In re Coles

• Decision Date: 06 July 1915
• Docket Number: 1068.
• Citation: 224 F. 170
• Parties: In re COLES.
• Court: U.S. District Court — Northern District of Iowa

224 F. 170

In re COLES.

No. 1068.

United States District Court, N.D. Iowa, Western Division.

July 6, 1915

G. T Wellman, of Sheldon, Iowa, for petitioner.

T. E Diamond, of Sheldon, Iowa, for trustee.

REED District Judge.

Sintha A. Coles was adjudicated a bankrupt by this court February 18, 1913, upon her own petition. At such time she owned in her own right a two-story brick-veneered building in the city of Sheldon, O'Brien county, this state, in which she had lived with her family for several years prior thereto, and claimed it as her homestead and exempt from judicial sale under the statutes of Iowa. She owned no other real estate. E. B. Myers was appointed trustee in bankruptcy of her estate, and on May 26, 1913, set apart from said real estate the following as exempt to her as a homestead, viz.:

'The certain one front room and the certain three rearmost rooms, all on the second floor of the building (above mentioned), of the value of about $600, and a small quantity of personal property.'

The bankrupt was then living upon the second floor of said building, occupying all the rooms thereof as her homestead, but she was not then notified of the report of the trustee.

On June 12th the referee entered an order as follows:

'The trustee herein having filed his report of exempt property in accordance with General Order XVII (89 F. viii, 32 C.C.A. xix), and no exceptions being taken thereto, now, on motion of T. E. Diamond, attorney for said trustee, it is ordered: That said trustee's report of exempt property be and the same hereby is in all things confirmed, and the bankrupt's claim to exemption is hereby determined accordingly. That the property specified in such report be delivered to said bankrupt forthwith.'

No notice was given to the bankrupt of this order until shortly before July 26th, when she filed with the referee exceptions or objections to such report, so far as relates to the homestead and the approval thereof by the referee, upon the grounds, among others, shortly stated, that said report in effect denies to her a right of homestead in such property, because said rooms so set apart to her are so related to other rooms in the building on the same floor, not assigned to her, that they cannot be partitioned or separated, so that she can have the exclusive use thereof, and do not afford her the use of the toilet and other rooms necessary and essential to afford her a reasonable homestead. August 14th the referee entered an order overruling such exceptions 'without hearing counsel thereon,' as he recites in the order. September 22, 1913, the bankrupt filed a petition for review of such report of the trustee, and of the order of the referee approving the same.

The referee has filed his certificate, showing the proceedings before him in said matter substantially as above stated. The trustee objects to the consideration of the petition for review, because no exception was taken to the report of the trustee or to the order of the referee, and that the petition for review was not filed with the referee within 10 days after such order was made, as required by a local rule in bankruptcy in this district. It is sufficient to say of the objections to the consideration of the petition for review that they are without substantial merit and must be and are overruled.

The testimony shows, without any dispute: That in April, 1907, the bankrupt contracted for the purchase of the premises in controversy for the sum of $1,400, took possession thereof at once, and in June, 1909, received the deed therefor, having then paid or settled for the full purchase price. At the time of such purchase her family consisted of herself, three daughters, and one son (her husband having recently died), and they occupied these premises as their homestead. Later one of the daughters married and moved from home; the son at the time of the bankruptcy was absent from home, whether permanently or only temporarily does not appear; but Mrs. Coles continued to live in the building, and to occupy all of the rooms on the second floor, consisting of a sitting room, kitchen, dining room, closets, pantry, water-closet, the cellar or basement, and a shed or lean-to attached to the rear of the main room of the first floor. The building is approximately 22 feet wide (the width of the lot) and some 90 feet in length, and fronts upon a street to the south. At first the bankrupt occupied the entire building and basement, using the front part of the first floor or main room as a store for the sale of secondhand goods, and the rear part as a kitchen and dining room, and all of the second floor for sleeping rooms of the family, and some roomers, and the shed or lean-to and basement for fuel, storage, washtubs, and other domestic uses. Later she successively rented the main room upon the first floor for different purposes, first as a salesroom of secondhand goods, then as a machine shop, and later for some other purposes, as she had opportunity to do from time to time, and used the income therefrom (approximately $250 per year for a part of the time) to aid in the support of herself and family. The rooms upon the second floor, the shed, and basement have always been used in connection with the use of the property as a homestead. Originally there were stairways leading from the inside of the main room of the first story to the basement and to the second floor, which were temporarily closed when the main room of the first floor was rented, as they were not needed by the occupants (but the openings were left, so they can be used when needed), and access to the second floor was reached by two outside stairways, one to the rear of the building from inside the shed, and one on the outside leading from the street in front, one of which rests in part upon a public alley of the city, and at present the only means of access to the second floor, both of which stairways enter anterooms upon the second floor that lead to a hallway extending nearly the entire length of the second floor, and from which the living rooms on that floor are reached. The basement, after the temporary closing of the cellarway leading from the first floor, was reached from the outside cellarway. There are three chimneys resting upon brackets in rooms on the second floor, which extend through the roof, into which flues or pipes enter from stoves used for heating purposes. The room in the first story was heated originally by means of stoves; the pipes extending through the ceiling into the chimneys upon the second floor. At some later time the first floor was heated by steam from a steam plant in a neighboring building. The plumbing from the second floor extends through the floor into the walls of the room below, thence to the basement, where it connects with the sewer pipes. The water pipes extend from the mains, through the first story to the second. The cellar is reached from the second story via the stairways before mentioned. Besides the sitting room, kitchen, dining room, closets, and pantry, there are some nine other small rooms upon the second floor, used for sleeping rooms by the bankrupt and members of her family, and at times some of them by roomers and transients, who may want them temporarily.

It is from the building thus shortly described that the four rooms upon the second floor were set apart to the bankrupt as the homestead of herself and family. The oldest daughter, Allie M., was, at the time of the bankruptcy, about 24 years old, lived at home with her mother, and was employed, and had been for some time, as saleslady or clerk in a store, and at times in a telephone office, earning some $35 a month, from which she contributed to the support of her mother and a younger sister some 9 or 10 years old. The value of the building and lot as a whole at the time of the bankruptcy is estimated at $3,000 to $4,000; but the first story, apart from the rest of the building, it is said by some of the witnesses, would have no market value, but with the right to rest permanently upon the basement wall, and have the roof kept in proper repair, it would be worth about $1,000. It is obvious from this description of the building, which is approximately correct, that the four rooms set apart by the trustee and approved by the referee as the homestead of the bankrupt are entirely inadequate to afford her a reasonable and proper homestead, and it was practically so conceded in argument on behalf of the trustee. The report of the trustee, setting apart such rooms, and the approval thereof by the referee, as the homestead of the bankrupt, must therefore be each set aside and vacated.

Besides asserting the inadequacy of the rooms set apart for the homestead, it is contended in behalf of the bankrupt that the design and construction of the building and the use made of it by her are such that the building cannot be partitioned or so divided as to afford her a reasonable and proper homestead in a part thereof, with reasonable access to other rooms that are actually necessary and essential to a homestead, which should not be impaired or invaded by the occupants of the first floor or other parts of the building, and that she is entitled to have the whole building and premises set apart to her as a homestead; and this is the important question involved in this controversy.

Under the Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 544) a bankrupt is entitled to the exemptions provided by the state law in force at the time the petition in bankruptcy is filed. So far as applicable Code of Iowa 1897, Sec. 2972 et seq. provides: That the homestead of every family, whether owned by the husband or wife, shall be exempt from judicial sale. A widow or widower, though without children, shall be deemed a family,...