Court Opinion

ID: 9442614
Source: CourtListenerOpinion
Date Created: 2023-08-03 18:53:16.638461+00
Date Added: 2024-06-11T17:29:09.365708
License: Public Domain

HUTCHESON, Chief Judge
(concurring
specially).
I agree with the conclusion of the main opinion that under the circumstances of this case the court below erred in taking jurisdiction of, and adjudicating, the complicated issues tried below.
With the premise, however, on which that conclusion was based, that the court was without power to do so-, I emphatically disagree.
While, therefore, I concur in the judgment ordered, I feel that I should make plain that I do not do so because the power of the court over the property was exhartsted with the setting aside' of the exemption to the bankrupt. I do- it only because I am of the opinion that, declining to concern itself with the litigation of the complicated question presented, the court, in the exercise of:a sound discretion, should have remitted the parties to the state court for the determination of the matters to be litigated.
*755I am not in any doubt that, where there are no complicated issues for determination, the bankruptcy courts in Georgia have the power to, and should, on the application of an assignee of a homestead exemption, order the property turned over to him rather than, because of a supposed want of power to do otherwise, ordering it turned over to the bankrupt for state court litigation.
As carefully pointed out in the Kronstadt case, cited in the majority opinion, the Lockwood case, relied on by the majority for its holding of want of power, did not deal with the question presented here. It dealt with a claim of the holder of a waiver agreement which could be enforced only upon the theory that, because of the waiver, the property, claimed as exempt, constituted a part of the assets of the estate and was, therefore, subject to his claim as a creditor to it.
The court there correctly held, and this is all that it did hold, “such exempted property constitutes no part of the assets in bankruptcy. The agreement of the bankrupt in any particular case to waive the right to the exemption makes no difference”.
With deference, the court in the Lockwood case, did not hold, it could not have held as the question was not before it, as was suggested in the majority opinion, that “after the designated property has been set apart and the question of its exemption vel non determined, the bankruptcy court thereafter has no power to distribute the exemption by adjudicating contests between the bankrupt and his creditors which involve, solely, the ownership of the aggregate exemption, as such.”
Throughout the Lockwood opinion, and in all of the cases and text books citing and following it, it is made clear that what the court held in Lockwood’s case was that the bankrupt court has no power to administer exempt property as “assets of the bankrupt estate subject to administration.” [190 U.S. 294, 23 S.Ct. 753.]
Our case, In re Marschall, 5 Cir., 296 F. 685, 686, while not precisely in point on its facts, plainly and unequivocally holds that property in possession of the bankrupt claimed by him as exempt “is brought into the custody of the court the same as all other property owned by him and in his possession”, and that where there is a controversy over its ownership, the bankruptcy court has the power, as distinguished from the duty, to determine whether it should be delivered to the bankrupt or to the person claiming title under him.
There may, there most probably will, be many cases arising in Georgia in which there is no substantial controversy between the assignee of the homestead exemption and the bankrupt as to the validity of the assignment and the rights of the assignee under it. Because this is so, I am unwilling to agree to the view that in all such instances the bankruptcy court for want of power must, declining to order the exempt property turned over to the assignee, remit the parties to the state court. I think it can, and should, in such circumstances settle the matter in a summary way by ordering the exempt property delivered to the creditor assignee, thereby determining the credit to be allowed against his general claim against the estate and thus expediting its winding up.
In situations where, as here, there are complicated defenses to the assignee’s claim, or where, as supposed in the majority opinion, there are numerous creditors holding conflicting claims, the bankruptcy court ought not to take on the determination of these questions, not, however, because of a want of power but because it ought not to commit its resources to, or dissipate its energies in, doing so.
To hold, as the májority opinion does, that there is a complete want of power in the bankruptcy court to make the simple adjudication necessary in bringing most of these controversies to an end is, in my opinion, to confuse power with expediency and thus to unduly hamstring and cripple simple bankruptcy administration in Georgia.