Bixler v. Kennedy

Opinion by Kephart, J., A debtor will be refused the right to claim the exemption of $300.00 provided by law where he denies the ownership of that which he cannot hide, or embarrasses the officer of the law in the execution of his legal duty, or attempts to conceal or fraudulently sell his property so that it may be taken out of the reach of creditors: Gilleland v. Rhoads, 34 Pa. 187; Kreider’s Est., 135 Pa. 578; Riley v. Ogden, 185 Pa. 506; Emerson v. Smith, 51 Pa. 90. The rule is founded in sound morality and “is agreeable to the spirit and intention of the exemption law. It was an enactment for the honest poor, not for the roguish: Strouse’s Executor v. Becker, 38 Pa. 190. The exemption may be claimed in an attachment execution: Strouse’s Executor v. Becker, 44 Pa. 206. Fraud is not a bar- to the claim for exemption where it is independent of the transaction in which the levy was made, but where it exists in the very transaction it is a positive bar and is not to be used merely in mitigation of damages: Emerson v. Smith, supra. The court below held: “The sale by the defendant of his goods in bulk without notice to the plaintiff who was a. creditor at the time of the sale, was fraudulent as against the plaintiff by the Act of March 28, 1905.” The acts which will de [44] prive a debtor of bis exemption must be such acts of dishonesty as show an intention to cheat, defraud or embarrass creditors or involving moral turpitude; they must be the acts of the debtor or those for which he is responsible and not the acts of others over whom he has no control. The law does not contemplate a constructive fraud which may arise through the neglect of another as being sufficient to prevent a debtor from obtaining his exemption. In this case the defendant did all he was required to do under the Act of 1905. He gave to the purchaser a list of his creditors with their addresses. It then became the duty of the purchaser to send out the notice required by the act. If he neglected to perform his duty, or inadvertently omitted notice to one person, the penalty imposed on the purchaser for this failure, was that the goods within ninety days could be seized for the debt. The right to have the goods applied to his debt is the protection given the creditor by that act. The sale of goods in bulk is not inherently fraudulent; it only becomes so for certain purposes through this act. The purposes are there defined. It was through the medium of this constructive fraud that this court held that goods sold in violation of the Act of 1905 could be reached through a fraudulent debtor’s attachment. The court below was in error in holding that the failure of the purchaser to give notice to the creditors was such fraud as would prevent the vendor from claiming his exemption. The judgment is reversed.