Freedman Bros. v. Parker

186 F. 693, 1911 U.S. App. LEXIS 4158
CourtCourt of Appeals for the Ninth Circuit
DecidedFebruary 6, 1911
DocketNo. 1,871
StatusPublished
Cited by36 cases

This text of 186 F. 693 (Freedman Bros. v. Parker) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Freedman Bros. v. Parker, 186 F. 693, 1911 U.S. App. LEXIS 4158 (9th Cir. 1911).

Opinion

ROSS, Circuit Judge

(after stating the facts as above). The motion to dismiss the petition for review is without merit and is denied.

While it is well-established law that exemptions in behalf of unfortunate debtors are to be liberally construed in furtherance of the object of such statutes, it should never be forgotten that courts have not the power to legislate, and can no more add an exemption not fairly within the statute than they can take from the statute. So also must it be remembered that courts of bankruptcy proceed upon equitable principles, and should no more sustain a positive fraud than would a court of equity. In respect to this homestead claim, both the referee and the District Court expressly recognized its fraudulent character. In view of the facts found, it is impossible to see how it could'have-been otherwise. -Here was a debtor fully conscious of his [697]*697bankruptcy, strenuously opposing those of his creditors _ who were seeking his adjudication as a bankrupt, the while disposing of and secreting his cash, and finally consenting to such an adjudication prowled the creditors would dismiss their then pending- petition for his adjudication as a bankrupt and procure other creditors to file a new one; his obvious purpose, made manifest by his action, being to put, in the interim, the money to which his creditors were justly entitled into property upon which he could and did forthwith declare a homestead. Surely no court acting upon equitable principles should sustain such a transaction.

In denying the validity of a similar claimed exemption, the Circuit Court of Appeals for the Fourth Circuit said, in the case of McGahan v. Anderson, 113 Fed. 115, 119, 51 C. C. A. 92, 95:

“As to the homestead exemption, the evidence of the bankrupt is by no means satisfactory. lie admits that he began the erection of the ‘house in July or August, 1880 — after Inly 1st.’ He does not make a candid disclosure as to where the money came from to build this house, but, when pressed, admitted that a part of it ‘came from the sale of goods which he had not paid for.’ He fails to disclose how much money came from the goods which Iw liad purchased and never paid for. He alone was possessed of the Information upon the subject. It was his duty, in setting up a claim to a homestead, to show by clear and conclusive proof that at the time he built the house upon the property he was in a solvent condition, and able to satisfy aU the claims against him,' before he could take money from his business for the purpose of securing a homestead. The fair deduction from all the evidence In this case tends clearly io prove that at the time he commenced the erection of this house he was in a failing condition, if not insolvent. He built this house upon a lot owned by.his wife, and afterwards had it conveyed to himself in order that he might have it set apart as a homestead. This is a most potential fact to show that he was shaping his course to protect himself as far as possible from the consequence of bankruptcy, which the evidence tends to show was imminent at that time, for on the 25th day of October following a petition of involuntary bankruptcy was filed against him, and in less than a month he was adjudicated a bankrupt. We deem it unnecessary 1o discuss the evidence in detail filed in this case, hut content ourselves with the conclusions that we have reached based upon all the evidence, more particularly on the evidence of the bankrupt himself.”

See, also, In re Mayer, 108 Fed. 599, 47 C. C. A. 512; In re H. L. Evans & Company (D. C.) 158 Fed. 153; In re Boothroyd & Gibbs, Fed. Cas. No. 1,652.

.Respecting the money allowance to the bankrupt in lieu of the cows, oalves, swine, bees, and domestic fowls exempted by the Washington matute, it is not claimed that the exact provisions of the statute of that state here in question have been expressly construed by the Supreme Court of Washington; but its rulings in the cases of Carter v. Davis, Sheriff, 6 Wash. 327, 33 Pac. 833, and United States Fidelity, etc., Co. v. Hollenshead, 51 Wash. 326, 98 Pac. 749, are quite suggestive of the true construction of the provisions of that statute. The first of the cases mentioned was brought by the wife of one R. P. Carter against the sheriff of one of the counties of the state of Washington to recover certain property levied by the sheriff under certain writs of attachment issued against R. P. Carter, and also to recover certain moneys, being the proceeds of attached property sold by the sheriff by order of court. The property levied upon and sold consisted of [698]*698two horses named Big Nellie and Fannie, for which the sheriff received $165, and also certain other live stock, consisting of mules, horses, and cattle, for which he received $250. R. P. Carter having-left the state, his wife, “ ‘acting for the said R. P. Carter, and in his absence,’ duly and legally claimed of the appellant (sheriff) as exempt from attachment and sale, and as being community property of the respondent (plaintiff) and the said R. P. Carter, certain household goods and furniture,” not exceeding $150 in value, and not involved in the litigation; and “also $250 in coin, the proceeds of the sale of , live stock, selected in lieu of the exemptions provided for in, subdivision 4 of section 486 of the Code of Civil Procedure; and also the sum of $165, the proceeds derived from the sale of the horses Big Nellie and Fannie.” The court said:

, “Now, conceding that R. P. Carter was a householder at the time of the levy, and it appearing that his family consisted of his wife, the respondent, only, he had a right as such householder, if entitled to any exemption whatever, to retain one bed and bedding and other household goods and utensils and furniture, such as he might select, but not exceeding $500 coin in value. Code Civ. Proc. § 486, subd. 3. The respondent, as his representative, selected the ‘bed and bedding’ and certain other household goods, utensils, and furniture, not exceeding $150 in value, none of which were levied upon by the appellant, and then demanded of appellant, in lieu of other property of like character which was not selected, and perhaps not even possessed by her husband, $250, the proceeds of the sale of the live stock above mentioned, none of which was claimed to be exempt at all, and also the sum of $165, the proceeds derived from the sale of the two horses Big Nellie and Fannie. The .claim to this $250, in the hands of the sheriff, is manifestly unfounded in law. The section of the statute referred to authorizes the selection of ‘other household goods, utensils and furniture,’ and prescribes the method and by whom such property may be selected, but confers no right to retain or select other property of a different character in lieu of that authorized to be selected and retained.”

If, as the court there held, the right given by the Washington statute to. select “other household goods, utensils and furniture,” in cases provided for, was confined to other property of the same kind, and conferred no right to retain or select other property of a different character in lieu of that authorized to be selected and retained, it would seem to follow necessarily that the same construction must be given to like provisions contained in subdivision 4, § 563, Rem. & Bal. Code, Wash.

The case of United States Fidelity, etc., Co. v. Hollenshead presented an appeal from a judgment directing the payment of money in the registry of the court to a judgment creditor, upon disallowing a claim for exemptions. We extract from the opinion of the court:

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Bluebook (online)
186 F. 693, 1911 U.S. App. LEXIS 4158, Counsel Stack Legal Research, https://law.counselstack.com/opinion/freedman-bros-v-parker-ca9-1911.