Campbell v. Geheb

Frank Holt, Justice. Appellant brought this action to set aside a quitclaim deed from appellee George M. Geheb to his appellee wife,_jCecil. Appellant alleged that the transaction was a fraudulent conveyance and was done for the purpose of delaying and hindering the appellant in the collection of a judgment against George. The chancellor held that the property is Cecil’s homestead and, therefore, is not subject to the claim of appellant as a judgment creditor. For reversal, appellant contends the chancellor erred in determining the homestead interest and refusing to set aside the conveyance. We cannot agree. Appellant acknowledges that Cecil properly claims the property as her homestead. Appellant argues, however, that Cieorge has shown no homestead interest in the property. Cecil lives in Ft. Smith on the property in question and Cieorge lives in Newton County where she lives with him occasionally. Therefore, his quitclaim deed to Cecil should be set aside as a fraudulent conveyance and appellant should be permitted to execute upon and sell George’s interest subject to Cecil’s homestead rights. Ark. Stat. Ann. § 30-210 (Repl. 1962) provides that when the husband neglects or refuses to claim his homestead rights, his wife may intervene and set it up. The stipulation, as abstracted by appellant, is as follows: Prior to the taking of any testimony, counsel for the parties made statements and stipulations to the effect that the judgment in 1968 was admitted; that Cecil Geheb was the sole owner of the realty prior to her marriage; that a tenancy by the entirety was created by the use of a third party; that the judgment was not of record in Sebastian County until 1973; and that the realty was conveyed in 1971 by Mr. Geheb to Mrs. Geheb without monetary consideration. In addition, the realty was the homestead of Cecil Geheb who obtained title from her father. All subsequent indebtedness had been paid by Mrs. Geheb. The reconveyance by Mr. Geheb was made three days after the last payment on the mortgage. In construing the homestead exemption, we have recognized that a conveyance destroys the homestead claim. See Drennen v. Wheatley. 210 Ark. 222, 195 S.W.2d 43 (1946), where we quoted as follows: The general rule is that, in the absence of specific constitutional or statutory authority therefor, there is no right on the part of a debtor to claim exempt funds arising from the voluntary sale of his homestead. ‘In the absence of statutory provisions to the contrary, the voluntary sale of homestead property is held in a majority of jurisdictions, to be a complete extinguishment of the homestead right; and consequently the proceeds of such sale, until invested in other exempt property, may be subjected to the claims of creditors.’ See also Obenshain v. Obenshain, 252 Ark. 701, 480 S.W.2d 567 (1972). Thus from the foregoing discussion, it would appear that any homestead right that Cecil Geheb may have had at the time of the conveyance to her husband was relinquished by that conveyance. Furthermore, a wife can only claim one homestead under Ark. Const. Art. 9, §3. This was recognized in Grimes v. Luster, 73 Ark. 266, 84 S.W. 223 (1904). In that case Hugh Grimes died leaving a widow. He had a homestead at Newport. The widow moved to Batesville, married and acquired a homestead with her second husband. She died leaving four children all of whom were adults except Harry Grimes. The three older children conveyed their interest in the Batesville property to Mark Luster. Harry brought the action to recover the rents and profits on the theory that he as a minor was entitled to claim a homestead right in the Batesville property. In holding that a minor could not acquire two homestead rights, we there stated: The beneficence of these provisions extend in favor of the children to the homestead of either parent. So long as the family circle is not broken by the death of either parent, there can be but one homestead; and it matters not whether that is the homestead of the father or mother. Thompson v. King, 54 Ark. 9; Wilmoth v. Gowett, 71 Ark. 594. And, as heretofore shown, successive homestead fights may be inherited by minors in cases like this one at bar where the widow acquires a homestead during her widowhood in her own right, but both cannot be enjoyed at one and the same time. Such an enjoyment would present an anomaly, and one not to be tolerated because contrary to the spirit and letter of the homestead exemption. . . . In Hollis v. State, 59 Ark. 211, 27 S.W. 73 (1894), in discussing the nature of the homestead right, we said: In the case of Harbison v. Vaughan, 42 Ark. 539, this court said that the protection of the family from dependence and want is the object of all homestead laws; that apart from his family, the debtor is entitled to no special consideration. As the protection of the family is the object of the homestead law, so it has been held that desertion of the family by the husband, still leaving the family occupying the homestead, is not an abandonment of the homestead. In Rosenberg v. Jett, 72 F. 90 (1894) Williams, District Judge, commented on the matter as follows: I am clearly of the opinion that during coverture, and while the husband and wife are not separated, but are living together as husband and wife, there can be no such thing as a separate homestead of the wife, separate and apart from her husband, that the domicile of the husband is the domicile of the wife, and, wherever he may erect a homestead, it is, in the contemplation of the law, the homestead of the husband and wife. . . . See also Bruce v. Bruce, 176 Ark. 442, 3 S.W.2d 6 (1928). We are firmly convinced that when Cecil Geheb conveyed to a third party for the purpose of creating an estate of the entirety, she also conveyed any rights of homestead that she may have had prior thereto. Furthermore, any rights of homestead that she could claim thereafter would have to arise out of the marriage relationship to George Geheb. It necessarily follows that when appellant stipulated that Cecil Geheb had a homestead in the property, they necessarily stipulated that that homestead was one acquired during the marriage which would exempt the property from sale under the homestead laws from the creditors of either the husband or the wife. In view of Ark. Stat. Ann. § 30-210, <¡u/>ra, it matters not that George Geheb did not claim the homestead exemption. Affirmed. Fugleman, J., dissents.