Court Opinion

ID: 8636557
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:46:13.564391+00
Date Added: 2024-06-11T16:55:36.948107
License: Public Domain

CADWALADER, District Judge.
If the exemption laws of all the states had resembled those of Pennsylvania, there would have been great apparent force in the argument against allowing the twofold exemption under the state laws and the act of congress to extend in any case, in the whole, beyond the value of $500. There would, however, have been difficulty in accommodating the argument to the words of the act of congress. "Whether this difficulty could have been overcome, it is unnecessary to consider, because, upon recurrence to the exemption laws of other states which are, in effect, incorporated with the act of congress, the argument loses all force, or all applicability. The act of congress must therefore Ire interpreted with reference to the other motives of legislation.
Proceedings in bankruptcy, where it is involuntary. resemble, in many respec-ts, a general execution for tire equal benefit of the creditors. Where bankruptcy is voluntary, the resemblance does not in all respects fail. It is foreign to the purpose of proceedings under such a bankruptcy, that they should operate upon property otherwise exempt from execution, unless it is thus exempt under defective previous laws, which the bankrupt law is, in this respect, intended to improve. *95Under the present bankrupt law no such change was intended. On the contrary, the previous uniform system, under state laws of exemption, in the federal and state courts is continued, as it had been established under the act of congress of 1S28, and under subsequent rules of the federal courts authorized by this act. In this respect, the bankrupt law merely provides that the state exemption laws, thus previously adopted, shall still apply, so as to exclude their subjects from the operation of the proceedings in bankruptcy. The law further enacts, in effect, that there may, in proper cases, be an additional exemption to be graduated with reference to the number, health, &c., of the bankrupt’s family, to his condition in life, socially and otherwise, and to his former and recent, if not present, circumstances. Confusion of the views of the present question has arisen from hastily assuming that it is a question of the absolute unmeasured allowance of an additional exemption to the value of $500. The allowance is conditional, and is measured with reference not merely to value, but also to subjects, and their suitableness to personal requirements. The subjects must be necessaries and other articles which, in character, as well as in amount and value, are suitable to his family condition and circumstances. There may be cases, few perhaps in number, in which, though he may own property of a value considerably exceeding $300, it would sanction a fraud upon his creditors to allow him any part of the excess beyond it, except the specifically designated articles. For example, in a possible case, a debtor who never had owned property to the value of $300 beyond the amount of his debts, might become a bankrupt for the very purpose of depriving creditors of recourse to assets in excess of this value. Such an attempt should never be successful. In ordinary cases, the property excepted should not. however, be of less value than $200, in addition to the subjects of the state exemption laws to the value of $300. and the specifically designated articles. In special cases, the property additionally excepted may be of greater value; and, in some extraordinary cases, may be of the full value of $r>00, making the whole value, including $300 under the state laws, amount to $800, in addition to that of the wearing apparel and other specifically designated articles. i j | ¡ ! i ! . | j ! j ; ■ i | I ! ! ; ¡ ■ , ! 1 ;
In the act of congress the articles newly excepted are mentioned first, and those previously exempted by state laws are mentioned lastlyi Tlie more natural order of considering the two subjects in Pennsylvania, if not elsewhere, is, perhaps, to invert this arrangement. Thus, the assignee should first consider what exemption is claimed under the laws of the state. 4s to the subjects of this claim of exemption, his only function is to see to their proper appraisement. In seeing to it, he should proceed as comformably to the laws of the state as may be possible. These subjects of exemption, and the specifically designated articles, having been set apart, a more responsible duty is afterwards to bo performed by him in designating the additional articles excepted under the act of congress.
In the present case, I infer that if the bankrupt is not to obtain a further exemption than has been allowed, neither he nor any other party objects to the selection of the ar-tides which he has received. He was mistaken in demanding the additional amount as of absolute right, independently of considera - tion relative to his family condition and circumstances. On the other hand, the assignee was also mistaken if he supposed the act of congress to preclude him absolutely, under all circumstances, from allowing an exernption beyond the value of $500 in the whole. Whether this bankrupt ought to have received more than has been allowed I have no certain means of deciding from what is now before me. This must be determined by the assignee, whose report, if the bankrupt persists in his claim, will be made hereafter through the register.