Opinion
No. 2438.
July 6, 1924.
Dickson Denny, of Shreveport, La., for bankrupt.
Wise, Randolph Rendall Freyer, of Shreveport, La., for opponent.
In Bankruptcy. In the Matter of Simon P. Fox, bankrupt. On review of order of referee disallowing exemptions. Affirmed.
The bankrupt in this case was a job printer, and all of his machinery, including press, equipment, etc. (except certain articles claimed as exempt), were covered by chattel mortgage or other liens which equaled or exceeded their value. Hence, in making his surrender, he listed upon his schedules that portion of the property constituting his printing business which was not so covered, and claimed it as exempt under article 644 of the Louisiana Code of Practice, which exempts from seizure "* * * tools and instruments necessary for the exercise of the trade or profession by which he gains a living. * * *" This claim was opposed by certain of the creditors "for the reason that there is no authority or warrant in law or fact for such exemption."
The referee sustained the opposition and disallowed the exemption, as disclosed by the following report:
"I, J.M. Grimmet, one of the referees of said court in bankruptcy, do hereby certify that in the course of the proceedings in said cause before me the following question arose pertinent to the said proceedings: Whether or not the bankrupt is entitled to claim as exempt certain printing fixtures and equipment, on the ground that the said equipment are tools and instruments with which the bankrupt earns a living. Your referee having decided the question adversely, application for review has been filed and allowed, and the said question is certified to the judge for his opinion thereon."
The Supreme Court of Louisiana has held that a printer falls within the class of persons contemplated by article 644 of the Code of Practice as entitled to the exemption, and that, "where it is shown that a party depends entirely upon his trade as a printer and editor for means of support, his printing press and materials necessary for the exercise of his trade are exempt from seizure under article 644, C.P." Prather v. Bobo, 15 La. Ann. 524.
Since it has been found as a fact by the referee that the property now in dispute did constitute a part of the equipment necessary for the conducting of the printing business (in which finding I concur), I am of the opinion that it would make no difference that the remainder was incumbered with liens and claims as to which the exemption would not apply. It is clear that a waiver of such exemptions as to claims carrying a privilege thereto could operate alone in favor of such claimant, and would not destroy the debtor's right to the exemption. 25 C.J. verbo "Exemptions," p. 86, § 144, subtitle "Mortgage," and authorities cited in footnote. Neither would it make any difference, in my opinion, that the bankrupt had, in his surrender, conceded the right of such privileged creditors to enforce their claims against a portion of the property. Harris v. Haynes, 30 Mich. 140; 25 C.J. p. 35, verbo "Exemptions," § 48.
However, the exemption exists only so long as the exempt property is used for the particular trade or profession, and in order to claim it I think the bankrupt should either show that it is being so used, or that it is his purpose to re-engage in the business within a reasonable time and as soon as circumstances will permit. I do not believe that it is necessary that he actually have at the time a complete establishment, as held by the referee; but, to sustain the right, he should show that he intends and has a reasonable prospect of reengaging in the trade or occupation for which the exempt property is adapted. In this case the bankrupt has made no such showing. For aught that appears, he has abandoned the trade of a job printer, and, for that reason, the exemption has ceased to operate. See authorities last cited; also McLeod v. Noble, 122 La. 714, 48 So. 161.
For the reasons stated, the finding of the referee is sustained and made the judgment of the court.