Moran v. King

BOYD, District Judge (after stating the facts as above). Under the head of "Homestead and Other Exemptions'” the constitution of Virginia (article II, § I) provides that: “Every householder, or head of a family, shall he entitled, in addition to the articles now exempt from levy or distress for rent, t.o hold exempt from levy, seizure1, garnisheeing or sale, under any execution, order or other pro^ cess issued on any demand for any debt heretofore or hereafter contracted, his real and personal property, or either, including money and debts due him. whether heretofore or hereafter acquired or contracted, to the value of not exceeding two thousand dollars, to be selected by him.” There is a further provision (article II, § 5) that: “The general assembly shall at the first session under this constitution prescribe in what manner and on what condition the said householder or head of a family shall thereafter set apart and hold for himself and family,0 a homestead out ol’ any property hereby exempted, and may in its discretion determine in what manner and on what conditions he may thereafter hold, for the benefit of himself and family, such personal property as he may have, and coming within the exemption hereby made.” The Virginia court of appeals, in construing the homestead and exemption provisions of the Virginia constitution, referring to the debtor, in Reed v. Bank, 29 Grat. 719, holds that: “The privilege given by the constitution is a personal privilege, to be exercised by him or not, as he may choose. The constitution does not de [732] dare, as does the poor debtor law, that certain property 'shall be exempt from levy, etc., but that the householder or head of a family shall be entitled to hold property to be selected by him to the value of $2,000, In the former case the law executes itself. It is a part of the public policy of the government to exempt that particular property absolutely from forced sale, and its provisions cannot be waived. But there is no such constitutional declaration that property to the amount of $2,000 shall be exempt. On the contrary, the very language used plainly shows that it may be exempt only when the privilege given the householder or head of a family has been exercised, and the property selected and set apart by him.” This doctrine was reaffirmed in Linkenhoker’s Heirs v. Deitrick, 81 Va. 44, 59 Am. Rep. 648, and was also declared by Chief Justice Waite in Re Soloman, 2 Hughes, 164, Fed. Cas. No. 13,166. The bankrupt in this case, when opportunity was afforded, exercised the privilege which the exemption laws of the state of Virginia conferred upon him. He filed his schedule before the meeting of creditors had taken place, and before the title to tlie property had passed, by the operation of the bankrupt law, to the trustees, and he made claim to certain specific articles of property as exempt under the provisions of the Virginia law above quoted. The property specified was that selected by him and claimed as exempt, and was all that he did claim at that- time. Subsequently he filed his petition to be allowed to amend his claim for exemption, in which he asks to enlarge said claim, and have other property set apart, on the .ground that it is his duty “to claim his full homestead, in order that his agreement with those creditors (that is to say, the agreement evidenced by the waivers) might be faithfully carried out.” It is thus seen that the purpose of the bankrupt, in his effort to enlarge his exemption, is not that property may be set apart for the benefit of himself and his family, in pursuance of the humane objects of the exemption law, but that whatever additional property he may withdraw from his estate in bankruptcy may go to the payment of debts due to persons to whom he has executed notes in which he has waived his right to claim exemption. We -think the supreme court of Ohio, passing upon the exemption laws of that state, in Sears v. Hanks, 14 Ohio St. 300, 84 Am. Dec. 381, has well defined the purpose of the homestead exemptions generally when it says: ' “The humane policy of the homestead act seeks not the protection of the debtor, but its object is to protect his family from the inhumanity which would deprive its dependent members of a home.” And among many other decisions to the same effect we find the following: “A statute of exemption is properly a remedial statute, evidently intended *to prevent families from being stripped of their last means of support, and left to suffer, or cast as a burden upon the public, and to rescue them from the hands of unfeeling creditors.” Leavitt v. Metcalf, 2 Vt. 342, 19 Am. Dec. 718. “The exemption was made for the benefit of the family, rather than its head, the debtor. Its object concerns the question of public policy. It is to keep together the wife and children, that the latter may be trained and educated to become useful members of society, to protect them against , dangers to which they would be exposed by being scattered at a tender age, and to secure them the means of instruction- and improvement.” Griffin v. Sutherland, 14 Barb. (N. Y.) 456. [733] The bankrupt in this case, upon the facts set forth in his petition, seeks exemption for no such purpose, but avows the object of his petition to be to remove so much of his property as- he can from the hands of the trustee in bankruptcy, in order that it may go to the benefit of certain creditors holding what are called “waiver notes.” “While the exemption laws are to be construed liberally, so as to carry with them the benevolent policy of the legislature, debtors claiming their benefit must bring themselves at least within the spirit of their provisions.” 12 Am. & Eng. Enc. Law (2d Ed.) p. 77. It is evident that the bankrupt, when he filed his schedules and made claim to exemption, had it in mind to set apart only such of his property as would inure to the benefit of himself and family; but later on he conceived the idea of favoring certain of his creditors to the exclusion of others, and it then occurred to him to enlarge his claim for exemption, for the purpose, as stated in his petition, of carrying out his agreement with these creditors. To grant his petition, therefore, would not, in our opinion, be consistent with the objects of the homestead exemption, or in furtherance of the due administration of his estate under the bankrupt laws of the United States. The bankrupt having exercised his privilege and made his selection of exempted property, the title to his entire estate, except the property selected as exempt, passed to the trustee, to be administered for the benefit of creditors under the provisions of the bankruptcy act, and the title thus vested in the trustee cannot now be disturbed by setting apart further exemptions. “As a general rule, if a person who holds a homestead, and is under no disability to assert it, fails to do so at the time and in the manner provided by law in any action or proceeding involving the right, he will be deemed to have waived his exemption.” 15 Am. & Eng. Enc. Law, p. 638, cases cited in note 7. We think this doctrine is in entire harmony with the exemption laws of Virginia as construed by the highest court of the state. The claim to exemptions under the constitution and statute law of the state is a privilege which the debtor may exercise or not, as he chooses; and, it being left to his option, he may claim as exempt property to the full amount of $2,000, or for a less amount, if he may see proper. In this case the bankrupt has exercised his privilege, has selected the property which he claimed as exempt, and, with the exception of the property so claimed, the title to the estate has vested in the trustee. We think the bankrupt is concluded, and should not be allowed to amend his schedules as prayed for. The petition is denied, and the judgment of the district court affirmed.