Case ID: va_74/html/0407-01.html
Source: Caselaw Access Project
Author: {"author": "ANDERSON, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Rose & Wife v. Sharpless & Son.
    April Term, 1880,
    Richmond.
    1. Komestead Deed — Defraadinsf Creditor» * — 'Validity.—'Where a “householder or head of a family” executes a homestead deed as a part and in furth-n-ance of a design to hinder, delay and defraud his creditors in the recovery of their just debts, such deed will be vitiated and invalidated by such conduct.
    
      2. Same — Same.—'Circumstances which will vitiate a homestead deed executed and recorded by a debtor in failing circumstances, prior to the levying of attachments on his goods.
    3. Same — Unpaid-For Goods — Burden of Proof. — The Constitution and laws of Virginia not allowing property to be claimed as exempt for debts contracted for the purchase price of such property or any part thereof — where a large portion of goods claimed as exempt has not been paid for, and are so mingled with those that have been, as to put it out of the power of the vendors to distinguish between the two, the onus is on the person claiming the exemption, to show which has been paid for; and he failing to do this, they will all be treated as not having been paid for, as far as the homestead deed is concerned, and therefore not exempt under the law.
    4. Same — Shifting: Stock of Merchandise— Quaere. — Quaere: Can a “homestead” be claimed in a shifting stock of goods used in the way of trade.
    This -was an action of debt in the circuit court of the city of Richmond, brought by Sharpless & Son of Baltimore against J oseph Rose, to recover the sum of $601.11, and costs of protest, the amount of a negotiable note dated the 39th of May, 1879, and payable in sixty days, given by Rose to Sharpless & Son for goods purchased at the time. At the time of instituting *the suit the plaintiffs sued out an attachment against the effects 'of Rose on the ground that he was removing the effects from the Commowealth.
    Previous and subsequent to this suit five other attachments were levied on the property of Rose, which consisted entirely in the goods in his storehouse, and these suits were upon claims for the purchase of goods made in May, 1879.
    The plaintiffs in this case recovered a judgment against the defendant Rose for the amount of their claim, and the only question was whether they were entitled to have the proceeds of the sale of the goods, which had been made under a consent order in the cause, applied to the satisfaction of their judgment, or whether Rose was entitled to retain them under his deed of homestead exemption, which he had executed a few days before the suits were brought against him. This deed covered all the goods in the store, and were valued in the deed at $1,633.00. At the sale by the sheriff they brought $3,150, though between the date of the deed and this sale he sold a part of them estimated at $300.
    The plaintiffs insisted that the deed was not valid on several grounds; and among them the following:
    1. That it appears by the evidence, that said Rose fraudulently and with intent to delay, hinder and defraud these creditors, had removed a large part of his property out of the State of Virginia, and concealed the same with the like intent, prior to the recordation of the homestead deed, and that this actual fraud on the part of Rose in the concealment and removal of his said property out of this State with said intent, only leaving enough property within reach of the process of the courts of this State as to be within the amount of homestead allowed by law, is in law a bar to such claim of homestead.
    *3. Because no part of the purchase money of said goods has been paid by said Rose, and therefore, under section 1, of chapter 183, of the Code of 1873, he is not entitled to any homestead in the said goods or the proceeds thereof.
    3. Because the claim of homestead in this case is in a shifting stock of goods owned or employed by said Rose in the way of trade, and being daily sold and converted into money, contrary to the true intent and meaning of said homestead law, and contrary to the provisions of section 7, of said 183d chapter, of the Code of 1873.
    The evidence in the case is voluminous, but is sufficiently stated in opinion of the court delivered by Judge Anderson.
    The cause came on to be heard on the 23d of December, 1879, when the circuit court held that the said deed of homestead was invalid, and the net proceeds of the sale of goods being sufficient to pay the attaching creditors who had recovered judgments against Rose, the plaintiffs, or their counsel, were authorized to check upon the fund for the amount of their debt and costs. And thereupon Rose and wife applied to this court for a writ of error and superse-deas; which was allowed.
    John A. Meredith and Meredith & Cooke, for the appellants.
    E. Y. Cannon and John Dunlop, for the appellees.
    
      
      See 2 Min. Inst. (4th 3$d.) 912.
    
   ANDERSON, J.,

delivered the opinion of the court.

The court is of opinion that there is not error in the judgment of the circuit court for which it should be reversed. They deem it unnecessary to consider the ^question which has been ably argued by the counsel on both sides, whether a householder, who has made a homestead' deed, can alien or encumber his property, embraced in the homestead, by a subsequent deed in which his wife does not unite. The plaintiff in error, who claims all the goods under the homestead, upon which the attachments and executions were levied, has not aliened or encumbered them by deed. But they were in his possession when levied on, and claimed to be held by him under the homestead. The aforesaid question is not, therefore, involved in this case.

But the question does arise upon the evidence, whether the said homestead deed was executed by the plaintiff in error as a part, and in furtherance, of a design to hinder and delay and defraud his creditors in the recovery of their just debts? If so, it would be vitiated and invalidated thereby. Gilleland v. Rhodes, 34 Penn. St. R. 187; Diffendendeffer v. Fisher, 3 Grant’s Cases, 30; Smith v. Emerson, 43 Penn. St R. 456; Strouse, ex’or, v. Becker, 38 Penn. St. R. 190.

In the last case, Woodward, J., said, the rule of decision which denies the benefit of the exemption law to a dishonest debtor, who shuffles and conceals his property, * * * is founded in a _ sound morality, and is agreeable to the spirit and intention of the exemption law. The remark is equally applicable to the homestead law.

The case is before us on a certificate of the evidence and not of the facts.

It is not our purpose to give a detailed statement of the evidence. It appears that Rose came to Richmond in August, 1878, and opened a retail store on Broad street. He brought with him a broken stock of goods, and had no other visible property. About the month of May, 1879, he went North and bought a large stock of goods, evidently on credit, as to the larger portion *of them. The debt of Sharp-less & Son was for $599.43. contracted on the 39th of May, 1879, and a negotiable note given for it at sixty days, which was protested July 31st, 1879. Claims against him were placed in the hands of John A. Coke, aggregating $1,320.40, which fell due, it would seem, only a few days earlier. The other debts upon which suits were brought and judgments obtained, and those upon which attachments were sued out, amount to upwards of $2,500, as well as can be ascertained from the record. The whole aggregating, perhaps, over $4,000, which were probably contracted for the stock of goods he brought on in the month of June, 1879, from the North. One witness estimates his stock of goods in June, 1879, to be worth from $5,000 to $6,000. He seems to have been engaged in selling goods by retail in a small way until he made this addition to his sto'-k in the month of June, 1879. Then, one month before the institution of the suits against him, and the levying of the attachments — one on the 26th of July, one on the 38th, and another on the 39th of July, 1879 —he suddenly changed his course of business from that of retailing to wholesale and retail, without any notice to the public, as far as appears, of his purpose to make such change, lie sold to merchants of Richmond; shipped large quantities of goods from the State; and pushed off his goods so rapidly that in the course of one short month, he had reduced his stock of goods, before the debts he had contracted for them fell due, from live to six thousand dollars, what his stock was estimated to be worth in June, to $2,150, the price for which the remnant actually sold, under the order of the court. By this means he had reduced his stock low enough to cover it by a homestead deed, and shield it from his creditors; and on the 31st of July, a few days before the attachments were sued out and levied on them, he ^executed such a deed, embracing all that remained of his stock, which, by an under valuation he put at $1,623. including not only the goods which were ievied upon and sold for $2,150, but all that he had sold between the date of the homestead deed and the making of the levy. Tor it seems he continued to sell the goods that he had set apart as a homestead, and probably sold in that interval, according to the estimate of his daily sales by his clerk, to the amount of from $350 to $300. What became of the money he received, for the large sales he had made, in the rapid reduction of his stock? The price he was to give for the goods had not' been paid. His attempted explanation is not satisfactory. It is evident, from the whole transaction, that it was the fraudulent contrivance of a debtor, to shield his property from the payment of his debts, under color of the homestead, as the final act, in its consummation.

But if the purchase money of the goods has not been paid, he is not entitled to hold them under the homestead law Article XI. section 1, of the Constitution; chapter 183, section 1, of the Code of 1873. It is very certain that a larger portion of his stock than that which was levied on and sold has not been paid for. These goods he so intermingled with his old stock on the shelves, that it was not in the power of the merchants from whom he purchased the new. to distinguish them from the old — those which had not been paid for, from those which had been paid for. It would seem reasonable and equitable that all should be held to be of the former class, unless shown by him not to be of that class. The onus should be on him to show, under these circumstances, that the goods which he embraced in his homestead, were not of the class that had not been paid for. It is a fact, that he had in his stock of goods a larger amount in value which he had not paid for than all that he claims under the ^homestead. And as he has put it out of the power of the defendants by intermingling them, to show it. it is incumbent on him to show that they are of the class of goods he has paid for. IIe has not shown that any part of the goods, which he claims under the homestead, has been paid for. and being mixed up by him with those which he has not paid for, so as to be undistinguishable, they will be taken to be all of the latter class, in the absence of all evidence to the contrary, and consequently are not subject to the homestead.

The question, whether a householder is entitled to have a homestead in a shifting stock of goods, used in the way of trade, ever liable to change, so that it is not the same yesterday and to-day, is a question of grave importance, but not necessary now to be decided,butnomatterhowitmightbe decided, for reasons already given, the homestead in this case could not be sustained.

Upon the whole, the court is of opinion to affirm the judgment of the circuit court.

Judgment affirmed.