Esten v. Cheek, 15578.

• Decision Date: 21 April 1958
• Docket Number: No. 15578.,15578.
• Citation: 254 F.2d 667
• Parties: Joseph ESTEN, Appellant, v. Crules R. CHEEK, Trustee in Bankruptcy of the Estate of Joseph Esten, Bankrupt, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

254 F.2d 667 (1958)

Joseph ESTEN, Appellant, v. Crules R. CHEEK, Trustee in Bankruptcy of the Estate of Joseph Esten, Bankrupt, Appellee.

No. 15578.

United States Court of Appeals Ninth Circuit.

April 21, 1958.

Phill Silver, Hollywood, Cal., for appellant.

Leslie S. Bowden, Los Angeles, Cal., for appellee.

Before FEE and BARNES, Circuit Judges, and HAMLIN, District Judge.

HAMLIN, District Judge.

Joseph Esten, appellant herein, filed his petition in bankruptcy on September 19, 1955, and was adjudged a bankrupt on said date. In Schedule B-4 of his Petition in Bankruptcy Esten listed an equity of $10,500 in real property, with improvements thereon, located at 1349 South Mansfield Street, Los Angeles, California. In Schedule B-5 of said petition Esten claimed a homestead exemption in said real property under the provisions of Sections 1260 to 1265, inclusive of the West's Ann.Civil Code of California. On April 24, 1956, the Trustee in Bankruptcy, appellee herein, filed his report of exempt property, in which the Trustee refused to set aside as exempt the real property located at 1349-1351 South Mansfield Avenue, Los Angeles, California, stating as the ground for such refusal that no valid declaration of homestead had been recorded with the County Recorder of Los Angeles County.

The evidence disclosed that on April 15, 1955, there was filed with the County Recorder of said county a Declaration of Homestead, executed by Anna Esten, the wife of the bankrupt, and that in said Declaration of Homestead the real property claimed by the bankrupt as exempt was described as "Lot 104, Tract No. 5069, as per map recorded in Book 56, Pages 82 to 85, of the Maps in the office of the County Recorder of said County." The true description of said property is "Lot 204, Tract No. 5069, as per Map recorded in Book 56, Pages 82 to 85, of the Maps in the office of the County Recorder of Los Angeles County." It is assumed that the declaration is faulty on this one point only and in all other respects conforms to California statutes since its validity is contested only as to the description. A declaration by the bankrupt's wife inured to his benefit because she made the declaration for their joint benefit, which is permissible under the statute. Calif.Civ. Code, § 1263.

On May 10, 1956, the bankrupt filed in the Bankruptcy Court his written objection to the Trustee's Report, containing a prayer that the property in question be declared to be exempt. Apparently no action was thereafter taken until October 10, 1956, on which day the bankrupt filed a petition for "order to show cause why Declaration of Homestead on real property of bankrupt should not be reformed to correct clerical error." The Referee in Bankruptcy issued the prayed-for order to show cause and, after hearing, made findings of fact showing the facts as set out hereinabove to be true, and also the following:

"(2) That it is true that it was the intention of your petitioner and his wife to declare a homestead upon Lot 204, Tract 5069 as per map recorded in Book 56, pages 82 to 85 of the Maps in the office of the County Recorder of Los Angeles County;

"(3) That it is true that it is necessary that the description in the Homestead should be amended, conformed and corrected so as to read: Lot 204, Tract 5069, as per map recorded in Book 56, pages 82 to 85 of Maps in the office of the County Recorder of Los Angeles County."

In addition, the Referee made the following conclusions of law:

"(1) That Joseph Esten, Bankrupt, is entitled to a Judgment of Reformation of the Declaration of Homestead executed by Anna Esten on April 18, 1955, and recorded in the office of the County Recorder on said date, reforming and correcting the description therein according to the real intent of the parties to read as follows: Lot 204, Tract 5069, as per map recorded in Book 56, pages 82 to 85 of Maps in the office of the County Recorder of Los Angeles County, also described as 1349-1351 South Mansfield Avenue, Los Angeles, California. * * *

"(3) That Joseph Esten, the bankrupt, is entitled to an Order directing the Trustee, Crules R. Cheek, to prepare and file an Amended Report of exempt property, setting aside as exempt to the bankrupt the property described as Lot 204, Tract 5069, as per map recorded in Book 56, pages 82 to 85 of Maps in the office of the County Recorder of Los Angeles County; also described by street and number as 1349-1351 South Mansfield Avenue, Los Angeles, California."

The Referee in Bankruptcy made his judgment that the Declaration of Homestead executed by the wife of the bankrupt upon April 15, 1955, and recorded on said date "be and the same is hereby reformed and corrected according to the real intent of the parties so that the description therein shall read as follows: Lot 204, Tract 5069, as per map recorded in Book 56, pages 82 to 85 of Maps in the office of the County Recorder of Los Angeles County; also described as 1349-1351 South Mansfield Avenue, Los Angeles, California."

The Trustee of the bankrupt estate filed a petition for review by the District Court. The Judge of the District Court held that the Declaration of Homestead could not be thus reformed, and reversed the order of the Referee in Bankruptcy. The appeal to this Court is from the order of the District Court which reversed the Referee's order of reformation. The appeal is timely taken.

Section 6 of the Bankruptcy Act declares that allowance of exemptions which are prescribed by State law shall be recognized (11 U.S.C.A. § 24) and State law will determine the right to the exemption. Gratton v. Trego, 8 Cir., 1915, 225 F. 705, 707; Turner v. Bovee, 9 Cir., 1937, 92 F.2d 791.

Under California Civil Code, § 1263, a declaration of homestead must contain inter alia, "(3) A description of the premises;"¹ Appellant contends that the homestead declaration filed prior to the petition in bankruptcy was a substantial compliance with the requirement that a Declaration of Homestead shall describe the premises, and that the California cases require that in determining whether there was a substantial compliance that the rule of liberal construction applies to a Declaration of Homestead. We believe that the rule of liberal construction in this matter exists in California and that it has been so declared in many cases. Donnelly v. Tregaskis, 154 Cal. 261, 97 P. 421; Johnson v. Brauner, 131 Cal.App.2d 713, 281 P.2d 50, and the cases cited therein; Simonson v. Burr, 121 Cal. 582, 54 P. 37; Greenlee v. Greenlee, 7 Cal.2d 579, 61 P.2d 1157; Feintech v. Weaver, 50 Cal. App.2d 181, 122 P.2d 606; and others.

Thus the California cases have upheld the validity of a homestead (1) where the property was identified by a proper street address but with an incorrect Lot and Block description added thereto, Oktanski v. Burn, 138 Cal.App.2d 419, 291 P.2d 954; (2) where the declaration failed to contain the statement required by the statute that "she (the wife) therefore makes the declaration for their joint benefit," Johnson v. Brauner, supra 131 Cal.App.2d 713, 281 P.2d 52; (3) where the homestead was filed on five lots and the Court held the homestead was valid as to one of the lots, Guernsey v. Douglas, 171 Cal. 329, 153 P. 227; (4) where incorrect description of 160 acres of land in the declaration was followed by "said homestead known by the name of `Geary's Ranch,'" In re Estate of Geary, 146 Cal. 105, 79 P. 855; and in other similar cases.²

In this case certain property was correctly described on which the declarant did not reside. The statement of the declarant that she was residing on the property described was not true. The declarant resided on "Lot 204" and not on "Lot 104".

"The sufficiency of the declaration of homestead must be determined from the statements expressly made therein, and cannot be affected by any secret intentions which may have been in the mind of the claimant." Carey v. Douthitt, 140 Cal.App. 409, 412, 35 P.2d 632, 633.

Appellant...