Court Opinion

ID: 6748010
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:01:50.494587+00
Date Added: 2024-06-11T16:02:09.550650
License: Public Domain

CARPENTER, J.
(dissenting);
In an action like this to set aside a transfer of the title to real estate as a fraud upon creditors, the rule at common law or in other jurisdictions as to the relationship of exemptions to such issue is unimportant. In Ohio the subject is controlled by statutes which have been construed and applied by the courts. McComb v Thompson, 42 Oh St 139, 146.
Our exemption statutes indicate a distinction between a homestead exemption, §11730 GC, and selected property exempt in lieu of a homestead. §11738 GC. A homestead is merely exempt “from sale on judgment or order”, while a husband and wife, not the owners of a homestead, may hold in lieu therefore “exempt from levy and sale, real and personal property” etc. This distinction is pointed out in Genell v Hirons, 70 Oh St 309.
*300John L. Walker was the owner of the homestead February 15, 1935, when he incurred the debt to the plaintiffs and on September 28, 1936, when he made the deed in question conveying it to his wife Carrie M., hence the exemption rights of the defendants were defined in §11730, and his property was only held exempt “from sale on judgment or order.” It was then the right of the plaintiffs to reduce their claim against him to judgment and effect a lien on the Walker land. §11656 GC. To them this was a valuable right which they lost if the deed to the wife stands. With such lien they could either force the sale of the property, subject to the prior H.O.L.C. mortgage and the right of Walker or his wife to claim $500 of the proceeds in lieu of a homestead (§11738 GC) or they could maintain their lien until the reduction or discharge of the mortgage might make their lien good, or until the property ceased to be used as a homestead. In any event, their lien could be kept alive as long as Walker owned the land, even though it might have been formally set off to him as a homestead. McComb v Thompson, supra; Roig v Schultz, 42 Oh St 165.
It is a fair deduction from the evidence that the Walkers so reasoned this out and, by the deed, sought to safeguard their property from these possibilities while John, out of his earnings, could pay off the mortgage and defeat plaintiff’s claim.
Unless, as a matter of law under §11104 GC, the fact that Walker’s equity in the homestead was worth less than the 8500 he could hold in lieu of a homestead on its sale, §11737 GC, rendered it impossible for him by the transfer to defraud plaintiffs, fraud in the transaction was proven.
In Bills v Bills, 41 Oh St 206, an action to set aside a deed as a fraud, the court said that the evidence as to the value of the property and that it was a homestead was immaterial and was properly excluded. The reason for this is made apparent in Roig v Schultz, supra, a similar action, in which the opinion said that the plaintiff was entitled “to a judgment establishing his lein on the premises whether a, sale, as against the claim of a homestead could be enforced or not”, and that, “Until the costs and the mortgage lien were fully satisfied no question, as to precedence between the plaintiff’s judgment and the right of defendant’s exemption in lieu of a home-steady, could arise.” Hence there was, up to that time, no issue as to the homestead, and claims as to it were not a defense to the action to set aside the deed. This propostion is stated in syllabus 2.
In my opinion, the finding here should be that the deed was fraudulently made, and that the statute of limitations did not bar this action, and that a judgment setting aside the deed should be entered. What the rights of the parties would be if that were done is not now before the court, — these matters would develop on further proceedings followed such judgment.