IN RE: ARNOLD

IN RE: ARNOLD
2003 OK 63
73 P.3d 861
Case Number: 97700
Decided: 06/24/2003

THE SUPREME COURT OF THE STATE OF OKLAHOMA

IN RE: LANNIE D. ARNOLD AND DEBORAH ANN ARNOLD, Debtors.

CERTIFIED QUESTION FROM THE UNITED STATE BANKRUPTCY COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA

¶ 0 A question certified from the U.S. Bankruptcy Court asks whether under Oklahoma law a recent statutory amendment entitles a married couple living together to each claim 160 acres of rural land for a total of 320 acres as exempt homestead. We answer that it does not.

CERTIFIED QUESTION ANSWERED

J. David Ezzell, ELLIOTT, ENABNIT, NEWBY, EZZELL, OVERSTREET, RIFFEL & RIFFEL, PLLC, Enid, Oklahoma, Attorneys for Debtors.
Joe Pelofsky, United States Trustee, Herbert M. Graves, Assistant United States Trustee, OFFICE OF THE U.S. TRUSTEES, Oklahoma City, Oklahoma.

SUMMERS, J.

¶1 Pursuant to the Revised Uniform Certified of Questions of Law Act, 20 O.S. 2001,§§1601 et seq., the Honorable T. M. Weaver, Judge of the United States Bankruptcy Court for the Western District of Oklahoma submitted this question: Under recent amendments to

¶2 The facts of this matter are not in dispute. The debtors, Mr. and Mrs. Arnold, filed a joint voluntary petition seeking relief under Chapter 11 of the Bankruptcy Code. The 320 acres the Arnolds claimed as exempt homestead include land on which their marital home is located and land used in their business operations. Those 320 acres are not located within any city, town or village, and are a portion of approximately 1,300 acres of real property the debtors own which is a single contiguous tract of land.

¶3 The Arnolds base their claim for combined 160 acre exemptions on 1997 amendments to the statute wherein the legislature deleted the words "family" and "single, adult person", and replaced them with the word "person".

Prior to 1997, section 2 of Title 31 provided that:

"The homestead of any family in this state or the homestead of a single, adult person in this state not within any city, town or village, shall consist of not more than one hundred sixty (160) acres of land, which may be in one or more parcels, to be selected by the owner. The homestead within any city or town owned and occupied as a residence only, shall consist of not exceeding one (1) acre of land, to be selected by the owner: Provided, that the same shall not exceed in value the sum of Five Thousand Dollars($5,000.00) and in no event shall the homestead by reduced to less than one-quarter (1/4) of an acre, without regard to value: And provided, further, that in case said homestead is used for both residence and business purposes, the homestead interests therein shall not exceed in value the sum of Five Thousand Dollars($5,000.00). . ."

The current version of the section in pertinent part provides:

A. The homestead of any person in this state, not within any city or town, shall consist of not more than one hundred sixty (160) acres of land, which may be in one or more parcels, to be selected by the owner.

B. Effective November 1, 1997, the homestead of any person in this state, not within any city or town, annexed by a city or town on or after November 1, 1997, owned and occupied and used for both residential and commercial agricultural purposes shall consist of not more than one hundred sixty (160) acres of land, which may be in one or more parcels, to be selected by the owner.

C. The homestead of any person within any city or town, owned and occupied as a residence only, or used for both residential and business purposes, shall consist of not exceeding one (1) acre of land, to be selected by the owner.

For purposes of this subsection, at least seventy-five percent (75%) of the total square foot area of the improvements for which a homestead exemption is claimed must be used as the principal residence in order to qualify for the exemption. If more than twenty-five percent (25%) of the total square foot area of the improvements for which a homestead exemption is claimed is used for business purposes, the homestead exemption amount shall not exceed Five Thousand Dollars ($5,000.00) . . ." 31 O.S. Supp. 2001,§2 . Amended by Laws 1997, c.§1; Laws 1997, c. 345,§1. (emphasis added.)

¶4 In Oklahoma the homestead right is both constitutional and statutory.

¶5 The United States Trustee suggests that substituting "person" for "family" and "single, adult person," was merely intended to "streamline" the statutory language, not to change the meaning of the homestead interest, and that the real intended subject of the Legislature's amendment was to clarify the limitation on the business use of the urban homestead set forth in subsection C. We agree with the Trustee's position that the statutory changes do not encourage married people to divorce or separate in order to claim individual homestead interests. Under both versions married persons could arguably divorce with equal results if they chose to do so in order to obtain an additional exemption.

¶6 We are not persuaded by the Arnold's contention that the substitution of "person" is inconsistent with the meaning and intent of the prior version of the statute which recognized the eligibility for homestead of "any family" and also a " single, adult person." Neither have the Arnolds presented any convincing support for their claim that these legislative amendments were intended to change the historical character and established purpose of the homestead.

¶7 The Arnolds' position approaches this amended homestead statute as if it concerns individual property ownership, unconnected to the historical character and public policy served by the homestead laws. This view is erroneous. In Oklahoma, the homestead exemption has long been seen as a character or designation which attaches to the land itself in order to preserve the family home for occupation, and to protect the family from demands of creditors. Jones v. Berger,

¶8 Homestead is not an incidence of ownership. Nor does its presence or non-presence change ownership of the land. Nothing like it is known at common law. Pettis v. Johnson,

¶9 We have long recognized that under our constitutional and statutory provisions

"the homestead of the family may consist of more than one tract of land, and it may be owned either by the husband or wife, or by both jointly, or one tract be owned by one and another tract owned by the other, so long as the aggregate number of acres occupied as the home shall not exceed 160 acres. Gooch v. Gooch,

¶10 Related statutes regarding the homestead ad valorem tax exemption make it clear that both prior to and after 1997, married couples could claim only one homestead for ad valorem tax purposes. Title

"I. Any single person of legal age, married couple and their minor child or children, or the minor child or children of a deceased person, whether residing together or separated, or surviving spouse shall be allowed under this Code only one homestead exemption in the State of Oklahoma."

¶11 While this question has not been raised in Oklahoma before, the United States Trustee has presented us with analogous decisions from other jurisdictions where efforts made by spouses to combine or "stack" separate homestead exemptions have been denied. While it is true as the Arnolds argue, that the statutory provisions in these matters do vary in some respects from Oklahoma's, we do not find the differences to be of meaningful significance, and we find those decisions instructive in resolving the question before us.

¶12 In Pruitt v. Wilson,

¶13 In Stevens v. Pike County Board,

¶14 Similarly, in In re Riebow, 114 B.R. 656(Bankr. E.D. Mo., 1990), it was held that under Missouri's statute granting "every person" a homestead exemption, husband and wife as joint debtors could not "aggregate" the exemption amount of $8,000.00 so as to create an exemption of $16,000.00.

¶15 The Arnolds urge us to apply the general rule that homestead laws are to be liberally construed in favor of the debtor, and rule in their favor. This we cannot do. While it is true that homestead laws should be liberally construed to comport with their beneficent spirit of protecting the family home, a liberal construction cannot be the means of defeating a positive law or a rule established by judicial precedent. Enosburg Falls Savings Bank v. McKinney,

¶16 In answer to the certified question we declare that under Oklahoma law where husband and wife are living together on the same rural homestead property they may claim only one homestead exemption which does not exceed 160 acres.

¶17 WATT, C.J., HODGES, LAVENDER, HARGRAVE, KAUGER, SUMMERS, BOUDREAU, WINCHESTER, JJ. - Concur

¶18 OPALA, V.C.J. - Concurs in Result

FOOTNOTES

1 The provisions of Title 31 O.S §§ 1- 5 vitalize Article 12, §§ 1-3 of the Oklahoma Constitution. Art., 12, Okla. Const. § 1, was similar to the provisions of 31 O.S. 1991, § 2, and it was amended concurrently with and similarly to 31 O.S.1991, § 2 in 1997.

Art.,. 12, Okla. Const., § 2 :

" The homestead of the family shall be, and is hereby protected from forced sale for the payment of debts, except for the purchase money therefor or a part of such purchase money, the taxes, due thereon, or for work and material used in constructing improvements thereon; nor shall the owner, if married sell the homestead without the consent of his or her spouse, given in such manner as may by prescribed by law; Provided, Nothing in this article shall prohibit any person from mortgaging his homestead, the spouse, if any, joining therein; nor prevent the sale thereof on foreclosure to satisfy any such mortgage."

Art., 12,§ 3 provides in relevant part:

". . . The Legislature may change or amend the terms of this article."

2 This same provision is set forth in 68 O.S. 2001, §2888.