The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1873-04-17
cOSSTiTUTIOSALITY OF THE BANKRUPT
LAW AFFIRMED-THE HOMESTEAD
EXEMPTION, &c.

4 "a
LAW AFFIRMED-TIlE HOMESTEAD
EXEMPTION, &c.
In the United States District Court at Lynch
| burg. Thursday, Judge Rives rendered an impor-
tant decision in bankruptcy in the case Of Daniel
2. Jones, which had been argued for several
days. The case was disposed of by the following
decree:
In the matter Of Daniel P. Jones, 5aakrnpt-I,s
bankruptcy.
The cause came on this day to be heard on the
petition of said bankrupt to be allowed an addi-
tional exemption to the amount of the homestead
out Of certain bonds, yet unpaid, due from
him as purchaser Of two tracts of land former
lily belonging to him and sold by decree of the
Circuit Court of Bedford upon creditors bill, the
record OF which suit is exhibited along with the
answer of Elizabeth W. Mead upon the return
of the rule against the creditors to show cause
against said etition, upon the answer of John
A. Wharton, Elizabeth W. Mead, James O. Hens
ley and others, and upon exhibits accompanyin 6
the same, and was argued BY counsel On con-
sideration whereof, it appearing to the court
that no debts were proven against the bankrupt;
that he received his exemption under the law as
it then stood, and as far his personal estate
allowed; that having petitioned for his dis
charge in March. 1872, he was finally discharged
in September, 1872, without leaving any funds to
be administered in bankruptcy; that concurrent
ly with those proceeding in bankruptcy, the
aforesaid suits brought in the Circuit Court of
Bedford for subjecting his lands to the liens Of
!, his judgment creditors previous to the adjudica-
ton IN bankruptcy, Was permitted to proceed
without bjection on his part or that of his
signee, or any attempt on their part to stay said
suit, to q decree of sale, the confirmation Of the
report of sale and the appointment Of receiver
to collect the bonds for the purchase money! the
court is of the opinion and doth decide under
this state of facts, first, that said case of bank
ruptcy is settled and terminated, and cannot be
revived so as to allow the filing of said petition
secondly, that thu fund out of which this increas
: ed exemption is asked is the subject of a new
contract on the part Of the bankrupt by virtue
Of which it has, by his consent, been ded Gated
: to, and become the property of his creditors !;
4 and thirdly. that this court has power or au
thority to GUST or interfere with the jurisdiction
of the Circuit Court of Bedford, that had right
fully attached in the snit before mentioned and
wrest from it or its officers the funds in
course Of collection and held for final distribution
according to the rights of the respective parties
; wherefore the court doth adudge, order and de-
cree that the said petition of Daniel P Jones' the
: discharged bankrupt be dismissed at his cost.
Though the court might here close this opin-
ion, it feels called to intimate its view on 9TH
er points discussed, because it will be necessary
fer the members of the bar to act at once in ref
|
: speedily to decide them.
=, First as to the
QUESTION coNsTITUTIoNAL1TY
> which has been raised and argued at length and
, with ability.
4 The point taken by those who contend that
+, this law is unconstitutional is that while the
i constitution requires that any bankrupt law
passed by Congress- shall be uniform, this in
adopting the variant exemptions of the different
States otfends in that particular.
!, The court is inclined to think this objection is
net valid. The authorities of the United States
: have always been disposed to respect the State
: laws. If an execution has issued from a court
!. of the United States against the property of a
citizen, it will not be levied upon such property
q as is exempt from execution under the laws Of
his State. So when the Bankrupt Law comes to
= take the property of the bankrupt for the bene
|, fit of his creditors, lit will leave exempted to
81 him such property under the laws of his State
he is entitled to hold. The law of Congress is
uniform in respecting the STATE exemptions
though they may be variant
This question has been frequently heretofore
g submitted to the District Court, and it has uni
Z formly been held by them that the adoption Of
,, variant State exemptions is not unconstitutional
and it is too late now for this court to Oh ange
= the current of decisions in that, particular The
court must hold these laws to be constitutional
And now the question is
: now SHALL THEY BE ADMINISTERED.
: The amendment to the bankrupt law, propos
n cd March Sd, 1873, is extraordinary one in
: all respects. 1t purports in part to be declar
! atory act. This court was aware that acts were
h OCCASIONALLY passed by Parliament decaratory OF
the common law, unwritten law, but an act
declaratSry of the meaning and purpose of a
n former act seems to be. anomaly. And in VIVA!
it declares this law seems to have no marked or
t special significance.
n,,tt SC, 1. 4,cI 1.
: is important. 1t not only declares what the
y amendment of june 1872, was intended to be, but
it enacs what it shall be-.
1t must be held giving to bankrupts in Vir-
J ginia the benefits of the homestead pre- vided in
d the constitution Of 1868 and the law made to Sc
n cure it, What the homestead privilege is, Of
: course, depends on the law of the State, as in.
e terpreted by the Supreme Court of Appeals Of
il The State. But the act of Con. ress approved
, March Sd, 1873, makes some changes in the
q homestead law of Virginia. 1t exempts it as
# against debts contracted before as we'll as subse
quently to the adoption of the constitution Of
J. 1868. This appears very reasonable and proper
II 1t also exempts it against all liens of judgments
in the State courts. Why it hadnot embraced al
so liens from deeds of trust, mortgages, &c., this
court cannot understand because it can see nj
e superior sanctity in the lien of deed of trus
r over that of a judgment of court of competent
jurisdiction. But the court must take the law a.
|
d cases, his homestead exemption against old as
well as new debts, and against all liens of judg
= ments in the State courts.
is The Judge went on to say that there would +,
great difficulty in. adminis ering the law, and ne
~ complete, general rule could now be laid down
= on that subject.
~ Each must be left to be determined under
. the peculiar circumstances attending it. Suct
~ GENERAL PRINCIPLES
MI nh
. l. 1t must be regarded as prospective in its OPP
erations and speaking from the date of its appro
"a val.
l. 2. The homestead exemption must be admins.
tered as State exemption, and in accordance
with State law, except SO far as the act Of Con
gress may have changed State law.
3d. 1t cannot be allowed where the bankrupt
II has been discharged leaving no fund in the han
p OF the court out Of which the allowance may be
# made.
4th. Il cannot be allowed, where rights have
vested, which it would be necessary to disturb
n As, for instance where mans lands have beer
:, sold for the benefit of creditors
r There no part the land can be exempted
4 because 1t has been sold, and the rights Of the
purchaser must be respected. Nor can the pur.
u chase money be exempted, because that has al
n ready been adjudged as belonging to the credi
tors.