In re Rafferty
| Decision Date | 26 December 1901 |
| Citation | 112 F. 512 |
| Parties | In re RAFFERTY et al. |
| Court | U.S. District Court — Northern District of Iowa |
O'Donnell & Lattner, for bankrupts.
Henderson Hurd, Lenehan & Kiesel, for trustee.
The question presented by the certificate of the referee in this case is whether the trustee can rightfully sell, as part of the assets of the estate, the interest held by the bankrupts in outlots 578A and 579A in Dubuque, Iowa, or whether the premises are exempt to the bankrupts under the homestead laws of Iowa. The evidence shows that the property was acquired years ago by the father and mother of the Rafferty sisters and was occupied by the family as their home. The mother died some 13 years ago, and the father about a year after, leaving a family of nine children-- two sons and seven daughters. The two sons and a married daughter made no claim to the home property, leaving that in the possession of the daughters who continued to occupy the premises as a home. When the petition in bankruptcy was filed, and at the present time the occupants of the premises were and are Susie D., Florence, and Genevieve Rafferty; four of the sisters being married, and living elsewhere. The three sisters just named are all of full legal age, and have lived where they now do during their entire lifetime. Some time since, two of the daughters-- Mary E. Rafferty, now Mrs. McCann, and Susie D. Rafferty-- engaged in the millinery business under the firm name of Rafferty Sisters, but the enterprise not proving a success financially, they were adjudged bankrupts in this court, and their estate is now in process of settlement. The trustee applied to the referee for an order directing him to sell the interest of the bankrupts in the premises, and the bankrupts interposed their claim to the property as exempt. Upon the hearing the referee held that the premises could not be deemed to be a homestead, nor could the three sisters now living therein to be held to be a family within the meaning of that term as used in the homestead law of the state, and therefore the premises were not exempt from liability for the debts of the several owners thereof, and the question now presented for consideration is whether this conclusion is a correct construction of the statute of Iowa. Section 2972 of the Code of Iowa declares that 'the homestead of every family, whether owned by the husband or wife, is exempt from judicial sale, where there is no special declaration of statute to the contrary. ' In some of the states the statutory provision is that the homestead of the head of the family is exempt, and it has been held under these statutes that, to come within the exemption, there must be one who stands in the actual control of the household, as the head thereof, and being under a legal or moral obligation to support the other members of the household. This is not the provision of the Iowa statute, the declaration therein being that the homestead of every family is exempt; and it is clear that the purpose of the statute is to extend its benefits to the family as a whole, and this beneficient purpose should not be defeated by holding that when the parents, who are recognized as the heads of the family, pass away, the protection of the statute is withdrawn from the family, which continues to exist, though bereft of its natural heads. Having regard to the object sought to be attained by the homestead exemption law, it would seem that, to hold that the death of the parents terminates the family relation, and subjects the common home to liability for the debts of one or more of the heirs at law, would be a denial of one of the most important purposes sought to be attained by the statute in question. The exemption of the family home from judicial sale has regard, not only to the interests of the individual citizens, but is founded also upon sound public policy, which recognizes the benefit derived by the community at large from the ownership by every family of a common and permanent home. The state, by its legislation, wisely encourages the acquisition of homes by its people; and there is no greater incentive to that end than the knowledge the parent has that, if he is taken away, his children, so long as they continue members of the family, cannot be deprived of the protection of the home acquired through years of labor and saving on part of the parents, and in many cases aided by the earnings of the entire family. In this view of the Iowa statute, it cannot be held that, where the character of a homestead has once been fairly and properly impressed upon the premises occupied by a given family, the family relation is terminated, and the homestead character of the property is destroyed, simply because one or more of the members of the family are called away by death, leaving the family circle, though diminished in numbers, still in existence, and still carrying on the family life under the same roof tree.
The distinction existing between statutes conferring exemptions on heads of families and those conferring exemptions on the family is clearly defined by the supreme court of Iowa in Reeseman v. Davenport, 96 Iowa, 330, 65 N.W. 301 wherein it was held that the rule...
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