The opinion of the court was delivered by: BRUCHHAUSEN
The trustee herein petitions for a review of the order of Hon. Sherman D. Warner, Referee in Bankruptcy, dated January 12, 1959.
The Referee denied the trustee's application for the turnover of a bank deposit and incidental relief.
Max Edelman was adjudicated a bankrupt on March 17, 1958. The trustee's application for turnover originated with an order to show cause, dated June 26, 1958, returnable on July 17, 1958. The Referee reports that no evidence was submitted to him other than the petition of the trustee, attached to the order to show cause, and the answering affidavit of Annette Edelman, the wife of the bankrupt, and that the trustee did not request an opportunity to offer additional evidence.
In substance, the trustee alleged in his petition that on or about October 30, 1956, Sarah Levine, the sole creditor of the bankrupt, obtained a judgment against him for the sum of $ 8,231.04, thus rendering him insolvent; that, in his schedules, he listed no assets other than exempt life insurance policies; that at a meeting of creditors held on April 18, 1958 he testified that his wife had an account in the Long Island National Bank, wherein she deposited moneys he gave her from his income. The trustee also submitted a transcript of the account, showing that it was in the names of Annette Edelman or Helen Simon; that the balance on deposit on March 17, 1958, the date of the adjudication, was $ 213.77 and the balance therein on May 2, 1958 amounted to the sum of $ 133.67.
In the answering affidavit of said Annette Edelman, she averred that part of the money deposited belonged to her mother, Helen Simon, that the remainder came from salary earned by her husband, claimed to be exempt from execution; that the husband's salary was subject to a garnishee execution and all of the moneys had been earned during the pendency of supplementary proceedings commenced by the judgment creditor about a year and a half prior to March 17, 1958, and that she used the said sum of $ 213.77 for household needs and expenses.
It is not disputed that at the time of the trustee's application for turnover of the bank deposit, the balance amounted to $ 133.67. The evidence is in conflict as to whether all or part thereof belonged to Helen Simon. None of it was in the possession of the bankrupt. Under these circumstances, the Referee would not be warranted in summarily directing a turnover to the trustee of the balance on deposit. His ruling to that effect is upheld. See In re Brockton Ideal Shoe Co., 2 Cir., 202 F. 199.
The trustee, in addition to turnover, requested the Referee to adjudicate that the said balance was the property of the bankrupt and therefore an asset of the estate. Section 2, sub. a(11) of the Bankruptcy Act, 11 U.S.C.A. 11, sub. a(11) empowers the bankruptcy court to determine all claims of bankrupts to their exemptions.
A statutory exemption for the benefit of a family may be claimed by the wife of the bankrupt. In re Youngstrom, 8 Cir., 153 F. 98; In re Luby, D.C., 155 F. 659; In re Maxson, D.C., 170 F. 356; In re Burnham, D.C., 202 F. 762.
It is not disputed that the excess, if any, of the moneys on deposit over and above the part belonging to Helen Simon, represented salary of the bankrupt turned over by him to his wife.
The Referee held such salary was exempt under Section 684 of the New York Civil Practice Act. That section permits a judgment creditor to garnishee ten percent of a debtor's salary. Such a garnishee was in effect at the time of the adjudication of bankruptcy herein. The Referee ruled that the remaining ninety percent was exempt.
Section 684 of the said Act permits as judgment debtor to garnishee the salary of a debtor to the extent of ten percent thereof. The section makes no reference to the disposition of the remaining ninety percent of salary. However, Section 793 does provide the creditor with a remedy leading to a possible application of the said remaining salary towards liquidation of the judgment. It authorizes a judgment creditor to apply for a court order, directing the payment to him in installments of the debtor's income, however and whenever earned and acquired, as the Court in its discretion may deem proper provided however that the Court in determining whether such installments should be ordered shall take into consideration the following factors, viz.:
1. The reasonable requirements of the judgment debtor and his family, if dependent upon him.
2. The ten percent payments, provided for in Section 684.
It is apparent under Section 793 that the question of the disposition of the debtor's remaining ninety percent of salary is not determinable until such time as the issue is raised and the Court has evidence presented to it as to the amount thereof reasonably required for the debtor and his family. The amount, if ...