Schuler v. Miller.

being, by any legal process, applied to the payment of debts, unless in the assignment the exemption is expressly waived * * ; and, as to the homestead exemption, ** *the appraisers appointed by the court shall, on making the appraisement, set the same off in the same way that appraisers of property levied on or attached are required to do."

The homestead right is a statutory right purely, created for the benefit of the debtor and his family. Under our laws, a homestead exemption is merely a personal privilege of the beneficiaries. It is not an assignable estate, but a mere possessory right, personal to the debtor and his family, and which does not run with the land. As held in McComb v. Thompson, 42 Ohio St. 139, the right to have and hold a homestead is a personal privilege which cannot be conveyed to another, and is lost by neglect or refusal to claim it, or by abandonment of the homestead. The husband, or, in case of his failure or refusal, the wife, may exercise the right of making the demand therefor, or may refuse so to do.

Such being the nature of the homestead privilege, its enjoyment is not made dependent upon holding the legal title to the land set off; and a reservation by the assignor of a homestead right, is in keeping with a conveyance of the fee to the assignee, in trust for the benefit of creditors. The law designs that a debtor's property shall be applicable to the payment of his debts; and when the appraisers appointed by the court have set off the homestead, it is not the fee in the land that passes, but merely the right to use and occupy the same for the purposes of a homestead. If the property in the hands of the assignee proves inadequate to pay the creditors in full, when the land ceases to be occupied for a homestead, it may be subjected to the payment of the assignor's debts. But, if the creditors are otherwise wholly satisfied, a resulting trust arises, and the assignee may be ordered to reconvey to the assignor, the legal title to the land set off.

On the 5th day of May, 1879, the plaintiff in error, Louis Schuler, a creditor to whom Joseph Sommer was indebted at the time of his assignment, recovered a judgment against Sommer in the court of common pleas of Stark county, and it is

Schuler v. Miller.

contended that that judgment became a valid lien upon the land in which the homestead had been set apart prior to that day. But on that day, the legal title, as it is evident, was not in Sommer, but in his assignee. The provision of the statute regulating judgments, that the lands and tenements within the county where the judgment is entered, shall be bound for the satisfaction thereof from the first day of the term at which judgment is rendered, is applicable only to legal interests in lands and tenements-to such interests as can be sold upon execution. The defendant or judgment debtor must have a legal title in order that the judgment may operate as a lien. Baird v. Kirtland, 8 Ohio, 21. The judgment, therefore, of Schuler, did not attach as a lien

Schuler having acquired no lien upon the land by virtue of his judgment, even if, after the setting apart by the appraisers of a homestead to Sommer, there was in consequence vested in him an interest that could be reached on execution, the levy of Schuler's execution on the 14th day of July, 1883, upon the land in controversy, could be of no avail to him as against Miller, the defendant in error, as Sommer had executed and delivered to Miller, as early as the 15th day of April, 1880, his warranty deed of the premises, which was duly recorded on the 20th day of May, 1880. Doubtless if the judgment of Schuler had once taken effect as a lien, it could not have been divested by a subsequent occupation of the premises as a homestead; and although the enforcement of such judgment might have been suspended as long as the property retained its homestead character, yet, upon an abandonment of the homestead, or an alienation of it by the owners, whereby the homestead character was removed, the property would have been left liable to be sold under the judgment against the alienors at the date of the conveyance. But the case at bar does not present such a state of facts. Freeman on Judgments, § 355; McComb v. Thompson, supra.

The question, however, arises, what title did the defendant in error acquire by the deed from Sommer? Assuming that the homestead right was thereby terminated, what, if any interest in the land, could the grantor vest in his grantee? As

Schuler v. Miller.

to the legal title in the land, it could not be conveyed by Sommer, as it was already vested in the assignee, and it is not disclosed that he ever reconveyed it to the debtor. Sommer, therefore, could transfer to Miller, the defendant in error, only an equitable interest, the measure of which would be determined upon the settlement of the assignee's final account, and to that interest Miller became entitled. The principle is stated in Halsey v. Whitney, 4 Mason, 206, that any surplus which shall remain in the hands of an assignee after indemnifying and paying fully all the creditors, will constitute a resulting trust by mere operation of law in favor of the debtor. And as said by Read, J., in Matter of Potter, 54 Pa. St. 465, "an assignment by an insolvent debtor for the benefit of creditors, always leaves a resulting trust in the assignor, which, if his debts were actually paid, or a legal presumption of their payment has arisen from lapse of time, entitles him to the possession of the assigned property.”

Before the execution issued on Schuler's judgment was levied on the land, the assignee, according to the finding of facts, had filed his final account, and fully administered and settled his trust. But the assignee is not a party to this action, and as such has furnished no information in regard to the property assigned to him in trust for the benefit of creditors. We do not discover from the record, that his final account represented all the creditors of Sommer to have been paid in full. Indeed, the levy of the execution in favor of Schuler would indicate, or afford the presumption, that they had not all been so paid. Under such circumstances, the premises, of which a deed had been executed to Miller, and of which the occupancy as a homestead had ceased, would constitute a fund in the hands of the assignee, for distribution among creditors-the surplus, if any, after paying them all in full, to be held by him in trust for the debtor, or Miller, his grantee in the warranty deed. The provisions of the statute regulating assignments of insolvent debtors would preclude Schuler from absorbing the whole of such trust fund, and limit him to a proportionate share thereof.

Bassenhorst . Wilby.

For these reasons we are of opinion, that the plaintiff in error acquired no lien on the land involved in this suit, by reason of the rendition of the judgment in his favor against Sommer, and the levy of the execution in July, 1883. But we think the circuit court erred in affirming the judgment of the court of common pleas, so far as it adjudged Miller to be seized of a legal title and estate in the land described in his petition, and decreed that he should be quieted in the possession of the premises.

Judgments of the circuit court and court of common pleas reversed, and petition and cross-petition dismissed.

BASSENHORST v. WILBY.

Promissory notes-Overdue - Presentment for payment ·

Reasonable time for ·

When question for court, when for jury-Insolvency of maker-Demand and notice-Waiver.

1. A promissory note negotiable in form, though over-due, is still capable of being transferred by indorsement, and when so transferred the indorser is, in the absence of anything to the contrary, liable upon his indorsement, if, in a reasonable time thereafter, the note is presented to the maker for payment and notice given in case it is not paid.

2. In such case a reasonable time for its presentment is the lapse of such a period after the indorsement as, under all the circumstances, will enable the holder, in the exercise of reasonable diligence, to present the note for payment.

3. What is a reasonable time is generally a mixed question of law and fact. Where the facts are in dispute, it should be submitted to the jury for its determination under proper instructions from the court; but where the material facts are admitted, or not in dispute, it is a question for the court, and cannot properly be submitted to the jury.

4. The known insolvency of the maker, and that he himself can not pay, does not dispense with the necessity of presentment for payment in order to fix the liability of the indorser.

5. B., the payee of a negotiable promissory note over-due, transferred it by indorsement to W. for a valuable consideration on the 30th of July, 1883; the makers were, to the knowledge of the parties, insolvent at the time of the transfer and had made an assignment for the benefit of their creditors; and it was known that, by reason of certain litigation be

Bassenhorst v. Wilby.

tween the general and certain secured creditors, the note would not be paid immediately from the funds in the hands of the assignee; all the parties resided in the same city, and nothing was said at the time of the indorsement as to whether the note should be presented to the makers for payment or not; upon the determination of the litigation in favor of the secured creditors, the note was, on the 21st of November, 1883, presented to the makers for payment and immediate notice of non-payment given the indorser. Held: (1) That there is nothing in the facts of the transaction from which an inference can be drawn that presentment for payment had been waived by the indorser; (2) that the note was not presented to the makers for payment within a reasonable time; and (3) that the indorser was discharged.

(Decided Oct. 4, 1887.)

ERROR to the Superior Court of Cincinnati.

Baker & Goodhue, for plaintiff in error.

Lawrence Maxwell, Jr. and Gustavus H. Wald, for defendant in error.

MINSHALL, J. The suit below was upon the indorsement of a certain promissory note. The note had been made by Hyman & Armstrong for the sum of $255.25, payable to W. C. Bassenhorst, or order, one day after date. It was dated January 2, 1883, and was indorsed to the plaintiff July 30, by the following indorsement: "Pay to the order of Charles B. Wilby. W. C. Bassehorst." The plaintiff, in his petition, simply alleged that the defendant was indebted to him upon this indorsement, in the amount of the note and interest, and "that due demand for payment *** had been made, and that the defendant had received due notice of said demand and non-payment of said note." The answer was a general denial. From a bill of exceptions taken on the trial, it appears that at the close of the plaintiff's evidence, the defendant moved for judgment on the ground that payment of the note had not been demanded of the makers, and notice of non-payment given the defendant in a reasonable time. A similar motion was made at the close of the case. Both motions were overruled, and the jury by direction of the court, rendered a verdict in favor of the plaintiff. To all which exceptions were duly reserved.