Smith v. Ratcliff
| Decision Date | 03 June 1889 |
| Citation | 66 Miss. 683,6 So. 460 |
| Court | Mississippi Supreme Court |
| Parties | LEMUEL D. SMITH v. THOMAS C. RATCLIFF ET AL |
FROM the circuit court of Lincoln county, HON. J. B. CHRISMAN Judge.
The appellant is a judgment creditor of the defendant, Ratcliff the judgment being rendered in 1885 for a principal sum of two hundred and sixty-eight dollars. In December, 1888 appellant caused the Equitable Insurance Company to be garnished and the company, by agreement of the parties, paid the money it owed Ratcliff, more than appellant's judgment, to appellee, Cassedy, who in accordance with the agreement answered as a garnishee instead of the insurance company.
The answer of Cassedy as garnishee admits the indebtedness, but claims the fund as exempt from garnishment, because it is the proceeds of a fire insurance policy on a house which was part of the homestead exemption of the debtor at the time it was burned. The debtor also interposes a claim to the fund on the same ground.
This being the state of the record, the plaintiff moved for a judgment against the garnishee, Cassedy, which motion was denied and the garnishee discharged. From the judgment discharging the garnishee and taxing plaintiff with the costs, the latter appeals.
Judgment reversed.
R. H. Thompson, for appellant.
That which is not exempt by the words of a statute cannot be made so by the courts. It could only be done upon the idea that some legislative policy is subserved; but this process of reasoning would exempt everything owned by a debtor. If something in addition to the things enumerated is to be exempted, who can say what is liable? Supposed hardships are not to be relieved against, for there are nine-tenths of the people of the state who, if deprived of three hundred dollars, would suffer inconvenience. We cannot add ten acres to the eighty acres exempted, nor ten dollars to the one hundred dollars exempt to the laborer as wages. How, then, can we exempt money that is not due for wages at all, and that, too, when the debtor has already received from the insurance company more than six hundred dollars, the garnishment having intercepted less than half of the amount due on the policy?
The idea that this money is by transmutation the identical dwelling-house that was lost is a pure fiction. If "fictions" and "transmutations" are to be carried into jurisprudence, no execution need ever be levied, for ingenious debtors can always be relied on to furnish the fiction and transmutation.
The correct view is announced in Adams v. Dees, 62 Miss. 354.
In some of the states, as Arkansas and Pennsylvania, the statutes authorize the debtor to select such personal property of a given value as he desires to hold, and those courts decide that money may be claimed, and hence the avails of an insurance policy. This is because it is within the terms of the statute.
It is true that Thompson on Homesteads and Exemptions, § 750, declares that money due on a policy for loss of exempt property is exempt. He follows a California case, and neither the text-book nor the cases cited give any reasons. The best reasoned decision is found in Wooster v. Page, 54 N.H. 125, which denies such exemption and says: "it is the furniture and not the avails of it that is exempted; when the property is consumed it is no longer household furniture in possession of the debtor, nor did it become household furniture in the hands of the insurance company." The trouble with the California case and that of the inferior court of New York, cited by Thompson in the text-book, is that they carry the rule which distinguishes between voluntary and involuntary exchanges of exempt property too far. The exemption is always lost if the debtor voluntary exchanges exempt property for property not enumerated in the statute.
If appellant's view is correct, the facts all being before the court, this court should reverse and enter judgment here for appellant.
H. Cassedy, for appellees.
It is the settled policy of this state, as indicated by legislation and the courts, to secure to every head of a family a home, that he may not be made a pauper either by the greed of rapacious creditors or his own improvidence. This precise question, however, has never been presented here.
While the voluntary disposition of the homestead is recognized, the involuntary disposition of it is scrupulously guarded and the rights of the owner and his family are jealously protected. In many states the courts do not hesitate to depart from the letter of the statute and embrace its spirit and equity, and hence hold the proceeds of insurance of exempt property to be also exempt.
Such is specially held in Houghton v. Lee, 50 Cal. 101, and in Cooney v. Cooney, 65 Barb. 524. See also Probst v. Scott, 31 Ark. 652; Strause Ex'r v. Becker, 44 Pa. 206; Thompson, Hom. and Exemp., §§ 748, 749, 750, 783, and 784; Smyth, Hom. and Exemp., § 102.
Every state where the question has been presented holds such proceeds exempt except New Hampshire. Wooster v. Page, 54 N.H. 125. Mr. Thompson in his text-book says, "the rule is founded in reason too cogent to be shaken by the dissent even of that able court."
The case of Adams v. Dees, 62 Miss. 354, is not applicable. In that case there was a voluntary disposition by the debtor of his homestead, amounting to an abandonment.
The true policy of the state in reference to exemptions is laid down in Moseley v. Anderson, 40 Miss. 54. To hold that this money was not exempt would be violative of such declared policy.
The single question presented by this record is this: Is the money due from an insurance company on the loss of the house, which was a part of the homestead of the insured, exempt from liability to legal process against the homestead exemptionist?
If called on to declare what should be the law, our answer would be that inasmuch as the house was exempt, the money due because of its destruction should be, to enable the owner to rebuild. This would accord with the policy which secures the homestead against the demands of creditors, for it is undoubtedly true that a contract made to secure its owner against the...
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