U.S. Supreme Court
Smalley v. Laugenour, 196 U.S. 93 (1905)
Smalley v. Laugenour
Submitted November 28, 1904
Decided January 3, 1905
196 U.S. 93
The rights of a bankrupt to exempt property are those given by the statutes of the states, and if such exempt property is not subject to levy and sale under those statutes, it cannot be made to respond under the federal Bankrupt Act.
A creditor may contest the bankrupt's claim to exemption in the bankruptcy court, or may invoke the supervision and revision of the circuit court of appeals, but, failing to do that, cannot, unless the order setting the bankrupt's exemption apart be absolutely void, question its validity in another proceeding in the state court.
Nor can the judgment of the state court following the order of the bankruptcy court and giving effect to the exemption be reviewed by this Court on writ of error under § 709, Rev.Stat., on the ground that plaintiff in error was denied a title, right, privilege or immunity, under the Constitution or authority of the United States specially set up or claimed in the state court.
This was an action of ejectment commenced in the Superior Court of Lincoln County, Washington, by A. F. Smalley and F. McLellan against George F. Laugenour and Jane Laugenour (with two others, who subsequently ceased to be parties), to recover possession of certain real estate situated in that county. chanroblesvirtualawlibrary
The action was tried by the court without a jury, which filed findings of fact and conclusions of law and rendered judgment for plaintiffs, whereupon defendants Laugenour carried the case by appeal to the Supreme Court of Washington. The judgment was there reversed and the cause remanded with directions to enter judgment for appellants, defendants below. 30 Wash. 307. This writ of error was then brought.
The facts were stated by that court in brief as follows:
"The appellants are husband and wife, and acquired the land in controversy as early as the year 1885. On March 16, 1895, the respondents and one L.J. Hutchings, as partners, recovered a judgment in the Superior Court of Lincoln County on a community debt against the appellant Geo. F. Laugenour for the sum of $363.45. On April 12, 1899, execution was issued on the judgment and levied on the land mentioned, under which, after due advertisement, it was sold at public auction to the respondents for the sum of $532.15, being the amount then due on the judgment. Thereafter the sale was confirmed by the court, and after the time for redemption had expired, a sheriff's deed was executed and delivered to the purchasers, which they caused to be recorded. On May 10, 1899, three days before the execution sale took place, the appellant Geo. F. Laugenour filed in the United States District Court for the District of Washington his voluntary petition in bankruptcy, in the schedule to which he listed the land in controversy, claiming the same as exempt under the Bankruptcy Act. On May 11, 1899, the referee in bankruptcy, to whom the proceedings had been referred, adjudged the petitioner a bankrupt, and thereupon gave to the creditors of the bankrupt shown in the schedule attached to the petition, among whom were the respondents, the formal notice required by the Bankruptcy Act, notifying them of the adjudication of bankruptcy, of the time and place fixed for the first meeting of the creditors, that they might attend at such meeting, prove their claims, examine the bankrupt, and transact such other business as should properly come before the
meeting. None of the creditors appeared at the time fixed for the meeting -- viz., June 5, 1899 -- and no trustee was elected or appointed, the referee finding that no necessity existed therefor. On August 9, 1899, the bankruptcy court entered an order discharging the bankrupt from all debts and claims made provable against the bankrupt's estate, and, on August 12,"
"regularly made an order in said bankruptcy proceedings, setting aside to said bankrupt, as exempt under the act of Congress relating to bankruptcy, the real estate hereinbefore described, and awarding said real estate to the said bankrupt."
"The court further found that, since the execution sale, the appellants had been in possession of the real estate, claiming to be the owners of the same, and for several years last past had resided in Spokane County, Washington, and that the real property, during the time, had been occupied by the defendant Harry Gilliland as their tenant. On the facts so found, it ruled that the respondents were the owners and entitled to the possession of the premises, and entered judgment accordingly."