Case ID: f_155/html/0550-01.html
Source: Caselaw Access Project
Author: {"author": "EWING, District Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In re SORG.
    (District Court, W. D. Pennsylvania.
    August 2, 1907.)
    (No. 3,293.)
    1. Bankruptcy — Garnishment of Trustee — Proceeds of Exempt Property.
    An attachment execution issued on a judgment on a note waiving exemptions and served on the debtor’s trustee in bankruptcy, who holds proceeds of exempt property sold, is invalid and ineffective to create hny lien or claim upon the fund, which is in custodia legis, and not subject to attachment.
    [Ed. Note. — For cases in point, see Cent. Dig. vol. 6, Bankruptcy, § 677.]
    2, Same — Exemption—Administration of Exempt Property.
    A court of bankruptcy has no jurisdiction to administer properly set aside to a bankrupt'under his' claim for. exemption.
    In Bankruptcy. On certificate from referee.
    
      George C. Eewis, for bankrupt.
    R. B. Petty, for 'claimant George Altmeyer.
   EWING, District Judge.

The question certified by the referee is whether the bankrupt is entitled to his exemption claimed, or whether the same should be distributed to George Altmeyer, claiming the sum due by virtue of writs of execution issued upon a certain judgment in favor of Altmeyer waiving the benefit of the exemption law. A creditors’ petition was filed against Sorg on the 31st of July, 1906, and on the same day James E. Richards was appointed receiver, and on his petition setting forth, inter alia, that George Altmeyer had issued execution against the said Albert M. Sorg, at No. 170, August term, 1906, on a judgment confessed July 26, 1906, a restraining order was issued and the property levied upon taken possession of by the receiver and subsequently sold. Sorg was adjudicated a bankrupt October 10, 1906, and in his schedules filed October 30th he claimed $300 exemption out of the funds arising from the sale of his estate by the receiver on August 15th preceding. Subsequently Altmeyer issued an attachment execution, and served the same on Richards, who had then been elected trustee of the estate as garnishee, claiming to attach this exemption fund in his hands, and he now seeks by virtue of his judgment and levy and said attachment execution to have the trustee pay to him the $300 exemption claimed by the bankrupt, instead of delivering the same to the bankrupt.

The judgment and levy made prior to the filing of the petition in this case were avoided by section 67f of the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 564 [U. S. Comp. St. 1901, p.'3450]). In re Richards, 3 Am. Bankr. Rep. 145, 96 Fed. 935; In re Wilkes, 7 Am. Bankr. Rep. 514, 112 Fed. 975; In re Tome, 8 Am. Bankr. Rep. 285, 115 Fed. 906. ,And the attachment execution served on the trustee subsequently is invalid and ineffective, because the fund was then in custodia legis. In re Renda, 11 Am. Bankr. Rep. 521, 149 Fed. 614. Moreover, the bankrupt court has no jurisdiction to administer property set aside to the bankrupt under his claim for exemption. Lockwood v. Exchange Bank, 190 U. S. 294, 23 Sup. Ct. 751, 47 L. Ed. 1061.

The referee was of opinion that the bankrupt was entitled to his exemption, and awarded the same to him; and his action therein is affirmed.