Peppers v. Cauthen

Feb 20, 1915

Reporters:: , ,
Before:: Lumpkin

Lumpkin, J.

1. The motion to dismiss the petition was in the nature of a demurrer on the ground that it showed on its face that the exemption had not been set aside when the petition was filed. This does not appear on the face of the petition. On the contrary the original petition (which was filed on February 7th, 1913) alleged that the bankrupt had applied for and had set apart to him an exemption. The amendment attached a copy of the order of the referee in bankruptcy, deciding certain issues raised by objections which had been filed to the valuation placed upon the property set apart to the bankrupt as an exemption by the trustee. The order of the referee was dated February 18, 1913, but it did not appear on what date the trustee in bankruptcy set apart the property as an exemption to the bankrupt. It can not be said, therefore, that the petition showed on its face that the trustee in bankruptcy had not set apart the property before the petition was filed. Whatever may have been developed by the evidence, no motion was made for a new trial, and the propriety of the finding of the jury is not properly before us. It has been held that where property has been set apart as exempt by the trustee in bankruptcy, and before his report has been confirmed by the referee, an equitable petition may be filed. Arnwine v. Beaver, 134 Ga. 377 (67 S. E. *233937). What has been said above renders it unnecessary to discuss the ruling made in Coffey v. Mitchell, 139 Ga. 430 (77 S. E. 561), further than to say that it was there stated that no relief was sought against the bankrupt defendant other than a special judgment fixing a lien on the property which he was s‘eeking to have set apart as an exemption in bankruptcy; and that it was not decided that no case could arise where equitable relief might not be invoked prior to the formal setting apart of the exemption. It has been held that after the property has been set apart by the trustee but before the time for filing exceptions has elapsed he may transfer it. Taylor Company v. Williams, 139 Ga. 581 (77 S. E. 386). If no equitable petition could, in any case or under any circumstances, be filed without alleging that the exemption had been set apart, the result might sometimes be a race -between a creditor holding a note containing a waiver of exemption, who must wait until the actual setting apart of such exemption before applying to a court of equity, and an insolvent bankrupt endeavoring to sell or divest himself of the exemption immediately upon the setting apart by the trustee. If, as has been said, after an exemption is set apart, in theory of the law it is treated as always having been in the bankrupt and never administered by the court of bankruptcy, when a bankrupt proceeds for the purpose of having property segregated and thus set apart to him, it would seem that this very fact might furnish a ground for the creditor to proceed before it is too late, with proper allegations as to necessity therefor. Of course he could not finally subject property until it was set apart, and any right to have the property taken possession of by a receiver might be dependent upon its being set apart and upon the result of exceptions to the trustee’s action. But we are not called on to rule whether this necessarily requires a creditor having a note containing a waiver to wait, under all circumstances, until the entire transaction is or may be over; nor do we make any ruling on this subject.

2. Exception was taken to the inclusion in the decree of attorney’s fees for bringing the fund into court while the waiver of homestead was only operative as to the amount of the debt. The theory on which attorney’s fees for bringing a fund into court is allowed is that if the diligence of one creditor secures a fund for a common benefit, and if others share therein, any expense of securing it should not fall on the diligent creditor alone, but that those *234who participate in the fund should contribute their share to the common expense, so that the fund going to the different creditors may be first taxed with the proper amount of attorney’s fees before its distribution. But this does not authorize creditors to be paid in full and also to require the debtor to pay attorney’s fees for bringing the fund into court. What is here said refers to the award of a fee from the fund for bringing it into court, and not to the contract fees which may be contained in the notes. Direction is given that the decree be so modified that if the fund is sufficient to pay the waiver notes in full, together with such costs and expenses as have been decreed against the fund, attorney’s fees for bringing such fund into court shall not be taxed as against such excess, but that such fee may be awarded from the fund which would be going to the creditors participating in the distribution.

3. It is contended that the decree was erroneous in directing the costs of the receivership to be paid from the fund, on the ground that the waiver only covered the debt. The notes sought to be enforced contained a promise to pay a stated amount with interest and “with all cost of collection,” and waived all homestead or exemption rights as against the notes and any renewal thereof. The waiver clearly included such costs, and there was no error in directing that they be paid from the fund. The court has a discretion in awarding costs in an equitable action. Civil Code (1910), § 5423.

4. It was contended that a part of the property, included in the exemption and against which the decree was rendered was household ‘and kitchen furniture and wearing apparel, and that under the law the right to an exemption in such property can not be waived. The constitution declares that a debtor shall have the power to waive or renounce in writing the right to the benefit to the exemption, except as to wearing apparel and not to exceed $300 worth of household and kitchen furniture and provisions to be selected by himself and wife, if any. Civil Code (1910), § 6584. Under the ruling in Miller v. Almon, 123 Ga. 104 (50 S. E. 993), in order for this exemption of $300 to be effectual as against a waiver, it must have been set apart. It does not appear that in the court below the point was raised that the debtor and his wife selected household and kitchen furniture not exceeding $300 in value and claimed it as an exemption in spite of the waiver. So far as appears from this bill of exceptions, the point is made for *235the first time by assigning error on the .decree. We do not think this furnishes ground for reversal.

5. Another ground of the. exception to the decree complains that it was erroneous, for that “under the evidence submitted under paragraphs of the amended plea, said contract of conditional sale, which was evidenced by the bond for title signed by and the notes sued on by R. L. Cauthen, R. L. Cauthen, J. J. McLanahan, and G. H. McLanahan, was rescinded by the acts therein set forth.” This seems to be a complaint more appropriate to a motion for a new trial than to an exception to a decree. Moreover, the statement, “under the evidence submitted under paragraphs of the amended plea,” is so indefinite as to which paragraphs of the plea are referred to and what evidence is intended that it is a very loose and uncertain form of exception to a decree.

A similar criticism may be made as to other exceptions, and in so far as they raise points for determination they are without ■ merit.

Judgment affirmed, with direction.

All the Justices concur, except Fish, G. J., absent.