In re Martin
Supreme Court of Oklahoma
875 P.2d 417 (1994)
John R. and Elsie B. Martin (debtors), in bankruptcy, owed secured debts to Oklahoma Bank & Trust Company (the bank), the federal Small Business Administration (SBA), and a state agency. The bank's liens on the Martins' farm and mineral rights weren't enough combined to cover its large claim. The SBA held the sole lien on the Martins' homestead and a junior lien on the farm, and either asset alone could satisfy the SBA's claim. The bank argued the SBA should be forced to satisfy its claim solely from the homestead, leaving the farm fully available for the bank; the Martins objected that Oklahoma law barred forcing a sale of their homestead. The federal bankruptcy court certified the question of applicable state law to the Oklahoma Supreme Court.
Whether state law controls how assets are marshaled among a debtor's multiple properties when the debtor owes debts to two or more creditors.