Homestead Interest of Nonassenting Spouse

Matherly v. The Citizens Bank; The Citizens Bank v. Matherly; Penn Waters, LLC v. The Citizens Bank, [Ms. 1210396; SC-2022-0443; SC-2022-0520, Oct. 28, 2022] __ So. 3d __ (Ala. 2022). The Court (Mendheim, J.; Parker, C.J., and Bolin, Shaw, Wise, Bryan, Sellers, Stewart, and Mitchell, JJ., concur) affirms the Coffee Circuit Court’s judgment in a quiet title action involving the foreclosure of a mortgage and the homestead interest of the mortgagor’s spouse, Jenny Matherly, who did not sign the mortgage. As part of its judgment quieting title in the property to Citizens Bank, the circuit court awarded Jenny Matherly $5,000 for her homestead interest.

The Court rejects Citizens Bank’s appeal of that award and explains “Jenny did not ‘waive’ any right she may have possessed to void alienation of her homestead under § 6-10-3 or to claim a homestead interest pursuant to § 6-10-40 by claiming a homestead exemption under § 40-9-19(a)(1)” for a different property she owned. Ms. *26.

The Court rejects Jenny’s argument that “Article X, § 205, Ala. Const. 1901, and § 6-10-3, Ala. Code 1975, required the circuit court to find that the Citizens Bank mortgage agreement was void because it was executed without her signature or assent.” Ms. *27. The Court explains her husband’s “execution of the Citizens Bank mortgage agreement without Jenny’s assent and signature did not void the mortgage under § 6-10-3 because that right to prevent homestead alienation does not apply to a mortgage or conveyance in excess of the homestead value provided in § 6-10-2 as long as the nonassenting spouse is allotted the homestead interest provided in § 6-10-40. In other words, the only right available to Jenny, pursuant to § 6-10-40, is to receive the homestead-interest amount of $5,000, which is what the circuit court awarded to Jenny.” Ms. *35.

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