Court Opinion

ID: 9829570
Source: CourtListenerOpinion
Date Created: 2023-09-01 19:26:29.492686+00
Date Added: 2024-06-11T07:43:03.071840
License: Public Domain

On Rehearing.
The bank sets up no right or interest in or to lot 17. That lot is not involved in the controversy. The hank’s claim arises in and under the purported lien on the lots in suit, and the litigation is entirely in respect to the validity of the liens. In the original opinion it was determined, namely: '(1) That the hank knew of the use and occupancy of the lots in suit as homestead, and, so knowing, it was not in any wise in the attitude of an innocent holder of the purported lien notes, and therefore not entitled to a foreclosure of the lien on or a deed to the homestead; (2) that the order of the bankruptcy court setting aside as exempt lot 17 did not have the effect to work estoppel and preclude litigation in respect to the validity of 'the purported liens on the different lots in suit.
After a full reconsideration of the case, we adhere to the conclusion that the bank may not invoke estoppel as by judgment against Mrs. Jeffries upon the order of the bankruptcy court exempting lot 17. Mrs. Jeffries was not a party to proceedings in bankruptcy as “debtor.” L. R. A. 1916D, 1233; In re Dixon, 18 F. (2d) 961. That there was imposition upon the bankruptcy court and the creditors of the estate as to lot .17, even though with knowledge of Mrs. Jeffries, would not create an ineontestible right to the bank to the property in suit or to enforce the purported liens against it. There was in no wise involved in the order exempting lot 17 the determination of the validity of the purported liens against the lots in suit, and the bank derived no right' under such order to the property in suit. Mrs. Jeffries can still legally deny the validity of the lien and set up against it claim of homestead to lots in suit, without having the order of the bankruptcy court set aside. As analogous, it has been held that the wife may not be conclusively estopped from claiming her separate property by reason of having inventoried it as a part of the estate of her deceased husband; she not having sold same to a person without notice of her rights. Mitchell v. Mitchell, 80 Tex. 101, 15 S. W. 705; Speer on Marital Rights, § 252. And estoppel in pais, as growing out of a fraudulent purpose and a fraudulent result, as exempt lot 17 may not be made the basis of relief, because the bank did npt acquire the purported lien on the lots in suit in reliance on such conduct, and it did not change its position for the worse. The bank’s claim of the notes was merely approved by the bankruptcy court, and their validity became a subject-matter of litigation as occasion existed in a court of competent jurisdiction. The purported lien notes long antedated the bankruptcy proceedings.
As stated in the original opinion, the attempted renunciation of the property in suit as homestead by merely listing lot 17 in its stead, although a fraud upon the bankruptcy court as to lot 17, will not aid the purported lien of the bank. It would not work estoppel for that reason. Lot 17 was not the actual homestead at the time, but the lots in suit were. It is not, as so often laid down in the cases, mere declarations that constitute land homestead, b,ut the use to which it is put. It is undisputed that the lots in suit before, at the time of, and since, the bankruptcy, were actually occupied and used as homestead.