In re LIBY

In re LIBY. (District Court, E. D. Pennsylvania. November 24, 1914.) No. 5066. Bankruptcy (§ 399) — Exemptions—Personal Privilege — Waiver. Since, by tbe laws of Pennsylvania, tbe exemption allowed to a debtor is a personal privilege to bim, wbicb be may waive and lose, and not a police regulation, primarily for tbe benefit of tbe community, to prevent tbe debtor from becoming a public charge, a Pennsylvania bankrupt’s failure to surrender all bis property to bis trustee was sufficient to deprive bim of tbe right to exemptions out of that wbicb be did surrender. [Ed. Note. — Eor other cases, see Bankruptcy, Cent. Dig. §§ 657, 669; Dee. Dig. § 399.*] In Bankruptcy. In the matter of bankruptcy proceedings of Harry Liby. On petition to review a referee’s order disallowing a bankrupt’s exemption. Affirmed, and petition dismissed. Levi & Mandel, of Philadelphia, Pa., for bankrupt. Harry L. Jenkins and William S. Furst, both of Philadelphia, Pa., for objecting creditors. For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes [MAJORITY — DICKINSON, District Judge.] DICKINSON, District Judge. The order of the referee is based upon a finding of fact. Every presumption exists in favor of the correctness of this finding. It should not be disturbed by the court, unless a mistake is clear. No such justification for interference by the court with the finding is present in this case. The whole question, therefore, resolves itself into one of law. The question presented is: Does the fact that the bankrupt has not surrendered all of his property to the trustee in bankruptcy deprive him of his right to his exemption out of that which he has surrendered? This again resolves itself into another question: Is the exemption allowed for the benefit of the bankrupt, or is the exemption law In the nature of a police regulation, and primarily for the benefit of the community, to prevent insolvents from becoming public charges? In some of the states one answer is made to this latter question, and in the others a different answer. In the state of Pennsylvania the exemption is viewed as the personal privilege of the debtor, which he may waive, and which he may lose. In other states the public policy feature is given emphasis. The Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 544) allows whatever exemption is given by the state laws, and the courts of the United States have followed the rulings of the state courts in the construction of exemption statutes. In re Schafer (D. C.) 151 Fed. 505. This disposes of the only question involved in the present appeal, and the order of the referee is affirmed, and the petition for review dismissed.