Long Bell Lumber Co. v. Miller

240 S.W.2d 405, 1951 Tex. App. LEXIS 2095
CourtCourt of Appeals of Texas
DecidedApril 30, 1951
Docket6150
StatusPublished
Cited by27 cases

This text of 240 S.W.2d 405 (Long Bell Lumber Co. v. Miller) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Long Bell Lumber Co. v. Miller, 240 S.W.2d 405, 1951 Tex. App. LEXIS 2095 (Tex. Ct. App. 1951).

Opinion

MARTIN, Justice.

Appellant, The Long Bell Lumber Company, recovered a judgment against appel-lee, Edwin R. Miller, for the sum of $12,-115.48. An abstract of this judgment was filed in Wilbarger County, Texas. Ap-pellee brought suit to cancel the abstract of judgment lien and to remove the cloud thereby cast upon appellee’s title to the North 10 feet of Lot 5 and all of Lots 6, 7 and 8,-in Block 38 of the Original Town of Vernon, Wilbarger County, Texas.

*406 The evidence discloses that appellee was conducting a business on said lots other than a portion rented to one Richard G. Coffey, and that appellee had formed a corporation known as Miller Construction Company shortly after the above judgment was taken, and that this corporation, as well as another known as Lymm Corporation, were operating out of the building on said lots. The testimony shows that the appellee formed Miller Construction Company, a corporation, with an intent to forestall any interference by appellant with appellee’s business and contracts. The corporate stock was owned by members of appellee’s family. Although the name of the corporation was placed on the business building, the evidence discloses that ap-pellee continued to operate his business individually in the buildings on the lots in question. Appellee did not transfer the lots or any of his tools and equipment to the corporation nor did he transfer any of his business contracts to the corporation.

Upon appellee’s filing suit to remove cloud and cancel the abstract of judgment lien, appellant sought by cross petition the foreclosure of such lien. Appellee asserted that the property in question was his business homestead and had been for a number of years; that the renting of a portion thereof was only temporary and for the purpose of paying for improvements as made on the lots. The trial court refused appellant’s petition for foreclosure and entered judgment removing the cloud on the title to the lots.

Two points of error are asserted on appeal. Appellant first alleges that the homestead exemption was lost to appellee by the creation of the corporation, Miller Construction Company, whereby the property in issue became the principal place of business of the corporation as formed with the fraudulent design of defeating appellant’s judgment. The appellant further alleges that the homestead exemption was lost by a lease of the premises for a term of three years with an option for an additional three years extension.

A careful search of appellant’s brief does not disclose any assertion of the specific term “abandonment of the business homestead” as a basis for the attachment of its judgment lien, but appellant contends principally that the exemption was lost by appellee’s fraudulent creation of the corporation to defeat the judgment lien. Appellant in support of this position relies upon two cases: Nowlin et ux. v. Wm. Cameron & Co., Inc., Tex.Civ.App., 54 S.W.2d 1035, and Mayfield, et ux. v. First State Bank of Holland, Tex.Civ.App., 19 S.W.2d 454, which last case is approved by the Nowlin case.

Appellant stresses that the Now-lin case, supra, is based on the proposition that the homestead exemption was lost by fraud of Nowlin in creating the corporation and transferring all his stock and business to the corporation for which he acted as manager and that such cause is decisive here under the facts. A decisive reply to any argument that the homestead exemption may be lost by fraudulent acts done with intent to defeat a creditor is found in the following decisions. Posey v. Commercial Nat. Bank, Tex.Com.App., 55 S.W.2d 515, 517, holds: “The only way, after a property has been designated as a homestead, for it to lose its homestead character, is by death, abandonment, or alienation. All are questions of fact, and so in this case the abandonment * * * must be ascertained from the testimony”.

Sakowitz Bros. v. McCord, Tex.Civ.App. 162 S.W.2d 437. We find in Cocke v. Conquest, 120 Tex. 43, 35 S.W.2d 673, page 678, this statement by the Supreme Court of Texas: “This exemption from forced sale of a homestead is founded upon public policy, and must be upheld and enforced, as it should be, and has been scarcely without an exception by the courts of this state, notwithstanding the fact that in doing so they sometimes directly assist a dishonest debtor in wrongfully defeating his creditor.”

Archenhold v. B. C. Evans Co., 11 Tex.Civ.App. 138, 32 S.W. 795; King v. Harter, 70 Tex. 579, 8 S.W. 308.

It will surely be conceded in this cause that the homestead exemption was not lost by alienation or by death, so we have only the proposition of whether or not the home *407 stead was lost by abandonment. By like reasoning, it is apparent that the underlying and fundamental principal in Nowlin v. Wm. Cameron & Co., Inc., supra, is that Nowlin, owner of the drugstore, by transferring all his stock and fixtures to the corporation and by engaging in the exclusive business of manager for the corporation ceased his individual business on the premises and thereby abandoned his business homestead.

In this cause, appellant raises the issue that the appellee abandoned his business homestead in three ways, (a) by appellee being absent from the same at intervals on business jobs, (b) by appellee’s fraudulent formation of a corporation and permitting said corporation to conduct its business out of the building claimed by appellee as his business homestead, and (c) by appellant’s leasing out a portion of the premises to Richard G. Coffey.

The courts have spoken many times on the issue of abandonment. There must be (a) a discontinuance of use coupled with (b) a fixed intention never to return to the homestead or again use it as such. The rule has been expressed as to a business homestead in McDowell v. Northcross, Tex.Civ.App., 162 S.W. 13, 14, as follows: “In order to constitute an abandonment of a business homestead, the head of the family must cease to use it for the purposes for which it is exempt, and have no present intention to resume business on the property.”

The Supreme Court of Texas in Gulf Production Co. v. Continental Oil Co., 139 Tex. 183, 132 S.W.2d 553, 576, quotes with approval the following rule: "The homestead, therefore, is not to be likened to prison bounds, within which the family must always remain, but to a sanctuary, to which they may always return. And an abandonment is accomplished, not by going away without any intention of returning at any particular time in the future, but by going away with the definite intention never to return at all.”

Also see Keenan v. Burgess, Tex.Civ.App., 206 S.W.2d 1021.

It is further observed that the rules for determining whether a residence hornet stead has been abandoned obtain in determining whether a business homestead has been abandoned. Federal Petroleum Co. v.

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Bluebook (online)
240 S.W.2d 405, 1951 Tex. App. LEXIS 2095, Counsel Stack Legal Research, https://law.counselstack.com/opinion/long-bell-lumber-co-v-miller-texapp-1951.