Case ID: ky_210/html/0777-01.html
Source: Caselaw Access Project
Author: {"author": "Judge Clay", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

First National Bank of Scottsville v. Duncan, et al.
    (Decided October 27, 1925.)
    Appeal from Monroe Circuit Court.
    1. Homestead — Debtor Entitled to Homestead Rights in Proceeds of Involuntary Sale, and May Assert Rights at Any Time Before Pinal Order Disposing Thereof. — Debtor is entitled to homestead in surplus proceeds arising from the sale of his property to pay lien debts, and may assert such right at any time before there is a final order disposing of such proceeds.
    2. Homestead — Claim of Homestead in Proceeds of Sale Held Good as Against Attaching Creditor. — Where remainder of proceeds of-sale to pay lien rights remained subject to further orders of court, and before any such order was made debtor claimed homestead therein, chancellor did not err in sustaining claim thereto as against one who had judgment against debtor and had attached such proceeds, inasmuch as such judgment was not conclusive of homestead rights, not applying attached proceeds to payment of debt.
    W. D. GILLIAM for appellant.
    B. P. DENHAM for appellees.
   Opinion of the Court by

Judge Clay

Affirming.

This appeal challenges, the correctness of the chancellor’s ruling in awarding W. H. Duncan a homestead in the surplus proceeds of his real estate, which was sold to pay his lien debts.

The facts are these: The action was originally brought by the Commonwealth Life Insurance Company to enforce a mortgage lien on certain real estate belonging to Duncan. Judgment went by default and tbe land ■ was ordered sold. Several months later, and at tbe April, 1924, term, R. L. Pauli, who bad tiled a cross-petition, was adjudged a lien subject to prior liens on tbe lands that bad been sold, and tbe priority of liens was reserved for further adjudication. At tbe same term an order was entered directing tbe master commissioner to collect tbe sale bond, to pay the debt of the Commonwealth Life Insurance Company and certain other indebtedness, including taxes, and to bold tbe remainder of tbe money, if any, subject to tbe further orders of tbe court. When tbe above orders were made there was also pending an action in which tbe First National Bank of Scottsville sought tbe recovery of $5,000.00 against Duncan and wife, and asked a general order of attachment. No answer having been filed, judgment went by default, and tbe attachment was sustained. Some time later Duncan filed bis. answer claiming.a homestead in the surplus funds arising from tbe sale of bis lands. Tbe relief was granted and tbe First National Bank of Seottsville appeals.

It is tbe rule in this state that where tbe necessary conditions are present the debtor is entitled to a homestead in tbe surplus proceeds arising from tbe sale of bis property to pay lien debts, and may assert this right at • any time before there is a final order disposing of such proceeds. Marcum v. Edwards, 181 Ky. 683, 205 S. W. 798. Here, the court, after adjudging that tbe taxes and certain lien debts be paid, directed the balance to' be held subject to tbe further orders of tbe court. It is true that appellant recovered judgment for its debt and that its attachment was sustained, but, as tbe judgment Avas not accompanied by an order applying tbe attached proceeds to the payment of its debt, tbe judgment was not conclusive of tbe right of homestead, Marcum v. Edwards, supra, but tbe proceeds as theretofore directed still remained subject to tbe further orders of tbe court. Before any order disposing of 'the proceeds was made Duncan claimed the homestead, and the chancellor did not err in sustaining bis claim.

Judgment affirmed.