2. HOMESTEAD (§§ 78, 193*) TIMELY ASSER-1 them his interest in the property. In De

TION OF RIGHT.

A debtor entitled to land in remainder, who entered upon the land shortly after his right to possession accrued, asserting his homestead rights on sale in partition, is entitled to homestead rights in the proceeds.

[Ed. Note. For other cases, see Homestead, Cent. Dig. §§ 110, 364; Dec. Dig. §§ 78, 193.*] Appeal from Circuit Court, Graves County. Action by T. L. Frizzell against M. W. Rozzell, consolidated with another suit for partition. From a judgment denying plaintiff a homestead in the land sought to be partitioned, he appeals. Reversed and remanded.

cember, 1910, the creditor has his execution levied on the property, and in 1911 the property was sold under an order of court for division of the proceeds. It was held that the debtor was entitled to a homestead in the

part of the proceeds of the land coming to him. In the case at bar the debtor's part of the proceeds of the land, when added to the lot on which he lives, is far less than $1,000.

[2] He had under the rule announced in the case referred to a reasonable time to assert his exemption privilege, and there can be no question that he promptly asserted it, for he took possession of the land as soon

Moorman & Warren, of Mayfield, for ap- as he could reasonably do so after it was vapellant.

HOBSON, C. J. The mother of T. L. Friz

zell died in June, 1910, the owner of a tract of 27 acres of land, and he inherited from her an undivided one-fourth interest in the land. Her husband, Jordan Hackney, on July 19, 1910, in consideration of $125, conveyed to J. H. Gibson his "lifetime dowry" in the tract of land. The land at the time of Mrs. Hackney's death was rented out to one Jackson for the year 1910, and he continued

cated by the tenant, who had a right to hold it until the end of his term. The law favors homesteads, and, where inherited property is divisible, a party who owns an undivided interest in it will be allowed a reasonable time to secure a division of the property, and to settle upon the part which may be allotted to him as a homestead. Where it is indivisible and cannot be divided, he must be allowed the same right in the proceeds, for the

proceeds of the sale represent the land. Judgment reversed, and cause remanded

for a judgment as above indicated.

TION OF BLIND v. MURRAY et al. † (Court of Appeals of Kentucky. Nov. 7, 1913.) 1. ASYLUMS (§ 2*)-STATE INSTITUTIONS-FINANCIAL MANAGEMENT.

in possession of the land under his contract of tenancy until January 1, 1911. On December 30, 1910, M. W. Rozzell, who had an execution issued on a judgment in his favor against T. L. Frizzell, had it levied on T. L. KENTUCKY INSTITUTION FOR EDUCAFrizzell's interest in the land. Soon after this levy, and in January, 1911, T. L. Frizzell, who was living about 21⁄2 miles from the land, took possession of it, and began preparation for raising a crop, and did cultivate the land that year. In May, 1911, the land was sold under the execution, and on August 23, 1911, Frizzell brought this suit, charging that he was a housekeeper with a family, and that the land was exempt to him as a homestead. During the pendency of the on the treasurer for the same in favor of the action a suit was filed by another joint own-board of visitors, one-fourth payable in 6 er to sell the entire tract for a division of the proceeds on the ground of indivisibility, and, Jordan Hackney having died, the entire tract was sold, and brought $800. The circuit court on final hearing held that T. L. Frizzell was not entitled to a homestead in the land, and dismissed Frizzell's petition. From this judgment, he appeals.

Acts 1910, c. 98, appropriated a certain sum for the Kentucky Institution for the Education of the Blind, to be expended by the board American National Bank to meet the extraordiof visitors in repaying money advanced by the nary expenses, and for improving the facilities of the school, making repairs, etc., and providing that the auditor should issue his warrants

months, one-fourth in 12 months, etc. Held that, where necessary improvements were made under an arrangement between the board of visitors and the bank named, by which the bank furnished the money for the improvements, the warrants to be turned over to it as they came into the hands of the board, the institution was bound to turn the warrants over to the bank, though there was a change in the membership of the board of visitors after the arrangement was made; the institution not being entitled to divert the appropriation from the purposes for which it was made by the Legislature.

[Ed. Note.-For other cases, see Asylums, Cent. Dig. § 1; Dec. Dig. § 2.*]

2.

ASYLUMS (§ 4*)-STATE INSTITUTIONS-FISCAL MANAGEMENT.

[1] We do not see that this case can be distinguished from Staun & Co. v. Proctor, 152 Ky. 142, 153 S. W. 196. In that case the mother died in the year 1903, the owner of a house and lot, leaving surviving her her husband and four adult children. After her death the husband, who was entitled to a homestead in the property, occupied it until 1910, and after that time his second wife occupied it until it was sold. In October, 1910, the four children brought a suit for a sale of the house and lot and a distribution of the proceeds; the father having conveyed to For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes

certain sum for the Kentucky Institution for Under Acts 1910, c. 98, appropriating a the Education of the Blind, and directing the auditor to issue warrants therefor in favor of the treasurer of the board of visitors, payable visitors had no authority to hold or collect a as stated, a former treasurer of the board of warrant issued under the act, after he had ceas

ed to hold office; the present treasurer being entitled thereto.

[Ed. Note. For other cases, see Asylums, Cent. Dig. § 3; Dec. Dig. § 4.*]

3. ASYLUMS (§ 4*) STATE INSTITUTIONS FISCAL MANAGEMENT.

For a number of years the board of visitors of the Kentucky Institution for the Education of the Blind had an arrangement with a bank to furnish it the cash for current expenses, instead of conducting the institution on credit during the quarterly periods at which the state warrants were payable, and to pay the bank out of the warrant issued at the end of each quarter. The board in office in January, 1912, had the bank to advance the money necessary for that quarterly period, to be paid out of the warrant issued on March 31st; but the new board in office at that time refused to pay the bank the amount of its advances for January. Held, that the amount furnished by the bank for expenses of the institution during January was the debt of the institution, which the new board was legally bound to pay from the proceeds of the warrant issued on March 31st. [Ed. Note. For other cases, see Asylums, Cent. Dig. § 3; Dec. Dig. § 4.*]

Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division.

Action by the Kentucky Institution for the Education of the Blind against Logan C. Murray and the American National Bank to compel the transfer of certain warrants, issued by the state auditor, to plaintiff. From a judgment requiring that the warrants be assigned to the bank, plaintiff appealed, and the bank took a cross-appeal from a part of the judgment, denying it a money judgment against plaintiff. Reversed on both appeals, and remanded for judgment as directed.

Samuel G. Tate, of Louisville, for appellant. Burnett, Batson & Cary, of Louisville, for appellees.

board of visitors, at a meeting of a majority of the members thereof, which examination and approval shall be certified by the president of said board and countersigned by the secretary; and each claim shall be noted or named on the journal of the proceedings of said board, giving the date, amount, and name of the person to whom allowed."

By the act of March 25, 1910 (see Acts 1910, p. 275), $17,000 was appropriated out of the treasury for the benefit of the institution. The act making the appropriation contains this provision: "Said sum to be expended by the board of visitors of said institution in the following manner, viz.: For money advanced by American National Bank to meet insurance and other extraordinary expenses, four thousand dollars; for improving and extending teaching facilities, five thousand dollars; for repairs and fencing, five thousand dollars; for installing electricity, three thousand dollars.

And the auditor

is hereby authorized and directed, on application of the president of said board of visitors, to issue his warrants on the treasury for the same, in favor of the treasurer of the board of visitors of said Institution for the Blind, one-fourth payable in six months, one-fourth in twelve months, one-fourth in eighteen months, one-fourth in twenty-four months, on and after the date of this act becoming a law."

The act took effect 90 days after the adjournment of the General Assembly in 1910. The board, in view of the fact that the improving and extending of the teaching facilities, the repairs and fencing, and the installing of electricity were immediately needed by the institution, made an arrangement HORSON, C. J. The Kentucky Institution with the American National Bank to furnish for the Education of the Blind is a corporathe money to pay for the improvements, tion created under section 299, Ky. St., with agreeing with the bank that, when the warpower to sue and be sued, and to take and rants were issued in 6, 12, 18, and 24 months, hold property for the use of the institution. they would be turned over to the bank; the By section 300 the institution is under the purpose of the arrangement being to give control of a board of visitors to be nominated the school the advantage of the improveby the Governor and approved by the Senate. ments, and not cripple its usefulness during The board of visitors under section 301 are the time that would elapse before the wargiven power to have possession and control rants would be payable. The improvements of the buildings and grounds and the direction, were made and paid for. Three of the warcontrol, and management of all special and rants came to the hands of the board, and general matters, concerns, and interests of were turned over to the American National the institution, and also to pass such rules Bank pursuant to the agreement. But in and orders as they shall deem fit and proper March, 1912, the Governor appointed a new to carry into effect the powers granted. The board of managers, and this board elected a board elects a treasurer, who executes bond new treasurer. The fourth and last warrant to be approved by the Governor, and it is was issued after the new board came in, the duty of the superintendent to report to and after the new treasurer had been electthe board annually a detailed statement of ed; but it was sent to Logan C. Murray, who the condition of the institution. Section 303, was the treasurer under the old board, the Ky. St., provides: "That the treasurer of said new treasurer not having executed bond apinstitution shall only pay the debts, claims, proved by the Governor and delivered to the and charges against said institution, on the Auditor for safe-keeping as provided by warrant of the president, after they have section 301, Ky. St. Logan C. Murray rebeen examined, audited, and approved by said | tained the warrant, and refused to deliver it

to the authorities of the institution, upon | March 31st. Before the warrant was issued the ground that they, if they received the on March 31st, the old board went out, and warrant, would cash it, and leave the debt the new board came in. The new board redue the American National Bank unpaid. ceived the warrant, but declined to pay the This suit was brought by the institution bank the amount of its advances for the against Logan C. Murray and the American month of January. The bills for February National Bank to compel them to turn over and March had not been paid by the bank, the warrant to the institution. The circuit and these were paid by the new board. The court required the present treasurer, whose bank by its answer asked judgment against bond had been approved after the warrant the institution for the amount of its advances was issued, to assign the warrant to the for January, $3,780. The circuit court deAmerican National Bank, and, from this clined to give the bank judgment for this judgment, the institution appeals. money, and of this it complains on the crossappeal.

[1, 2] The money, having been appropriated by the Legislature for certain named purposes, cannot be diverted by the authorities of the institution from these purposes. The interests of the school required that the improvements provided for by the act should be made at once, and, these improvements having been made under an arrangement between the board of visitors and the bank, to the effect that the bank would furnish the money to pay for the improvements as they were made, and that the warrants as they came to the board should be turned over to the bank, the mere fact that there was a change in the membership of the board in no manner affected the validity of the arrangement. The corporation remained the same, and the corporation, having received the benefit of the money, must account to the bank for it. The rights of the parties are precisely the same as they would be if the old board had remained in office and were prosecuting this suit. Logan C. Murray as former treasurer was without authority to collect or to hold the warrant. The warrant should have gone to the present treasurer of the board, that the books of the corporation may be properly kept, and he should be directed by the board of visitors now in office to turn it over to the bank, the proceeds to be credited on the account of the bank for the advances refer

red to.

But

[3] On the cross-appeal this question arises: The Legislature makes an appropriation payable quarterly; the school has to be carried on during the quarter before the warrant issued at the end of the quarter is

sent to the treasurer. For a number of

years, instead of buying provisions and the like on credit to be paid for at the end of the quarter, the board has made an arrangement with some bank to furnish the cash, and to pay the bank out of the warrant issued at the end of the quarter. This was done not only by the last board but by the board before it, and seems to have been an established custom. Following this custom, the board in office in January, 1912, had the American National Bank to advance thei money necessary for the upkeep of the institution, on the agreement that it was to be paid out of the warrant to be issued on

The warrant issued on March 31st was for

the maintenance of the institution for the quarter ending on that day. The new board was under the same obligation to pay the bank for the maintenance of the institution in January out of that warrant as it was to pay the outstanding bills for February and March. The debt was the debt of the institution, and the warrant was money appropriated to pay for the maintenance of the institution during this period. We therefore conclude that judgment should have been entered in favor of the bank for this amount, with interest, and, if the present board has no funds on hand out of which it may be paid, it should be paid out of the next warrant issued to it by the Auditor. Each party will pay his own cost in this court and in the circuit court, and, after judgment is entered in the circuit court as above indicated, the circuit court will retain control of the case for such further orders as may be necessary for the enforcement of the judgment.

The court will enter a judgment directing the appellees immediately to turn over the warrant in controversy to the appellant, and directing the appellant immediately on receiving the warrant to assign and deliver is true that under section 303, Ky. St., the treasurer may only pay debts and charges on the warrant of the president after they have been examined, audited, and approved by the board, the claim of the bank is for money paid on claims so audited and approved and paid by the treasurer, and, the board having declined to pay the bank the

it to the American National Bank. While it

amount thus overdrawn, it may be recovered by action as any other claim against a corpo

ration.

Judgment reversed on the original and on the cross-appeal, and cause remanded for a judgment as above indicated.

SMITH v. BERRY et al. (Court of Appeals of Kentucky. Nov. 11, 1913.) 1. MORTGAGES (§ 32*)-DEED OR MORTGAGEEVIDENCE.

debtor, imminent danger of the loss of the property by the debtor, and inadequacy of the price paid to him by the creditor for the alleged con

Existence of the relation of creditor and

veyance, are facts which lead courts to consider | lived only a short while afterwards. Her sisan instrument a mortgage rather than a deed. ter Miss Ann Harben had been a member of [Ed. Note. For other cases, see Mortgages, the family for ten years before her death. Cent. Dig. §§ 60-66, 84-94; Dec. Dig. § 32.*] The wife of appellant, Smith, was another 2. WITNESSES (§ 144*)-TESTIMONY OF DECEsister.

DENT.

In an action by the next friend of infant heirs of the alleged grantor to have a deed, absolute on its face, declared a mortgage evidence as to the grantee's conversation with his grantor, who is now dead, is not admissible as against

the infant heirs.

[Ed. Note.-For other cases, see Witnesses, Cent. Dig. §§ 625-643; Dec. Dig. § 144.*] 3. MORTGAGES (8 38*)-EVIDENCE-DEED OB MORTGAGE.

Evidence held to sustain a finding that a deed, absolute on its face, was in fact intended as a mortgage.

[Ed. Note. For other cases, see Mortgages, Cent. Dig. §§ 108-111; Dec. Dig. § 38.*] 4. MORTGAGES (§ 32*)-DEED OR MORTGAGE.

It is immaterial whether the failure of the parties to a deed, absolute on its face, but intended as a mortgage, to express their real intention therein was due to fraud or to mistake.

[Ed. Note. For other cases, see Mortgages, Cent. Dig. §§ 60-66, 84-94; Dec. Dig. § 32.*] Appeal from Circuit Court, Daviess County. Action by D. G. Berry, as next friend for his infant children, against John W. Smith. From a judgment for plaintiff, defendant appeals. Affirmed.

La Vega Clements, of Owensboro, for appellant. Birkhead & Wilson, of Owensboro, for appellee.

NUNN, J. This is an action instituted in the Daviess circuit court by D. G. Berry, as next friend for his seven children, to have an instrument, purporting to be a deed of conveyance, declared a mortgage.

It seems that a construction company did some paving in front of this property by which it acquired a $60 lien, and, in a suit to enforce it, the Central Trust Company, which also held a $300 lien against it, was required to set it up, and by these proceedings the property was sold by the master commissioner, and Mrs. Berry became the purchaser at the price of $725. Appellant swears that Mrs. Berry was unable to pay the purchase money, and that she came to him, her brother-in-law, seeking his aid, and proposed that she would give him a mortgage on the place if he would pay off the lien debts. He replied that he did not want to get mixed up in it unless he could get a deed for the place, and that Mrs. Berry agreed to make him a deed, and thereupon Mrs. Berry and her husband, D. G. Berry, did execute and deliver to him the deed, which is the one in controversy here. The recited consideration is that Smith will assume and pay the lien debts of the trust company and the construction company. These approximated $400. As above stated, he testifies that, as a part of the consideration, he also canceled the $325 of indebtedness which he held against the Berrys, making the total consideration $725; that being the amount Mrs. Berry bid for the property at commissioner's sale. Smith swears that was the full value of the property at the time he purchased it. Witnesses for appellee show that the property is and was worth at the time $2,000, while witnesses for Smith estimate the property to be worth from $800 to $1,400. But it is evident that Smith's witnesses re

The petition alleges that at the time this instrument was executed it was the understanding and agreement of the parties that it was only for the purpose of securing the ap-garded the improvements on the lot as of pellant, Smith, against any loss in the payment by him of the two lien debts, approximating $400, referred to in the instrument, and that by fraud or mistake this agreement was omitted. The appellant's answer controverted these allegations, but by the second paragraph admitted that the consideration set out in the instrument was not the real one, for, in addition to assuming payment of the $400 lien debts, the instrument also was in payment to Smith of about $325, which Smith at various and sundry times had loaned and supplied to D. G. Berry and his wife, Florence M. Berry, and that in this way the total consideration was $725.

The property covered by the instrument was a house and lot in the city of Owensboro; the lot extending 330 feet through from Main to Third street, and fronting 57 feet on each street. The title was in Mrs. Florence M. Berry, wife of appellee, and mother of the seven children. The instrument was executed and delivered in 1909, and for about a year previous Mrs. Berry had been an invalid, and

negligible value because the house was old, and most any one able to purchase the lot would not care to live in a house of that character. This deed occasioned no change in the relations of the parties or in the occupancy of the house. The Berrys continued to live in the house for three years, and until just a short time before this suit was instituted, when Smith by proceedings in a magistrate's court evicted them, for the reason, as he says, that they were paying him no rent.

Smith does not make any satisfactory showing as to the amount, origin, or nature of the debt he held against the Berrys, or whether D. G. Berry or his wife, Florence M. Berry, was the party responsible. He files no statement of it, and there is nothing in the record upon which the amount of it may be fixed.

It is clear from the proof that the appellee, D. G. Berry, was an improvident sort of a fellow, and it is no doubt true that his brother-in-law had contributed to the support of

the infant children. The conversations which Miss Harben swears Smith had with her all point strongly to the fact that he also regarded the instrument as security for a loan, and, since he does not deny her testimony, the lower court was justified in taking it as true.

his family for years before the death of Mrs. | she is dead, and is not admissible as against Berry. Whether at the time these contributions were made he intended them as donations or sales it does not appear. He was in the grocery business, and either for reasons of pride or sympathy he endeavored to keep the wolf from the door of the Berry family. However, all the witnesses who testify on this point admit that Miss Harben was the mainstay and real support of the family, both before and since the death of her sister. Miss Harben swears that between the time the instrument was executed and the institution of this suit she had numerous conversations with the appellant in which he asked her to pay him the money he had in the place, and that he would then deed it back to the children, and assured her in all these conversations that all he wanted was the money he had in it. She also swears that the Berrys had no account at his store, and that they never bought of or owed him anything, except that Smith did pay one-half of Mrs. Berry's funeral expenses.

It should be noted here that Smith does not deny any of these statements of Miss Harben.

In the case of Hobbs v. Rowland, 136 Ky. 197, 123 S. W. 1185, this court held that parol evidence is admissible to show that a deed, absolute in its terms, is a mortgage to secure a debt.

Appellant, Smith, admits that as between himself and Mrs. Berry the relation of debtor and creditor existed, and that the transaction originated in an application to him for a loan of money, and that, failing to secure the loan, she was about to lose the place. There is strong proof that the consideration was inadequate. While there is a conflict in the testimony as to the value of this property, yet all of the witnesses value it in excess of the amount he says he paid, viz., $725, and his witnesses also place but little value on the house, aside from the lot. This method of valuing is hardly fair to appellee's children. It was a home to them, and using it for a shelter, with Miss Harben as a mother, it was as valuable and serviceable to them as any palace.

[4] In the case of McKibben v. Diltz, 138 Ky. 684, 128 S. W. 1082, 137 Am. St. Rep. 408, this court approved the doctrine that, whenever the instrument is ascertained to be only a security for money, it will be considered a mortgage, however artfully it may be disguised. The courts in determining questions of this character look beyond the name given by the parties to the instrument. A mortgage is none the less a mortgage, although the parties may call it a deed. Appellant argues, however, that, Berry having alleged that the deed was intended to be a mortgage, and the agreement to this effect being omitted by fraud or mistake, the burden is upon him to sustain it. Appellant admits that Mrs. Berry was in debt to him, and that the deed does not show the true consideration, and the undisputed testimony of Miss Harben establishes the fact that appellant regarded the transaction as a loan, and all the other evidence in the case, except the deed itself, tends to confirm that as the intention of the parties. Whether the failure to express in the instrument the real intention was by fraud, or whether it was by mistake, is immaterial when the record clearly shows that for one or the other reasons it was omitted. No doubt the instrument was drawn just as appellant desired it should be, and whatever was omitted he intended should be omitted; but, considering all the facts and circumstances, there was either a fraud upon Mrs. Berry, or it was a mistake upon the part of appellant. We prefer to believe it was his mistake rather than fraud. For the purposes of this case, it is sufficient in either event.

From the above considerations it will be seen that we are of the opinion that the facts amply justified the lower court in holding the instrument to be a mortgage, and it properly referred the case to the master commissioner to take proof as to the amount of appellant's claim and value of the improvements he had made on the property.

The judgment is therefore affirmed.

[1-3] The relation of debtor and creditor, imminent danger of loss of the property, and inadequacy of price, are all factors which incline the courts to consider an instrument a mortgage rather than a deed. Except the deed itself, and the testimony of appellant, Smith, relating to conversation he had with Mrs. Berry at the time the deed was made, all the evidence shows that this instrument was intended to be a mortgage, and not a deed, and the inducement which Smith had to go into the transaction, aside from his interest in the Berry family, was the security it gave to him for the payment of the $325, approximately, which he claimed the Berrys owed to him. His testimony as to conversation with Mrs. Berry is incompetent now that 392.*]

GAHREN, DODGE & MALTBY v. PARKERSBURG NAT. BANK. (Court of Appeals of Kentucky. Nov. 6, 1913.) 1. APPEAL AND ERROR (§ 392*)-BONDS-MoTIONS TO REQUIRE.

After the submission of an appeal on the merits, a motion to require the appellant to ex

ecute a bond for costs will not be entertained. [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 2089 2094; Dec. Dig. §