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Cargill, Inc. v. Hedge

Supreme Court of Minnesota
375 N.W.2d 477 (1985)


Facts

Sam and Annette Hedge (defendants) bought a 160-acre farm, which they placed in a Minnesota family farm corporation, Hedge Farms, Inc. Annette was the sole shareholder of Hedge Farm, Inc., and the Hedges and their daughters were the corporation’s only officers. Sam purchased farm supplies from Cargill, Inc. (plaintiff), which was unaware that the corporation existed. When Sam failed to pay for the supplies, judgment was entered against Sam Hedge and Hedge Farms, Inc. Cargill was the successful bidder at an execution sale on the farm. The trial court enjoined the proceedings, allowed Annette Hedge to join the suit as an intervenor, and found that the Hedges had a right to exempt 80 acres from the execution, as their homestead. The court of appeals affirmed, finding that Annette had an equitable interest in the corporate property as the sole shareholder of Hedge Farms, Inc., and that her equitable interest, along with the Hedges’ occupancy of the farm, satisfied the requirements under the homestead statute. The court of appeals implied that it would be willing to pierce the corporate veil to reach the same result. The Supreme Court of Minnesota granted Cargill’s petition for review.

Rule of Law

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Holding and Reasoning (Simmonet, J.)

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