In re Liming
Decision Date | 02 September 1982 |
Docket Number | Adv. No. 82-0043.,Bankruptcy No. Bk-81-00391 |
Parties | In re Harold Gregg LIMING a/k/a Gregg Liming, Debtor. CENTRAL NATIONAL BANK AND TRUST COMPANY OF ENID, OKLAHOMA, Plaintiff, v. Harold Gregg LIMING, Defendant. |
Court | United States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — Western District of Oklahoma |
Clark McKeever, of McKeever, Glasser, Conrad, Herlihy & McKeever, Enid, Okl., for plaintiff.
Jon R. Ford, of Ford, Grey, Harvey & Smith, Enid, Okl., for debtor-defendant.
This matter came on for hearing after required notice upon Central National Bank's complaint asking that the debt owed by the defendant be held nondischargeable as violative of 11 U.S.C. § 523(a)(2)(B). The debtor urges that said debt is dischargeable and additionally seeks to avoid the lien under Code section 522(f). After a full evidential hearing the case was taken under advisement with briefs invited.
(1) Is a farm tractor an implement (or tool of the trade) within the avoiding scope of Code § 522(f)(2)(B). (2) Is the renewed debt balance nondischargeable.
1. On April 7, 1980, the debtor went to the plaintiff to borrow $15,000.00 for operating capital in his farming operation; and submitted a written financial statement falsely showing a net worth of $183,000.00. The bank advanced the $15,000.00 and took a security interest in a John Deere tractor worth some $30,000.00.
2. On June 23, 1980, the debtor returned to the bank and executed a second financial statement listing a net worth of $33,096.00.
3. On July 7, 1980, the debtor and the plaintiff entered into a renewal agreement of the April 7, 1980 note wherein the debtor reduced the loan and refinanced the unpaid balance. The John Deere 4840 tractor continued as collateral.
4. On February 27, 1981 the debtor filed a chapter 13 petition but converted to a chapter 7 on December 10, 1981.
5. At the time of the filing of the petition, the debtor was a farmer, although at the time of the hearing herein he was employed by Northrup at Vance Air Force Base, Enid, Oklahoma.
Lien Avoidance
1) Code § 522(f) provides:
2) The debtor's right to avoid liens impairing exemptions is not dependent or related to the nature of the debt secured by such liens and debtor may bring action to avoid lien even though creditor has commenced a separate action to have debt secured by the lien declared nondischargeable. In re Gantt, 7 B.R. 13, 6 B.C.D. 967 (Bkrtcy. N.D.Ga.1980).
3) 31 Okla.Stat. (1981) § 1(A)(5) provides:
4) 68 Okla.Stat. (1971) § 2422 states in part:
"The term `farm tractor\' as used in the preceding Section and in the following Section is hereby defined to be any motor vehicle of tractor type designed and used primarily as a farm implement for drawing plows, lister, mowing machines, harvesters, and other implements of husbandry on a farm . . . "
5) In Davis v. Wright, 194 Okl. 451, 152 P.2d 921, 922 (1944) the Oklahoma Supreme Court noted:
Code Statute
As noted in 11 U.S.C. § 523(a)(2):
At the time of his petition filing the debtor was a farmer as defined by 11 U.S.C. § 101(17) so as to qualify for exemptions allowed by law. Moreover, the tractor in question is an "implement of husbandry used upon the homestead" under Oklahoma law so as to be "exempt from attachment or execution and every other species of forced sales for payment of debts". § 1(A)(5), supra Significantly, there is some question under federal decisional law whether the Code § 522(f)(2)(B) avoiding authority as to "implements . . . or tools, of the trade of the debtor" is as broad as unlimited state exemptions where "non-purchase-money security interest" loans are concerned. A well-reasoned view restricts this avoidance power to security interests in hand tools and small implements. Read In re O'Neal, 20 B.R. 13, 9 B.C.D. 17 (Bkrtcy.E.D.Mo. 1982); In re Sweeney, 7 B.R. 814, 6 B.C.D. 1377, 1379-80 (Bkrtcy.E.D.Wis.1980). This...
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