Putnam Sand & Gravel Co. v. Albers

California Court of Appeal Jan 26, 1971 No. Civ. 1242Published

Before: Ginsburg

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Holding. A debtor may file a valid declaration of homestead on property previously subject to a fraudulent conveyance if the declaration is filed before the entry of a judgment lien, as the homestead exemption takes priority over such subsequent judgments.

Issues

Does a lis pendens prevent a debtor from filing a valid homestead declaration on property previously transferred fraudulently?
Does a fraudulent conveyance preclude a debtor from claiming a homestead exemption upon the reconveyance of the property prior to judgment?

Disposition. affirmed

Quotations verified verbatim against the opinion

“The general rule is that the principles of fraudulent conveyances do not apply to declarations of homestead, and that the fact that a debtor filed a declaration of homestead to hinder and delay his creditors does not affect its validity”

“The very purpose of the homestead law is to protect the property from existing debts.”

“We likewise hold that, notwithstanding the fraudulent conveyance, the defendants Albers retained an equitable interest in the property which would enable them to file a valid claim of homestead before judgment.”

Opinion

GINSBURG, J.

Plaintiff recovered a money judgment which was declared to be a lien against certain real property; he appeals from a portion of the judgment which made the lien subject to a claimed homestead exemption.

On August 10, 1967, the defendants Albers and others owed money to plaintiff on an account for building materials. On that date the de

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fendants Albers conveyed the real property in issue here to the Yorks, their daughter and son-in-law, without consideration. This conveyance was admittedly a fraudulent transfer under the provisions of section 3439.07 of the Civil Code.

On June 7, 1968, plaintiff commenced this action, seeking judgment for the amount of the indebtedness, together with interest thereon. Plaintiff also asked that the conveyance to the Yorks be set aside and annulled on the ground that it was fraudulent as to creditors, and that the judgment for the indebtedness be declared to be a lien on the real property. At the same time, plaintiff recorded a notice of pendency of action, pursuant to Code of Civil Procedure section 409,

containing a description of the real property that had been conveyed to the Yorks.

On June 24, 1968, after the fihng of this action and the recording of the lis pendens by plaintiff, the Yorks conveyed the subject property back to the defendants Albers. Thereafter, on July 2, 1968, before judgment was entered herein, the defendants Albers recorded a declaration of homestead on the property. On April 2, 1969, the trial court granted plaintiff judgment for the amount prayed for and a lien on the real property in the amount of the judgment; but, in so doing, the trial court ordered that said lien should be subject to the defendants Albers’ claim of homestead in the amount of $15,000.

Plaintiff contends that the lis pendens, recorded prior to the reconveyance of title from the Yorks to the defendants Albers and before the declaration of homestead was recorded, had the effect of preserving the status of the title as of the date it was recorded, June 7, 1968. Plaintiff further argues that, under Civil Code sections 1214 and 1215,

Putnam Sand & Gravel Co. v. Albers

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GINSBURG, J.

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