Fleischhauer v. Bilstad

• Citation: 233 Or. 578,379 P.2d 880
• Parties: Josephine FLEISCHHAUER, Respondent, v. Herb BILSTAD, Leola Bilstad, Pacific Title Insurance Co., an Oregon corporation, Defendants, Omar W. Gray and Zeda M. Gray, Appellants.
• Decision Date: 13 March 1963
• Court: Supreme Court of Oregon

Page 880

379 P.2d 880

233 Or. 578

Josephine FLEISCHHAUER, Respondent, v. Herb BILSTAD, Leola Bilstad, Pacific Title Insurance Co., an

Oregon corporation, Defendants,

Omar W. Gray and Zeda M. Gray, Appellants.

Supreme Court of Oregon, In Banc.

Argued and Submitted Sept. 7, 1962.

Decided March 13, 1963.

Will H. Masters, Portland, for appellants. On the briefs were Masters & Masters, Portland.

Paul D. Hanlon, Portland, for respondent. On the brief were Morton H. Zalutsky and Hart, Davidson, Veazie & Hanlon, Portland.

Before McALLISTER, C. J., and ROSSMAN, PERRY, SLOAN, O'CONNELL, GOODWIN, and LUSK, JJ.

LUSK, Justice.

This is a declaratory judgment proceeding instituted for the purpose of obtaining a declaration that certain real property is subject to the lien of a judgment in favor of the plaintiff Josephine Fleischhauer. The property, described as Lot 1, Block 13, Beusonic Heights, Washington County, Oregon, was formerly owned and occupied as a homestead by the defendants Herb Bilstad and Leola Bilstad (who are not parties to this appeal). The defendants Omar W. Gray and Zeda M. Gray, husband and wife, hereinafter referred to as the defendants, purchased the property from the Bilstads after the plaintiff had recovered a judgment against the latter in the circuit court of Washington county. The court entered a declaratory decree favorable to the plaintiff from which the defendants have appealed. The court held, not only that our statute as construed by this court does not exempt a homestead from the lien of a judgment, but, in addition, that the Bilstads had abandoned the homestead prior to the sale of the property to the defendants. Both propositions are challenged by the defendants in this court.

Upon the former question the plaintiff relies, as did the trial judge, on Bush v. Shepherd, Adm'r., 186 Or. 105, 205 P.2d 842 (1949). The defendants say that this court erred in its construction of the homestead statute in that case and urge that the decision should be overruled.

The applicable statute, ORS 23.240, originally enacted as Chapter 112, Oregon Laws 1919, reads:

'A homestead shall be exempt from sale on execution from the lien of every judgment and from liability in any form for the debts of the owner to the amount in value of $7,500, except as otherwise provided by law. The homestead must be the actual abode of and occupied by the owner, his spouse, parent or child, but such exemption shall not be impaired by temporary removal or absence with the intention to reoccupy the same as a homestead, nor by the sale thereof, but shall extend to the proceeds derived from such sale to an amount not exceeding $7,500, while held, with the intention to procure another homestead therewith, for a period not exceeding one year.' (Italics added.)

Except for an increase in the amount of the exemption from $3,000 to $7,500 and a verbal change that is not material, the statute reads today as it did when Bush v. Shepherd, Adm'r., was decided. See section 6-1301, O.C.L.A. We held in that case that a motion of a judgment debtor for the satisfaction and discharge of the judgment was erroneously allowed by the circuit court. The judgment debtor based his motion on the ground that he had been discharged from the payment of such judgment by his discharge in bankruptcy and that the property involved was his homestead which had been set off to him as exempt property in the bankruptcy proceedings. We held that the action of the bankruptcy court was effective only to discharge the debtor from his personal liability and not to release a valid lien. We said that ORS 18.350 (then section 6-801, O.C.L.A.) imposes the lien of a judgment upon all the real property of the judgment debtor in a county from the time of docketing and that the homestead statute contains no exception from this provision. Notice was taken of the decision in Willamette Collection & Credit Service v. Henry, 138 Or 460 at page 465, 7 P.2d 261 at page 263 (1932), where we said:

'At the legislative session of 1919, the 1893 homestead exemption statute as amended in 1905, was repealed and our present law enacted. (Laws 1919, p. 160). It will be observed that the present law exempts the homestead from (1) judicial sale on execution, (2) the lien of every judgment, (3) liability in any form for debts of the owner.'

But this statement was said to be dictum and the conclusion of the court was that the legislature did not intend to exempt the land claimed as a homestead from judgment liens, but only 'to prohibit the sale of it on execution when the right to the property as a homestead is timely asserted and established.' 186 Or. at 120, 205 P.2d at 848.

The briefs of counsel in Bush v. Shepherd, Adm'r., were singularly devoid of argument upon the construction of the 1919 Act--a lack which well may have contributed to the error into which we are now convinced the court fell in that case.

A history of homestead legislation in this state and the course of judicial decision will aid in demonstrating the accuracy of this statement. This history was recited in Willamette Collection & Credit Service v. Henry, but its repetition briefly here is necessary for a full understanding of the question. The first homestead statute was enacted in 1893. It provided:

'The homestead of any family shall be exempt from judicial sale for the satisfaction of any liability hereafter contracted, or for the satisfaction of any judgment hereafter obtained on such debt.' Oregon Laws 1893, p. 93.

This section was amended in 1905 so as to read:

'The homestead of any family shall be exempt from judicial sale for the satisfaction of any judgment hereafter obtained. Such homestead must be the actual abode of and owned by such family or some member thereof.'

Oregon Laws 1905, ch. 221.

It was held in Hansen v. Jones, 57 Or. 416, 109 P. 868 (1910), that under the language of these sections 'the exemption of the homestead is only from judicial sale, and not from the lien of a judgment, nor from the levy of an execution thereon.' 57 Or. at 420, 109 P. at 870. Hence, the court decided that upon a conveyance of the property by its owner 'the homestead right ceased to exist, and [the] grantee took the full title freed therefrom, but subject nevertheless to the judgment lien, which from that time became superior in right.' 57 Or. at 426, 109 P. at 872.

In the course of a discussion of the decisions in other states the court said:

'By the early decisions of the Supreme Courts of Wisconsin and Minnesota, statutes providing in general terms that judgments should be liens on all the defendant's real estate were construed as extending such liens over homesteads, which by law were exempt from sale under execution. This will appear by the decisions cited from those states; but the rule as announced in those decisions was later abrogated by statutes enacted after the rendition of such decisions, and therefore the later decisions of those states are not opposed to this view. * * *' 57 Or. at 422, 109 P. at 871.

The significance of these observations will appear later.

The construction placed upon the former statute in Hansen v. Jones was approved in Wilson v. Peterson, 68 Or. 525, 136 P. 1187 (1914) and Johnson v. Tucker, 85 Or. 646, 167 P. 787 (1917). At the session of the legislative assembly next following the decision in Johnson v. Tucker the prior law was repealed and the present statute enacted. Following enactment of the 1919 statute, came Willamette Collection & Credit Service v. Henry and then Bush v Shepherd, overruling the so-called dictum in the former case, and, in effect, reinstating the decisions construing the repealed statute. That is to say, Bush v. Shepherd holds that, notwithstanding the very marked change in language, no change in meaning was effected by the 1919 enactment. While the presumption of a change of intention from a mere change of language in a statute is not always entitled to weight (Endlich, Interpretation of Statutes, § 378), still it must be acknowledged that the new language of the 1919 Act, 'from the lien of every judgment and from liability in any form for the debts of the owner', is sufficiently arresting to raise a presumption that a departure from the old law was intended, particularly in view of the fact that our decisions construing the former law had held that a homestead was not exempt from the lien of a judgment. See Rieger v. Harrington, 102 Or. 603, 613, 203 P. 576; 1 Sutherland, Statutory Construction 412, 415, Amendatory Acts § 1930; 50 Am.Jur. 261, Statutes § 275.

There is convincing evidence that the 1919 Act was copied in relevant part from a Wisconsin statute adopted in 1878, Wisconsin Revised Statutes § 2983 (1878), which is now substantially West's Wisconsin Statutes Annotated § 272.20. See Lacy, Homestead Exemption--Oregon Law, A Postscript, 34 Ore.L.Rev. 1, 9. ¹ The Wisconsin statute, as it was in 1919, provided:

'A homestead * * * shall be exempt from seizure or sale on execution, from the lien of every judgment and from liability in any form for the debts of such owner to the amount in value of five thousand dollars, * * *.'

This statute had been construed by the Supreme Court of Wisconsin prior to 1919 as exempting a homestead from the lien of a judgment. Carver v. Lassallette, 57 Wis. 232, 15 N.W. 162 (1883); Smith v. Zimmerman, 85 Wis. 542, 55 N.W. 956 (1893). The statute had the effect of changing the law in that regard as previously announced in Hoyt v. Howe, 3 Wis. 752, 62 Am.Dec. 705 (1854), which construed language of the older Wisconsin statute similar to that used in the original homestead law of this state and in the 1905 amendment thereof. Hoyt v. Howe was cited by this court in Hansen v. Jones as supporting its construction of our former statute and, as we have seen, the court pointed out that the later decisions of the Wisconsin court were not opposed to this holding because they were based on a change in the statute...