263 F. 63 | 5th Cir. | 1920
This is an appeal from an order of the District Court for the Southern District of Florida, sitting as a court of bankruptcy', which denied a petition filed by the bankrupt for a review of an order of the referee, which disallowed the bankrupt his personal property exemptions, under the statute of Florida, in full. Under the exemption laws of Florida, the bankrupt is entitled to $1,000 in value of personal property, to be selected by him, as exempt to him from the payment of his debts. The Bankruptcy Act (Comp. St. §§'9585-9656) recognizes this exemption. The referee allowed the bankrupt personal property of the value of $500 as exempt, but denied him the remaining $500 in property of his selection, based upon his finding that the bankrupt had failed to account for moneys received by him shortly before bankruptcy to the extent of between $600 and $700, except by a payment of $300 thereof to his wife 15 days before the filing of his petition. This payment was first disclosed upon the second examination of the bankrupt, at an adjourned creditors’ meeting.
The purpose of the rule is not to punish the bankrupt for committing fraud or for making preferential transfers, but it rests upon the theory that the unaccounted for assets arc still in the possession of the bankrupt at the time of the filing of his petition, and should have been surrendered to his trustee for the benefit of his creditors, and that, if the bankrupt fails to make such surrender, he may be made to do so by the bankrupt court. To avoid circuity, his failure to surrender will be treated as a forced selection of the assets concealed or unaccounted for, as a part of his exemptions. This principle justifies the action of the District Court with reference to the moneys wholly unaccounted for. The amount of $300 paid his wife, shortly before bankruptcy, is in a different attitude. It is conceded that it was paid to liquidate a just debt owing by the bankrupt to his wife. It was an unlawful preference under the Bankruptcy Law, having been made within four months of the filing of the petition, and while the bankrupt was insolvent. That alone would not justify a charge against the bankrupt’s exemption in equal amount. The case of Florida Loan & Trust Company v. Crabb et al., supra, holds that the concealment or removal beyond the reach of his creditors of a part of his personal property by a debtor in an attachment as a preliminary to claiming his constitutional exemptions will, where the property remains so concealed, be treated as a selection pro tanto by the debtor of his exemptions.
As this was what was done in the District Court, its order denying the petition to. review referee’s order was correct, and it is therefore affirmed.