Williams v. Jones

1. Homestead—when debt is for purchase money. Where the assignee of notes given for a part of the purchase price of land, by an arrangement' with the principal maker, who was the purchaser of the land, surrenders the notes and takes from him in lieu thereof the note of the purchaser alone, with a trust deed on the land to secure the note, the debt will be unchanged, and will remain a debt incurred for the purchase money. 2. Same—exception in statute is not confined to vendor’s lien. The object of the limitation of the homestead exemption to debts not incurred for the purchase money is not merely to protect the vendor’s lien,—so although there be a waiver of the lien by taking other security for the purchase money, the holder of the indebtedness will not thereby lose the protection of the statute.

Writ of Error to the Circuit Court of DeWitt county; the Hon. Lyman Lacey, Judge, presiding. This was a hill in chancery, filed by Eh P. Williams, against Isaac M. Jones and wife, to foreclose a deed of trust. The bill alleged, among other things, that the debt was for purchase money, which was. denied by the answer, and a homestead set up in defence, it not having been properly released in the trust deed. On the hearing the circuit court dismissed the bill at the costs of the complainant. The following is the agreed statement of the facts: “About five years ago, (1875), William 0. Gray, Samuel Steele and W. H. Cottingham owned the'property in controversy, and sold the same to defendant Isaac M. Jones, taking his notes for part of the purchase money, with Wm. C. Beale as personal security. Before these notes matured, Gray and others sold and assigned them to complainant, Williams, who surrendered the notes to Jones, upon his giving the note and trust deed in controversy upon the same land for the same debt. ” Then follows a copy of the note and trust deed, usual form. The certificate of acknowledgment to the trust deed does not state that the parties released the right of homestead. It was further agreed that unless the debt is for purchase money, the defendants are entitled to and have an estate of homestead in the premises, and that the land is not worth over $1000. Mr. M. Donahue, and Mr. R. A. Lemon, for the plaintiff in error: A homestead is not exempt from sale for a debt or liability incurred for the purchase or improvement thereof. Rev. Stat. 1874, p. 497, sec. 4. The debt in this case was for purchase money, which has never been paid. The renewal of the note,—the evidence of the debt to the assignee,—does not change the character of the debt. Fowler v. Ellwood, 66 Ill. 438; Smyth on Homestead Exemptions, 221. This court has often decided that where a person loans money to another to enable the latter to purchase a homestead, the money so loaned is purchase money. Austin v. Underwood, 37 Ill. 438; Magee v. Magee, 51 id. 500. Now, if the only object of the exception in the statute was to protect the vendor in his lien, we fail to understand the principle upon which the above cases were decided. If, however, the intention of the statute was' to protect and secure the debt regardless of the capacity (whether as vendor or otherwise) in which the creditor held the evidence of the debt, we can then readily see the reason and force of such an interpretation. If a court of equity will look at the substance of this trans- • action, we think there is no room to doubt that this is purchase money. See Kimble v. Esworthy et al. 6 Bradw. 517.