Turnbeaugh v. Santos, 10747.

• Decision Date: 18 December 1944
• Docket Number: No. 10747.,10747.
• Citation: 146 F.2d 168
• Parties: TURNBEAUGH et al. v. SANTOS.
• Court: U.S. Court of Appeals — Ninth Circuit

146 F.2d 168 (1944)

TURNBEAUGH et al. v. SANTOS.

No. 10747.

Circuit Court of Appeals, Ninth Circuit.

December 18, 1944.

Ernest J. Torregano, of San Francisco, Cal., for appellants.

Gumpert & Mazzera and J. Calvert Snyder, all of Stockton, Cal., for appellee.

Before DENMAN, STEPHENS and BONE, Circuit Judges

DENMAN, Circuit Judge.

This is an appeal from an order of the District Court affirming the order of the referee holding invalid a claim of exemption for a homestead made in the proceeding in bankruptcy initiated by appellants. The District Court gave no opinion.

Appellant Orvey Turnbeaugh in August, 1940, purchased a lot of land in San Joaquin County, California, about a quarter of a mile from the town of Ripon, upon which lot he intended to make a home for his wife and family. It was about an acre and a half in area lying alongside an irrigation ditch. It is not questioned that when he bought the land he intended to build and did thereafter build thereon a six room house, a garage, and a well.

At the time of the purchase of the land the family, consisting of appellants and their two grown sons and younger daughters, were residing in a rented house some distance from the lot. The appellants' intent to give up this rented place as their residence after the purchase of the lot was next shown in their consultation with the manager of the Stockton Guarantee Title Company regarding the homesteading of the property. He advised them they would have to construct a building on the premises and live in it as their home, including sleeping in the building.

Appellant husband was a contracting painter by trade. He bought tools, lumber and cement, and with the aid of his sons he built a one story frame building with concrete foundations and floor 22 by 24 feet in area, to be used first as a residence for himself and wife and later as a garage. They bought a three piece bedroom set including a bedstead and mattress, also a library table and two rugs for the concrete floor, with which they furnished the building, and also at first an oil heater and later a wood stove heater. During this period appellants' intent to make their home on the lot was further shown by their arrangement of a loan for the construction of the six room building and the well. The well was dug during the month of December. Till then they brought their drinking water to the homestead from the rented place, but obtained their water for laundering from the irrigation ditch. The second dwelling was finished on May 31, 1941.

On the afternoon of November 14, 1940, appellants moved into this single room dwelling and slept there that night and continuously every night thereafter during the construction of the larger six room building until its completion. On the day following the first night's occupancy of the premises, November 15th, Mrs. Turnbeaugh executed her declaration of homestead of the property, which was filed on November 20, 1940.

Mr. Turnbeaugh some time afterward became ill and unable to continue his trade as contracting painter and on August 8, 1942, a year and eight months after the declaration of homestead, he and Mrs. Turnbeaugh filed the petition in bankruptcy. They claimed the homestead as an exemption under Bankruptcy Act § 6, 11 U.S.C.A. § 24.

The trustee recognized the exemption. This was contested by appellee, a creditor for a debt created subsequent to the declaration for moneys used by the appellant in his contractor's business. There was a hearing before the referee who held the exemption not established and ordered it denied. The District Court affirmed the order and this appeal followed.

The hearing was conducted by the referee with a complete misapprehension of one of the underlying principles of the homestead law, and one of the findings in a substantial aspect is grossly unfair to appellants. Over the protest of appellants' attorney, appellants were subjected to a gruelling cross-examination as to the husband's past debts existing at the time the wife made the homestead declaration, on the theory that a homestead declarant is acting in fraud of creditors in seeking to establish a homestead. To the contrary the very purpose of the homestead law is to afford a residence to debtors, which is free from their debts. This elemental underlying principle is summarized in California Jurisprudence, v. 13, pp. 477, 478, a much cited section. Cf. Montgomery v. Bullock, 11 Cal.2d 58, 77 P.2d 846; Yager v. Yager, 7 Cal.2d 213, 217, 60 P.2d 422, 106 A.L.R. 664; Gray v. Brunold, 140 Cal. 615, 620, 74 P. 303. The quoted section reads: "The doctrine bearing upon conveyances made to hinder, delay and defraud creditors has no application to the creation of a homestead. A homestead is not invalid because the declarant is in debt, or declared the homestead to protect it from existing debts. This is the very purpose of the homestead laws."

There is nothing in the evidence which warrants the assertion of the appellee's brief that the appellants simulated a residence "for the purpose of defrauding and defeating creditors."

It is an unfair statement of the referee that "The evidence is vague and conflicting as to whether bankrupts actually slept in the garage prior to and at the time of the declaration of homestead." This fact was established by the uncontradicted and unshaken testimony of the appellants and one of their neighbors and one of their sons. Another son was waiting to testify and appellants' attorney stated his evidence would be the same as his brother's. The referee with the demeanor of these witnesses fresh in mind stated: "Well, I am satisfied that they were sleeping there. * * * Well, they say so, they say so." Appellants' attorney then stated, "If the court is desirous of obtaining or hearing any more evidence of it —", to which the referee replied "No." The referee further stated: "There is no question about it in the Court's mind, there is no question about that. Now, if you have any other points, other than the matter of their sleeping there and having their furniture there on that night, and having their lunch there...