O'Leary v. Croghan

• Decision Date: 15 August 1919
• Docket Number: 4530
• Citation: 42 S.D. 210,173 N.W. 844
• Parties: JAMES O'LEARY, Plaintiff and respondent, v. O. CROGHAN, Defendant and appellant.
• Court: South Dakota Supreme Court

42 S.D. 210

173 N.W. 844

JAMES O'LEARY, Plaintiff and respondent,

v.

O. CROGHAN, Defendant and appellant. South Dakota Supreme Court Appeal from Circuit Court, Moody County, SD Hon. Joseph W. Jones, Judge #4530--Reversed F. A. Warren Attorney for Appellant. Rice & Rice Attorneys for Respondent. Opinion filed August 15, 1919

POLLEY, J.

The only question presented for determination on this appeal is the constitutionality of chapter 150, Laws of 1911.

Section 4 of article 21 of the Constitution reads as follows:

"4. Exemptions.—The right of the debtor to enjoy the comforts and necessaries of life shall be recognized by wholesome laws exempting from forced sale a homestead, the value of which shall be limited and defined by law,. to all heads of families, and a reasonable amount of personal property, the kind and value of which shall be fixed by general laws."

Pursuant to the mandate contained in this section, the first Legislature that convened after the adoption of the Constitution enacted chapter 86, Laws of 1890, which has become known as the general exemption law.

Section 18, art. 6, of the Constitution, provides that:

"No law shall be passed granting to any citizen, class of citizens or corporation, privileges or immunities which upon the same terms shall not equally belong to all citizens or corporations."

Chapter 150, Laws of 1911 (section 2664, Rev. Code 1919), reads as follows:

"Nothing in this chapter shall be so construed as to exempt any personal property from mesne or final process for laborers' or mechanics' wages or physicians' bills, or for the necessaries of life, including only food, clothing and fuel, provided for the debtor or his family, except property absolutely exempt: ... Provided, that in case of physicians' bills or for necessaries of life, there shall also be exempt household and kitchen furniture, including stoves, of the debtor, to an amount in value not exceeding four hundred dollars, and also two cows; provided, however, that the collection of physicians' bills shall not be enforced by legal process in less than six months from the accruing thereof except when the debtor is about to remove from the state."

It is the contention of appellant that this law divides creditors into several classes, giving certain of these classes advantages and preferences over other classes in the matter of the collection of their debts; that in giving or attempting to give such preference the Legislature violated the above constitutional provisions; and that said law is unconstitutional and void.

The exemption law of 1890 (sections 2657-2661, inclusive, Code of 1919) enumerates certain classes of property, including a homestead of limited size and value, which shall be exempt from forced sale as against all claims of every kind and character (section 2657, Code of 1919). It then enumerates various items of personal property that may be selected by the debtor in case an attempt is made to subject such property to the payment of his debts. To this extent the action of the Legislature is in strict obedience to the mandate of the Constitution, but the Constitution does not authorize the Legislature to discriminate between debtors or creditors so that a debtor may enjoy the benefits of his exemption as against one class of creditors that he may not enjoy against another class; nor that one class of creditors may have advantages over another class of creditors in the means of collecting their debts. Under the provisions of chapter 150, Laws 1911, the amount of a debtor's exemptions depends upon the nature of his debts. As against certain classes of claims he may not be allowed any exemptions at all except such as are denominated absolute exemptions, while as against other claims he may be allowed additional exemptions to the extent of $750 worth of personal property, as provided by section 2659, or the alternative exemptions enumerated in section 2660. A corresponding discrimination is made as between different classes of creditors. A laborer or mechanic may satisfy his claim for wages out of any property of the debtor, except that made absolutely exempt, and may have immediate execution. A physician and one who has supplied the debtor with the necessaries of life must leave the debtor $400 worth of household and kitchen furniture, including stoves, and also two cows, in addition to his absolute exemptions; and the creditor who furnished the necessaries of life may have immediate execution, but a physician cannot have execution until six months after the accruing of his claim. None of these discriminations are authorized by section 4 of article 21 of the Constitution; while, on the other hand, such discriminations are expressly prohibited by the provisions of section 18, art. 6. The size and value of the homestead and the kind and value of the personal property that shall be exempt is left entirely to the wisdom of the Legislature. Its judgment on these matters is final. But whatever the value of the homestead and whatever the kind and value of the personal property that is allowed as exempt must be allowed to all debtors alike. The discriminations that have been attempted by the Legislature may be wise and in the interest of the public at large, but until the Constitution has been changed the Legislature is without authority to make them. In discussing a similar provision in the Constitution of Minnesota, the Supreme Court of that state, in Coleman v. Ballandi, 22 Minn. 147, said:

"This provision of the Constitution imposes upon the Legislature the duty of exempting from seizure or sale, for the payment of any debt or liability, a reasonable amount of property, and of determining such amount by law. In the discharge of this duty, and the exercise of its undoubted power, its judgment and discretion as to the amount of the exemption, and its reasonableness, are final and conclusive, and it may increase or diminish such amount from time to time, according to its own views of an enlightened public policy. Beyond this, however, it cannot constitutionally go. Discrimination, in its exemption laws, between different classes of creditors and kinds of debts or liabilities, is a species of class legislation which is absolutely prohibited. This must be regarded as the settled doctrine in this state."

The same rule was followed in Bofferding v. Mengelkoch, 129 Minn. 184, and in Burrows v. Brooks, 113 Mich. 307, 71 N.W. 460. If the Legislature could except a debt due for "necessaries" from the benefit of the exemption law, it could except any or all other debts, and, in that way, deprive a debtor of all benefit of the Constitution on this subject. Donaldson v. Voltz, 19 W. Va. 156; Tuttle v. Strout, 7 Minn. 465 (Gil. 374), 82 Am. Dec. 108.

Careful consideration has been given to the very exhaustive argument presented by respondent's counsel, but, as there is nothing doubtful or difficult of construction in the constitutional provisions involved, a review of such argument would serve no useful purpose. We are satisfied that, in enacting chapter 150, Laws of 1911, the Legislature exceeded its constitutional power, and that said law is void.

The order appealed from is reversed.

SMITH, P. J. (concurring).

The Constitution says, in language too plain to need interpretation, that a reasonable amount of personal property shall be exempt to all persons, and under that constitutional requirement the Legislature has itself declared what constitutes such reasonable exemptions in the general exemption law. The Constitution does not mean that citizens may be classified, and a certain exemption allowed one class and a different exemption or no exemption granted to another class—for example, that farmers may be given one exemption and merchants another because the difference in condition may be sufficient ground for a classification of such persons or occupations. The fallacy in the argument of respondent lies in that, by its logical application and effect, the Legislature may grant one person a reasonable exemption and deprive another of any exemption whatever. Respondent's counsel say:

"The exemption is granted to all alike. All debtors can claim the privilege of the exemption law as to such debts."

"[But] any person furnishing food, fuel, or clothing, any properly licensed physician, and any workman for wages can claim the benefit of the exception to the exemption law."

Granting an exemption to a debtor, with a provision under which it may be immediately seized and sold for a debt or class of debts, is equivalent to denying any exemption to such person. The statute is a classification of debts and not of debtors. It is, in reality, a classification of creditors with special privileges, and one of the favored class is now darning the privilege of depriving the debtor of his exemption.

But the Constitution says that "No law shall be passed granting to any citizen or class of citizens, privileges ... which upon the same terms shall not equally belong to all citizens."

I am unable to see how it can be claimed that a statute allowing the debts of certain classes of creditors to constitute an exception to the general exemption law falls short of granting a privilege which does not belong equally to all citizens (creditors). The Constitution expressly forbids the granting of special privileges to any class of citizens. Special privileges, to be constitutional, must be granted to all citizens equally. To hold that, because distinctions may exist which justify a classification of creditors, debtors are to be denied exemptions in every case where such a classification of creditors may be justified, is certainly a non sequitur. The fact that the constitutionality of such legislation has not heretofore been challenged, to my mind, is not an argument sufficiently persuasive to justify a continued violation of ...