The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-12-13
NO HOMESTEAD IN
SH|F TING STOCKS
United States Court OF Appeals
Upholds Validity of Virginia
Bankruptcy Laws.
MERCHANDISE NOT EXEMPT
Owner Cannot Separate Stock
for Purpose OF Defeating
Rights Of Creditors.

Tho validity OF constitutional and
statutory provisions OF the virginia
bankruptcy laws. which prohibit u
homestead exemption in i shifting
stock Of merchandise. was iphcio yes
tcrday in the Dnitcd States Circuit
Court OF Appeals. which affirmed u de-
cison OF tho United states District
Court. at Norfolh. In the C.se OF " IL
Fam I-auciDurg. bankrupt, against r.
{. Miiler. referee in bankruptcy of the
estate OF William ladorbug. bank
lupt
The decision is an important one to
5obbers OF the state, II Affords them
letter protection III circumstances
such as arose In the case before inc
court. The question had lever been
passed upOn by a higher court. and tho
consututionallty OF the Law had fire.
Gucn,ly been questioned
william LaderbuiB was merchant
operating retail store ia portsmouth,
hhd was adjuuE I'd a bankrupt on June
~ 1913 Two Gays before ihe adjud!-
cation. in contemplation o bankruptcy.
ho separated from his stock numerous
articles OF merchandise. valued at
%eOhcy, anu placed them. toglether with
store fixtures, valued at sli5 ana
household goods. valued at s7l3.25. in
OoAes numbered from one |, eighteen.
Homestead! Exemption.
Tho purpose Of separating and box
Ing the goods waa 10 enable MIN TO set
UP tne clatm that such goods had
ceased 70 be u pat OF Il shifting stock
81 merchandise. and could pc claimed
az exempted under the Constitution
and statutes OF Virginia. which pro
VIDE homestead exemption. but do
iot allow IL to bc claimed In a shtftiny
stock OF merchandise. Having tukei.
th!s preliminary step. I.adcriurg. after
a ~ 81 In. 4
!ho reicrea asking that the proucrtv
including the Eoods tn the boxes no
set apart AZ his homestead .xcmDtiou
@taGscd 10 the petition wfs q Daper
'aled q homestead deed. ia which Tho
property was scheduled. and I'm which
me petitioner declared that he clatn,
CO. selected and set apart tne prop-
cry 20 scheduled as hts Lorncstead.
ne referee refused 10 allow tho claim
rs TO tho merchandise taken fror, ,hr
STOCK OF goods. and his artion was
confirmed by tho United states District
Court The bankrupt then nied his
petition. asking Tho United states Cir
cut Court OF Appeals 10 exercise It's
power Of supcrintendencc AMI revision.
10 review tho Judgment an! adludge
TINT he was entitled TO the exemption
claiiaed
Lower Court SUSTAINED.
With Circuit Judges Knapp and
Woods and District Judge rnse in at
tendance. the case was arslnd : NJ
Brandt represented Tie petitioner. and
Edward r Baird. tho respondent
Baird Swink & Morehead 1cd briefs
for tho respondent The opinion. de-
livered by Judge Woods. urholds the
validity Of tho acts IN regard 10 shift
ms stocks of merchandise.
Touching on the separation OF ar
ticies FROM the whole stock; Judge
Woods said. in part:
The change must take plice In the
ordinary course OF affairs aud not In
pursuance OF q design TO defeat the
constitutional provision. The selec-
ton Of goods from the stock and box
Ing them was merely z part Of the
assertion OF hts Claim Of exemption,
and when ne assorted tho claim and
undertook TO make the selection. tho /
property involved was par; OF a
ehitt!ng stock OF merchandise. am
not property under which II homestead /
could be claimed"
He held further that "A debtor can
not by his act OF closing his store or
separating par, Of his shifting stock I
OF merchandise. with q view of de-
!eating rights OF the creditors. have /
Il homestead In such property