First National Bank v. Duncan

Opinion of the Court by Judge Clay Affirming. This appeal challenges, the correctness of the chancellor’s ruling in awarding W. H. Duncan a homestead in the surplus proceeds of his real estate, which was sold to pay his lien debts. The facts are these: The action was originally brought by the Commonwealth Life Insurance Company to enforce a mortgage lien on certain real estate belong *778 ing to Duncan. Judgment went by default and tbe land ■ was ordered sold. Several months later, and at tbe April, 1924, term, R. L. Pauli, who bad tiled a cross-petition, was adjudged a lien subject to prior liens on tbe lands that bad been sold, and tbe priority of liens was reserved for further adjudication. At tbe same term an order was entered directing tbe master commissioner to collect tbe sale bond, to pay the debt of the Commonwealth Life Insurance Company and certain other indebtedness, including taxes, and to bold tbe remainder of tbe money, if any, subject to tbe further orders of tbe court. When tbe above orders were made there was also pending an action in which tbe First National Bank of Scottsville sought tbe recovery of $5,000.00 against Duncan and wife, and asked a general order of attachment. No answer having been filed, judgment went by default, and tbe attachment was sustained. Some time later Duncan filed bis. answer claiming.a homestead in the surplus funds arising from tbe sale of bis lands. Tbe relief was granted and tbe First National Bank of Seottsville appeals. It is tbe rule in this state that where tbe necessary conditions are present the debtor is entitled to a homestead in tbe surplus proceeds arising from tbe sale of bis property to pay lien debts, and may assert this right at • any time before there is a final order disposing of such proceeds. Marcum v. Edwards, 181 Ky. 683, 205 S. W. 798. Here, the court, after adjudging that tbe taxes and certain lien debts be paid, directed the balance to' be held subject to tbe further orders of tbe court. It is true that appellant recovered judgment for its debt and that its attachment was sustained, but, as tbe judgment Avas not accompanied by an order applying tbe attached proceeds to the payment of its debt, tbe judgment was not conclusive of tbe right of homestead, Marcum v. Edwards, supra, but tbe proceeds as theretofore directed still remained subject to tbe further orders of tbe court. Before any order disposing of 'the proceeds was made Duncan claimed the homestead, and the chancellor did not err in sustaining bis claim. Judgment affirmed.