The language is, “personal property that may be exempt from execution.” The object of the provision relied upon by the majority was to save the mortgagees to other property that might be included therein. Without .that clause, a mortgage that covered property which might, be claimed as exempt would be entirely void, and no rights; could be claimed thereunder, although it covered other property that the mortgagor could in no event claim as exempt-To save the mortgage as to this property was the manifest purpose of the legislature. But it is said that the making; of the mortgage was a selection of the exempt property. Let me ask which of the other teams he selected. It will not do to» say that by making the mortgage he selected the property covered thereby as exempt, for that would manifestly defeat it. What, then, did he do? The opinion says, as I understand it, that by making the mortgage he elected to claim* other property. If that be so, what more is it than an agreement, made at the time of the execution of the instrument^, that he would not claim the property as exempt ? How chess *454this differ from any other simple agreement not to- claim 'exemptions ? If, then, the mortgage is on exempt property, -it is invalid. If not on exempt property, it is because the •debtor agreed at the time he made his mortgage not to claim it as exempt. If the making of the mortgage constitutes a selection, let me ask what the result would be had the debtor mortgaged one of the teams to A., another to B., and a third do C. Which of the. teams would be exempt from execution, ./and which mortgage invalid ? The making of the mortgage in'this case did not preclude the debtor from claiming the--.same property as exempt from execution, had another creditor levied thereon after the making of the mortgage; and In the supposed case it is conceded, as I understand it, that ihe debtor could have defeated one of the mortgages by making a selection, when called on, after an execution issued: If he could defeat one, why may he not defeat this one by making selection when required. The opinion is also, hot-domed on the thought that the mere making of the mortgage amounted to a selection. Certainly, if an express agreement do waive is invalid, an implied one should not be given force. 'The doctrine- of waiver, as announced and anplied in the •opinion, if given full -force, and carried to its logical con-elusion, would permit the husband to waive all his exemptions by the making of mortgages, and thus defeat the manifest purpose of the statute. Suppose a mortgage had ■been given on all the horses, or suppose that instead of one mortgage, covering all the property, there had been three, ¡each covering a. different team; which of the teams would be .-exempt, under the rule announced by the majority? The •■opinion says, as I understand it, that, if the mortgage had ibeen made on all three, it would be- void as to the exempt -•team. Suppose the debtor had mortgaged all three- teams, '.and thereafter had sold one team to A., another to- B., and -.-a, third to C.; which of the purchasers would have title clear •and free of the incumbrance ? If in such case the validity •af the mortgage is made to- depend on a selection thereafter *455to be made by the debtor, and he should fail or refuse to make a selection, then the very purpose of the statute is thwarted, and the mortgage will be valid, although covering •property that may be exempt from execution.
The validity of the mortgage should be determined- with reference to conditions existing at the time it is executed, .and not by reference to what transpires in the future. If the property covered thereby is such that it may, in good •faith, be selected by the debtor, if called on in the future ■to assert his exemptions from execution, the mortgage is 'invalid, by the express terms of the statute. If, however, 'its validity is made to< depend on actual selection, no one •-can tell whether it is valid or invalid until selection is made. Assume that a debtor has two teams, lie mortgages one to A. Thereafter 33., a creditor, sues him, and is about to 'levy execution on both teams. Is the debtor required to •select' the one not covered by the- mortgage ? I think not. "If he is not compelled to- do so, then he may hold one team •exempt as to one creditor, and another as to another. This, .•as I understand it, is contrary to all the authorities. On "the. question of the right of a debtor to select property •already covered by mortgage as exempt from execution, see Emerson v. Bacon, 58 Mich. 526 (25 N. W. 503); Patten v. Smith, 4 Conn. 450; Collett v. Jones, 2 B. Mon. 19 (36 Am. Dec. 530; Evans v. Harvester Works, 63 Iowa, 204; Brainard v. Simmons, 67 Iowa, 646; Cheney v. Caldwell, 20 Mont. 77 (49 Pac. Rep. 397; Ganong v. Green, 71 Mich. 1 (38 N. W. Rep. 661). The fault I find with the opinion is that it holds that the mere making of a rnort.-gage on property that may be held as exempt is a selection •of exempt property, or an election not to claim that identical •property as exempt. It is not necessarily a selection of •exempt property, for there may remain several items of the •same kind from which selection may be made. Moreover, we have seen that, notwithstanding the making of the mortgage, the debtor may still claim the property as exempt from *456execution. It is not an election or waiver, for the reason, that contracts to waive are invalid, and-for the further reason, that the statute does not authorize or require an election at the time the mortgage is made. Again, the election is-inferred from the mere making of the mortgage, which, as we have seen, is not regarded as conclusive. In order to sustain the mortgage on this theory, it must be assumed that the mortgage' is valid. With such an assumption, the-result announced in the majority opinion follows as a matter of course. The validity of the mortgage on property which may in good faith be claimed as exempt from execution is-the very question at issue; and I see no more in the transaction than an intent on the part of the mortgagor to incumber the property by mortgage. If the mortgage had been signed by both husband and wife, and its validity had been, indisputable, we could not infer that they intended to waive their right to claim that the property was exempt from execution. See Goodrich v. Brown, supra, where this very principle was applied to mortgages on real estate that was subject, to be claimed as a homestead. The opinion also fails to-recognize the distinction between specific exemptions and exemptions that depend upon the choice of the debtor; 'and, reduced to its last analysis, the question is, is the property covered by the mortgage such as the debtor might in, good faith claim if it were attempted to' be taken on execution? That it is such property is conceded, and I think we should', hold the mortgage invalid. The decision of the Michigan,, court relied on by the majority is correct, for the statute-there construed provides that a mortgage on any part of the-exempt property shall be void, etc. Our statute reads that, no incumbrance of personal property which may be held! exempt from execution, etc. Under the Michigan statute,, mortgages on exempt property are void. Under .our statute-,, mortgages on property that may. be held exempt from execution are invalid. One relates- to exempt property, and, the, other to exempt'and exemptable. Again, in the Mich*457igan case the court holds that the wife who claimed the property was estopped by her conduct from claiming’ the property that had been mortgaged by her husband. Why we should hold that a mortgage covering one hundred and twenty acres, of a. tract of one hundred and sixty, any forty of which might be claimed as a homestead, is invalid when not signed by both husband and wife, and yet say that a-mortgage on one of two or more teams, any one of which may be claimed as exempt, signed by the husband alone, is valid,, is not clear to my mind. In either case the debtor has the right of selection when called on to select. If the property is real, the making of a mortgage is not a selection; if it is personal, it is. As I view it, the- majority opinion makes the statute read, “No incumbrance of personal property that may be held exempt from execution shall be of any validity unless mortgaged before the exemption is claimed, etc. It may be said that the construction I contend for would enable the husband to perpetrate a fraud, and render it unsafe to take chattel mortgages without requiring the signature of the wife. No doubt, the act is crude, and it may be impolitic, but these are considerations for th¿ legislature. There is no particular hardship', however, in requiring the wife to join in mortgages covering property that may be claimed by the debtor as exempt from execution. All mortgagees of personal property necessarily assume the risk of title and authority of the mortgagor, and a. mortgagee of exemptable property may easily protect himself by procuring the signature of the wife. Of course, the debtor may sell either exempt or exemptable property and he may also waive his exemptions after execution has been levied, and thus defeat the exemption; but this is no reason for holding that he should be allowed to mortgage it, in the face of the statute now under consideration. Generally speaking, the specific articles exempted by statute are of little value. It is the exemptable property that furnishes, the family with support, and it was that property that the leg*458islature intended to protect. The question of estoppel is not involved, and there is no need of crona^-ring it. I '•would affirm the judgment.