Rehearing
Denied Jan. 25, 1924.
Syllabus by the Court.
Under
art. 9, § 3. par. 1, of the Constitution of Georgia (Civil
Code of 1910, §§ 6584, 3413), a debtor may waive or renounce
in writing his right to the benefit of the exemption provided
in this article, except as to wearing apparel, and not
exceeding $300 worth of household and kitchen furniture and
provisions. But money, though less in amount than $300, which
might be readily converted into any one of the classes of
property mentioned in the Constitution and laws as exempt
does not belong to either of them, and is not protected
against the waiver.
Cotton
is not "provisions" within the meaning of the
constitutional provisions just cited.
The
court did not err in ordering the receiver to sell the corn
purchased with the money set apart as exempt, and out of the
proceeds to pay first the costs, and then the balance to the
creditors as provided in the order.
Error
from Superior Court, Gordon County; M. C. Tarver, Judge.
Suit by
the Rome Oil & Fertilizer Company against M. N. Posey.
Judgment for plaintiff, and defendant brings error. Affirmed.
Within
Const. art. 9, § 3, par. 1 (Civ. Code 1910, §§ 6584, 3413)
relating to the right of a debtor to waive exemptions cotton
is not "provisions."
The
Rome Oil & Fertilizer Company brought an equitable petition
against M. N. Posey, and alleged the following facts: M. N
Posey was, on November 7, 1922, adjudged a bankrupt. His case
is pending in the District Court of the United States for the
Northern District of Georgia; and he has not applied for or
obtained a discharge in the bankruptcy case. James A
McFarland was duly appointed, qualified, and is acting as
trustee of the bankrupt's estate. On November 28, 1922,
the trustee set apart to the bankrupt a homestead and
exemption consisting of the following property:
"Household and kitchen furniture, $25; 50 bushels of
corn, of the value of $40; cash, $235; total $300."
Plaintiff is a creditor of the estate, and holds a judgment
against the bankrupt for $254.77, $15.58 cost, and $28.58
attorney's fees, with interest from October 15, 1921. The
judgment was based upon a note which included a clause in
which the maker of the note waived any and all homestead or
exemption to which he or his family might be entitled under
the laws of the state of Georgia; and the debt is of such
character that a discharge in bankruptcy would bar recovery
thereon. The homestead which has been set apart as aforesaid
has not been approved by the referee in bankruptcy, and no
order has been passed setting apart the same to the bankrupt,
nor has the same been delivered to him; and it is subject to
plaintiff's claim. Plaintiff is advised and believes that
the bankrupt is making an effort to secure possession of the
property described above, and that he will move it away and
render it impossible for plaintiff to secure or enforce its
claim against the defendant. Plaintiff is without adequate
remedy at law for enforcement of its rights against the
exempt property. The prayer was that a receiver be appointed,
with authority and direction to intervene in the court of
bankruptcy for the purpose of having the homestead and
exemption, so set apart to Posey, delivered to such receiver,
and that he take possession thereof and hold the property
subject to the further order of the court. The defendant
filed an answer in which he averred, among other things,
that--
"the exemption which has been set apart to him by the
trustee, approved and determined by the bankruptcy court, is
the nonwaiverable constitutional $300.00 homestead and
exemption as provided by the statutes of Georgia, consisting
of household and kitchen furniture, $25.00; 25 bushels of
potatoes, $40.00; 100 bushels of corn, $60.00; and corn
purchased by the trustee of the amount of 199 7/11 bushels,
of the value of $219.58; total, $284.58; that the homestead
and exemption claimed is nonwaiverable and is not subject to
the plaintiff's execution, nor the note upon which said
execution is based. * * * Defendant says, on the contrary,
that the exemption as hereinbefore specified has been allowed
to him by the court of bankruptcy, and is not subject to
plaintiff's indebtedness."
On the
trial it was agreed that the presiding judge should determine
the case without the intervention of a jury, passing upon all
questions of law and fact at issue. The defendant introduced
in evidence a certified copy of the original report of
exemption, signed and filed by J. A. McFarland, trustee, as
follows:
"The following is a schedule of property designated and
set apart to be retained by the bankrupt aforesaid, as his
own property, under the provisions
of the acts of Congress relating to bankruptcy: Household and
kitchen furniture, $25.00; 50 bushels of corn, of the value
of $40.00; cash, $235.00; total, $300.00."
Also, a
certified copy of an amendment to his schedule, filed on
December 13, 1922, in the bankruptcy court, which was signed
and sworn to by Posey and certified by the deputy clerk as
follows:
"And now comes the bankrupt by leave of the court, and
amends his original schedule by striking from schedule B-5
'cotton, $235.00,' and adding in lieu thereof
'corn, of the value of $235.00.' Petitioner was
advised and believed, at the time of the filing of his
original schedules, that he was selecting articles allowed
under the constitutional nonwaiverable $300.00 homestead as
provided by the statute of Georgia. The trustee sold the
cotton claimed and has converted the same into cash, and did,
on the 28th day of November, 1922, set apart bankrupt's
exemption, $235.00, of which was set apart in cash.
Petitioner desires that said cash be invested in corn by the
trustee herein and set apart to him as part of his exemption.
Should the court hold that that cannot be done in this court,
then petitioner prays that said cash, $235.00, be turned over
to the court of ordinary of Gordon county, to be by that
court invested in corn as selected. To that end petitioner
prays that the trustee herein be directed to so amend his
report of exemption."
The
defendant also introduced a certified copy of an order upon
said amendment, passed by C. D. McCutchen, referee, on
December 19, 1922, and certified by J. C. Printup, deputy
clerk, as follows:
"The above and foregoing amendment having been offered
and filed on the 13th day of December, 1922, within twenty
days from the filing of the report of exemption, and action
thereon being deferred for the purpose of hearing from
opposing counsel, it is therefore ordered that said amendment
be and the same is hereby allowed nunc pro tunc. Ordered
further that the trustee amend his report by setting apart to
the bankrupt 201 1/8 bushels of corn of the value of $219.58,
to be purchased with the cash in his hands, in addition to
the other items therein listed."
The
trial judge appended a note in the bill of exceptions, the
substance of which is as follows:
"Upon the first hearing of this case, which was had by
consent of parties on March 17, 1923, the court inquired of
counsel whether or not the referee had passed an order
directing the trustee to invest the cash $235.00 in corn, and
was informed by Mr. F. K. McCutchen, of counsel for M. N.
Posey, that there had been such an order passed. The court
thereupon continued the hearing until March 24, 1923, with
direction that a certified copy of this order be obtained. On
the date of the final hearing, March 24, 1923, the court
again inquired of counsel whether or not a certified copy of
this order had been obtained. Counsel for Posey thereupon
introduced, under one certificate of the deputy clerk of the
United States District Court for the Northern District of
Georgia, Northwestern Division, the copies herein referred to
of the report of the trustee setting aside the exemption to
the bankrupt, the amendment filed on the 13th day of
December, 1922, by the bankrupt, to his original claim of
exemption, and an account of the trustee in bankruptcy for
Posey, with the order of the referee allowing the same, the
last named not being set out in this bill of exceptions nor
material to the questions herein raised. The court again
called attention to the fact that no order of the referee
directing the investment of the cash in corn appeared in this
record. Counsel for Posey thereupon sought to prove by J. A.
McFarland, trustee, that the referee had orally directed such
investment. This evidence the court excluded upon objection
of counsel for plaintiff. The court thereafter passed the
judgment herein complained of, stating as his reason for so
doing the failure of the referee or any other proper
authority to direct the investment of the cash in corn. The
order of the referee of December 19, 1922, immediately
hereinbefore appearing, was on the back of and at the top of
one of the sheets attached to the certificate by the deputy
clerk of the United States court. It was not called to the
court's attention until this bill of exceptions was
presented for signature."
The
defendant introduced also a certified copy of the amendment
to the report of exemptions, dated and filed December 19,
1922, and signed by J. A. McFarland, trustee, and certified
by the deputy clerk, as follows:
"The above and foregoing report of exemptions is hereby
amended by striking cash $235.00 and adding in lieu thereof
corn in the amount of 199 7/11
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