261 F. 326 | 5th Cir. | 1919
This is a petition to revise an order of rhe District Court, as a court of bankruptcy confirming an order of the referee, which disallowed to the bankrupt certain items set apart to him by the trastee, as exempt under the Statutes of Texas. The items, so disallowed,, were (1) a house and lot claimed as a living homestead: (2) an automobile claimed as a family carriage; and (3) certain machinery connected with a grain mill, contained in a building which was allowed the bankrupt as exempt.
The bankrupt, at the time of the purchase, had other property, which was suitable for his homestead, and-was therefore called upon to indicate his selection. No preparatory steps to occupy the purchased premises wére taken by him before bankruptcy. The attitude, of the case is therefore that of one claiming a homestead without occupancy or tangible preparation to that end, and without having declared his intention to occupy the premises as a home. The .authorities are against the sufficiency of such a showing for a homestead exemption. Franklin v. Coffee, 18 Tex. 413, 70 Am, Dec. 292; Murphy v. Lewis (Tex. Civ. App.) 198 S. W. 1062; Blackwell v. Lasseter (Tex. Civ. App.) 203 S. W. 620; Markum v. Markum (Tex. Civ. App.) 210 S. W. 841; Barnes v. White, 53 Tex. 628. In the case of Gardner v. Douglass, 64 Tex. 76, relied upon by petitioner, there was a showing of a declaration of intention, and a subsequent occupancy of the premises as a home, both of which are lacking in this case.
The bankrupt was entitled to have it set aside to him as exempt, unless the trustee in bankruptcy could assert the objecting creditor’s claim. That claim was neither a transfer under section 70e of the act (Comp. St. § 9654), nor a lien obtained by legal proceedings, or at all, under section 67 (section 9651) of the act. It was therefore not vested in the trustee, and, being the right of the individual creditor alone, it could not interfere with the right of the bankrupt to have the automobile declared exempt from administration in the bankrupt court. The jurisdiction of the bankrupt court terminated when the automobile was set aside to the bankrupt. The right of the individual objecting creditor to follow the proceeds of the sale of the grain into the automobile would have to be asserted in the state court; the bankrupt’s discharge having been stayed for that purpose. Lockwood v. Exchange
“But we (Jo not fee) authorized to extend the scope of the law’s purpose any further than this. The mill and gin and pertinent apparatus and machinery may become part of the homestead in town or country, not because they are in themselves exempt, but because they are parts of that which is exempt. If they are annexed to and form part of a tract of land in which a family has a homestead right, their local ion and use will aid in determining what portion of the tract Is under protection from seizure, as in the case of Ilailway Co. v. Winter, 44 Tex. 597. But to be exempt us part of the homestead they must be part of the exempt realty. They form no part of the home proper, which it was the overrulng purpose of the Constitution to secure to the family, and can be claimed as exempt only when embraced in the words of the law as part of the land in terms protected.”
In the same case the Supreme Court said with reference to the claim that the machinery was exempt as tools of trade under article 2395, Revised Statutes of Texas:
“The proposition that the mill and gin machinery are exempt as tools of trade cannot be seriously insisted uxiou. That it was urged that they were part of the homestead ought to be a sufficient answer to a claim so diametrically oxniosite. No authority has been cited which has gone far enough to embrace as tools of trade this kind of property, and the analogies and reason of the law do not persuade us to pioneer such extreme doctrine.”
In the case of Willis & Bro. v. Morris, 66 Tex. 628-634, 1 S. W. 799, 803 (59 Am. Rep. 634), the Supreme Court said:
“Expensive and complicated machinery propelled by steam power, or any power other than hand, is not exempt ‘as tools of trade’; the latter phrase being held to ax>ply only to simple instruments used by hand. Thompson's Homestead and Exenrptions, § 75(>. The word ‘apparatus’ used in the statute may take a wider range and embrace such minor machinery as may be oxidated by hand, and such as courts of high authority have held- not to be included under the term ‘tools' as used in similar enactments.”
In the case at bar the mill machinery was propelled by an electric motor. The reason for the distinction and for the exclusion of machinery attached to a business homestead from the Benefit of the exemption laws, because the business homestead consisted of personalty, may not be obvious; but we are hound by the decisions of the Supreme Court of Texas which construe the exemption provisions of its Constitution and statute. The appurtenances of the mill,' which were on the mill lot, but not contained in the mill building, are likewise to be excluded from the benefit of the business homestead.
The order of the District Court is modified, by allowing the bankrupt the automobile as exempt, and, as so modified, is affirmed the cost of appeal to be equally taxed between petitioner and respondents; and it is so ordered.