Court Opinion

ID: 8768674
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:35:22.801266+00
Date Added: 2024-06-11T17:02:03.936265
License: Public Domain

J. B. McPHERSON, District Judge.
I agree with the learned referee, whose report appears herewith, in his ruling that the trustee may except to the allowance of the statutory exemption on the ground of the bankrupt’s fraud. The trustee’s duty to “set apart the bankrupt’s exemption and report the items and estimated value thereof to the court,” etc. (section 47, cl. 11), does not deprive him of the right, or, indeed, relieve him of the obligation, to decide on behalf of the creditors, whose representative he is, whether the bankrupt is entitled to the exemption at all, or has forfeited it by improper conduct. On principle, I see no reason why he may not come to this decision preliminarily, and refuse altogether to set apart the exemption; but as a matter of practice it is no doubt better that the trustee should first perform the purely ministerial function of separating and appraising the property, in accordance with general order 17, so that the specific articles may be designated; and then, if in his opinion he is justified in so doing, that he should make known formally the grounds on which he denies entirely the bankrupt’s right to the benefit of the statutory privilege. The provision in the general order, that “any creditor may take exceptions to the determination of the trustee,” etc., does not expressly, nor I think by fair implication, exclude the trustee. Certainly any creditor, acting by an agent, could take exception to the determination of the trustee, and the trustee himself, as the representative of the whole body of creditors, and therefore the most suitable person to act in their behalf, is in my opinion clearly within the sprit of the general order. Indeed, as the referee has supposed, he may even be fairly within the statutory definition of the word “creditor,” and may thus be expressly authorized to except.
Upon the facts nothing need be added to the report of the referee. I have made a prolonged examination of the testimony, and fully agree with his findings.
The order refusing the bankrupt’s exemption is affirmed.