STRANGMAN v. In the Matter of the Application for the Appointment of Appraisers to Appraise Homesteaded Property.*

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District Court of Appeal, Second District, Division 2, California.

Walter J. STRANGMAN, Petitioner, Judgment-Creditor and Appellant, v. George L. DUKE, Defendant, Judgment-Debtor and Respondent. IN RE: the Application for the Appointment of Appraisers to Appraise Homesteaded Property.*

Civ. 21442.

Decided: February 17, 1956

Snyder, Fletcher & O'Neil, South Pasadena, for appellant. George L. Duke and Joseph Doyle, Beverly Hills, for respondent.

Walter J. Strangman, judgment creditor, appeals from an order directing respondent's homestead to be sold. On December 2, 1952, Strangman recovered judgment against George L. Duke for $10,000, plus interest and costs; it was based upon an obligation created in February 1947, at which time the homestead exemption was $6,000. The judgment did not run against the wife, Esther H. Duke. The spouses owned a certain duplex property in undivided interests, that is, one-half was vested in the wife as her separate property and one-half was held as joint tenancy estate of the two spouses.

On September 15, 1952, said George L. Duke declared a homestead on the property asserting therein ‘That, it is my intention to use and claim my undivided interest in the said lot of land and premises above described, together with the dwelling houses thereon, and its appurtenances, as a homestead.’ The wife did not join in the declaration. Strangman, after levy of execution, brought a proceeding pursuant to § 1245 et seq., Civil Code, for appointment of appraisers, sale of the property and payment of his debt out of the proceeds in excess of the statutory exemption. The court, after appropriate preliminary proceedings, found the value of the property to be $19,500 subject to a tax lien of $169.85; also that the land could not be divided without material injury; ordered a sheriff's sale of an undivided one-fourth interest in the premises at a price which must exceed $6,0001 plus tax liens; distribution of the proceeds of sale was ordered as follows: (1) Payment of tax lien of $169.85; (2) payment of $6,000 to judgment debtor, George L. Duke; (3) satisfaction of Strangman's execution; and (4) balance, if any, to homestead claimant.

The arguments presented on appeal revolve around the limited nature of George L. Duke's title and the terms of his declaration.

The homesteading of property owned in undivided interests, such as joint tenancy or tenancy in common, has been a perplexing subject in this jurisdiction until recent years. Section 1238, Civil Code, now declares: ‘If the claimant be married, the homestead may be selected from the community property or the separate property of the husband or, subject to the provisions of section 1239, from the property held by the spouses as tenants in common or in joint tenancy or from the separate property of the wife. * * * Property, within the meaning of this title, includes any freehold title, interest, or estate which vests in the claimant the immediate right of possession, even though such a right of possession is not exclusive.’ The Supreme Court decided in Re Estate of Kachigian, 20 Cal.2d 787, 790, 128 P.2d 865, 867, that ‘the former rule prohibiting the selection of a homestead from an undivided interest in property during the lifetime of the owner has been abandoned.’ In this respect Matter of Estate of Davidson, 159 Cal. 98, 115 P. 49, which held that one or both of the spouses could not impress a homestead upon the undivided half interest of a husband owned as tenant in common with his wife, has ceased to represent the prevailing rule.

Respondent's assertion in his declaration that he claims as a homestead his undivided interest is in consonance with the rule now prevailing, and cases decided before the change in the law are not controlling. Husband or wife may now declare a homestead on joint tenancy property without the consent of the other spouse. Watson v. Peyton, 10 Cal.2d 156, 159, 73 P.2d 906. When it comes to selling the property in a special proceeding against the husband (pursuant to § 1245 et seq., Civ.Code) that sale effects a severance of the spouses' interests and only the husband's interest (in this case one-fourth) can pass to the purchaser; the wife becomes a tenant in common with the new owner. In re Rauer's Collection Co., 87 Cal.App.2d 248, 259, 196 P.2d 803. If dissatisfied therewith she may have a partition; thereupon the husband's homestead having been terminated, the wife may establish a new one if requisite facts such as residence, etc., be present. 40 C.J.S., Homesteads, § 13, p. 441; Spencer v. Geissman, 37 Cal. 96. In other words, the execution reaches and the sale conveys only the declaring husband's half of the joint tenancy interest. Cf. In re Rauer's Collection Co., supra, 87 Cal.App.2d 248, 256, 196 P.2d 803; In re Estate of Kachigian, supra, 20 Cal.2d 787, 792, 128 P.2d 865.

In the instant case the entire property was appraised at $19,500 and the sale limited to a one-fourth interest conditioned upon receiving a bid of more than $6,000 for said interest. Appellant asserts that respondent was not entitled to the entire exemption because his interest was only one-fourth of the entire property. There is no provision in our statute for apportionment of the exemption in any situation. See In re Rauer's Collection Co., supra, 87 Cal.App.2d at page 261, 196 P.2d at page 811. And its theory is opposed to such treatment. The right to declare a homestead does not depend upon the nature of the declarant's title, so long as he has some interest in the property which is a freehold vesting in him immediate right to possession, whether joint or exclusive. 25 Cal.Jur.2d § 25, p. 321. And one who is entitled to make such a declaration is declared to be entitled to an exemption from enforcement of debts to a specified extent—in this case $6,000. Since the statute says that one owning an undivided freehold estate may declare a homestead, and that every homesteader is entitled to a specific exemption, the creditor has no complaint. The statute is aimed at a limited protection against his claim. While it is of no interest to the creditor whether allowance of a $6,000 exemption to the husband in the case at bar would be prejudicial to the rights of the wife, it is pertinent to inquire into this matter as a test of the soundness of the conclusion above indicated. Husband and wife cannot have two homesteads, not even upon different properties, Gambette v. Brock, 41 Cal. 78, 84; Bullis v. Staniford, 178 Cal. 40, 44, 171 P. 1064, and of course cannot have two homesteads upon different interests in the same property. The wife could not in the present instance declare a homestead because § 1263, Civil Code, provides: ‘The declaration of homestead must contain: 1. A statement showing that the person making it is the head of a family, and if the claimant is married, the name of the spouse; or, when the declaration is made by the wife, showing that her husband has not made such declaration and that she therefore makes the declaration for their joint benefit’. (Emphasis added.) Without the statement that the husband has not made a declaration, one attempted by the wife is void. Booth v. Galt, 58 Cal. 254; Cunha v. Hughes, 122 Cal. 111, 54 P. 535; Hansen v. Union Sav. Bank, 148 Cal. 157, 82 P. 768; Schuler-Knox Co. v. Smith, 62 Cal.App.2d 86, 144 P.2d 47; Crenshaw v. Smith, 74 Cal.App.2d 255, 168 P.2d 752; Santa Barbara Lbr. Co. v. Ross, 183 Cal. 657, 659, 192 P. 436. All of this serves the basic policy of the law which is thus stated in the case of In re Estate of Kachigian, supra, 20 Cal.2d 787, 791, 128 P.2d 865, 867: ‘The policy underlying all homestead legislation, whether providing for the selection of a homestead by a person during his lifetime or by the court for his family after his death, is as stated in Re Estate of Fath, 132 Cal. 609, 613, 64 P. 995, 997, ‘to provide a place for the family and its surviving members, where they may reside and enjoy the comforts of a home, freed from any anxiety that it may be taken from them against their will, either by reason of their own necessity or improvidence, or from the importunity of their creditors,’ and to this end a liberal construction of the law and facts will be adopted by the courts.' As there is no possible way for the wife to gain an exemption so long as the husband's declaration is in effect, there is no reason for dividing the exemption or for denying the full amount thereof to the husband who alone has filed the declaration.

Appellant complains of the procedure pursued by the trial court, claiming that it was error to find upon the extent of respondent's interest in the premises and to limit the sale to his undivided one-fourth interest. The statute which creates this special proceeding does not prescribe the exact steps to be taken when an undivided interest is involved. Appellant argues that the entire property should be offered for sale, that the buyer is subject to the rule caveat emptor and takes what he gets in the way of title. In the present instance the declaration claims only an undivided interest without defining it, and orderly procedure dictates that the quantum of that interest be ascertained and the sale limited thereto. That is all that could pass under appellant's method of sale; why not define it and thus enhance the possible price through advising any prospective purchaser that he does not have to bid on a pig in a poke? There being no defined procedure, the court properly followed § 187, Code of Civil Procedure, which provides: ‘When jurisdiction is, by the Constitution or this Code, or by any other statute, conferred on a Court or judicial officer, all the means necessary to carry it into effect are also given; and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most conformable to the spirit of this Code.’

The gist of appellant's complaint about this procedure is that the finding that respondent owned a one-fourth interest in the premises would be res judicata in a later action brought by appellant to set aside as fraudulent the conveyance of the one-half interest to the wife as her separate property. Respondent' own affidavit says that the judgment was based upon ‘an alleged fraudulent transaction.’ It appears that the Dukes acquired the property as joint tenants on February 16, 1949, that a one-half interest was conveyed by the two spouses to the wife as her separate property on September 3, 1952, and that the husband's homestead declaration was filed on September 15, 1952. The opening brief asserts that the deed to the wife was made just 15 days before the trial of the action which resulted in judgment in favor of plaintiff on December 2, 1952; that the deed is subject to attack by appellant as a fraudulent transaction and such an attack would be frustrated by the finding at bar under the familiar doctrine of res judicata. It appears that all interests in the property are worth $19,500, that a one-fourth interest would be worth $4,875, and as a bid of more than $6,000 must be received at the sale, appellant, the judgment creditor, has no real possibility of realizing anything upon his judgment, whereas, if he sets aside the deed as fraudulent, he may be able to reach a one-half interest worth $9,750.

The rule of res judicata does not apply to causes or issues which were not and could not be before the court in the first proceeding. 15 Cal.Jur. § 198, p. 151. ‘A judgment is not an adjudication of those matters which were not and could not properly be relied upon and determined in the previous action; but is conclusive where the requisite jurisdiction exists, of all those matters which it clearly adjudicates.’ Maxfield v. Burtt, 121 Cal.App.2d 102, 114, 262 P.2d 580, 588. There was no issue of fraud presented to the court in the instant proceeding. No such issue could have been tried herein and the fear of res judicata which appellant voices is unfounded.

Appellant's claim that the entire duplex must be occupied by declarant and his family in order to qualify for a homestead is without merit. 25 Cal.Jur.2d § 38, p. 338.

The order is affirmed.

FOOTNOTES

1.  The amount of exemption is governed by the law in effect at the time the debt is created. In re Rauer's Collection Co., 87 Cal.App.2d 248, 253–254, 196 P.2d 803.

ASHBURN, Justice.

MOORE, P. J., and FOX, J., concur.