McCreight v. W. W. Scales & Co.

• Decision Date: 28 January 1924
• Docket Number: 23771
• Citation: 99 So. 257,134 Miss. 303
• Parties: MCCREIGHT et al. v. W. W. SCALES & CO. et al
• Court: Mississippi Supreme Court

99 So. 257

134 Miss. 303

MCCREIGHT et al. v. W. W. SCALES & CO. et al

No. 23771

Supreme Court of Mississippi

January 28, 1924

Division B

Suggestion of Error Overruled March 10, 1924.

APPEAL from chancery court of Oktibbeha county, HON. A. J. MCINTYRE Chancellor.

Proceeding between S. H. McCreight and others and W. W. Scales & Co. and others. From a judgment dissolving an injunction restraining the execution of a judgment, the former appeal. Reversed, and judgment entered.

Judgment reversed.

W. W Magruder, for appellants.

The chancellor held subject to execution in favor of appellees, an undivided seven-twelfths interest in certain tract of land. The case involves directly or indirectly the constitutionality, application, and effect of chapter 225, Laws of 1914, which appears as section 1821 of Hemingway's Code. Prior to the amendment of 1914 J. B. McCreight contracted certain indebtedness to W. W. Scales and Company upon which appellees secured an office confession of judgment on the 13th day of May, 1920.

Chapter 225, Laws of 1914, was adopted on the 26th day of March, 1914. J. B. McCreight was on that date more than sixty years of age and was living on said tract of land with his wife, Mrs. V. L. McCreight, as his homestead. Mrs. V. L. McCreight died on the 24th day of May, 1919. J. B. McCreight died on the 11th day of July, 1920.

Appellees secured a decree in the lower court against such seven-twelfths interest in said land, such decree holding in effect that chapter 225, Laws of 1914, was unconstitutional if given retroactive operation to protect the homestead exemption of said J. B. McCreight, deceased.

The land involved in this litigation was not subject to execution when the original debt of appellants' intestate to appellees was contracted. Such land was not subject to execution on the 26th day of March, 1914, when the legislature of that year adopted such chapter 225, Laws of 1914. Appellees at that time enjoyed no vested right whatever against the land involved in this litigation, and the legislative amendment was adopted at a time when said land was not subject to execution on appellees' indebtedness on judgment against appellants' intestate, J. B. McCreight, deceased.

The indebtedness of McCreight to Scales and Company was contracted under section 2146 of the Code of 1906. This statute was amended by the legislature of 1914, section 1821, Hemingway's Code. The instant case involves directly or indirectly a Constitutional question as to the application and effect of this amendment.

A comprehensive discussion of the question before the court for consideration will be found in 11 R. C. L., 490-91.

We recognize the constitutional inhibition against the impairment of any pre-existing contract by legislation; but we insist that the legislature in this case, by chapter 225, Laws of 1914, took from appellees no material right enjoyed by them as against appellants or their intestate, J. B. McCreight.

We have a number of early cases from different states based on a dictum in Bronson v. Kinzie, 11 U.S. (L. Ed.) 143, holding that statutes exempting property from execution may be applied to pre-existing contracts and do not violate such Constitutional provisions. Subsequent decisions by the supreme court of the United States, and by many other states, including our own state, make it entirely clear that any statute, creating exemptions or enlarging and increasing exemptions, may not under the Constitution be applied to pre-existing contracts or indebtedness.

We insist, however, that chapter 225, Laws of 1914, can properly under the Constitution, and under the facts of the instant case, be applied to it without violation of such constitutional inhibition.

Exemption laws are absolutely essential to the welfare of the body politic. Such statutes should receive a liberal construction in favor of the debtor "in order to advance the humane purpose of preserving to the unfortunate or improvident debtor and his family the means of obtaining a livelihood, and thus preventing him from becoming a charge upon the public." Chapman v. Berry, 73 Miss. 437. Appellees rely mainly upon Johnson v. Fletcher, 54 Miss. 628, in their demand that chapter 225, Laws of 1914, cannot be applied as against their indebtedness contracted prior to that date.

In Johnson v. Fletcher, decided under Acts of 1875, page 122, the court held that such amendment of the former statute, increasing the exemption from one horse or mule to two horses or mules, was unconstitutional or would be unconstitutional if given retroactive operation and effect. In the instant case, we have no increase whatever of the previous exemption by the Laws of 1914, either material or immaterial. In Johnson v. Fletcher, the legislature undertook to double the pre-existing exemption and the supreme court merely denied its retroactive effect against pre-existing contracts. We certainly take no issue whatever with that position.

When the debt was contracted, J. B. McCreight's land was not subject to appellees' execution, being a homestead. If, therefore, such land, as appellees concede, was not subject to execution when this statutory amendment was adopted on March 26, 1914, what did such amendment take away from appellees? What contractual right was thereby impaired? They had on that date, March 26, 1914, an absolute right to convey such land without consideration, or to do whatever they chose to do with it. Scales had no right whatever to look to it for the satisfaction of his indebtedness. The legislature deprived him of nothing. It took nothing from him. It impaired no contract. He is without standing in court to protest against a legislative amendment with which he has no concern or interest whatever, and which did not deprive him of any constitutional right. There is nothing in Rice v. Smith, 72 Miss. 42, or Leslie v. Phipps, 49 Miss. 790, that militates in the slightest degree against our position.

Under Richards v. City Lumber Company, 101 Miss. 678, this court held in effect that the constitutional inhibition against the impairment of contracts was intended to prohibit; confiscation of vested rights; denial of a valid and pre-existing defense to a cause of action.

We refer the court to the following for a general discussion: American Mercantile Exchange v. Blunt, 120 A. S. R. 478, 479; Brearly School v. Ward, Ann. Cas. 1912-B, 251, and the notes thereunder; Morse v. Goold, 11 N.Y. 281, 62 Am. Dec. 103; Hannum v. M. C. Inturf, 6 Baxter (Tenn.) 225, and The Virginia Homestead Cases, 22 Gratt. 266, 12 Am. Rep. 507.

But these cases clearly have no value whatever as against appellants in the instant case for the manifest reason that our Statute of 1914 does not withdraw or undertake to withdraw from execution or other process any property subject thereto when this indebtedness was contracted to appellees. Foster v. Byrne, 76 Iowa 295, 35 N.W. 513, 41 N.W. 22; Woolard v. Sturn, 96 Iowa 555, 65 N.W. 847.

Leftwich & Tubb, and W. E. Ward, for appellees.

The only question is whether or not the amendment to section 2146, Code of 1906, by Act of the legislature of 1914, chapter 225, approved the 26th day of March, 1914, and now inserted into Hemingway's Code, section 1821, is retroactive and deprives the appellee Scales of his vested rights fixed by law for the collection of his debt for which the note in question was given, dated December 1, 1913, and which was then given for a pre-existing debt. By section 819, Code of 1906, judgment liens bind all of the debtor's property. There was a judgment lien here.

Our court has decided that the head of a family must be the husband or wife, who has a family dependent on him or her for support; Hill v. Franklin, 54 Miss. 632; Powers v. Sample, 72 Miss. 189; Cox v. Martin, 75 Miss. 230. These cases expressly decide that the rights of the exemptionist depend on two contingencies, namely: occupancy of the premises as a home, and having a family. The question of occupancy has been dealt with distinctly in the following cases: Campbell v. Adair, 45 Miss. 170; Monger v. Gandy, 110 Miss. 133.

These statutes of (the) state in force at the time of the creation of a debt, as such statutes effect exemptions and the collection of a debt, are integrated into and become part of the contract for the debt's payment. Lessley v. Phipps, 49 Miss. 790; Richards v. City Lumber Co., 101 Miss. 678; Gunn v. Barry, 15 Wallace 610, 21 Law Ed. 212.

If statutes disturb the vested rights of a creditor, they are necessarily and essentially unconstitutional and void as to him. They are valid, of course, as to contracts made after their enactment, but invalid as to pre-existing contracts. The vested rights under a contract are all of such sanctity that they cannot be disturbed. Section 16, Constitution of Mississippi; Article 1, section 10, Constitution of United States.

The Constitution of the United States forbids any law of the state disturbing vested contracts: Lessley v. Phipps, 49 Miss. 790; Richards v. City Lumber Company, 101 Miss. 678; Gunn v. Barry, 15 Wallace 610, 21 Law Ed. 212; Edwards v. Keazey, 96 U.S. 595, 24 L.Ed. 793; Seibert v. U.S. 122 U.S. 360, 30 L.Ed. 1161; Acker v. Trueland, 56 Miss. 30; Johnson v. Fletcher, 54 Miss. 628; Chapman v. Berry, 73 Miss. 437; Rice v. Smith, 72 Miss. 42; Musgrove v. Vicksburg, 50 Miss. 677; Pennington v. Seale, 49 Miss. 518; Blomi v. Loudel (La.), 33 So. 741.

Appellant's counsel overlooks the facts. But for the Act of March 26 1914, the moment James B. McCreight died, his widow having predeceased him, that moment he ceased to be the head of a family and his one-half interest in the homestead became liable to Scales' debt. Again, the moment McCreight and his wife, even while living...