Summary
noting that "habitation" is defined as "dwelling"
Summary of this case from State v. WashingtonOpinion
No. 34452
Decided February 15, 1956.
Judgments — Execution — Enforcement of deficiency judgment — Limitation — Section 11663-1, General Code — Inoperative, when — Mortgage security on improved property — Building containing dwelling units and storerooms.
Section 11663-1, General Code, cannot operate to preclude the enforcement of a deficiency judgment rendered upon an indebtedness secured by a mortgage on real property upon which there has been located not only "dwellings for not more than two families" on the second floor but also two storerooms on the first floor designed and used for business purposes.
APPEAL from the Court of Appeals for Cuyahoga County.
Plaintiff instituted this action in the Common Pleas Court of Cuyahoga County by filing his petition in which he alleges that in June 1950 he had on deposit with defendant bank $740, and that on June 21, 1950, defendant bank notified plaintiff that defendant bank was no longer holding that amount for plaintiff's credit but had appropriated it to its own use. Plaintiff prays for judgment against defendant bank for $740 and interest.
In its answer, defendant bank admits that in June 1950 plaintiff had an account with defendant bank in the amount of $740 and alleges that on February 5, 1940, defendant bank recovered a judgment against plaintiff upon which there was a balance due of $5,244.82, and that defendant bank "set off against said judgment on or about" June 21, 1950, the $740 which plaintiff had on deposit with defendant bank, leaving a balance due defendant bank of $4,504.82 with interest. In its cross-petition defendant bank further alleges that plaintiff had no property subject to levy on execution sufficient to satisfy that judgment but that plaintiff had an equitable interest in certain real estate held in trust for him. Defendant bank prays that the petition be dismissed and that the equitable interest in that real estate be sold and the proceeds applied to the payment of defendant bank's judgment.
In his amended reply and answer to cross-petition, plaintiff alleges that that judgment "was rendered upon an indebtedness which was evidenced and secured by the mortgage on real property executed by the plaintiff upon which real property at all times referred to herein there has been located a dwelling for not more than two (2) families, which dwelling was and had been used in part by the plaintiff as a home, and was held as a homestead," that more than two years had elapsed "since the date of the confirmation of the sale resulting in said deficiency judgment," and that plaintiff had not "waived the benefits of Section 11663-1 of the General Code."
Section 11663-1, General Code (now Section 2329.08, Revised Code), reads:
"Any judgment for money rendered in a court of record in this state upon any indebtedness, which is secured or evidenced by a mortgage, or other instrument in the nature of a mortgage, on real property or any interest therein, upon which real property there has been located a dwelling or dwellings for not more than two families which has been used in whole or in part as a home or farm dwelling or which at any time was or is now held as a homestead by the person who executed or assumed such mortgage or other instrument, or which has been held by such person as a homesite, shall be unenforceable as to any Deficiency remaining due thereon, after the expiration of two years from the date of the confirmation of any judicial sale of such property completed subsequent to the rendition of such judgment, or after August 19, 1939, whichever shall be later. Provided, however, that any execution issued upon such judgment, or any action or proceeding in aid of execution, or in the nature thereof, or to marshall liens, commenced prior to the expiration of such two-year period or prior to August 19, 1939, whichever shall be later, shall not be affected by this section; and provided, further, that this section shall not affect any action or proceeding in the nature of a creditor's bill, commenced within such two-year period or prior to August 19, 1939, whichever shall be the later, to subject the interest of the judgment debtor in any property owned at the date of such judgment and concealed with intent to hinder, delay or defraud creditors.
"Provided, however, that the provisions of this act may be waived by an instrument in writing, executed by the judgment debtor within such two-year period or prior to August 19, 1939, whichever shall be the later, but such waiver shall not be effective unless within such two-year period or prior to August 19, 1939, whichever shall be the later, such waiver shall have been filed in the office of the clerk of the court in which the judgment was rendered. Upon the filing of said waiver the clerk of the court in which such judgment was rendered shall enter a memorial thereof on the docket in which the judgment was rendered.
"The provisions of this act shall apply to all actions and proceedings pending and all judgments existing at the effective date thereof." (Emphasis added.)
In the Common Pleas Court, judgment was rendered for the plaintiff against the defendant bank on the petition and for the plaintiff against the defendant bank on the cross-petition.
On appeal to the Court of Appeals on questions of law and fact, substantially the same judgment was rendered by that court.
The cause is now before this court on appeal by defendant bank from the judgment of the Court of Appeals, pursuant to allowance of a motion to certify the record.
Mr. Leo E. Rattay, for appellee.
Mr. Robert M. Skall, for appellant.
In the instant case, it appears that the deficiency judgment of defendant bank had been "rendered * * * upon * * * indebtedness * * * secured by a mortgage * * * on real property * * * used in * * * part as a home * * * by the person who executed * * * such mortgage"; and that, when defendant bank sought in 1950 to enforce the deficiency remaining due on that judgment, more than two years had expired "from the date of the confirmation of" the "judicial sale of such property completed subsequent to the rendition of" the foreclosure judgment. Also it appears that the provisos in the first and second paragraphs of Section 11663-1, General Code, are not applicable.
The question still remains whether the mortgage in the instant case was "on real property * * * upon which * * * there has been located a dwelling or dwellings for not more than two families," within the meaning of those words as used in the statutory section. The mortgage involved was on real property upon which there had been and still is located a building which had and has on the first floor two storerooms and on the second floor two suites each consisting of five rooms and a bath.
We do not therefore have, to use the words of the statute, merely "a mortgage * * * on real property * * * upon which * * * there has been located a dwelling or dwellings for not more than two families." Instead we have "a mortgage * * * on real property * * * upon which * * * there has been located" something different, i.e., "dwellings for not more than two families" and in addition thereto two storerooms designed for business use. It is apparent therefore that the judgment involved is not "upon any indebtedness which is secured or evidenced by a mortgage" on the kind of real property described by the statutory section.
We have been referred to cases that indicate that the word "dwelling," as used in some homestead exemption statutes, may include a building used not only for dwelling purposes but also for business purposes. Corey v. Schuster, Hingston Co., 44 Neb. 269, 62 N.W. 470; Hawley v. Arnold, 137 Neb. 238, 288 N.W. 823. See Phelps v. Rooney, 9 Wis. 70, 76 Am. Dec., 244; DeFord v. Painter, Sheriff, 3 Okla. 80, 41 P. 96, 30 L.R. A., 722; Olsen v. Lohman, 234 Iowa 580, 13 N.W.2d 332; and Orr v. Shraft, 22 Mich. 260. However, as so aptly stated in the opinion in DeFord v. Painter, supra:
"* * * little satisfaction, certainly, or advantage can be derived from an examination of the decisions coming from states of which we have not the statutes before us, or, having them before us, find them to be dissimilar to our own."
Our General Assembly, by the words which it used in Section 11663-1, General Code, rather clearly expressed an intention to restrict the application of that statute to real property upon which had been located nothing substantial in addition to "a dwelling or dwellings for not more than two families." Courts had sometimes held that a dwelling for more than two families might be claimed as a homestead. See for example In re Estate of Levy, 141 Cal. 646, 75 P. 301, 99 Am. St. Rep., 92 (building divided into three flats, each used by separate family, held "dwelling house" within meaning of homestead statute); Kiesel v. Clemens, 6 Idaho 444, 56 P. 84, 96 Am. St. Rep., 278 (hotel held subject to homestead declaration). But see Potter v. Clapp, 203 Ill. 592, 68 N.E. 81, 96 Am. St. Rep., 322, 329. Under the express words of Section 11663-1, General Code, such real property would not come within the real property therein described because it would have located thereon something substantial in addition to "dwellings for not more than two families."
A holding, that the real property in the instant case could be described by the statutory words "real property * * * upon which * * * there has been located a dwelling or dwellings for not more than two families," would appear to be unreasonable when compared to other holdings required by those statutory words. For example, if one of the two storerooms had been rented out to a family for its dwelling, then the real property in the instant case could admittedly not be described by those words, although its use would be more for dwelling purposes and less for nondwelling purposes than in the instant case and although the statute can never be relied upon unless there is some dwelling located upon the real property involved.
The words of the General Assembly obviously could not describe real property upon which there are located dwellings for three families because there would then be thereon "dwellings for more than two families." If therefore there is located upon a particular parcel of real property something substantial in addition to dwellings for more than two families, it should be equally apparent that such parcel of real property would not be described by those words. As stated in paragraph four of the syllabus in Carr v. Home Owners Loan Corp., 148 Ohio St. 533, 76 N.E.2d 389:
"Section 11663-1, General Code, represents a special restriction on the general right to enforce satisfaction of an indebtedness in the usual way and, therefore, should not be extended by implication to deny that right."
In this statute, having specified the limitation that the real property described therein should have located thereon "a dwelling," the General Assembly then clearly limited such real property to such as should have located thereon "a dwelling or dwellings for not more than two families." In other words, the General Assembly specifically required the location of at least "a dwelling" on such real property, then clearly provided against having thereon a dwelling or dwellings for more than two families and said nothing about the location thereon of anything else. It would not be reasonable to impute to that General Assembly an intention to describe real property upon which had been located anything substantial in addition to a dwelling or dwellings. To do so would be to extend "by implication" the statutory "restriction on the general right to enforce satisfaction of an indebtedness in the usual way" so as "to deny that right"; and would thus quite definitely appear to be contrary to the above-quoted principle of law which was announced by this court in paragraph four of the syllabus of the Carr case, presumably as a guide for construing this statute.
As said by Zimmerman, J., in the opinion in that case at page 542:
"If the General Assembly by the passage of Section 11663-1, General Code, meant to protect debtors in the situation of the Carrs [in the instant case the plaintiff], the language selected fails to accomplish that purpose.
"The statute in issue, being a special restriction of the general right to enforce contracts in the usual way, should not be so construed as to forbid an action not plainly prohibited by its provisions. In other words, the statute should not be extended and stretched by implication to preclude the assertion of a claim which in the absence of the statute would be enforceable." (Emphasis added.)
In the instant case, the whole of the first floor of the building involved is designed for use and was apparently used for business purposes. Only the second floor was used for dwelling purposes. Obviously, the first floor had as much useable space as the second floor and was more accessible for use than the second floor. It is apparent therefore that the building was designed and used primarily for business purposes. As stated by Matthias, J., in Montalto v. Yeckley, 138 Ohio St. 314, 321, 34 N.E.2d 765:
"* * * it is our judgment, and we so hold, that Section 11663-1, General Code, * * * does not operate to preclude the enforcement of a deficiency judgment rendered for an indebtedness secured by a mortgage upon premises on which is erected a building primarily for business purposes, consisting of a storeroom on the first floor and living quarters for not more than two families on the second and third floors."
It follows that the judgment so far as it is for plaintiff on the petition must be reversed and final judgment rendered thereon for defendant; and the judgment so far as it is for plaintiff on defendant's cross-petition must likewise be reversed and the cause remanded for further proceedings thereon in accordance with the law as announced in this opinion.
Judgment accordingly.
MATTHIAS, HART and STEWART, JJ., concur.
WEYGANDT, C.J., ZIMMERMAN and BELL, JJ., dissent.
I can not agree with the conclusion of the majority that the General Assembly "clearly expressed an intention to restrict the application of that statute [Section 11663-1, General Code] to real property upon which had been located nothing substantial in addition to `a dwelling or dwellings for not more than two families.'"
The statute says, "upon which * * * there has been located a dwelling or dwellings for not more than two families." It does not say, "upon which there has been located nothing substantial in addition to a dwelling or dwellings."
The majority opinion cites paragraph four of the syllabus in Carr v. Home Owners Loan Corp., 148 Ohio St. 533, 76 N.E.2d 389. The problem involved in that case was not the nature of the building located on the real estate (it was a single-family dwelling) but concerned the time of the commencement of the running of the statute. I agree that the statute should not be extended by implication to deny the right to enforce satisfaction of an indebtedness. Neither should it be restricted by writing into it words that do not appear therein.
A "dwelling house" is defined as follows in Bouvier's Law Dictionary (Baldwin's Century Edition): "A building inhabited by man. A house usually occupied by the person there residing, and his family. The apartment, building, or cluster of buildings in which a man with his family resides." Both Webster's New International Dictionary and the New Century Dictionary list as synonyms for "dwelling" such words as "habitation," "abode," "a place of residence." In none of the dictionaries is "dwelling" limited to the conventional "house" or to a building containing living quarters only.
It is a matter of common knowledge that many professional and business men have offices in connection with their homes. Can it be said that a physician or lawyer who erects a two-story building consisting of an office on the first floor and living quarters occupied by him as his home on the second floor has not erected a "dwelling" within the meaning of the statute?
The majority opinion attempts to fortify the position taken therein by saying that, if one of the storerooms on the first floor of the building involved herein had been rented out to a family for a dwelling, the building would not come under the statute because it contained dwellings for more than two families. The very statement of that eventuality should make that conclusion obvious. Neither would a 96-unit apartment building be a "dwelling for not more than two families."
But those are not the facts of this case. Here the trial court found that this building had been used as a dwelling for not more than two families, and the Court of Appeals affirmed that finding. I do not believe this court should substitute its finding of fact for that of the lower courts.
In the case of Montalto v. Yeckley, 138 Ohio St. 314, 34 N.E.2d 765, relied on by the majority, the living quarters located on the second and third floors of a building containing a storeroom on the first floor "were never occupied or held as a homestead by the mortgagor." In the present case, the lower courts found the living quarters had been occupied as a home for many years by the owner and his family. That finding that it thus constituted a dwelling should not be disturbed by this court.
WEYGANDT, C.J., and ZIMMERMAN, J., concur in the foregoing dissenting opinion.