Friday, November 22, 2013

Cargill, Inc. v. Hedge case brief

Cargill, Inc. v. Hedge case brief summary
375 N.W.2d 477 (1985)


CASE SYNOPSIS
Appellant creditor sought review of a judgment of the Court of Appeals (Minnesota), which affirmed a judgment holding that 80 acres of a farm owned by respondents, husband and wife, were protected by the homestead exemption of Minn. Stat. § 510.02 (1984).

CASE FACTS
Respondents owned a farm. They incorporated the farm pursuant to Minn. Stat. § 500.24, subd. 1(c) (1973). The husband purchased farm supplies and services on account from the creditor. The creditor was unaware that the farm was incorporated. The creditor obtained a judgment against the husband and the corporation for the amount of the debt. Respondents filed an action to enjoin the sale of the farm. The trial court held that 80 acres of the farm were exempt from sale pursuant to the homestead exemption of § 510.02. The appellate court affirmed the trial court's judgment.

DISCUSSION

  • On appeal, the court affirmed the judgment of the appellate court. 
  • The court held that the case was a proper one for a reverse pierce of the corporate veil because there was a close identity between respondents and the corporation and public policy favored protection of the homestead. 
  • The court determined that creditors were deemed to extend credit with awareness that, should an individual debtor default, a homestead was exempt. 
  • Therefore, the court ruled that 80 acres of the farm were protected by the homestead exemption.

CONCLUSION
The court affirmed the appellate court's judgment holding that 80 acres of respondents' farm were protected by the homestead exemption.


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