Bank of Anacortes v. Cook
| Decision Date | 07 January 1974 |
| Docket Number | No. 1809--I,1809--I |
| Citation | 517 P.2d 633,10 Wn.App. 391 |
| Parties | BANK OF ANACORTES, a banking corporation, Respondent, v. Logan COOK, d/b/a Cook Chiropractic Clinic, and Sandra L. Cook, his wife, Appellants, Michael C. Lipscomb and Jane Doe Lipscomb, husband and wife, Respondents. |
| Court | Washington Court of Appeals |
Richard B. Sanders, Attorney at Law, Seattle, for appellants.
John N. Cheney, Attorney at Law, Anacortes, Voris & Lipscomb, Richard C. Platte, Attorneys at Law, Bellingham, for respondent.
A question never precisely resolved by the many cases discussing the Washington homestead exemption statute, RCW 6.12, is presented by the somewhat unusual facts involved in this appeal: Is a homestead declaration invalid if the claimant vacates the premises he selected as a homestead and permanently moves to another state before the declaration is filed with the county auditor, even though the homestead claimant in fact was in full compliance with the residence requirements of the homestead statute on the date he signed the declaration? The trial court determined that a declaration of homestead filed under such circumstances is invalid, denied a motion to set aside the sheriff's sale of the property described in the homestead claim, and dismissed a third-party alternative claim for malpractice against the attorney who had prepared the homestead declaration but had failed to file it until after the claimant left the state.
The trial court's unchallenged findings of fact indicate that Logan Cook and his wife Sandra L. Cook, hereinafter referred to as 'Cook,' purchased the property in question which is located in Anacortes, in September, 1968, and resided there continuously until October 2, 1970, when the Cook family moved to Elgin, Illinois. The court specifically found:
They intended that their move would be permanent in nature and had no intention of returning to the State of Washington or their former residence.
Finding of fact No. 3, in part. Prior to the move to Illinois, in September, 1970 Logan Cook consulted with his attorney, third-party defendant Michael C. Lipscomb, in Bellingham, regarding financial problems, and on September 28, 1970 executed a declaration of homestead as to the Anacortes property. It is not disputed that Cook's statement in the declaration that he then resided on the property in question was true and accurate on September 28, 1970, the date Cook signed it. It was also established, and the court found:
The day after he signed the Declaration, Dr. Cook encountered a severe marital situation and three days later (Friday, October 2, 1970) moved his family and belongings to Illinois. Mr. Lipscomb had no information that Dr. Cook was contemplating the move or had actually moved out until two weeks after the move took place.
Finding of fact No. 11, in part. On approximately October 16, 1970, prior to the filing of the homestead claim, Cook executed an earnest money agreement for the purchase and sale of the Anacortes residence, but the sale never took place. It was not until October 19, 1970, some 17 days after Cook moved to another state and vacated the property he now claims as homestead, that Lipscomb filed the declaration of homestead in the auditor's office as required by RCW 6.12.070.
On the same day Cook left this state for Elgin, Illinois, October 2, 1970, the respondent Bank of Anacortes, hereinafter referred to as 'bank,' brought suit against Cook because he had defaulted in his payments on a $4,700 promissory note held by the bank which Cook had executed on June 1, 1970 in consideration for a personal loan. A default judgment was entered November 16, 1970; thereafter, the sheriff levied on Cook's Anacortes residence, and an execution sale followed on January 8, 1971. Since the date of the sheriff's sale the bank has been in possession of the premises and has rented them to third persons.
On March 23, 1972, Cook filed a motion to set aside the January 8, 1971 sheriff's sale. The bank countered by moving to invalidate the declaration of homestead. Cook responded by filing a third-party complaint alleging malpractice against attorney Lipscomb, seeking alternative relief from Lipscomb in the event the bank was successful in its effort to invalidate the homestead. The trial court concluded that Cook's declaration of homestead is invalid because Cook did not reside on the property at the time the declaration was filed with the county auditor. The court also concluded that attorney Lipscomb was not negligent as a matter of law and dismissed the third-party complaint. This appeal follows.
Cook assigns error to the trial court's conclusions of law which invalidated his homestead and denied his motion to set aside the sheriff's sale, and contends that the court's findings of fact do not support such legal conclusions. His argument is essentially that the court's findings make it clear that his homestead declaration was prepared in accordance with the statutory requirements of RCW 6.12.040 and 6.12.060, was executed in good faith and was recorded and filed with the county auditor before the sheriff's sale. RCW 6.12.010 and 6.12.040. Having followed such statutory procedure in all respects, Cook argues that his homestead is entitled to the presumption of validity given by RCW 6.12.090. As to the statutory residence requirements relating to homesteads, RCW 6.12.010, 6.12.050, and 6.12.060, Cook contends that such requirements go only to the time the declaration is executed and not to the time of filing. He asserts that the purpose of filing is one of notice only, and respondent bank received appropriate notice prior to the date of the sheriff's sale; consequently, he contends the trial court was in error in refusing to set the sale aside.
The homestead exemption statutes were enacted pursuant to Const. art. 19, § 1, for the purpose of providing a shelter for the family and an exemption for a home. Clark v. Davis, 37 Wash.2d 850, 226 P.2d 904 (1951). The homestead statutes are favored in the law and should be liberally construed. Lien v. Hoffman, 49 Wash.2d 642, 306 P.2d 240 (1957). They do not protect the rights of creditors; rather, they are in derogation of such rights, First Nat'l Bank of Everett v. Tiffany, 40 Wash.2d 193, 242 P.2d 169 (1952), but as the court in Barouh v. Israel, 46 Wash.2d 327, 331, 281 P.2d 238, 241 (1955), observed: 'No citation of authority is necessary for the rule that a declaration of homestead must be filed in good faith.' It is also well settled that a declaration of homestead is a right or privilege given a property owner by statute, so that its validity depends upon compliance with the statutory requirements and only by such compliance does the homestead come into existence. United States Fidelity & Guaranty Co. v. Alloway, 173 Wash. 404, 23 P.2d 408 (1933). Moreover, while a homestead valid on its face is entitled to a presumption of validity, such presumption shall exist only 'until the validity thereof is contested in a court of general jurisdiction in the county or district in which the homestead is situated.' RCW 6.12.090. See Costanzo v. Harris, 71 Wash.2d 254, 427 P.2d 963 (1967).
In analyzing the court's conclusion that the homestead claimed was rendered invalid by the failure of Cook to reside on the premises on the date of filing, we turn to a brief review of the language of the applicable statutes. RCW 6.12.010 provides in part: 'The homestead consists of the dwelling house, In which the claimant resides . . .' (Italics ours.) RCW 6.12.050 states in part: 'The premises thus included in the homestead Must be actually intended or used as a home for the claimants . . .' (Italics ours.) RCW 6.12.060(2) states that the declaration of homestead must contain '(a) statement that the person making it Is residing on the premises or has purchased the same for a homestead and intends to reside thereon and claims them as a homestead.' (Italics ours.) A plain reading of the statutes just quoted leads to the inescapable conclusion that a primary purpose of the legislature in enacting them was to protect the house in which the claimant resides or intends to reside. Further, in relation to that purpose, RCW 6.12.040 states in part: 'In order to select a homestead (claimant) Must execute and acknowledge . . . a declaration of homestead, and file the same for record.' (Italics ours.) In addition, RCW 6.12.080 provides in part: 'From and after the time the declaration is filed for record the premises therein described constitute a homestead.'
The cases interpreting these statutory provisions uniformly hold that a homestead declaration has no legal effect and therefore is ineffectual for any purpose until it is filed. In other words, there is no homestead in any property until the statutory procedure for claiming one is completed, which includes not only the execution of a declaration but its filing with the county auditor. Quite obviously, if the premises described in the declaration do not constitute a homestead until after the declaration is filed, there is no homestead at all prior to that time. In this regard, our court, in the early case of Brace & Hergert Mill Co. v. Burbank, 87 Wash. 356, 151 P. 803 (1915), after reviewing the statutory provisions relative to the claim of homestead, stated at 365 of 87 Wash., 808 of 151 P.: 'The language of these sections renders it plain that there is no homestead right in any specific property until it is selected, and such selection evidenced in writing and recorded as therein provided.' See also Washburn v. Wilen, 96 Wash. 480, 165 P. 403 (1917); Byam v Albright, 94 Wash. 108, 162 P. 10 (1916); In re Estate of Borrow, 92 Wash. 143, 158 P. 735 (1916); Hookway v. Thompson, 56 Wash. 57, 105 P. 153 (1909). Inasmuch as a homestead claim or declaration is ineffectual for any purpose until it is filed and may not be given retroactive effect,...
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