John Hancock Mut. Life Ins. Co. v. Wagner

• Decision Date: 17 August 1933
• Docket Number: 24361.
• Citation: 174 Wash. 185,24 P.2d 420
• Parties: JOHN HANCOCK MUT. LIFE INS. CO. v. WAGNER et al.
• Court: Washington Supreme Court

24 P.2d 420

174 Wash. 185

JOHN HANCOCK MUT. LIFE INS. CO. v. WAGNER et al.

No. 24361.

Supreme Court of Washington, En Banc.

August 17, 1933

Appeal from Superior Court, Lincoln County; W. M. Nevins, Judge.

Suit by the John Hancock Mutual Life Insurance Company against Charles H. Wagner and others. From the judgment, plaintiff appeals.

Reversed with instructions.

L. H. Brown, Tustin & Chandler, and Hamblen &amp Gilbert, all of Spokane, for appellant.

F. A McMaster, of Spokane, for respondents.

HOLCOMB Justice.

Some years ago, respondents Charles H. Wagner and his wife, being the owners and in possession of a 460-acre farm in Lincoln county, executed a mortgage thereon to appellant in the principal sum of $8,500. Some time thereafter, while the first mortgage was in good standing, they executed a second mortgage on the same property to respondent Arthur Wagner, a brother of Charles H. Wagner, which second mortgage, at the time of the trial below, was wholly unpaid and amounted to $5,800. In December, 1931, respondents Charles H. Wagner and wife, whom we shall hereinafter for brevity mention as respondents, being in default on appellant's first mortgage, an action was brought to foreclose it in the superior court of Lincoln county; which foreclosure proceeded in due course to judgment and sheriff's sale, which latter occurred on April 16, 1932. The property was bought in by appellant for $8,819.55. The sale was thereafter duly confirmed. Appellant is still the owner of the certificate of sale, and the property has not been redeemed therefrom.

During the year of redemption from such foreclosure and in the season of 1932, a certain crop of grain and hay was raised on the premises by respondents. On May 23, 1932, during the year of redemption, appellant paid $485.28 in satisfaction of the taxes on the land foreclosed for the years from 1928 [24 P.2d 421] to 1931. Thereafter it filed its claim of lien for such taxes, with interest, and for interest on the purchase price under the provisions of section 602, Rem. Rev. Stat., all amounting to $1,050.56.

Respondents refused to recognize this lien, and, having threatened to dispose of the crops in question, appellant sought, by receivership and injunctive proceedings in this cause, to enforce its lien for interest and taxes against the crops raised during the year of redemption. On the filing of the petition of appellant, the lower court appointed a temporary receiver.

In answer to appellant's petition, respondents claimed the right to hold the entire crop during the year of redemption for the whole of the 460 acres, by reason of having previously declared a homestead on the land in question. By reply, appellant attacked the validity of the declaration of homestead.

The declaration of homestead, after reciting the residence of respondents upon the land, the constitution of the family of respondents Charles H. Wagner and his wife, the description of the 460 acres of land in Lincoln county, and declaring that it was the intention of the declarant to use and claim the real estate and premises therein described, together with the dwelling situated thereon, as a homestead, also declared that the actual cash value of the above-described real estate, 'in excess of incumbrances upon the same, does not exceed the sum of One Thousand ($1,000.00) Dollars.'

The trial court found, among other things, that the farm of 460 acres in question was of the reasonable value of $1,000, over and above the incumbrances thereon of record at the time of filing the declaration of homestead; that the incumbrances of record at the time were appellant's mortgage of $8,500 and a second mortgage given to Arthur Wagner of $5,800, both of which mortgages were wholly unsatisfied. It will thus be seen that the value of the farm, as found by the court, was $15,300 in all.

Of the 460 acres, 200 acres are farm land under plow, and the balance is pasture. The crop for 1932 was sold by the receiver for $122.50, above expenses of harvesting and storage.

As stated by appellant, the sole question for determination upon this appeal is whether respondents are in possession of the land under and by virtue of a valid declaration of homestead made in the manner provided by law, and therefore not required to account for rents, as adjudged by the lower court.

The first attack made by appellant upon the declaration of homestead is that it is void, for the reason that it does not estimate the actual cash value of the premises.

An estimate was made, the incumbrances were of record and known and the court found that the actual cash value of the premises was $1,000 in excess of the combined incumbrances upon the land. The purpose of setting forth the value of the premises is to give notice to the world whether or not the value was within the statutory limit, and, if not, the excess above such limit. Graves v. Baker, 68 Cal. 134, 8 P. 693. Moreover, the estimate of value made by a homestead declarant is not conclusive either upon the declarant, the court, or any interested party. Nelsen v. McKeen, 165 Wash. 274, 5 P.2d 333.

The statute (Rem. Rev. Stat. § 552) prescribes that homesteads may be selected and claimed in lands and tenements with the improvements thereon, not exceeding in value the sum of $2,000, must be occupied, and intended to be occupied, by the declarant, as a home, and not devoted exclusively to any other purpose. Sections 537 and 538, Id., prescribe that upon the hearing of such matters as this, if the proof shows the value of the homestead exceeds the amount of the legal homestead exemption, the judge may appoint three appraisers to appraise the value of the homestead. Another section (section 543, Id.) provides for the appraisement to determine if the appraised value exceeds the homestead exemption, and, if so, whether the land claimed can be divided without material injury. See Nelsen v....