In re Parks

18 F. Cas. 1218, 9 Nat. Bank. Reg. 270

• Court: District Court, E.D. Michigan
• Decided: July 1, 1874
• Status: Published

Opinion

LONGYEAR. District Judge.

By the bankrupt act [of 1867 (14 Srat. 522)] § 14 and amendments, exemptions by state law's are extended to debtors in bankruptcy. By the constitution and laws of Michigan (1 Comp. Laws 1871, p. 76; 2 Comp. Laws, p. 1749) every homestead of not exceeding forty acres of land, and the dwelling-house thereon, and the appurtenances, to be selected by the owner thereof, and not included in any town plat, city or village; or instead thereof, at the option of the owner, any lot in any city, village or recorded town plat, or such parts of lots as shall be equal thereto, and the dwelling-house thereon, and its appurtenances, owned and occupied by any resident of the state, not exceeding in value fifteen .hundred dollars, shall be exempt. &c. In order to come within these provisions the dw’elling-bouse must be owned by the occupant as well as the land upon which it is located. Did the dwelling-house in this case belong to the petitioner, the owner of the lot, or did it belong to him and his partner in common?

There being no fraud in the transactions as against the firm creditors, their rights must be worked out and determined through the rights of the co-partners as between themselves. The petitioner owned the lot. He built the house upon it. He so built it with partnership funds, and, for aught that appears in the case, with the knowledge and consent of his copartner. The house became a part of the realty, and as much the separate property of the petitioner as the realty itself. 1 Washb. Real Prop. 2. The property and funds used in its erection thereby became separated from the partnership effects, and the separate property of the petitioner, and as between him and his co-partner, all the latter could claim in any event would be reimbursement by the former to the firm for the property and funds used. Story. Partn. 144, note 1. But in this case no such reimbursement could be claimed, because the firm was owing the petitioner more than the amount of the property and funds so used. The firm, therefore, not only had no interest or ownership in the house, but no .claim for reimbursement. From this it follows: 1. That the assignee has no claim to the house as partnership property. 2. That the house as well as the lot being owned and occupied by the petitioner as a homestead, the same is exempt by the bankrupt act and laws of Michigan. 3. That by the express provisions of the bankrupt act (section 14), nothing passed to the assignee by virtue of the assignment to him as the separate property of an individual partner, except any excess there may be in the value of the property in question over fifteen hundred dollars. 4. That the prayer of the petition must be granted.

The result arrived at renders it unnecessary to decide the second ground of demurrer. that is. whether under the laws of Michigan there can be a homestead exemption of property, owned by the occupant in common with others, as partners or otherwise. Upon this question the authorities are somewhat conflicting, but I shall do no more at the present time than to cite them for future reference. Some of them are in point, and some have only a bearing upon the question. Thurston v. Maddocks, 6 Allen, 427; In re Hafer [Case No. 5,896]; Tomlin v. Hilyard, 43 Ill. 300; West v. Ward, 26 Wis. 579; Kingsley v. Kingsley, 39 Cal. 665. See, also, 5 Cal. 244; 6 Cal. 165; 27 Cal. 418; Radcliff v. Wood, 25 Barb. 52; Stewart v. Brown, 37 N. Y. 350; In re Young [Case No. 18,148]; In re Rupp [Id. 12,141[; Anon., 1 N. B. R. (Quarto) 187 [Append; Fed. Cas.].

Let an order be made in accordance with the foregoing opinion.