First Nat. Bank of Beresford, S.D. v. Anderson, 13866

• Decision Date: 27 April 1983
• Docket Number: No. 13866,13866
• Citation: 332 N.W.2d 723
• Parties: FIRST NATIONAL BANK OF BERESFORD, SOUTH DAKOTA, A Corporation, Plaintiff and Appellee, v. Donald V. ANDERSON, Carla L. Anderson, Patrick E. Anderson, and Julia M. Anderson, Defendants, and Carol Anderson, (Unnamed Party), Appellant.
• Court: South Dakota Supreme Court

Page 723

332 N.W.2d 723

FIRST NATIONAL BANK OF BERESFORD, SOUTH DAKOTA, A Corporation, Plaintiff and Appellee, v. Donald V. ANDERSON, Carla L. Anderson, Patrick E. Anderson and Julia M. Anderson, Defendants and Carol Anderson, (Unnamed Party), Appellant.

No. 13866.

Supreme Court of South Dakota.

Argued Jan. 17, 1983.

Decided April 27, 1983.

Robert E. Hayes of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for plaintiff and appellee.

Richard Bogue of Rudolph & Bogue, Canton, for appellant.

WOLLMAN, Justice.

This is an appeal from an order accepting appraisement, releasing exempt property, and directing sale of real property. We affirm.

After recovering judgment against Donald Anderson, husband of appellant, in the principal sum of $115,567.10, filed for record September 12, 1978, appellee, pursuant to SDCL 21-19-3, on June 4, 1981, gave notice of levy upon certain of Donald Anderson's real property, described as the Southeast quarter of Section 2, Township 95, Range 51, in Clay County, South Dakota. Carol Anderson, appellant, claimed absolute and additional exemptions, including a homestead exemption for the entire tract.

Appellant and her husband acquired their interest in the property in question by virtue of a contract for deed between Joseph A. Skotvold, Allen R. Skotvold, and Kathleen Skotvold, vendors, and Donald Anderson, vendee, dated January 14, 1972. As a part of the consideration for the contract, Donald Anderson agreed to assume the balance of a mortgage held by the Federal Land Bank on the property. On May 2, 1973, appellant and her husband attempted to convey the property to their three children. Likewise, on September 3, 1974, the Skotvolds conveyed their interest in the property to appellant's children. On September 12, 1978, the circuit court declared void as a fraudulent conveyance the May 2, 1973, warranty deed from appellant and her husband to their children. We affirmed the circuit court's judgment in First National Bank of Beresford v. Anderson, 291 N.W.2d 444 (S.D.1980).

Three appraisers were appointed pursuant to SDCL 21-19-21 and were ordered to complete appraisement of the homestead by December 4, 1981. After a March 1, 1982, hearing, the circuit court entered the order appealed from. The trial court accepted the appraisement and found that the net value of the homestead was in excess of the statutory exemption of $30,000 provided by SDCL 43-45-3(2). Determining that division of the homestead was feasible, the trial court set aside unto the debtors, in accordance with SDCL 21-19-28, a homestead conforming to the $30,000 limitation.

Appellant's first contention concerns the determination of net value of a homestead as contemplated by SDCL 21-19-28. That statute provides:

If the net value of the debtor's homestead being determined is more than the homestead exemption set by subdivision (2) of Sec. 43-45-3, the court shall determine whether it is feasible to divide such homestead so that the debtor retains his full homestead exemption as provided by law .... If the court finds that such division is not feasible, the court shall make an order to the effect that only that portion of the debtor's homestead represented by the valuation of such homestead exemption plus any encumbrances is subject to levy.

Appellant contends that the trial court made no determination as to the priority and extent of liens existing against the property, and that since no such determination was made, the trial court's order determining the "net value" of the homestead should be set aside.

The settled record includes an abstract search conducted by the Clay County Abstract Company. The circuit court had this abstract, which reveals the nature and amount of all liens existing against the homestead, before it prior to issuing its order determining the net value of the homestead. The mortgage in favor of the Federal Land Bank, on which there is due approximately $13,000, and two other judgments totaling $2,384.78 appear to be the only liens of record that are prior to appellee's judgment lien. Included among the subsequent liens is an Internal Revenue Service lien for unpaid taxes in the amount of $1,144,267.55.

Appellant contends that a determination of net value of the homestead must involve consideration of the effect on the property of what appears from the record to be inferior liens. Appellant states in her brief:

Since there is no determination that any of the existing liens will terminate or end, the property has no net value. Since such determination is impossible, the Order of the Court determining that the "net value" of the property exceeds the homestead exemption should be set aside.

Pointing to the Internal...