Lamar Life Ins. Co. v. Babin

• Decision Date: 12 November 1963
• Docket Number: No. 46606,46606
• Citation: 246 La. 19,163 So.2d 81
• Parties: The LAMAR LIFE INSURANCE COMPANY v. Mark P. BABIN and Mrs. Ethel Porche Babin.
• Court: Louisiana Supreme Court

Page 81

163 So.2d 81

246 La. 19

The LAMAR LIFE INSURANCE COMPANY v. Mark P. BABIN and Mrs. Ethel Porche Babin.

No. 46606.

Supreme Court of Louisiana.

Nov. 12, 1963.

On Rehearing March 30, 1964.

Borowski & McMahon, Houma, for intervenor-relator.

O'Neal & Waitz and Philip E. Henderson, Houma, for respondents.

McCALEB, Justice.

This case involves the right of a conventional mortgagee, under an act of mortgage containing a homestead waiver, to assert the homestead claim in his own behalf and be paid from the proceeds of the sale of the mortgaged property, in preference to prior judicial mortgages, out of the amount which would have been reserved as the homestead of the judgment debtor had he appeared and established that the property sold under executory process was his homestead.

The facts are these: The property of the defendants, Mark P. Babin and Mrs. Ethel Porche Babin, was sold by executory process to satisfy a first mortgage thereon in favor of plaintiff amounting to more than $8,000. It brought $14,000 at the sale and, after payment by the Sheriff of the first mortgage with interest and attorney's fees and also the amount of a sewerage lien, there remained the sum of $3895.86 to be applied toward the payment of other creditors listed in the certificate of mortgages. This certificate, ranking the judgments and mortgages in order of their recordation in accordance with law (see Article 3329 of the Civil Code and Harvey v. Thomas, 239 La. 510, 119 So.2d 446 and cases there cited), showed (excepting mortgages not applicable to this case) the following:

1. A judicial mortgage in favor of D. H. Holmes Company, Ltd. for $158.62, with interest and costs.

2. A conventional mortgage in favor of E-Z Finance plan of Houma, Inc. for $2,640.00 with attorney's fees and costs, which mortgage contains a waiver of homestead;

3. A judicial mortgage in favor of Dr. Earl Fernandez for $86.42 with interest and costs;

4. A judicial mortgage in favor of Isaac W. Sharp, Jr., respondent herein, for $600, with interest and costs, and

5. A conventional mortgage containing a waiver of homestead in favor of Charles Collins (the relator herein) for $1055.84, with interest, attorney's fees and costs.

The holders of the conventional mortgages listed as (2) and (5) thereafter instituted a rule to show cause why they should not be paid, by preference over the judgment creditors, the $3894.86 proceeds remaining in the hands of the Sheriff by reason of the fact that their mortgages contained homestead waivers. The respondent, Sharp, holding a judicial mortgage superior in rank to the conventional mortgage of Collins, resisted this claim with certain other holders of judicial mortgages. After a hearing the rule was discharged and the Sheriff was ordered to distribute the proceeds on hand in the order listed on the mortgage certificate.

It was the view of the judge that, inasmuch as the judgment debtors had only one homestead, which had first been waived in favor of the seizing creditor, The Lamar Life Insurance Company, the entire amount of the proceeds attributable to this homestead exemption had been consumed in satisfaction of the writ; that the surplus remaining in the hands of the Sheriff did not include any part of the homestead exemption and that this amount must be distributed to the mortgage creditors in order of their rank as evidenced by the mortgage certificate.

Collins appealed to the Court of Appeal, First Circuit, from the adverse decision where the judgment of the district court was affirmed. The Court of Appeal adopted in part the reasoning of the trial judge. It further concluded that, since the Babins (the judgment debtors) were not claiming the homestead exemption, Collins' inferior conventional mortgage could not be given preferential rights to be paid out of monies which might have been segregated as homestead funds because the right to claim a homestead exemption is personal to the homesteader, and his mortgagee with a homestead waiver could not exercise this right in the homesteader's behalf. See Lamar Life Insurance Company v. Babin, La.App., 148 So.2d 366.

On application of Collins we granted a writ of certiorari, it appearing that the decision of the Court of Appeal might be in conflict with our ruling in Glenn v. Bresnan, 123 La. 1014, 49 So. 690.

In this Court counsel for respondent, Sharp, are contending, for the first time, that the judgment below should be affirmed because the relator, Collins, did not file in evidence the act granting him a mortgage on the property of the judgment debtors, which allegedly contains a waiver of the mortgagors' homestead exemption.

It is true that a certified copy of the Act of Mortgage is not filed in the record, counsel for Collins having merely attached to their brief in the Court of Appeal such a copy for the benefit of the Court. Nevertheless, we find no merit in the contention of Sharp's counsel in view of the following circumstances.

It appears from the record that, at the beginning of the trial of the rule in the district court, counsel for Collins, in order to prove the allegations of the rule that E-Z Finance Plan and Collins were holders of mortgages containing waivers of homestead exemption, offered in evidence the mortgages which were duly recorded. When this offer was made, counsel for Sharp stated:

'I have no objection to stipulating that the mortgages referred to by counsel are of record. I have no objection to stipulating that the judgments listed in the certificate are of record.'

Unquestionably, this stipulation was understood by counsel for Collins and also the district judge as a concession not only of the fact that the proffered mortgage acts were recorded and were past due and unpaid but also that they contained waivers of the mortgagors' homestead exemption.

If counsel for Sharp were contending here that the Collins mortgage does not actually contain a homestead waiver, a different matter might be presented and a remand would be in order. But, in view of the fact that no such contention is made, we consider counsel's stipulation in the lower court broad enough to include an admission that the mortgage does contain the waiver alleged by Collins.

On the other hand, a perusal of the record discloses that it is barren of any evidence that the property seized and sold was the homestead of the judgment debtors, who have not appeared in the case. Since Collins is claiming that the waiver of the homestead exemption by his mortgagors vested in him, under authority of Glenn v. Bresnan, 123 La. 1014, 49 So. 690 (1909), a beneficial estate in the homestead exemption which attached to the proceeds, he obviously assumed the burden of establishing that the judgment debtors' property was homestead property at the time of the judicial sale. Failure to prove that such was the case is fatal to Collins' claim.

Section 1 of Article XI of the Constitution provides:

'There shall be exempt from seizure and sale by any process whatever, except as hereinafter provided, the Homestead, bona fide, owned by the Debtor and occupied by him, consisting of lands, not exceeding one hundred and sixty (160) acres * * * Of every head of a family, or person having a mother or father or a person or persons dependent on him or her for support * * * to the total value of not more than Four Thousand Dollars ($4,000.00).

'Provided, that in case the homestead exceeds Four Thousand Dollars ($4,000.00) in value, the Beneficiary shall be entitled to that amount in case of a sale of the homestead under legal process realizes more than that sum; if the sale does not realize more than that sum, over and above all costs and expenses, said sale shall be null and void.

'The Benefit of his exemption May be claimed by the surviving spouse, or minor child or children, of a deceased beneficiary.' (Italics ours.)

By Section 3 of Article XI it is provided that any person entitled to a homestead may waive it in whole or in part by signing a written waiver thereof which shall have effect from the time of recordation. The authority to waive a right as to a creditor does not necessarily connote that the right itself may be sold or assigned and it would appear from the language of the above quoted constitutional provisions that the benefit of the exemption is, as the Court of Appeal found, personal to the beneficiaries mentioned thereon.

However, this Court held in Glenn v. Bresnan, supra, which decision was reaffirmed in Abbott v. Heald, 128 La. 718, 55 So. 28, despite a vigorous dissenting opinion by Mr. .justice Provosty (see 55 So. 30), that a waiver of homestead by a debtor created a beneficial estate in favor of a conventional mortgagee, viz.--a special real right so that the creditor might utilize the debtor's homestead as a basis for payment of the mortgage and be paid in preference to prior recorded mortgages out of the unclaimed homestead fund.

Whether or not the decision in Glenn v. Bresnan is correct and should be perpetuated (its validity has not been challenged by respondent) is a matter which need not be determined in this case. For, acknowledging that Collins has the right, in view of the homestead waiver, to claim a beneficial estate in the homestead exemption and to assert and utilize it so as to secure a preference over judicial mortgages superior in rank, he cannot have $4,000 segregated as a homestead exemption of the judgment debtors in the absence of proof that the property seized and sold under the first mortgage was the Babins' homestead at the time of its seizure.

It is the well-settled jurisprudence that the provisions of Section 1 of Article XI of the Constitution are not self operative. Indeed, this Court has many times stated that homestead laws, being in derogation of common right, are to be strictly construed and that persons invoking their protection are required to come both within their spirit and letter. See, among other cases, Brannin v. Womble, 32...