Rix v. Capitol Bank

DILLON, Circuit Judge. We hold the following propositions: 1.That the property in question, being admitted to be the homestead of the bankrupt at the time of the commencement, of the proceedings in bankruptcy, and as such being -‘exempted” by the constitution of the state ‘•from forced sale under any process of law,” the same was “excepted” by the bankrupt act (section 14) “from the operation of the provisions” of that section, and the “title” thereto did not “pass to the assignee.” nor was “the title of the bankrupt thereto impaired or affected by the provisions of this (the bankrupt) act.” 2. The constitutional provision respecting the homestead recognizes the validity of a “lien” thereon, “given by the consent of both husband and wife;” the mortgage, therefore, to the defendant by the bankrupt and wife created a valid lien upon the homestead property in favor of the mortgagee, but such mortgage did not otherwise affect the right of the owner to the homestead exemption, which, as against general creditors, and as against the assignee in bankruptcy, continued to exist, notwithstanding such mortgage. 3. The property mortgaged is admitted to be “the proper homestead” of the mortgagor and his family, and being within the limits of an incorporated city, and not appearing to exceed the quantity allowed by law, the statutes of the state (section 2, c. 38, p. 473) do not require, in order to preserve the exemption, that the owner shall apply to have the property selected and sot apart as a homestead. 4. Tinder the constitution. of the state and the bankrupt act (section 14) the title to homestead property, that is, to property in good faith, “occupied as a residence by the family of the owner,” at the time of the commencement of the proceedings in bankruptcy, does not pass to the assignee, but remains in the bankrupt. If it had been admitted or established that the bankrupt had subsequently abandoned the homestead, this would give no right to the assignee; but the mere fact that since the adjudication of bankruptcy “Stilwell has left the state and has not since returned, and that his family have removed with their effects from the state and have not since returned.” does not. to say the least, very clearly negative an intention to return to the homestead, nor preclude the right to do so and redeem the mortgage and have the benefit of the exemption. The proof of an intention to abandon (if it be conceded that in Kansas the homestead right can be lost by abandonment of the property) should be clear and decisive. See Shepherd v. Cassiday, 20 Tex. 24. 96; Davis v. Andrews, 30 Vt. 678; 1 Am. Law Reg. (N. S.) 711, 712. In any view of the case the assignee in bankruptcy has no title to or right in the homestead property, and hence cannot maintain a bill to have the mortgage thereon adjudged fraudulent as against the bankrupt act, nor to restrain its foreclosure in the state court. Bill dismissed.