(Norris v. Thomas, 216 S.W.3d 851 (Tex. 2007))
Once upon a time, it was all smooth sailing for Tom. Life was going so swimmingly that he had managed to acquire a 68-foot yacht, complete with four bedrooms, three bathrooms (or “heads” as nautical types would say), a galley and upper and lower salons. From stem to stern, Tom’s yacht was worth several hundred thousand dollars. Tom and his wife sold their prior home on the range, moved into the yacht, and ranged from New Orleans to Florida and points beyond.
Unfortunately, Tom’s spending exceeded his means and, when the creditors closed in, he put the yacht in dry-dock and filed for personal bankruptcy. Since the Bankruptcy Code provides that a bankrupt debtor may keep his homestead, Tom claimed his yacht could not be got. But the folks he owed money to felt that Tom should not be able to simply sail away and leave them high and dry.
It fell to the court to decide whether Tom’s yacht was a protected homestead or something else. Everyone agreed that it was his home—but was it his homestead? Homestead laws don’t define what a homestead is. While the court agreed with Tom that the homestead laws should be construed generously, it noted that courts cannot stretch those laws “beyond their moorings.”
The court concluded that a man’s home may be his castle, but a castle tends to be firmly planted on the ground. It’s not here one day and gone tomorrow. A homestead is steady, still, stationary. Even though Tom’s yacht may be in dry-dock today, it might be roaming the seven seas tomorrow, which homesteads just don’t do. So, alas, poor Captain Tom had to walk the plank.
Moral: When times are tough
And seas are rough,
And you’re upset
By too much debt,
If all you’ve got
Is just your yacht,
That’s good news for
A creditor.
Prof. Bob Rains is the author of True Tales of Trying Times: Legal Fables for Today, a collection of 52 illustrated “legal fables” based on actual cases. True Tales is available for purchase at http://www.willowcrossingpress.com.