50 Pa. Super. 185 | Pa. Super. Ct. | 1912
Opinion by
The facts controlling this case are not in dispute. The defendant filed a voluntary petition in bankruptcy in the United States district court for the western district of Pennsylvania on December 29, 1910, which petition contained a schedule showing his debts and obligations, including the debt due the plaintiff. It is conceded that plaintiff had due notice of the bankruptcy proceedings on or about the date the petition was filed. Plaintiff’s claim against the defendant was for rent due it under a written lease made in March, 1910. This lease contained a warrant of attorney authorizing the confession of judgment and waiver of exemption, etc. The debt was prov
The appellant’s learned counsel rests his case on the proposition that the discharge in bankruptcy extinguished this claim not only as a personal obligation against the defendant but that it also relieved the property levied upon from all liability for the satisfaction of the plaintiff’s claim. It has been so often decided that a creditor having a judgment waiving exemption may levy upon the property appraised and set apart to the bankrupt prior to his discharge that we may consider that question settled. In Sharp v. Woolslare, 25 Pa. Superior Ct. 251, we held
The exact question for decision here is, where the plaintiff had a valid judgment against the defendant, waiving exemption, and had issued an execution and levied upon the defendant’s exempted property in the bankruptcy proceedings, before the discharge in bankruptcy, can the sheriff proceed on the execution and levy to sell paid goods notwithstanding the discharge in bankruptcy?
“Thus a judgment which has become a lien on property will continue to be so, but if the judgment is merely a personal liability, it is released by a discharge. In an action to enforce a mechanic’s hen or mortgage, the discharge will not bar the proceedings, except as to a personal judgment for a deficiency”; the author adds other illustrations. In footnote on page 829, it is said: “After a discharge of the debtor, a creditor cannot enforce his debt against his exempt property, unless a lien had been fastened on said property before the discharge was granted.”
We believe it is never contended that the lien of a mortgage is released by a discharge in bankruptcy. The debt is discharged as to the individual and all other property than that affected by the lien. In the present case there was a hen created by the levy and we think the defendant was discharged from personal liability but the
In McKenney v. Cheney, 118 Ga. 387, it was said: “A discharge in bankruptcy does not discharge the lien of a judgment obtained within four months prior to the adjudication of bankruptcy upon a note waiving the homestead exemption allowed by the laws of this state upon lands set aside by the bankruptcy court as exempt.” This ruling was followed in Bell v. Dawson Grocery Co., 120 Ga. 628, in which a note containing a waiver of exemption was not proven in the bankruptcy court; held, “That lien on such property obtained after setting apart of the exemption could be enforced and a discharge would be withheld until a recovery was had.” In Powers Dry Goods Co. v. Nelson, 10 N. D. 580, it was held: “The hen of a judgment on personal property of a bankrupt is not destroyed by a mere discharge of the debt secured by the lien through a discharge under the national bankruptcy act; and unless such hen is one which is itself declared void by said act, it may be enforced through a modified form of judgment, as against the property on which the hen exists.”
- The United States supreme court recognizes the right of creditors in whose favor exemption has been waived to proceed against the exemption set apart to the debtor, under the state law, and also the right of the court to withhold the discharge of the bankrupt, if he be otherwise entitled thereto, until a reasonable time has elapsed for the excepting creditor to assert in a state tribunal his alleged right to subject the exempt property to the satisfaction of his claim: Lockwood v. Exchange Bank, 190 U. S. 294.
In the present case the plaintiff did not need a stay of proceedings in the bankruptcy court, as to the discharge of the defendant, because the plaintiff was proceeding legally, before the discharge, to sell the exempted
In Gilmore & Co. v. Smith, 15 Pa. D. R. 347, Criswell, P. J., of Venango county, well said: “Can he (a creditor) proceed and sell the exempt property after final discharge, if, by means of an execution in the sheriff’s hands, he obtains a levy and control of the same before final discharge? A levy upon an execution is, in law, a seizure and appropriation of the debtor’s property to the payment of the debt for which the seizure is made. The appropriation is not finally consummated until a sale has been made, but the sale is simply for the purpose of determining the amount of the credit. Until a sale the property remains in the hands or custody of the officer as a pledge to secure and enforce the payment of the debt,” etc.
The appeal is dismissed at the cost of appellant, and the order of the court below discharging the rule is affirmed.