Fox v. Brannan

Plaintiff was a purchaser at a bankrupt sale of the trustee's interest in a certain three-story frame house owned by defendant bankrupt. Homestead exemptions were claimed by defendant, and the trustee sold the property subject to such exemptions. *Page 127 The dimensions of the building in question are 26` x 36`, located on a single lot. There is one apartment on the first floor, consisting of five rooms and a bath. On the second floor are two apartments, each consisting of three rooms and a bath. Defendant lives on the third floor which extends over the entire house and consists of a large room, with toilet, wash bowl, and kitchen facilities. There is no question but what defendant has no other property and occupies the premises aforesaid as a home. A front stairway leads to the downstairs apartment, and a single stairway at the side of the house leads up to the second and third floors and also provides another entrance for the downstairs apartment. The basement is occupied by the defendant, except that tenants in the apartments have laundry privileges there; each tenant has a right to use a locker installed in the basement. There is a three-car garage on the premises, partitioned so that there is a room for a single car in one part, and the remainder is capable of housing two cars. A bill was filed by plaintiff for an accounting of the proceeds of rents from the apartment lessees which have been paid to defendant since the bankrupt sale, and for a decree adjudging plaintiff to be the owner of the aforesaid apartment. The trial court decreed that plaintiff and defendant were tenants in common of the premises, but that defendant has no interest in any of the apartments, and that defendant is entitled to the third floor of said house which is declared to be his homestead; that while plaintiff and defendant are cotenants of the premises, nevertheless plaintiff has no dominion over the third floor, occupied by defendant as a homestead, nor has the said defendant any dominion over the premises occupied by the apartment tenants; and that both parties are required to "justly bear and *Page 128 pay all portions of expenses that may be incurred in connection with the operation of said apartment house, such as the furnishing of light, heat, gas and water." Defendant was also obliged to account to plaintiff for rentals received from the apartments subsequent to the bankrupt sale. The only question before us, therefore, is whether defendant's homestead in this house, divided into four apartments, extends to the entire premises. The Constitution, 1908, art. 14, § 2, provides: "Every homestead of not exceeding forty acres of land and the dwelling house thereon and the appurtenances to be selected by the owner thereof and not included in any town plat, city or village; or instead thereof, at the option of the owner, any lot in any city, village or recorded plat, or such parts of lots as shall be equal thereto, and the dwelling house thereon and its appurtenances, owned and occupied by any resident of the State, not exceeding in value fifteen hundred dollars, shall be exempt from forced sale on execution or any other final process from a court." Section 14608, 3 Comp. Laws 1929 (Stat. Ann. § 27.1572), provides: "A homestead, consisting of any quantity of land not exceeding forty acres, and the dwelling house thereon and its appurtenances, to be selected by the owner thereof, and not included in any recorded town plat or city or village, or instead thereof, at the option of the owner, a quantity of land not exceeding in amount one lot, being within a recorded town plat or city or village, and the dwelling house thereon and its appurtenances, owned and occupied by any resident of this State, not exceeding fifteen hundred dollars, shall not be subject to forced sale on execution, or any other final process from a court, for any debt, or debts growing out of or founded upon contract, either express or implied." *Page 129 With regard to this case, the limitations upon the right of plaintiff to claim a homestead not exceeding $1,500 in value are that the premises must be a dwelling house; and that it must be owned and occupied by the claimant. A homestead may be claimed upon premises used partly for business and partly for a dwelling. King v. Welborn, 83 Mich. 195 (9 L.R.A. 803). Where a building was used as a hotel which claimant owned and in which he resided, although a part thereof was used for business purposes as a barber shop, it was held that such premises were a homestead, and that if the value thereof exceeded $1,500, a lien in favor of creditors beyond such value attached, and that a sale afforded the only means of reaching the excess. Lamont v. LeFevre, 96 Mich. 175. In the case of In re Robison, 215 Fed. 662, homestead claimants owned a three-story building with 24 bedrooms, equally divided between the second and third floors; a restaurant on the first floor was operated by a third party; five rooms of the premises were occupied by the homestead claimants; the other rooms were used for hotel purposes. In a proceeding in bankruptcy, the court held the entire premises exempt as a homestead, citing as authority, among other cases,King v. Welborn, supra. "The weight of authority is to the effect that if a building is used by a debtor as his family residence, it may be his homestead, and exempt as such, notwithstanding a part of it may be leased to others for residence or business purposes." 29 C. J. p. 809. "If the property comprising his homestead is worth more than $1,500, the statute provides a way by which he may receive the value of his exemption, and his creditors the balance to apply on his debts." King v. Welborn, supra. *Page 130 See 3 Comp. Laws 1929, §§ 14615, 14616 (Stat. Ann. §§ 27.1579, 27.1580). Dyson v. Sheley, 11 Mich. 527, referred to by Mr. Justice BUTZEL in the accompanying opinion, is similar in some degree to the instant case; but we have concluded not to follow the rule therein generally stated, in the future. We are of the opinion that defendant's homestead to the value of $1,500 extended to the entire premises in question. Creditors, or the trustee in bankruptcy acting in their behalf, were entitled only to the excess over and above this homestead value, which in this case could be reached only by a sale of the premises pursuant to the statute. Decree vacated, with costs to defendant. SHARPE, POTTER, and CHANDLER, JJ., concurred with McALLISTER, J.