155 F. 659 | S.D. Ohio | 1907
(after stating the facts as above). If liquors had been set off to Mrs. Ruby as her allowance in lieu of a homestead, she could not sell them at retail or wholesale without paying the special tax exacted by the internal revenue law and also the assessment imposed by the Dow law. This assessment is a tax (State v. Rouch, 47 Ohio St. 477, 25 N. E. 59), and would in any event be $200, and it might be much more. As she owns no real estate, she would, if she sold the liquors, also have to find a landlord who would be willing to have his property subjected to the lien imposed by the Dow law, because the assessment provided by that law, until paid, rests as a lien on the real property in which the trafficker in liquor transacts his business. She would, in all probability, be required to pay an increased rental, whether she sold the liquors on the premises occupied by her as a residence or on premises other than those so occupied. If she should engage in the liquor business to realize on her property, and should default in the payment required by the Dow law, her property would be subject to seizure and sale for the assessment and penalties, free from any exemption on her part. Thus the property exempt from sale and execution under the homestead act for the protection of the family would lose its freedom from levy and sale as against the assessment under the Dow law the instant she defaulted in the payment of her assessment as a trafficker in spirituous liquors. It is quite improbable, if she retailed the liquors, that she would be able to sell them all, unless to some degree she replenished her stock
Under the Ohio rule, a person not the owner of a homestead, but lawfully entitled to hold in lieu thereof, exempt from levy and sale, real or personal property to an amount not exceeding $500 in value, may, by making a proper demand, if such property be incumbered by a lien, receive out of the proceeds arising from a sale of the property, $500 in cash, or so much thereof as remains after the satisfaction of the lien and costs. Loveland on Bankr. (3d Ed.) 523, 524, announces that:
“If the property of the bankrupt Is incumbered by liens, the court may order the property sold. The bankrupt will then be entitled to claim exemptions out of the fund arising from the sale of the equity of redemption, or to select property to the value allowed by the state law.”
The text is sustained by In re May (decided by Judge Swing under the Ohio law) Fed. Cas. No. 9,326, 2 Bull. 152. In short, when the exemption will be defeated unless its allowance be in cash out of the proceeds of a sale, it will, if practicable, be ordered paid out of such proceeds. Under the circumstances of this case, the purpose of the exemption law would be substantially, and perhaps wholly, defeated, unless the allowance in lieu of a homestead be made in cash, because.
No property had been set off to Mrs. Luby when she waived her claim to it in kind and asked for $500 in cash out of the proceeds of a sale of her husband’s property; nor does In re Woodard (D. C.) 95 Fed. 955, apply, for in that case the property had been set off to the claimant, who thereupon entered into an agreement that it might be sold in the interest of her husband’s estate, along with the residue of his property. In the case at bar the waiver of the selection of goods and the election to take cash out of the proceeds of a sale were concurrent. Mrs. Luby’s action was in effect an amendment of her claim. Under proper circumstances amendments have been allowed, even though they withdrew from the creditors, in cash or otherwise, the whole or nearly the whole of the cash or property allowed -by law to an exemption claimant, and also to correct mistakes of commission or due to ignorance of the technical requirements of the law, concerning which counsel fail to enlighten the claimant, although advised of the facts. In re Falconer, 110 Fed. 111, 49 C. C. A. 50; In re White (D. C.) 128 Fed. 513; In re Kaufmann (D. C.) 142 Fed. 898. In Sears v. Hanks, 14 Ohio St. 298, 84 Am. Dec. 378, it was held that:
“The .humane policy of the homestead act seeks not the protection of the debtor; but its object is to protect his family from the inhumanity which would deprive its dependent members of a home. * * * And, in aid of this wise and humane policy, the whole act should receive as liberal a construction, as can be fairly given it.”
In Hill v. Myers, 46 Ohio St. 183, 19 N. E. 593, it was said that:
“The homestead laws have an object perfectly well understood, in the promotion of which courts may well employ the most liberal and humane rules of interpretation” — citing Freeman on Co-Tenancy & Partition, § 54.
I am of the opinion that Mrs. L/uby is entitled to $500 in cash in lieu of a homestead, and the referee is directed to proceed with the distribution of the bankrupt’s estate in accordance with the foregoing.