Gray v. Bank of Hartford

• Decision Date: 23 December 1918
• Docket Number: 53
• Citation: 208 S.W. 302,137 Ark. 232
• Parties: GRAY v. BANK OF HARTFORD
• Court: Arkansas Supreme Court

208 S.W. 302

137 Ark. 232

GRAY v. BANK OF HARTFORD

No. 53

Supreme Court of Arkansas

December 23, 1918

Appeal from Sebastian Chancery Court, Greenwood District; W. A Falconer, Chancellor; affirmed.

Decree affirmed.

Daniel Hon, for appellant.

1. The court's holding that appellee's plea of former adjudication was well taken because of appellant's failure to plead the homestead right in the former suit, is in direct conflict with the decision of this court in Bunch v. Keith, 64 Ark. 654. See also 55 Ark. 55. No mention of these cases is made by the court in Baker v Hudson, 117 Ark. 492, relied on by appellee, and it cannot be that the latter case was intended to overrule the former. See also 96 Ark. 540; 11 Am. & Eng. Enc. of L., 390.

2. Counsel reviews the testimony and contends that the land claimed as a homestead was never abandoned by the appellant as such. Being a chancery case, it is tried here de novo, and unless the evidence as between the appellant and appellee is at equipoise, the chancellor's finding is not persuasive. 130 Ark. 465.

3. Appellee's claim against the homestead is concluded by the bankruptcy proceeding. Having through its agent and employee, Holbrook, realized $ 400 out of its purchase of the Bonanza property above expenses, and having asked nothing of the court in bankruptcy concerning the lands set apart to appellant as his homestead, it cannot now repudiate its action and take the other lands under its judgment. See Loveland on Bankruptcy (1899), p. 339; 196 U.S. 149; 229 U.S 512; 196 U.S. 93, 25 S.Ct. 216; 121 Am. St. Rep. 414; 11 Am. & Eng. Enc. of L., 390, 391, 428.

4. The sheriff's deed to appellee was premature and void contrary to the provisions of § 3279, Kirby's Digest. Under an execution sale, the real estate sold may be redeemed within twelve months. Kirby's Dig., § 3292. And a sale under attachment is but a sale under execution. 52 Ark. 290.

5. The action for possession should have been in the circuit court. Appellant pleaded his right to be heard at law. Kirby's Dig., §§ 3304, 3631.

Geo. W. Dodd, for appellees.

1. The plea of former adjudication was well taken. Whether Baker v. Hudson, 117 Ark. 492, overrules Bunch v. Keith, 64 Ark. 654, and Robinson v. Swearingen, 55 Ark. 55, it is not necessary to determine. There are points of difference which distinguish this case from these earlier cases, and bring it well within the principles laid down in Baker v. Hudson. See also 96 Ark. 540.

Appellant is concluded by the decree awarding the writ of possession, and also by the order of the court made when the sale was confirmed. He was a party to those proceedings, and they are final adjudications of the right to possession of the lands.

Actual removal from the farm raises a presumption of abandonment, to rebut which it is incumbent upon the claimant to show that, notwithstanding his removal, it was always his intention to return. 60 Ark. 262; 101 Ark. 101; 74 Ark. 88; 76 Ark. 575; 68 Ark. 76; 103 Ark. 574.

2. Appellees are not concluded by the bankruptcy proceedings. Appellee bank might have purchased the Bonanza property at the trustee's sale instead of from Holbrook and still not have been accountable to appellant in any manner. The lots were never sold under the bank's judgment.

Appellant cannot complain because the bank did not ask anything in the bankruptcy court. Its order of November 12, 1915, recognizes and is an adjudication, that the bank had a lien on the farm property, and this lien it has never relinquished. If appellant chose to claim land as homestead against which there existed valid liens, the bank could only stand upon its legal rights and assert its lien in the proper forum.

The attachment was placed in the hands of the officer October 16, 1914, and having been levied by him on the property, the farm lands, became a specific lien thereon from that date. 54 Ark. 179; 56 Ark. 292; 58 Ark. 252; 87 Ark. 406; 15 Ark. 331; 39 Ark. 97; 67 Ark. 359; 29 Ark. 85; 64 Ark. 96; 60 Ark. 394.

The lien having been filed more than four months prior to the finding of the bankruptcy proceedings, was not affected by the bankruptcy proceedings. 187 U.S. 165; 119 F. 868; 3 Remington, Bankruptcy, p. 768, § 2672, et seq.; 187 U.S. 177; 190 U.S. 294; 155 F. 913; 229 U.S. 511; 158 F. 606; 22 Am. Bankruptcy Rep., 621, 171 F. 897; 19 A. B. R. 621, 156 F. 794; 104 Ark. 234; 129 Ark. 218; 7 Corpus Juris, Bankruptcy, § 289, and notes.

The bankruptcy court having, under Gray's claim, set the land aside to him as exempt, it had no jurisdiction to adjudicate liens against the property. That jurisdiction remained in the State courts. 7 Corpus Juris, Bankruptcy, § 642; 104 Ark. 234; 129 Ark. 218.

Under the proof, there is no merit in the contention that the setting aside of the land as homestead to the appellant by the bankruptcy court is res judicata and conclusive against the bank in this case. 51 Ark. 84. As against general creditors Gray could impress the land with the homestead character after he returned from Texas; but such impressment would not annul existing liens. 74 Ark. 592; 66 Ark. 382; 40 Ark. 69; 101 Ark. 296; 56 Ark. 621; 41 Ark. 94.

It is well settled that exemptions in bankruptcy are allowed under State laws as interpreted by the State courts. 7 Corpus Juris, Bankruptcy, § 619. The question really decided in Smalley v. Laugenour, 196 U.S. 93, relied on by appellant, was one of jurisdiction, and not the question of res adjudicata.

3. The sheriff's deed was neither prematurely executed nor prematurely ordered by the court. Upon transfer of the original case, that court acquired complete jurisdiction both of the parties and the subject matter. 33 Ark. 328; Id. 454. The right of redemption does not exist in this case. That right in attachment cases is confined to sales made under the orders of a court of law. 52 Ark. 290.

4. Appellant was a party to the original suit in which the writ of possession was awarded, and this order was not objected to nor appealed from. The court had inherent authority to enforce its decree in this respect, as well as authority under the statute to issue writs of possession or assistance. Kirby's Dig., § 4476.

The discharge in bankruptcy operates in personam. Appellee is not proceeding against appellant personally, but against the property upon which it has a valid lien which was not discharged or impaired by the bankruptcy proceedings. 7 Corpus Juris, p. 411, § 729; Id., p. 411, § 731, and notes.

HUMPHREYS, J. MCCULLOCH, C. J., and SMITH, J., concur.

OPINION

HUMPHREYS, J.

This suit was instituted in the Greenwood District of the Sebastian Chancery Court by appellant against appellees, to enjoin them from ousting him under writ of possession from 160 acres of land near Bonanza, Arkansas, claimed by him as a homestead, and, for that alleged reason, not subject to process.

Appellees answered denying that the land was appellant's homestead and exempt to him under the laws of the State.

The cause was heard upon the pleadings and evidence, from which the court found that the land was not the homestead of appellant, and decreed a dismissal of his bill for the want of equity. From the decree of dismissal an appeal has been prosecuted to this court, and the cause is before us for trial de novo.

Appellant was the owner of a 209-acre tract of land near Bonanza Arkansas, of which the 160-acre tract in question was a part, as well as some lots in Bonanza on which he resided. On the 11th day of September, 1914, he conveyed the Bonanza property to W. B. Martindale who conveyed it to him in December of the same year; and, on the 15th day of October, 1914, conveyed the 209-acre tract to his brother, G. W. Gray, in payment of an indebtedness to him, and put him in possession of same. On October 16, 1914, appellee, Bank of Hartford, brought suit in attachment on two notes against J. B. Gray and B. Troutt in the Greenwood District of the Sebastian Circuit Court and levied the attachment upon the 209-acre tract of land of which the 160-acre tract in question was a part. J. B. Gray, at that time, was in Texas with his family and was served by warning order. G. W. Gray intervened in the suit, setting up title to the 209-acre tract of land under the deed aforesaid from his brother. Appellee, Bank of Hartford, filed an answer denying the allegations of the intervention, and a cross-bill against G. W. Gray and J. B. Gray, alleging that the conveyance was fraudulent as against creditors and sought the cancellation thereof. The cause was then transferred to the chancery court. J. B. Gray entered his appearance to the cross-bill but filed no pleading. While no answer was filed to the cross-bill by G. W. Gray, the cause was submitted to the court upon the issue, among others, as to whether the conveyance of the 209-acre tract was a fraud upon the creditors of appellant, J. B. Gray. J. B. Gray made no contention in that case that the 160-acre tract of land included in the 209-acre tract was his homestead. The cause was heard on June 7, 1915, and the court rendered judgment on that date against J. B. Gray and B. Troutt for $ 3,739.05, sustained the attachment, dismissed the intervention of G. W. Gray for want of equity and ordered a sale of the land to satisfy the judgment. On August 30, 1915, G. W. Gray reconveyed the 209-acre tract to his brother, J. B. Gray. On the 22nd day of September, 1915, appellant filed a petition in bankruptcy in the Federal Court for the Western District of Arkansas at Fort Smith and was adjudged a bankrupt on September 25, 1915. In that proceeding he filed a schedule of all his property, both real and personal, including the tract in question, and all of his indebtedness, including the judgment obtained against him on June 7,...