Louis S. Miguel v. Edward M. Walsh

This is an appeal from a judgment of the district court upholding the order of a referee in bankruptcy who determined that the residence of the appellant, by him claimed to be a homestead, was subject to the claims of appellant’s creditors.

On September 18, 1967, appellant borrowed $6,400.00 from the Wells Fargo Bank and pledged shares of stock to the bank as security for the loan. On October 30, 1967, part of the pledged stock was released, sold through the bank and the proceeds, in the sum of $3,317.57, applied to the loan. This left a balance of $3,082.43. On November 3, 1967, other pledged stock was released to the appellant under a written agreement with bank, under which appellant agreed to sell the stock and apply the proceeds to his loan. The testimony of the bank official who handled the transaction makes it clear that appellant withdrew the stock on the express condition that he would sell it and turn the proceeds over to the bank. Appellant sold the stock, but did not pay the bank. The proceeds of the sale were used as a further payment on certain real property, title to which was then being held in escrow. The escrow was closed and title to the real property delivered…