Robert Moody & Son v. Century Savings Bank - 239 U.S. 374 (1915)
U.S. Supreme Court
Robert Moody & Son v. Century Savings Bank, 239 U.S. 374 (1915)
Robert Moody & Son v. Century Savings Bank
Argued November 10, 11, 1915
Decided December 13, 1915
239 U.S. 374
A petition filed by a trustee in bankruptcy in the bankruptcy proceeding, asserting title to lands of the bankrupt reciting encumbrances thereon and asking that they be sold, the assets marshaled, and all persons claiming liens be made parties, gives rise to a controversy in bankruptcy proceedings, the decision in which may be reviewed by the Circuit Court of Appeal under § 24a of the Bankruptcy Act and 128, Judicial Code.
Although such a proceeding is commenced by the trustee, the appearance of holders of mortgage liens asserting their rights and seeking to have them enforced conformably to their contentions is equivalent to affirmative intervention, and brings a controversy quite apart from ordinary steps in bankruptcy.
Homestead rights in land are creations of the states in which the lands are situated, and the validity and operation of mortgages thereon are determined by the statutes of the state in which the homestead is situated, as construed and applied by the courts of that state.
Under the laws of Iowa, as construed by the courts of that state, a homestead, even when validly mortgaged, may be sold only for a deficiency remaining after exhausting all other property covered by the same mortgage.
The right to insist on the exemption of a homestead in Iowa from sale except for deficiency is not personal to the mortgagor, but may be asserted by anyone to whom the homestead owners may have transferred an interest; nor can they after such transfer prejudice the transferee in the exercise of this right.
204 F. 963.
The facts, which involve the jurisdiction of this Court of appeals from judgments of the circuit court of appeals, in a bankruptcy proceeding and the marshaling of proceeds of sale of homestead property in Iowa, are stated in the opinion.