Two issues are raised on this appeal:
1. Were the Guptills entitled to claim a homestead exemption in the land in question?
2. The Guptills not claiming a homestead exemption, could their mortgagee, Production Credit Association, claim that homestead exemption?
1. Were the Guptills able to claim a homestead exemption? It is undisputed, absent the statutory homestead exemption, a judgment which is properly docketed creates a superior lien on real property for a period of ten years.
The trial court, Lueptow contends, erroneously ordered the Production Credit Association mortgage to have priority over the cognovit note. Lueptow argues that in reaching this conclusion the trial court wrongly determined that the Guptills were entitled to a homestead exemption under the Wisconsin statutes. Arguing (1) that the Guptills had no equity in the property which they had occupied, (2) that they did not receive any
Sec. 272.20 (1), Stats., defines the homestead exemption:
"An exempt homestead as defined in s. 990.01 (14)
In answer to Lueptow's first supportive argument— that the Guptills had no equity in the property—the record indicates the contrary. It is true that at the time of the Guptills' execution of their mortgage with Production Credit Association the balance they yet owed to the Lueptows under the land contract was more than the initial land contract sale price.
It has long been acknowledged, however, that the vendee in a land contract has an equitable interest in the real estate.
Lueptow also argues that the Guptills are unable to claim the homestead exemption in the proceeds of the sale of the property because they did not receive any of such proceeds with which they might "procure another homestead therewith, for 2 years."
"The plaintiff argues that under the decision of the trial court the defendant John and his wife are given the benefit of two homestead exemptions. The right of the defendant John to acquire a new homestead with the proceeds derived from the sale of the first homestead is undoubted, sec. 272.20, Stats. If John chose to use the proceeds derived from the sale of the homestead for the payment of creditors other than the plaintiff, the
A similar situation exists in the instant case. Lueptow is precluded, under the homestead exemption statute, from executing his judgment lien against the homestead of the Guptills. The Production Credit Association, the mortgagee, is not so precluded and would be able to foreclose or use some other suitable remedy even as against the Guptills' homestead.
Also refuting Lueptow's argument is the case of Clancey v. Alme.
We conclude, therefore, that the Guptills could validly exercise their homestead exemption in the proceeds of a sale of such homestead in order to forward such surplus to their mortgagee. This is precisely what occurred in the Clancey Case.
Lueptow's final argument is an asserted abandonment of such homestead. The statute provides a homestead exemption to a resident owner who occupies the homestead.
As early as Upman v. Second Ward Bank,
"Under the statutes of this state, a judgment of a court of record becomes a lien upon the debtor's real estate, situated in the county where the judgment roll or transcript of the judgment is filed....
"... If the property is not a homestead when the judgment is obtained, it is a lien upon it...."
This was also reiterated in Eloff v. Riesch:
"It is conceded that when the judgment was docketed in April, 1955, the property was occupied by both Edward and Rosemary as their homestead. The value of their combined equity was $3,196.62. Edward's interest was clearly exempt from the judgment lien at that date."
2. May the mortgagee of the Guptills exercise the right to the homestead exemption? Lueptow argues that the Guptills did not exercise their homestead exemption. They further argue that the Production Credit Association, mortgagee of the Guptills, cannot stand in their shoes so as to exercise such right.
It is unnecessary, however, to determine whether the mortgagee herein may "stand in the shoes" of the Guptills in order to reap the advantage of the Guptills' homestead exemption. This court has long held the right to the homestead exemption does not depend upon its formal exercise. This is nowhere more clearly stated than in Martin v. C. Aultman & Co.
"It is claimed by the counsel for the defendant that the plaintiff has no right to a homestead in any of these lands. But the fact is abundantly established that the judgment debtor occupied the ninety-nine acres which she conveyed as and for a homestead for some years before she made the conveyance to the plaintiff. ... Now, as no selection of a homestead was made when the execution sale took place in December, 1887, though the plaintiff might then have claimed a homestead and had the officer set the premises selected apart to him, we still think he can have a homestead right...."
This mere occupancy rule was also held to be a sufficient exercise of the homestead exemption right in Larson v. State Bank of Ogema.
"[S]uch use and occupancy themselves evidence the selection by the owner of all of such contiguous land as his homestead, and constitute notice to all of its character as his homestead, and of his selection thereof as such, without his giving any other notice."
It follows from these holdings of mere occupancy and use constituting an exercise of the homestead exemption that the exemption, in the instant case, was properly exercised by the Guptills' residence on the real estate at the time of the docketing of Lueptow's cognovit judgment. The exemption having been exercised by mere occupancy, it is unnecessary to determine whether the mortgagee of the Guptills may so exercise the exemption in their stead.
The homestead exemption statute itself permits a mortgagee to have a mortgagor's homestead exemption declared:
Thus, a mortgagee may have the homestead exemption declared on the mortgaged premises.
Lueptow also suggests that the theory of the homestead exemption is defeated by allowing a creditor to take a mortgage for an antecedent debt and effectively defeat the mortgagors' exemption. Such defect, if any, is with the statute itself rather than its interpretation. The exemption statute expressly excepts mortgagees from the operation of the exemption.
Lueptow's final contention involves the amount which was forfeited by the first prospective purchaser and the balance of the receiver's funds. Lueptow asserts that the sum of $1,310.67 should not be subject to the homestead exemption and, therefore, should be awarded to him. The Production Credit Association contradicts Lueptow's computation (supported by the record), stating that of the $310.67 receiver's funds, a total of $277.97 in expenses was incurred.
The question of whether a forfeiture sum may be included in the exempt proceeds of a homestead sale has not been decided by this court. This court has, however, stated that any excess moneys from a sale of the subject matter of a land contract (specific performance) belong to the vendee. The vendor is only entitled to the contract price plus costs and disbursements in such a sale.
By the Court.—Order affirmed.