Petition — Crist v. Crist

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Office-Supreme Court, US

FILED

SDSS x

No. ~ MAR 17 1981

CLERK

In the Supreme Court of the United States

October Term, 1980

In the Matter of James F. CRIST, JR.,

Debtor,

James F. CRIST, Jr., Debtor, in

possession, Appellant,

Petitioner,

vs.

Jane S. CRIST, Appellee,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

JOHN M. SIKES, JR.

(Counsel of Record)

MACEY & ZUSMANN

JAMES W. PENLAND

Docketed: THOMAS D. RICHARDSON

1795 Peachtree Road

Atlanta, Georgia 30367

(404) 897-7200

In the Supreme Court of the United States

October Term, 1980

In the Matter of James F. CRIST, JR.,

Debtor,

James F. CRIST, Jr., Debtor, in

possession, Appellant,

Petitioner,

vs.

Jane S. CRIST, Appellee,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

JOHN M. SIKES, JR.

(Counsel of Record)

MACEY & ZUSMANN

JAMES W. PENLAND

Docketed: THOMAS D. RICHARDSON

1795 Peachtree Road

Atlanta, Georgia 30367

(404) 897-7200

QUESTIONS PRESENTED

Where the Court of Appeals held that, by

providing the benefits of dischargeability

for alimony owed by wives, but not that

owed by husbands, Section 17a(7) of the

Bankruptcy Act of 1898 (former 11 U.S.C.

§ 35a(7)) violated the equal protection

component of the due process clause of the

Fifth Amendment, did it err:

(i) by refusing to declare same a

nullity?

(2) by extending the burden of

nondischargeability to wives who were

never intended to be burdened by the

statute?

(3) by refusing the husband the

benefit of dischargeability which is

available to wives.

PARTIES

The caption of the case does not contain

the names of all parties inasmuch as the

Court of Appeals consolidated two separate

actions on appeal. The second action is

In the Matter of Frederick H. PINKERTON,

Jr., Bankrupt, Frederick H. PINKERTON,

Jr., Appellant vs. Betty Jane PINKERTON,

Appellee.

III

TABLE OF CONTENTS

- QUESTIONS PRESENTED......--++++++- I

OPINIONS BELOW. .... cc cccvccccveces 1

JURISDICTION. . cc cccceceseccsessvves 2

STATUTES AND RULES INVOLVED....... 3

STATEMENT UNDER RULE 28(bD)........- 3

STATEMENT OF THE CASE......---+ee--s +

pS ee ee ee ee oe ee 8

oe el) ls ae ee ee a ee ee 21

APPENDIX --

Opinion of the Fifth Circuit.... Al

Order of the District Court..... A37

Judgment of the District Court... A55

Opinion and Order of the

Bankruptcy Court......cecrsececs A57

Section Seventeen a. of the

Bankruptcy Act of 1898 (former

OF Viet. © BOO h ss & 0:0 0s 68 ee ew A75

TABLE OF AUTHORITIES

CASES

Califano v. Goldfarb,

Rt UY PED, nn kk cw cece. 13

Califano v. Westcott,

443 U.S. 76 (1979).... 3, 12-15, 17-18

Gomez v. Perez,

404 U.S. 535 | SEE ae 3, 14-15

In re Baird, 4 BCD 926

(U.S. Bankr. Ct. S.D.Fla. 1978)..... 9

In re Crist, 632 F.2d 1226 (1980)..... 1

In re Crist, 460 F.Supp. 891

(N.D.Ga. 1978)................005... 2

In re Kelly, 4 BCD 648

(U.S. Bankr. Ct. M.D.Tenn. 1978).... 9

In re O'Bryan, 5 BCD 946

(U.S. Bankr. Ct. W.D.Ky. 1979)...... 9

In re Stimson, 4 BCD 441

(U.S. Bankr. Ct. D.Colo 1978)....... 3

In re Wasserman, CCH Bankr. L. Rep.

1 66,471; 3 BCD 467 (U.S. Bankr. Ct.

ES UMP E DS pac cweccccecccececece, 9

Kalina v. Railroad Retirement Board,

5941 F.2d 1204, aff'd men. 431 U.S.

NN Ch Gh a dab ceeeececcecee 16-17

Weinberger v. Wiesenfeld,

I ys) ee 13

Welsh v. United States,

- 398 U.S. 333 (1970).. 3, 12, 14-16, 20

Wengler v. Druggists Mut. Ins. Co.,

et Cr SAMS ees c cb sc ce secees 13

Wetmore v. Markoe,

US ae CS eee ll, 14

OTHER AUTHORITIES

Fifth Amendment of the

United States Constitution..... passim

rn ee Wetee. © ZLACB)(T2).... 00. 7-8

Peewee 22 U.8.C. § 35a(7).. cc oce. passim

A > & Serre 7-8

EE eee 7-8

POE URS soca ccc cc cece ssc ccrceces 4

EG ee 2

eee 4

ES eee 17

EE 2 eee 16

Supreme Court Rule 17.1l(a), (c)....... 2

Votoloto, A Review of Recent Equal

Protection Challenges to the

Dischargeability-of-Alimony

Provision of Section 17a(7) of

the Bankruptcy Act, 13 SUFFOLK

meee e mee Ms «BUDO (1979)... we ccc cees 9

No.

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1980

In the Matter of JAMES F. CRIST, JR.,

Debtor,

James F. CRIST, Jr., Debtor, in

possession, Appellant, Petitioner,

vs.

JANE S. CRIST, Appellee,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

OPINIONS BELOW

The opinion of the United States Court

of Appeals for the Fifth Circuit is report-

ed at 632 F.2d 1226 (1980), and is repro-

duced at pages Al-A36 of the Appendix.

The Opinion and Order of the District

Court is reported at 460 F.Supp. 891 (N.D.

Ga. 1978) and is reproduced at pages A37-

AS5S6 of the Appendix. The Opinion and

Order of the Bankruptcy Court was not

officially reported and is reproduced at

pages A57-A74 of the Appendix.

JURISDICTION

The Court of Appeals' decision sought to

be reviewed herein was dated and entered

on December 17, 1980. Accordingly, the

instant Petition is timely. The jurisdic-

tion of this Court is invoked under 28

U.S.C. Section 1254(1).

The Court of Appeals' decision on which

this Petition is taken is appropriate for

review on certiorari under Supreme Court

Rule 17.1(a) and (c) in that: the Court

of Appeals has declared a federal statute

unconstitutional but has attempted to

remedy the constitutional defect in a

manner which is in direct conflict with

the directions of the Supreme Court for

applying remedies to defective statutes.

Welsh v. United States, 398 U.S. 333

(1970); Gomez v. Perez, 404 U.S. 535

(1973) and Califano v. Westcott, 443 U.S.

76 (1979).

STATUTES AND RULES INVOLVED

Section 17a(7) of the Bankruptcy Act of

1898, 11 U.S.C. § 35a(7) provides in

pertinent part:

A discharge in bankruptcy shall re-

lease a bankrupt from all of his

provable debts, whether allowable in

full or in part, except such as

are for alimony due or to become due,

or for maintenance or support of

wife....

(Section 17(a) is set out in its entirety

at pages A75-A78 of the Appendix. )

STATEMENT UNDER RULE 28(b)

Since the proceeding draws into question

the constitutionality of Section 17a(7) of

the Bankruptcy Act of 1898 (former 11

U.S.C. § 35a(7)), an Act of Congress

affecting the public interest, and neither

the United States, nor any agency, officer

or employee thereof is a party, it is

noted that 28 U.S.C. § 2403(a) may be

applicable. No Court of the United States

as defined by 28 U.S.C. § 451 has, pursuant

to 28 U.S.C. § 2403(a), certified to the

Attorney General the fact that the consti-

tutionality of such Act of Congress has

been drawn in question.

On February 24, 1978 the United States

moved to intervene in the Bankruptcy Court

pursuant to 28 U.S.C. § 2403; the Motion

was granted the same day; the intervenor

withdrew the intervention on May 9, 1978.

STATEMENT OF THE CASE

Jane S. and James F. Crist were granted

a divorce by a Georgia court on March 4,

1977. The parties executed a separation

agreement, incorporated into the divorce

decree, providing that the husband would

pay the wife $30,000 in a lump sum upon

the sale of their house, or in installments

which were to be completed by March 1978.

James Crist further agreed to pay Jane

Crist: as alimony, the sum of $350 per

month until the aforementioned $30,000 was

paid in full: $5,000 for attorney's fees

she had incurred; and $350 per month for

the support of their minor daughter. Both

the $30,000 and $5,000 obligations were

evidenced by promissory notes. Crist

secured these obligations by executing a

deed to the house which transferred a

security interest to his former wife. He

also agreed to transfer certain personal

effects, including home furnishings and an

automobile.

James Crist paid $7,500 in March 1977,

$2,500 of which was in payment on the

$5,000 attorney fee commitment with the

remainder applicable to the $30,000 note.

In April 1977, he paid $2,500 on the

$30,000 note. During the months of April

and May, 1977, he paid the monthly alimony

stipends of $350.

James Crist made no payments after the

May 1977 alimony installment. He filed a

Chapter XII bankruptcy petition in July

1977. The instant proceeding was filed as

an adversary proceeding to determine the

dischargeability of Crist's obligation to

his wife prior to filing a Plan of Arrange-

ment under Chapter XII. The constitutional

issue of the dischargeability of the

obligations due Jane Crist under Section

17a(7) was presented to the Bankruptcy

Court, which ruled that none of the above

listed obligations were dischargeable.

The Bankruptcy Court found a balance of

$22,500 due on the $30,000 note $2,500 due

on the $5,000 attorney's fee note and an

accrued arrearage on the $350 monthly

alimony payments, through February 1978,

of $3,150, and concluded that Section

17a(7) was constitutional and proscribed a

discharge of any of these debts as all

were alimentary obligations.

The District Court affirmed the bankrupt-

cy court's decision upholding the constitu-

tionality of Section 17a(7). On appeal

the Court of Appeals reversed the District

Court and found Section 17a(7) unconstitu-

tional. Instead of nullifying the statute,

it formulated a remedy, the result of

which denied discharge of the debt. The

Petition seeks review of the formulation

of the remedy, given the prior finding

that the statute is unconstitutional.

Federal jurisdiction in the court of

first instance was based upon Sections

2(a)(12), 411 and 452 of the Bankruptcy

Act of 1898, formerly 11 U.S.C. §§ 11(a)

(12), 811 and 852.

ARGUMENT

In the case below, the Fifth Circuit

properly declared Section 17a(7) of the

Bankruptcy Act of 1898 (former 11 U.S.C.

§ 35a(7)) unconstitutional because it

violated the equal protection component of

the Due Process Clause of the Fifth Amend-

ment. The Fifth Circuit then sought to

avoid the effect of holding Section 17a(7)

unconstitutional by formulating a remedy

which left the statute operable notwith-

standing its unconstitutionality, and at

the same time defeated the legislative

purpose.? The Court erred by its

1. The issue of the constitutionality of

Section 17a(7) has recently been the subject of

much judicial scrutiny with a variety of con-

flicting decisions and remedial approaches.

In re Wasserman, CCH Bankr. L. Rep. 7 66,471, 3

remedying Section 17a(7)'s constitutional

defect by extending the burdens placed by

the statute upon men to women and by

denying men the benefits of discharge

given to women by the stc tute.

Section 17a(7) discriminates on the

basis of gender because it is underinclu-

Sive. A statute conferring a benefit is

"“underinclusive" if it excludes from

benefits those persons who, but for the

BCD 467 (U.S. Bankr. Ct., D. R.I. 1977) (found

Section 17a(7) unconstitutional and extended

benefit of discharge to husband); In re O'Bryan, 5

BCD 946 (U.S. Bankr. Ct., W.D.Ky. 1979)( found

Section 17a(7) unconstitutional and extended

benefit of discharge to husband); In re Baird, 4

BCD 926 (U.S. Bankr. Ct., S.D.Fla. 1978)(upholding

constitutionality of Section 17a(7) but reading

statute gender neutral and implying nondischarge-

ability of alimony payable by wife in dicta); In

re Kelly, 4 BCD 648 (U.S. Bankr. Ct., M.D. Tenn.

1978)(upholding constitutionality of Section

17a(7) under important governmental objective

test); In re Stimson, 4 BCD 441 (U.S. Bankr. Ct.

D.Colo. 1978) (upholding constitutionality of

Section 17a(7) reading "wife" to mean "spouse" and

rendering statute gender neutral); Votoloto,

A Review of Recent Equal Protection Challenges to

the Dischargeability-of-Alimony provision of Section

17a(7) of the Bankruptcy Act, 13 Suffolk Univ. L.

Rev. 506 (1979).

statute's classification, would have been

entitled to them. Discharge of an alimony

obligation is always like a two-edged

sword. Alimony is a private burden on the

payor and a private benefit on the payee.

Thus, while there are benefits under

Section 17a(7), there are also burdens.

The benefits are inseparable from the

burdens. Section 17a(7) is underinclusive

because it allows a wife to discharge her

alimony obligations owing to a husband

while it denies that same benefit of

discharge to a similarly situated husband.

Section 17a(7) prevents husbands from

discharging alimony obligations owed to

wives. It also denies protection to

husbands receiving alimony from having the

alimony owed them discharged by wives.

Under the operation of Section 17a(7),

wives always benefited and husbands were

always burdened. The difference in treat-

ment is purely gender based.

The legislative purpose of Section

17a(7) was to protect wives from losing

their alimony benefits upon bankruptcy of

their husbands, whether or not dependent,

and to provide that wives in bankruptcy

may escape any alimony obligations they

may have and thereby to obtain a fresh

start without regard to their husband's

dependency. The legislative purpose was

reviewed by the Fifth Circuit below at 632

F.2d 1232 in a quote from Wetmore v. Markoe,

196 U.S. 68, 7/7:

[T]he bankruptcy law should receive

such an interpretation as will effec-

tuate its beneficient purposes, and

not make it an instrument to deprive

dependent wife and children of the

Support and maintenance due them from

the husband and father, which it has

ever been the purpose of the law to

enforce.

The Fifth Circuit found this legisla-

tive purpose to be discriminatory and thus

declared the statute unconstitutional in

the case below.

The Supreme Court has established the

appropriate remedy to be followed by a

court which finds a constitutional defect

in a statute resulting from a denial of

equal protection. In Welsh v. United

States, 398 U.S. 333, 361 (1970), and in

Califano v. Westcott, 99 S.Ct. 2655, 2663

(1979)

Where a statute is defective because

of underinclusiveness ... there

exists two remedial alternatives: a

court may either declare [the statute]

a nullity and order that its benefit

not extend to the class that the

legislature intended to benefit, or

it may extend the coverage of the

statute to include those who are

aggrieved by the exclusion. [This

rule will hereinafter be referred to

as the "Welsh/Westcott" rule. ]

After declaring Section 17a(7) uncon-

stitutional for gender-based discrimination,

the Fifth Circuit, in formulating a remedy

to the statute's defects, applied a cor-

rupted version of the Welsh/Westcott rule

which fully ignored Section 17a(7)'s

legislative purpose. The Fifth Circuit

stated its remedial approach to the rule

as follows:

The remaining qu’ 3;tion is whether to

declare the entire subsection a

nullity and deny its benefits to both

groups, or to extend its coverage and

provide equal benefits to both groups.

We opt for the latter, following the

path blazed by the Supreme Court in,

inter alia, Califano v. Westcott,

supra, Califano v. Goldfarb, supra,

Weinberger v. Wiesenfeld, supra, and

Wengler v. Druggists Mut. Ins. Co.,

Supra

We conclude that the proper

remedy in the case at bar is to

extend the benefits of § 17(a)(7) to

the excluded class. Accordingly,

either a husband or wife receiving

alimony or maintenance or support may

assert the nondischargeability of the

obligation under § 17(a)(7).

While the Fifth Circuit "opted for

the latter," in fact, they did the "former,"

that is, they effectively denied the

statute's benefits of discharge and fresh

start to both groups. The Fifth Circuit

failed to recognize that in this situation

for every benefit there is a corresponding

burden. By extending the benefit of

protection from discharge to a husband

receiving alimony, maintenance or support,

the Fifth Circuit removed a woman's right

to discharge her debts such as are for

alimony due or to become due, or for the

maintenance wr support of husband which

are accorded her under the plain language

of the statute.

The operation of the Fifth Circuit's

remedy is in direct conflict with the

stated legislative purposes of Section

17a(7) as set forth in Wetmore v. Markoe.

By “opting for the latter" and doing the

"former," the Fifth Circuit has misapplied

the remedial procedures set out by the

Supreme Court in Welsh, supra, Westcott,

supra, and their progeny.”

2. In Gomez v. Perez, 409 U.S. 535 (1973) the

Supreme Court invalidated a Texas statute which

denied illegitimate children the right to support

from their natural fathers. If the Fifth Cir-

cuit's approach in Crist of extending petitioner's

The Welsh/Westcott rule relies heavily

on a close scrutiny of the legislative

intent supporting a defective statute in

formulating a remedy. The Supreme Court

has emphasized that in choosing a remedy

for a statute defective for underinclusive-

ness, a court should attempt to accommodate

as fully as possible the policies and

judgments expressed in the statutory

scheme, and a court should not use its

remedial powers to circumvent the intent

burden of parental non-support to all

similiarly situated children had been

applied in Gomez, the result would have been the

denial of the right to support for all children

from their natural fathers.

In Welsh v. United States, supra, the court had

the alternative of either extending the burden of

military service to all persons who conscientiously

objected to military service upon religious grounds

or of extending the benefit of conscientious

objector status to petitioner, and allowing him

exemption from military service. Had the court

adopted the "extension of burden" remedy followed

by the Crist court, the result in Welsh would have

been a denial of conscientious objector status to

everyone. Such a decision would have cured the

equal protection defect, but it would have totally

defeated Congress' purpose of protecting freedom

of conscience.

of the legislature. Under no circumstances

should the remedy of extension of benefits

be applied to defeat the legislative

purpose of the defective provision.

In Kalina v. Railroad Retirement Board,

941 F.2d 1204, aff'd mem., 431 U.S. 909

(1977) the Supreme Court adopted the Sixth

Circuit's declaration that Section 2(f) of

the Railroad Retirement Act of 1937 was

void on the grounds of violation of the

equal protection con»onent of the Fifth

Amendment resulting from sex discrimination.

The Sixth Circuit found the statute to be

defective because it was underinclusive.

Under the Welsh test, the Court had the

alternative of extending the benefits of

the Retirement Act to male spouses without

regard to proof of dependency on the same

terms as applied to female spouses, or to

require that female spouses meet the same

dependency test that were required for

male spouses. The Court refused to extend

the burden of requiring widows to prove

dependency stating:

This result would be contrary to the

considered decision of Congress that

spouses of male railroad workers are

to be conclusively presumed dependent.

And courts cannot disregard directions

of Congress so long as they are

constitutional. It would incongruous

if in adopting a remedy for a consti-

tutional violation by the legislature

we were to engage in improper judicial

conduct.

Id., 541 F.2d at 1210.

In Califano v. Westcott, supra, the

Supreme Court affirmed the District

Court's holding that Section 407 of the

Social Security Act (42 U.S.C. § 607),

which provided benefits to families whose

dependent children were deprived of

parental support because of the unemploy-

ment of the father, but did not provide

for children deprived of parental support

because of the unemployment of the mother,

was violative of the Due Process Clause of

the Fifth Amendment because it discrimina-

ted on the basis of gender. The course of

action adopted by the Court in remedying

the underinclusive statute was to extend

the benefits to families in which either

the mother or father was unemployed. Ina

part concurring, part dissenting opinion,

Justice Powell, joined by the Chief

Justice, Justice Stewart and Justice

Rehnquist, agreed that Section 407 of the

Social Security Act was violative of the

equal protection component of the Fifth

Amendment, but disagreed with the remedy

of extension of benefits. Justice Powell

stated that this "extension [of benefits]

reinstates a system of distributing benefits

that Congress rejected when it amended

Section 407 in 1968. Rather than frustrate

the clear intent of Congress, the Court

simply should have enjoined any further

payment of benefits under the provision

found to be unconstitutional." Califano v.

Westcott, supra, 99 S.Ct. at 2666. Further-

more, Justice Powell stated "Rather than

thus rewriting § 407, we should leave this

task to Congress.... We cannot assume

that Congress in 1968 would have approved

this extension if it had known that ulti-

mately payments would be made whenever

either parent became unemployed." Id.

In casting its remedy for the constitu-

tional defects of Section 17a(7) by denying

wives a fresh start in bankruptcy and by

protecting men from a discharge of alimony

payments due them from wives who are in

bankruptcy, the Fifth Circuit has perverted

the clear purpose of Section 17a(7) which

is plainly to favor women over men.

Section 17a(7) was never intended to

protect similarly situated men. The

Court's decision is a “lateral step" that

robs the legislation of its meaning in

order to avert the collision between its

plainly intended purpose and the commands

of the Constitution. See Welsh v. United

States, supra, 398 U.S. at 354 (Justice

Harlan concurring).

It is thus clear that in ignoring the

legislative purpose of Section 17a(7) and

creating a new statute out of whole cloth,

the Fifth Circuit's remedy is improper.

In this circumstance, the proper remedy,

considering the legislative purpose of the

act, is to declare the entire section a

nullity and to extend the benefit of

discharge in bankruptcy of alimony obliga-

tions to include men as well as women.

A complete statement of the remedy

for underinclusive statutes can be

stated. Where a statute is defective

because of underinclusiveness there are

two remedial alternatives: a court may

either declare it a nullity and order that

its benefits not extend to the class that

the legislature intended to benefit, or a

Court may extend the coverage of the

statute to include those who are aggrieved

by the exclusion. But in either case, the

exclusion or the extension of benefits

must not contravene the clear purpose and

intent of the legislature. If a remedy

consistent with the legislative intent

cannot be cast, then the statute must

Simply be declared void.

Under this test the only remedy that

can be applied to the defects of Section

17a(7) is to declare the section void and

a nullity and thereby extend the benefit

of discharge in bankruptcy to husbands as

well as wives.

CONCLUSION

The Petition for a Writ of Certiorari

should be granted.

Respectfully submitted,

JOHN M. SIKES, JR.

(Counsel of Record)

MACEY & ZUSMANN

1795 Peachtree Road

Atlanta, Georgia 30367

(404) 897-7200

APPENDIX

Nos. 78-3575, 79-1114.

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT.

In the Matter of James F. CRIST, JR.,

Debtor.

James F. CRIST, Jr., Debtor, in

possession, Appellant,

Vv.

Jane S. CRIST, Appellee.

In the Matter of Frederick H. PINKERTON,

Jr., Bankrupt.

Frederick H. PINKERTON, Jr.,

Appellant,

Vv.

Betty Jane PINKERTON, Appellee.

Decided and Filed December 17, 1980.

James W. Penland, Atlanta, Ga., for James F.

Crist, Jr.

Charles A. Ratz, Atlanta, Ga., for Jane S.

Crist.

T. Brian Glass, Wilbur T. Fitzgerald, Atlanta,

Ga., for Frederick H. Pinkerton, Jr.

Joseph J. Burton, Jr., Atlanta, Ga., for

Betty Jane Pinkerton.

Appeals from the United States Dis-

trict Court for the Northern District of

Georgia.

Before RUBIN and POLITZ, Circuit

Judges, and POINTER*, District Judge.

POLITZ, Circuit Judge:

These cases were consolidated on appeal

because both concern, inter alia, the

constitutionality of § 17(a)(7) of the

Bankruptcy Act of 1898, codified in 11

U.S.C. § 35(a)(7), which was modified and

* District Judge of the Northern District of

Alabama, sitting by designation.

replaced subsequent to this suit by the

Bankruptcy Reform Act of 4978, 12 U.S.C. %

523(a)(5). In each case the district

court affirmed findings by the bankruptcy

judge that the debts involved were non-

Sinners alimony obligations. For

the reasons assigned, we affirm the

decision of the district court in each

case.

A. The Pinkertons

Betty Jane and Frederick H. Pinkerton

were married in Miami, Florida in 1948 and

had three children prior to being divorced

there in 1969. The Florida divorce decree

incorporated two agreements. The first,

dated March 1, 1968, required the husband

to provide the wife with periodic support

and maintenance Payments which were sub-

ject to increase if the husband's income

increased and were to terminate upon the

Wife's remarriage. This agreement also

contained provisions for Support of the

Pparties' three children. The second accord,

executed on July 11, 1969, reaffirmed the

first agreement and provided for a payment

of $35,000 in case as "full and final

settlement and division of property between

husband and wife." Frederick Pinkerton

paid the $35,000, moved to Georgia and

later remarried. Subsequently, Betty Jane

Pinkerton filed suit in Georgia alleging

that her former husband had fallen into

arrears, totalling $13,000, under the

alimony and child support provisions of

the March 1968 accord. That litigation

was settled on May 21, 1975, by a compro-

mise agreement which expressly superseded

all prior agreements. The compromise pro-

vided for the lump sum payment of $10,000

for the alimony and child support arrear-

age, and the delivery of a promissory note

for $30,000 payable in 36 monthly instal-

lments of $833.33. The note provided

penalities for default, specifically ac-

celeration of the unpaid balance, 8%

inter

settl

est and attorney's fees. The 1975

ement agreement further provided:

The aforesaid promissory note of

$30,000 being delivered to the wife

as full and final settlement of any

and all claims for any and all al-

imony, support, and all other bene-

fits, rights and privileges to which

the wife is now entitled, has been

entitled, and may or will be entitled

to in the future by virtue of the

former Agreements of the parties.

Said note represents full, final and

absolute settlement of all benefits

due the wife under the aforesaid

Agreements and Decree of Divorce.

June 1975, the Florida court approved

the compromise settlement, amended the

Pinkertons' divorce decree to include the

new accord, and adopted a stipulation of

the parties which delared, in pertinent

part:

[T]he [settlement] Agreement of May

21, 1975 [is] a true and accurate

reflection of [the Pinkertons'] in-

tentions as to alimony and other

property dispositions to which they

have agreed, and that said Agreement

is executed pursuant to paragraph 15

of their, original Agreement of March

1, 1968.

Frederick Pinkerton initially complied

with the 1975 agreement by making the

$10,000 payment and four monthly payments.

He thereafter defaulted and filed a volun-

tary petition in bankruptcy, listing as a

debt, for which he sought a discharge, the

balance on the $30,000 note. Betty Jane

Pinkerton was granted a Summary judgment

accelerating the principal balance due,

plus interest, but was denied attorney's

fees, without prejudice, pending final

disposition of the debt--discharge issue.

The bankruptcy judge opined that § 17(a)(7)

precluded a discharge of the alimony

obligation; the district court affirmed

this conclusion.

1. Paragraph 15 of the March 1, 1968 agreement,

which established the alimony and child support

schedules, stated: "No modification or waiver of

any of the terms of this agreement shall be valid

unless in writing and executed with the same for-

mality as this agreement."

On appeal, Frederick Pinkerton poses two

alternative theories in Support of his

Claim of entitlement to a discharge.

First, he insists that the non-discharge

Provisions of § 17(a)(7) are inapplicable

to his situation because the May 1975

agreement involved a property settlement

and not alimony. Second, he asserts that

§ 17(a)(7) creates an impermissible gender-

based classification which is violative of

the due process clause of the Fifth Amend-

ment. We discuss these contentions in

Parts I, II and III below.

B. The Crists

Jane S. and James F. Crist were granted

a divorce by a Georgia court on March 4,

1977. The parties executed a separation

agreement, incorporated into the divorce

decree, providing that the husband would

pay the wife $30,000 ina lump sum upon

the sale of their house, or in installments

which were to be completed by March 1978.

James Crist further agreed to pay Jane

Crist: as alimony, the sum of $350 per

month until the aforementioned $30,000 was

paid in full; $5,000 for attorney's fees

she had incurred; and $350 per month for

the support of their minor daughter. Both

the $30,000 and $5,000 obligations were

evidenced by promissory notes. Crist

secured these obligations by executing a

deed to the house which transferred a

security interest to his former wife. He

also agreed to transfer certain personal

effects, including home furnishings and an

automobile.

James Crist paid $7,500 in March 1977,

$2,500 of which was in payment on the

$5,000 attorney fee commitment with the

remainder applicable to the $30,000 note.

In April 1977, he paid $2,500 on the

$30,000 note. During the months of April

and May, 1977, he paid the monthly alimony

stipends of $350.

James Crist made no payments after the May

1977 alimony installment. He filed a

bankruptcy petition in July 1977. The

issue of the dischargeability of the

obligations due Jane Crist was presented

to the bankruptcy court, which ruled that

none of the above listed obligations were

dischargeable. The bankruptcy court found

a balance of $22,500 due on the $30,000

note, $2,500 due on the $5,000 attorney's

fee note and an accrued arrearage on the

$350 monthly alimony payments, through

February 1978, of $3,150, and concluded

that § 17(a)(7) proscribed a discharge of

any of these debts as all were alimentary

obligations. The bankruptcy court rejected

the contention that § 17(a)(7) created a

gender classification inconsistent with

the Fifth Amendment and the contention

that the obligations at issue constituted

a voidable preference under § 60 of the

Al0

Bankruptcy Act, 11 U.S.C. § 96. The

district court, 460 F.Supp. 891, affirmed.

On appeal, James Crist asserts the same

Fifth Amendment and voidable preference

arguments that were presented to the bank-

ruptcy court. We discuss these contentions

in Parts III and IV below.

Part I: Alimony or Property Settlement

Two tribunals, the bankruptcy court and

the district court, have Classified the

Pinkertons’ May 1975 agreement as an al-

lmony accord. Under the relevant standard

of review, findings of fact are not to be

disturbed unless Clearly erroneous. "The

test ... is not whether a different

conclusion from the evidence would be

appropriate, but whether there is sufficient

evidence in the recored to [reflect] clear

error in the trial judge's findings."

Matter of Bardwell, 610 F.2d 228, 230 (5th

Cir. 1980). Frederick Pinkerton insists

that the facts in the record Support his

All

position with the force and urgency required

by this standard. Characterization of the

$30,000 note as a property settlement un-

questionably would make it a dischargeable

debt, not subject to § 17(a)(7), which

provides in relevant part:

A discharge in bankruptcy shall re-

lease a bankrupt from all of his

Provable debts, whether allowable in

full or in part, except such as

are for alimony due or to become due,

Or for maintenance or Support of wife

Or child

Resolution of this issue requires a

determination of the intention of the

parties, as reflected by the substance of

the agreement, viewed in the Crucible of

Surrounding circumstances as illuminated

by applicable state law. In re Nunnally,

906 F.2d 1024, 1027 (Sth Cir. 1975);

In re Smith, 436 F.Supp. 469, 476 (N.D.Ga.

1977); Golden v. Golden, 411 F.Supp. 1076,

1078 (S.D.N.Y.), aff'd, 535 F.2d 213 (2d

Cir. 1976).

Several facts convince us that the Pink-

ertons intended the May 1975 compromise to

Al2

constitute an amended alimony agreement

rather than a property settlement. The

July 1969 agreement stated that "the hus-

band agrees to pay the wife as full and

final settlement and division of property

between the husband and the wife, the sum

of Thirty-Five Thousand ($35,000.00) Dol-

lars cash." (Emphasis added. ) Upon pay-

ment of this amount, the property settle-

ment was complete. Before addressing the

substantive alimony provisions, including

the terms of the $30,000 note, the May

1975 agreement declared that "the parties

are desirous of reforming and revising

Said Agreements and wish to modify same as

provided for in paragraph 15 of said

Agreement of March 1, 1968." Moreover,

the stipulation between the Pinkertons

attested to the fact that the May 1975

accord was "executed pursuant to paragraph

15 of their original Agreement of March Ra

1968."

The March 1968 agreement involved alimony

Al3

and child support. The July 1969 instru-

ment related to the property settlement,

was concluded and no longer executory

when, in May 1975, the alimony arrearage

litigation was compromised and settled.

The evidence is overwhelming that the

$30,000 note Frederick Pinkerton signed

and delivered to Betty Jane Pinkerton

related to his alimony obligation and was

not a part of a property partition.

Reference to Florida law, as appropri-

ately made by the district court, confirms

this analysis and characterization of the

$30,000 note. When disposition of a fed-

eral question requires reference to state

law, federal courts are not bound by the

forum state's choice of law rules, but are

free to apply the law considered relevant

to the pending controversy. 1A Moore's Fed-

eral Practice 4 0.325 (2d ed. 1979).

Numerous factors support the reference to

Florida law. The Pinkertons were married

Al4

in Florida, resided in Florida and were

divorced in Florida. The 1968, 1969 and

1975 agreements

were all submitted to the Florida court

for approval and inclusion in the Florida

divorce decree. The 1975 compromise arose

out of litigation looking to the declara-

tion and collection of an arrearage in al-

imony and child support accruing under the

1968 court-approved alimony and support

agreement.

In the context of divorce decree modifica-

tion disputes, Florida courts "are concerned

with the substance and not the form of the

payments." Fagan v. Lewis, 374 So.2d 18,

20 (Fla.App. 1979). Accord, White v. White,

338 So.2d 883 (Fla.App. 1976). That the

parties may designate payments “alimony"

does not necessarily make the payments

alimony from a legal standpoint. The

opposite must necessarily follow: that

one or both parties might label a payment

something other than alimony will not

Al5

change its character if indeed from the

substance of the Payment it is clearly

alimony. The $30,000 note is evidence of

Frederick Pinkerton's obligation to pay

alimony to Betty Jane Pinkerton and, as

such, comes under the aegis of § 17(a)(7).

Part II: Interest and Attorney's Fees

The May 1975 note contained the following

provision:

{[I]n the event any one of the

aforesaid thirty-six (36) installments

is not made within ten (10) days of

the date it is due, then upon written

notice to the undersigned and his

failure to tender said payment within

seven (7) days, the Holder of this

Note shall have the right to declare

the remaining unpaid installments

due, and the right of action on all

unpaid installments for principal,

plus interest accruing at the rate of

eight (8%) per cent per annum on the

unpaid principal from the date of

such written notice, plus attorney's

fees of ten (10%) per cent and all

court costs....

When Frederick Pinkerton defaulted on his

Payment schedule, Betty Jane Pinkerton

sent a letter demanding payment within

seven days, "or the entire unpaid balance

Al6

of the note will be accelerated. "'*

Citing § 63(a)(1) of the Bankruptcy Act,

aa U.8.¢€, § 103(a)(1),° Frederick Pinkerton

contends that his former wife is not enti-

tled to interest after the date the peti-

tion in bankruptcy was filed. His recita-

tion in brief of the general rule on

interest, as it applies to provable fixed

liabilities, is correct. See Sexton v.

Dreyfus, 219 U.S. 339, 31 S.Ct. 256, 55

L.Ed. 244 (1911). He errs, however, when

he seeks to apply the limitation of interest

We recognize that the bankruptcy and district

courts deferred consideration of the attorney's

fee question. Because we dispose of all substantive

questions, the interest and attorney's fee issues,

which are matters of law, are ripe for review and

are resolved.

3 11 U.S.C. § 103(a)(1) provides:

(a) Debts of the bankrupt may be proved and a)l-

lowed against his estate which are founded upon

(1) a fixed liability, as evidenced by a judgment

or an instrument in writing, absolutely owing at

the time of the filing of the petition by or

against him, whether then payable or not, with

any interest thereon which would have been

recoverable at that date or with a rebate of

interest upon such as were not then payable and

did not bear interest.

Al7

rule to non-dischargeable debts. In

Bruning v. United States, 376 U.S. 358, 84

S.Ct. 906, 11 L.Ed.2da 772 (1964), the

Supreme Court, in holding that taxes

subject to the non-discharge provisions of

§ 17 are not insulated from accruing

interest charges, stated:

It is undisputed that, under § 17,

petitioner remained personally liable

after his discharge for that part of

the principal amount of the tax debt

and pre-petition interest not satis-

fied out of the bankruptcy estate.

The courts below held that, under

§ 17, petitioner also remained per-

Sonally laible for post-petition

interest on the tax debt, and we find

no substantial reason to reverse that

holding. Initially, one would assume

that Congress, in Providing that a

certain type of debt should survive

bankruptcy proceedings as a personal

liability of the debtor, intended

personal liability to continue as to

the interest on that debt as well as

to its principal amount. Thus, it

has never been seriously suggested

that a creditor whose claim is not

Provable against the trustee in

bankruptcy loses his right to interest

ina post-bankruptcy action brought

against the debtor personally. In

most situations, interest is considered

to be the cost of the use of the

amounts owing a creditor and an

incentive to Prompt repayment and,

thus, an integral part of a con-

Als

tinuing debt. Interest on a tax debt

would seem to fit that description.

Thus, logic and reason indicate that

post-Petition interest on a tax claim

excepted from discharge by § 17 of

the Act should be recoverable in a

later action against the debtor

personally, and there is no evidence

of any congressional intent to the

contrary.

376 U.S. 360, 84 &.Ct. at 907. Accord,

Hugh H. Eby Co. v. United States, 456 F.2d

923 (3rd Cir. 1972); In re Romero, 535

F.2d 618 (10th Cir. 1976).

We hold that interest continues to

accrue on the alimony obligation as an

integral part of that obligation. We

likewise hold that the attorney's fee

provision is an integral part of the

alimony obligation represented by the

promissory note. Florida courts will

enforce express stipulations for attorney's

fees which are integral parts of alimony

agreements. See Scott v. Scott, 303 So.2d

683 (Fla.App. 1974); Howell v. Howell, 207

So.2d 507 (Fla. 1968).

Al9

We reach the same conclusion with respect

to the balance due for attorney's fees in

the Crist case. Considering the totality

of that situation, we find that the balance

due on the note given in evidence of the

agreement to reimburse Jane Crist's attor-

ney's fees comes within the ambit of

alimony.

Part III: Equal Protection Challenge

Both Pinkerton and Crist invoke the pro-

tections of the Fifth Amendment and claim

that they should be absolvved from paying

alimony to their former wives because the

non-discharge provision of § 17(a)(7)

creates a gender classification which vio-

lates the equal protection aspect of the

due process clause.? They claim that

4. In Bolling v. Sharpe, 347 U.S. 497, 74 S.Ct.

693, 98 L.Ed. 884 (1954), the Supreme Court noted

that the Fifth Amendment due process clause contains

an equal protection component. Fifth Amendment

equal protection claims are considered in exactly

the same manner as claims under the Fourteenth

Amendment equal protection clause. Weinberger v.

Wiesenfeld, 420 U.S. 636, 638 n. 2, 95 S.Ct. 1225,

1228 n. 2, 43 L.Ed.2d 514 (1975).

A20

because § 17(a)(7) would allow their

former wives to secure a discharge of an

alimony or support debt, denying them such

@ discharge is unconstitutional.

Over the past decade the Supreme Court

has considered, in a long progression of

cases, the vitality of statutes and regula-

tions which classify individuals differently

solely on the basis of sex. Frequently,

when these laws are reviewed under the

magnifying glass of the equal protection

; 5

Clause, their raison d'etre evaporates,

5. The Supreme Court has consistently invalidated

Statutes which create "archaic and overbroad

generalizations" about women, Schlesinger v.

Ballard, 419 U.S. 498, 508, 95 S.Ct. 572, 42

L.Ed.2d 610 (1975), which automatically assume

that women are the weaker sex, Stanton v. Stanton,

421 U.S. 7, 15, 95 S.Ct. 1373, 43 L.Ed.2d 688

(1975), and which establish gender-based distinc-

tions "solely for the purpose of achieving admini-

Strative convenience", Frontiero v. Richardson,

411 U.S. 677, 690, 93 S.Ct. 1764, 36 L.Ed.2d 583

(1973).

A21

resulting in declarations of unconstitutionality. °

In a recent pronouncement the Supreme Court reiter-

ated the standard under which gender classifications

Statutes must be judged: "(OJur precedents require

that gender-based discriminations must serve

important governmental objectives and that the

discriminatory means employed must by [sic] sub-

Stantially related to the achievement of those

objectives." Wengler v. Druggists Mut. Ins. Ce.

446 U.S. 142, 150, 100 s.ct. 1540, 1545, 64 L.Ed.2a

107, 115 (1980).

One type of statute containing a gender-based

discrimination has Passed constitutional muster.

6. See, e.g., Wengler v. Druggists Mut. Ins. Co., supra;

Califano v. Westcott, 443 U.S. 76, 99 S.Ct. 2655, 61 L.Ed.2d

382 (1979); Orr v. Orr, 440 U.S. 268, 99 S.Ct. 1102, 59

L.Ed.2d 306 (1979); Califano v. Goldfarb, 430 U.S. 199, 97

S.Ct. 1021, 51 L.Ed.2d 270 (1977); Craig v. Boren, 429 U.S.

190, 97 S.Ct. 451, 50 L.Ed.2d 397 (1976); Stanton v. Stanton,

supra, Weinberger v. Wiesenfeld, supra; Taylor v. Louisiana,

419 U.S. 522, 95 S.Ct. 692, 42 L.Ed.2d 690 (1975); Frontiero

v. Richardson, supra; Stanley v. Illinois, 405 U.S. 645, 92

S.Ct. 1208, 31 L.Ed.2d 55] (1972); Reed v. Reed 404 U.S. Fae

92 S.Ct. 251, 30 L.Ed.2d 225 (1971).

A22

The Supreme Court has upheld statutes

designed to alleviate "the disparity in

economic condition between men and women

caused by the long history of discrimina-

tion against women." Califano v. Webster,

430 U.S. 313, 317, 97 S.Ct. 1192, 51

L.Ed.2d 360 (1977). See also Schlesinger

v. Ballard, 419 U.S. 498, 95 S.Ct. 572, 42

L.Ed.2d 610 (1975); Kahn v. Shevin, 416

U.S. 351, 94 S.Ct. 1734, 40 L.Ed.2d 189

(1974).

In Crist, the district court determined

that § 17(a)(7) did create a gender-based

distinction involving alimony, but concluded

that this provision survived constitutional

challenge under the shelter of Kahn. Both

appellees before us urge a Kahn analysis

in support of their positions. Recourse to

a Kahn compensation rationale is helpful and

A23

enlightening, but inadequate. ” Although

the Supreme Court has approved statutes

which indemnify women for past discrimi-

nation, the Court has not accepted blanket

declarations of this objective as justifi-

cation for gender-based distinctions.

Rather, the Court requires an investigation

as to "whether women {have] in fact been

Significantly discriminated against in the

sphere to which the statute applied a sex-

based classification." Orr ¥. Ore,

7. We disagree with the district court in Crist

that a Kahn compensation justification would im-

munize § 17(a)(7). The Supreme Court applied this

rationale only after emphasizing and concluding

that a very strong governmental interest was

served by the gender classification. Webster, 430

U.S. at 318, 97 S.Ct. at 1195; Ballard, 419 U.S.

at 510, 95 S.Ct. 578; Kahn, 416 U.S. at 355, 94

S.Ct. at 1737. In Wengler, the Supreme Court

indicated that the government's interest in the

area of maintenance and support for spouses is not

Strong enough to shield the legislation under a

Kahn compensation haven. 446 U.S. at 148 n. 4,

100 S.Ct. 1544 n. 4. See also Hull Sex Discrimina-

tion and the Equal Protection Clause; An Analysis

of Kahn v. Shevin and Orr vy. Orr, 30 Syracuse

L.Rev. 639 (1979); Note, Alimony Awards Under

Middle-Tier Equal Protection Scrutiny, 59 Neb.

L.Rev. 172, 181-85 (1980).

A24

440 U.S. 268, 281, 99 S.Ct. 1102, 1112, 59

L.Ed.2d 306 (1979). In Orr, the Court

rejected the gender classification in

Alabama's alimony laws which limited

alimony payments to wives, reasoning that

a Kahn compensation justification, which

automatically presumes that a woman has

suffered discrimination, is insufficient

to sustain a gender-biased law when the

proceedings envisioned are sufficiently

designed to ferret out this information.

As the Court said:

Under the [Alabama alimony] statute,

individualized hearings at which the

parties' relative financial circum-

stances are considered already occur....

[SJince individualized hearings can

determine which women were in fact

discriminated against vis a vis their

husbands ..., Alabama's alleged com-

pensatory purpose may be effectuated

without placing burdens solely on

husbands. Progress toward fulfilling

such a purpose would not be hampered,

and it would cost the State nothing

more, if it were to treat men and

women equally by making alimony bur-

dens independent of sex.

440 U.S. at 281-82, 99 S.Ct. at 1112-13.

A25

It has also been suggested? that the

term "spouse" be substituted for the term

"wife," instantly rendering § 17(a)(7)

gender neutral.” In support of this

proposition, we are invited to examine

Bank of Marin v. England, 385 U.S. 99, 87

S.Ct. 274, 17 L.Ed.2d 197 (1966), where

the Supreme Court addressed the interpreta-

tion of the term "transfer" as contained

8. This argument is raised by Betty Jane Pinker-

ton and the Bankruptcy Court in Pinkerton.

9. Section 523(a)(5) of the Bankruptcy Reform Act

of 1978, which became operative on October 1, 1979,

is analogous to § 17(a)(7) with one exception: It is

gender neutral. 11 U.S.C. § 523(a)(5) provides:

A discharge under section 727, 1141, or 1328(b) of

this title does not discharge an individual debtor

from any debt--

(5) to a spouse, former spouse, or child of the

debtor, for alimony to, maintenance for, or support

of such spouse or child, in connection with a sep-

aration agreement, divorce decree, or property set-

tlement agreement, but not to the extent that--

(A) such debt is assigned to another entity, vol-

untarily, by operation of law, or otherwise; or

(B) such debt includes a liability designated as al-

imony, maintenance, or support, unless such liability

is actually in the nature of alimony, maintenance, or

support.

A26

in § 70(d)(5) of the Bankruptcy Act.

Noting that "we do not read these statutory

words with the ease of a computer," the

Court said "[t]Jhere is an overriding

consideration that equitable principles

govern the exercise of bankruptcy jurisdic-

tion." 385 U.S. at 103, 87 S.Ct. at 277.

Essentially, this decision counsels liberal

construction of the Bankruptcy Act in

light of the purpose of the provision

under consideration.

We find an early expression of the per-

ceived purpose of § 17(a)(7) in Wetmore v.

Markoe, 196 U.S. 6S, 25 &.Ct. 172, 49

L.Ed. 390 (1904), where the Court was

considering the forerunner?? of the non-

10. The 1903 amendments to the Bankruptcy Act

of 1898, which contained alimony and support non-

discharge provisions for the first time, were

Carried forward and incorporated into the Bankruptcy

Act of 1938. They remained substantially unchanged

in the 1970 amendments to the Bankruptcy Act of

1938. 1A Collier on Bankruptcy 9 17.18 at 1668-69

(14th ed. 1978).

A27

discharge provision we now review. While

the case involved Provability of a debt

under the 1898 Bankruptcy Act, the Court

discussed the nondischargeability of a

Support obligation under the 1903 Bankruptcy

Act and stated:

The bankruptcy law should receive

such an interpretation as will effec-

tuate its beneficent Purposes and not

make it an instrument to deprive

dependent wife and Children of the

Support and maintenance due them from

the husband and father, which it has

ever been the Purpose of the law to

enforce.

196 U.S. at 77, 25 s.ct. at 175. As

Wetmore indicates, the underlying purpose

of the non-discharge status for the support

Provision was Specifically to aid wives

and children by insuring that husbands

could not disentangle themselves from

their support obligations. Since the

Support provision was designed by Congress

in 1903 to aid women, we have neither the

authority nor the desire to act for Congress

by transforming the term "wife" to "spouse"

A28

under the supposed marching orders of

Bank of Marin. Moreover, in Westcott,

Wiesenfeld and Goldfarb, supra, when faced

with interpretative situations identical

with that we now face, the Supreme Court

declined to substitute the term "surviving

spouse" for "widow." Instead, the Court

applied an equal protection analysis in

scrutinizing the statutes as written. We

shall not follow the route suggested by

the bankruptcy court in Pinkerton, for the

Supreme Court has clearly marked that

route as legally impassable.

We advance to the final theory tendered

in support to § 17(a)(7) which was discussed

by the district court in Pinkerton and

submitted in the briefs and arguments of

both appellees. This argument is premised

on the thesis that § 17(a)(7) contains two

discrete and independent provisions which

are separated by a comma and the disjunctive

A29

“or." The critical language of § 17(a)(7)

it: “alimony due or to become due, or for

maintenance or support of wife or child."

The alimony clause portion of the foregoing

excerpt contains no reference to either

sex and it is forcefully argued that it is

gender neutral and therefore constitutional.

The district judge in Pinkerton adroitly

distinguished alimony and support. Because

of our resolution of these disputes we do

not reach that question, but note the

; , ’ 11

persuasiveness of his reasoning.

ll. One must consider the canons of construction

which support a distinction between alimony and

support, including the doctrine of last antecedent,

Quindlen v. Prudential Insurance Company of America,

482 F.2d 876 (5th Cir. 1973); the mandate that

courts give effect, whenever possible to all parts

of a statute and avoid an interpretation which

makes a part redundant or superfluous, General

Motors Acceptance Corporation v. Whisnant, 387

F.2d 774 (5th Cir. 1968); and consideration of the

use of the disjunctive “or" between two terms,

Reiter v. Sonotone Corp., 442 U.S. 330, 99 S.Ct.

2326, 60 L.Ed.2d 931 (1979).

Further, alimony is defined in a gender neutral

A30

The Remedy

We conclude that, by Providing the

benefit of non-dischargeability of debts

fashion by the laws of Georgia (Ga. Code Ann.

§ 30-201) and Florida (Fla.Stat.Ann. § 61.08).

Finally, there are other Significant differences

between alimony and maintenance and support. The

maintenance and support clause is limited to a

segment of the familial unit--wives and children.

Alimony, derived from the Latin words "alimonia"

and “alere," has long been recognized as including

the sustenance, norishment or Support obligations

Provided by ascendants for descendants, descendants

for ascendants, as well as spouses for each other.

For example, see Louisiana Civil Code arts. 229,

230 and 231, which provide:

Art. 229. Reciprocal alimentary duties of ascen-

dants and descendants

Children are bound to maintain their father

and mother and other ascendants, who are in need;

and the relatives in the direct ascending line are

likewise bound to maintain their needy descen-

dants, this obligation being reciprocal.

They are also bound to render reciprocally all

the services which their situation can require,

if they should become insane.

Art. 230. Scope of alimentary obligation

By alimony we understand what is necessary for

the nourishment, lodging and support of the

person who claims it.

A31

for alimony and support owed to wives but

not to husbands--or, to state it another

way, by providing the benefit of discharge-

ability of such debts owed by wives but

not those owed by husbands--§ 17(a)(7)

violates the equal protection component of

the due process clause of the Fifth Amend-

ment. The remaining question is whether

It includes the education, when the person

to whom the alimony is due, is a minor.

Art. 231. Basis for granting alimony

Alimony shall be granted in proportion to the

wants of the person requiring it, and the circum-

stances of those who are to pay it.

Additionally, La.Civil Code article 148 details

alimentary obligations for the wife in a situation

of judicial separation or divorce.

Civil Code article 229, which establishes recipro-

cal alimony duties between ascendants and descen-

dants, is found in the Louisiana Civil Code of

1870, the Civil Code of 1825, the predecessor

codification of 1808, as well as in the Code of

Napoleon of 1804. It is hardly a new kid on the

block.

A32

declare the entire subsection a nullity

and deny its benefits to both groups, or

to extend its coverage and provde equal

benefits to both groups. We opt for the

latter, following the path blazed by the

Supreme Court in, inter alia, Califano v.

Westcott, supra, Califano v. Goldfarb,

Supra, Weinberger v. Wiesenfeld, supra,

and Wengler v. Druggists Mut. Ins. Ce.

supra.

In Westcott, the Supreme Court held that

§ 407 of the Social Security Act, 42

U.S.C. § 607, which provides benefits for

dependent children of unemployed fathers

but not those of unemployed mothers,

violated the due process clause of the

Fifth Amendment because it discriminated

on the basis of gender. The district

court remedy for the constitutional depri-

vation was the extension of benefits to

cover those not included. The Supreme

Court affirmed.

A33

In Goldfarb, the Court found that the

different treatment of men and women

mandated by 42 U.S.C. § 402(£)(1)(D)

constituted invidious discrimination. The

Court found that the provisions of the

Statute limiting benefits received by a

widower to less than those received by a

widow were unconstitutional. To correct

the constitutional defect, the three-judge

trial court ordered that the benefits

provided to widows be extended to widowers.

The Supreme Court affirmed.

In Wiesenfeld, the Court upheld a three-

judge court finding that 42 U.S.C. § 402(g),

which provided social security survivor's

benefits to widows but not to widowers,

was unconstitutional. The three-judge

court

enjoined the continued refusal to pay

§ 402(g) benefits to widowers solely on

the basis of sex. The Supreme Court

affirmed.

A34

In Westcott, Goldfarb, and Wiesenfeld the

Court's remedy for the constitutional

infirmity of the Challenged federal statutes

was to extend the benefits to the excluded

Class.

Finally, we note the decision in Wengler

which involved a state workers' compensation

Statute found to violate the Equal Protec-

tion Clause of the Fourteenth Amendment.

The statute granted a conclusive presumption

of dependency to wives but did not grant

that presumption to husbands. The Court

remanded the case to the state court,

noting:

We are left with the question whether

the defect should be cured by extending

the presumption of dependence to

widowers of by eliminating it for

Widows. Because state legislation is

at issue, and because a remedial

outcome consonant with the state

legislature's overall purpose is

preferable, we believe that state

judges are better positioned to

choose an appropriate method of

remedying the constitutional violation.

A35

446 U.S. at 152, 100 S.ct. at 1547.

We conclude that the proper remedy in

the cases at bar is to extend the benefits

of § 17(a)(7) to the excluded class.

Accordingly, either a husband or wife

receiving alimony or maintenance or support

may assert the non-dischargeability of the

obligation under § 17(a)(7).

Part IV: Voidable Preference

James Crist alternatively contends that

the alimony payments due his ex-wife con-

stitute a voidable preference under § 60

of the Bankruptcy Act, 11 U.S.C. § 96. We

find this argument totally devoid of

merit.

Conclusion

The judgments of the district courts are

affirmed insofar as they hold that the

obligations involved are alimony and, as

such, are not discharged by virtue of the

bankruptcy adjudication. Both cases are

remanded in order that the district courts

A36

may enter judgment for the Principal,

interest and, as appropriate, attorney's

fees.

Each case is AFFIRMED and REMANDED for

further Proceedings not inconsistent

herewith.

A37

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

In the matter of:

JAMES F. CRIST, JR., BANKRUPTCY FILE

Debtor,

JAMES F. CRIST, JR.,

Plaintiff,

7; NUMBER B77-1759A

JANE S. CRIST,

Defendant

ORDER

This action is before the Court on

appeal from a decision by United States

Bankruptcy Judge Robinson filed on May 17,

1978. The plaintiff-debtor appeals the

bankruptcy judge's ruling on his motion to

determine the dischargeability of Jane s.

Crist's claims in this Chapter XII proceed-

ing.

The motion for a determination was heard

by the bankruptcy judge on February 24,

1978.

A38

AS a result of that hearing, the bankruptcy

judge made the following twenty-four find-

ings of fact:

Ria On March 4, 1977, James F. Crist,

Jr. (hereinafter, "Debtor") and Jane $.

Crist (hereinafter, "Defendant") were

divorced by order of the Superior Court of

Fulton County, Georgia according to the

terms of the Final Judgment and Decree

(Joint Exhibit 1) entered that day.

2. Said Final Judgment and Decree was

based upon the Stipulation Placed in the

Record of the divorce action by the Court

(Joint Exhibit 2) on February 9, 1977.

3. On March 29, 1977, a Separation

Agreement was reached and executed by the

Parties (Joint Exhibit 3, hereinafter,

"Separation Agreement").

4. On March 30, 1977, another order

(Joint Exhibit 4, hereinafter "Order") was

entered in the divorce case completely

A39

amending the Final Judgment and Decree and

fully incorporating the Separation Agree-

ment.

5. Under the terms of the Order, the

Defendant was awarded a judgment against

the Debtor which included $30,000.00 in

cash (Paragraph 4.A of the Separation

Agreement), $350.00 per month termed

alimony (Paragraph 4.B) until such time as

the $30,000.00 cash Payment required by

Paragraph 4.A of the Separation Agreement

Was paid in full, and $5,000 in attorneys

fees awarded to Defendant's Attorney John

C. Gray (Paragraph 4.G). No monetary

limit was included within the terms of the

Order and Separation Agreement restricting

the total amount of monthly alimony payments

that could be required before the monthly

alimony payments could be terminated by

the Debtor. Pursuant to the Order, Defen-

A40

dant was also to receive $350.00 per month

as child support for her minor daughter.

6. Additionally, under the terms of the

Separation Agreement and Order the Debtor

was required to transfer to the Defendant

all right, title and interest in a 1974

Oldsmobile Vista Cruiser Station Wag’ n

(Paragraph 4.C) and all items listed in

Exhibit "B" (Paragraph 4.D) and Exhibit

"G" to the Separation Agreement.

7. Pursuant to the Separation Agreement

(Joint Exhibit 3) and Order, Debtor executed

two promissory notes, one in the amount of

$30,000.00 (Joint Exhibit 5) to evidence

his obligation under Paragraph 4.A of the

Separation Agreement and another in the

amount of $5,000.00 (Joint Exhibit 6) to

evidence his attorney's fee obligation

under Paragraph 4.G of the Separation

Agreement.

8. The Debtor also executed a "Debt

Obligation" (Joint Exhibit 7) to evidence

A41

the $350.00 per month alimony obligation

under Paragraph 4.B of the Separation

Agreement.

9. In addition, the Debtor executed a

"Deed to Secure Debt" (Joint Exhibit 8)

Pursuant to Paragraph 4.H of the Separation

Agreement and Order which was properly

filed and recorded March 30, 1977, for the

Purpose of securing the Payments required

by the notes (Joint Exhibits 5 and 6) and

the Debt Obligation (Joint Exibit 7).

10. On March 29, 1977, Debtor paid the

Defendant $7,500.00, five thousand of

which was pursuant to the $30,000.00 Note

(Joint Exhibit 5) and Paragraph 4.A. of

the Separation Agreement and Order and

$2,500.00 of which was Pursuant to the

$5,000.00 Note (Joint Exhibit 6) and

Paragraph 4.G. of the Separation Agreement

and Order.

11. On April 29, 1977, Debtor paid the

Defendant an additional $2,500.00 pursuant

A42

to the $30,000.00 Note (Joint Exhibit 5)

and Paragraph 4.A. of the Separation

Agreement and Order.

12. Additionally, Debtor made monthly

alimony payments of $350.00 per month

during April and May of 1977 pursuant to

the Debt Obligation (Joint Exhibit 7) and

Paragraph 4.B. of the separation Agreement

and Order.

13. No further morthly alimony payments

have been made since the May, 1977 payment.

Permanent monthly alimony Payments required

by Paragraph 4.B. of the Separation Agree-

ment and Order which were not made to the

date of the trial (February 24, 1978)

total $3,150.00.

14. All items of personal property

listed on Exhibit "Gg" of the Separation

Agreement as incorporated in the Order

belonged to the Debtor prior to the execu-

A43

tion of the Separation Agreement and were

transferred to the Defendant pursuant to

the Separation Agreement and Order in lieu

of back alimony and chiid Support due

prior to February 21, 1977. This transfer

was effective as of the date of execution

of the Separation Agreement.

15. Ownership of the items listed in

Exhibit "B" of the Separation Agreement as

incorporated in the Order prior to the

execution of the Agreement is stipulated

in Joint Exhibit 9. All these items were

transferred to the Defendant's ownership

upon execution of the Separation Agreement.

16. The title to the 1974 Oldsmobile

Vista Cruiser Station Wabon referred to in

Paragraph 4.C. of the separation Agreement

was 1n the Debtor when the Agreement was

Signed. Title to this automobile has been

transferred to the Defendant pursuant to

the terms of the Separation Agreement and

Order.

A44

17. The shares of "Old Republic" stock

referred to in Paragraph 4.F. of the Sep-

aration Agreement belonged to the Defendant

at the time the Agreement was executed.

18. On July 30, 1977, the value of the

Rivermeade residence owned in fee simple

by the Debtor exceeded the outstanding

loan balance of the first lien security

interest held by Charter Mortgage Company

and the outstanding balance of the second

lien security interest held by Fidelcorp

Mortgage Corporation by more than $35,000.

19. Joint Exhibit 11 contains true and

correct copies of discovery pleadings

filed in the divorce action between the

parties.

20. Joint Exhibit 12 contains compila-

tions of checking account activity and

other financial data compiled by counsel

for the Defendant prior to approximately

February 9, 1977.

00.

A45

21. The $30,000 cash payment required

to be made by the Debtor to the Defendant

by Paragraph 4.A. of the Separation Agree-

ment and Order was intended by the parties

to that Agreement to cushion the Defendant-

Wife during the transition period following

the divorce, to help her re-establish

herself economically and to contribute

towards her maintenance and support.

22. The $350.00 per month alimony

payment required to be made by the Debtor

to the Defendant by Paragraph 4.B. of the

Separation Agreement and Order was intended

by the parties to that Agreement to provide

for and contribute towards the maintenance

and support of the Defendant-wife.

23. The transfer to the Defendant of

the 1974 Oldsmobile Vista Cruiser Station

Wagon and all those items listed in Exhibits

"B" and "G" of the Separation Agreement

not already owned by the Defendant pursuant

A46

to the Separation Agreement and Order were

intended by the parties to that Agreement

to cushion the Defendant during the tran-

Sition period following the divorce, to

help her re-establish herself economically,

and to contribute toward her maintenance

and support.

24. Neither Defendant nor her agent had

reasonable cause to believe that the

Debtor was insolvent at the time of any

transfers of property and money by the

Debtor to the Defendant pursuant to the

separation Agreement and Order and the

documents created and executed pursuant

thereto.

On appeal the Debtor has raised several

objections to the lower Court's conclusions

of law. He primarily asserts that Section

17(a)(7) of the Bankruptcy Act, 11 U.S.C.

§ 35(a)(7), is constitutionally invalid

under the due process clause of the Fifth

A47

Amendment because of its impermissible

gender-based distinctions. The Debtor

also contests the bankruptcy judge's

finding that a March 30, 1977 Order,

incorporating the Separation Agreement

constituted the final step in a novation,

creating a new obligation running from the

Debtor to the defendant and extinguishing

the old one.

Finally, the Debtor objects to the bank-

ruptcy judge's conclusion that the property

transfers to the defendant did not create

a voidable preference under Section 60 of

the Bankruptcy Act, 11 U.S.C. § 96. Since

the Court finds that each of the contested

transfers comes within the terms of Section

17(a)(7) of the Bankruptcy Act and the

terms of that Section do not make an

impermissible gender based distinction,

the two latter objections of the Debtor

need not be considercd.

A48

Section 17(a)(7) of the Bankruptcy Act

Provides in pertinent part, as follows:

A discharge in bankruptcy shall

release a bankrupt from all of his

Provable debts, whether allowable in

full or in part, except such as .....

(7) are for alimony due or to become

due, or for maintenance or Support of

wife or child...

11 U.S.C. § 35(a)(7). The plaintiff

contends Section 17(a)(7) is constitution-

ally invalid in that its exclusive reliance

upon gender allows for the conference of

benefits and burdens based solely on

sexually related assumptions as to depen-

dency. Traditional €qual protection

analysis requires that a legislative

Classification, "be reasonable, not arbi-

trary, and must rest upon some ground of

difference having a fair and substantial

relation to the object of the legislation,

so that all persons Similarly circumstanced

shall be treated alike." Royster Guano Co.

v. Virginia, 235 U.S. 412, 415 (1920).

A49

The Supreme Court has held that classifica-

tions distinguishing between the sexes are

"subject to scrutiny under the equal

protection clause." Reed v. Reed, 404

U.S. 71, 75 (1971).

While gneder based classifications are

subject to scrutiny under the equal pro-

tection clause, they are not inherently

unconstitutional. "To withstand constitu-

tional challenge, previous cases established

that classifications by gender must serve

important governmental objectives and must

be substantially related to the achievement

of those objectives." Craig v. Boren, 429

v.8. 190, 197 (1976). The Supreme Court

has recognized reduction of the disparity

in the economic condition between men and

women caused by the long history of discrim-

ination against women as such an important

governmental objective. Schlesinger v.

Ballard, 419 U.S. 498 (1975); Kahn v.

Shevin, 416, U.S. 351 (1974).

ASO

The Supreme Court's decision in Kahn is

especially instructive. In Kahn the Court

upheld a Florida Statute providing a $500

property tax exemption for widows, but not

for widowers. The Court considered the

financial difficulties facing the widowed

female in contrast to those facing the

widowed male. The rationale relied on by

the Court in Kahn is equally applicable to

the divorced female. Especially pertinent

is the Court's statement that:

While the widower can usually continue

in the occupation which preceded his

spouse's death, in many cases the

Widow will find herself suddently

forced into a job market with which

she 1s unfamiliar, and in which,

because of her former economic depen-

dency, she will have fewer skills to

offer. (footnote omitted)

Kahn, 416 U.S. at 354.

This Court is well aware that gender

based distinctions must be justified by

more than "archaic and overbroad" generali-

zations, Schlesinger v. Ballard, 419 U.S.

A51l

at 508, about female dependency or female

inability to cope in the marketplace.

Although spurning such absurdities, the

Court recognizes that a divorced female,

like a widow, is now likely to encounter

more difficulty in meeting financial

obligations than a divorced male. This is

especially true during the time immediately

following a divorce. By serving the

important governmental objectives delineated

in Kahn, and recognized in federal legisla-

tion, see Title VII of the Civil Rights

Act of 1964, 42 U.S.C. 2000e et seq.,

section 17(a)(7) satisfies the constitu-

tional requirements for gender based

classifications as stated in Cralg v. Boren,

429 U.S. at 197.

As used in Section 17(a)(7), the term

"alimony" carries no sexual connotation.

Although the section specifies that debts

for the maintenance of a wife are not dis-

A5S2

Chargeable, this does not preclude its ap-

plication to a female bankrupt who is

Paying alimony. In abstract terms then,

Section 17(a)(7) does not make a gender

based distinction. The gender based

distinction arises only in the context of

applying Georgia law to the Statute. In

Georgia, alimony may not be awarded to the

ex-husband. Ga. Code Ann. § 30-201;

Murphy v. Murphy, 232 Ga. 252 (1974) cert.

den. 421 U.S. 929 (1974); Mack v. Mack,

234 Ga. 692 (1974). In Murphy, the Georgia

Supreme Court held that sex based distinc-

tions in Georgia's alimony laws had a fair

and substantial relation to the purpose of

the legislation, which was to provide

Support for the dependent wife of a broken

marriage. Murphy, 232 Ga. at 353.

In the present action the Debtor is

apparently seeking a collateral attack on

the award of alimony to his ex-wife. Such

AS3

a contest would be more properly held in

the State Court which made the alimony

award. The bankruptcy laws should not be

used as a tool to evade those obligations,

nor are the bankruptcy laws the proper

medium for an attack on Georgia's alimony

laws.

The only question left for determination

is whether or not the money and property

awarded to the defendent [sic] as a result

of her divorce came within the coverage of

Section 17(a)(7). In findings of fact

numbered 21, 22, and 23, the bankruptcy

court held that the property transferred

contributed to the maintenance and support

of the Debtor's wife. It is a well estab-

lished rule that the district court is

bound by the bankruptcy judge's findings

of fact unless they are clearly erroneous.

In re Mascolo, 505 F.2d 274, 277 (lst Cir.

1974); In re American Packers Exchange,

AS4

Inc., 449 F.2d 1313 (lst Cir. 1977).

There has been no showing that the referen-

ced findings of fact are erroneous and

they are adopted by this Court.

Accordingly, the Plaintiff-Debtor's

appeal from the determination of the bank-

ruptcy judge is DENIED.

So ORDERED, this the 2lst day of Septem-

ber, 1978.

/s/ Harold L. Murphy

UNITED STATES

ASS

UNITED STATES DISTRICT COURT

FOR THE

NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

JAMES F. CRIST, JR.,: BANKRUPTCY CASE

NUMBER:

Debtor : B77-1759A

JAMES F. CRIST, JR.,: JUDGMENT

Plaintiff/Appellant:

vs.

JANE S. CRIST,

Defendant/Appellee

This action came on for consideration

before the Court, Honorable Harold L.

Murphy, United States District Judge, pre-

siding, and the issues having been duly

considered and a decision having been duly

rendered,

It’ is Ordered and Adjudged that the

Plaintiff-Debtor's appeal from the deter-

mination of the bankruptcy judge is DENIED.

AS6

Dated at Atlanta, Georgia, this 27th day

of September, 1978.

BEN H. CARTER

Clerk of Court

By: /s/ Rebecca Laury

Deputy Clerk

A57

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

IN THE MATTER OF: :

JAMES F. CRIST, JR.,: CASE NO. B77-1759A

Debtor,

JAMES F. CRIST, JR.,:

Plaintiff,

Vv.

JANE S. CRIST, : Chapter XII

Defendant. > proceedings

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The above-styled action having regularly

come on for trial of all issues before

this Court on February 24, 1978, and said

trial having been held at that time, the

Court makes the following Findings of Fact

and draws the following Conclusions of Law

with respect thereto:

AS8

FINDINGS OF FACT

1. On March 4, 1977, James F. Crist,

Jr. (hereinafter, "Debtor") and Jane Ss.

Crist (hereinafter, "Defendant") were

divorced by order of the Superior Court of

Fulton County, Georgia according to the

terms of the Final Judgment and Decree

(Joint Exhibit 1) entered that day.

2. Said Final Judgment and Decree was

based upon the Stipulation placed in the

Record of the divorce action by the Court

(Joint Exhibit 2) on February 9, 1977.

3. On March 29, 1977, a Separation

Agreement was reached and executed by the

parties (Joint Exhibit 3, hereinafter,

"Separation Agreement").

4. On March 30, 1977, another Order

(Joint Exhibit 4, hereinafter "Order") was

entered in the divorce case completely

amending the Final Judgment and Decree and

fully incorporating the Separation Agree-

ment.

A59

5. Under the terms of the Order, the

Defendant was awarded a judgment against

the Debtor which included $30,000.00 in

cash (Paragraph 4.A of the Separation

Agreement), $350.00 per month termed

alimony (Paragraph 4.B) until such time as

the $30,000.00 cash payment required by

Paragraph 4.A of the Separation Agreement

was paid in full, and $5,000 in attorneys

fees awarded to Defendant's Attorney John

C. Gray (Paragraph 4.G). No monetary

limit was included within the terms of the

Order and Separation Agreement restricting

the total amount of monthly alimony payments

that could be required before the monthly

alimony payments could be terminated by

the Debtor. Pursuant to the Order,

Defendant was also to receive $350.00 per

month as child support for her minor

daughter.

6. Additionally, under the terms of the

Separation Agreement and Order the Debtor

A60

was required to transfer to the Defendant

all right, title and interest in a 1974

Oldsmobile Vista Cruiser Station Wagon

(Paragraph 4.C) and all items listed on

Exhibit "B" (Paragraph 4.D) and Exhibit

"G" to the Separation Agreement.

7. ‘Pursuant to the Separation Agreement

(Joint Exhibit 3) and Order, Debtor executed

two promissory notes, one in the amount of

$30,000.00 (Joint Exhibit 5) to evidence

his obligation under Paragraph 4.A of the

Separation Agreement and another in the

amount of $5,000.00 (Joint Exhibit 6) to

evidence his attorney's fee obligation

under Paragraph 4.G of the Separation

Agreement.

8. The Debtor also executed a "Debt

Obligation" (Joint Exhibit 7) to evidence

the $350.00 per month alimony obligation

under Paragraph 4.B of the Separation

Agreement.

A6l1

9. In addition, the Debtor executed a

"Deed to Secure Debt" (Joint Exhibit 8)

pursuant to Paragraph 4.H of the Separation

Agreement and Order which was properly

filed and recorded March 30, 1977, for the

purpose of securing the payments required

by the notes (Joint Exhibits 5 and 6) and

the Debt Obligation (Joint Exhibit 7).

10. On March 29, 1977, Debtor paid the

Defendant $7,500.00, five thousand dollars

of which was pursuant to the $30,000.00

Note (Joint Exhibit 5) and Paragraph 4.A.

of the Separation Agreement and Order and

$2,500.00 of which was pursuant to the

$5,000.00 Note (Joint Exhibit 6) and

Paragraph 4.G. of the Separation Agreement

and Order.

11. On April 29, 1977, Debtor paid the

Defendant an additional $2,500.00 pursuant

to the $30,000.00 Note (Joint Exhibit 5)

and Paragraph 4.A. of the Separation

Agreement and Order.

A62

ae. Additionally, Debtor made monthly

alimony payments of $350.00 per month

during April and May of 1977 pursuant to

the Debt Obligation (Joint Exhibit 7) and

Paragraph 4.B. of the Separation Agreement

and Order.

13. No further monthly alimony Panyments

have been made since the May, 1977 Payment.

Permanent monthly alimony Payments required

by Paragraph 4.B. of the Separation Agree-

ment and Order which were not made to the

date of the trial (February 24, 1978)

total $3,150.00.

14. All items of personaly property

listed on Exhibit "G" of the Separation

Agreement as incorporated in the Order

belonged to the Debtor Prior to the execu-

tion of the Separation Agreement and were

transferred to the Defendant pursuant to

the Separation Agreement and Order in lieu

Of back alimony and child Support due

prior to February 21, 1977. This transfer

A63

was effective as of the date of execution

of the Separation Agreement.

15. Ownership of the items listed in

Exhibit "B" of the Separation Agreement as

incorporated in the Order prior to the

execution of the Agreement is stipulated

in Joint Exhibit 9. All these items were

transferred to the Defendant's ownership

upon execution of the Separation Agreement.

16. The title to the 1974 Oldsmobile

Vista Cruiser Station Wagon refered to in

Paragraph 4.C. of the Separation Agreement

was in the Debtor when the Agreement was

Signed. Title to this automobile has been

transferred to the Defendant pursuant to

the terms of the Separation Agreement and

Order.

17. The shares of "Old Republic" stock

referred to in Paragraph 4.F. of the

Separation Agreement belonged to the

Defendant at the time the Agreement was

executed.

A64

18. On July 30, 1977, the value of the

Rivermeade residence owned in fee simply

by the Debtor exceeded the outstanding

loan balance of the first lien security

interest held by Charter Mortgage Company

and the outstanding balance of the second

lien security interest held by Fidelcorp

Mortgage Corporation by more than $35,000.00.

19. Joint Exhibit 11 contains true and

correct copies of discovery pleadings

filed in the divorce action between the

parties.

20. Joint Exhibit 12 contains compila-

tions of checking account activity and

other financial data compiled by counsel

for the Defendant prior to approximately

February 9, 1977.

21. The $30,000 cash payment requried

to be made by the Debtor to the Defendant

by Paragraph 4.A. of the Separation Agree-

ment and Order was intended by the parties

to that Agreement to cushion the Defendant-

A65

wife during the transition period following

the divorce, to help her re-establish

herself economically and to contribute

towards her maintenance and support.

22. The $350.00 per month alimony

payment required to be made by the Debtor

to the Defendant by Paragraph 4.B. of the

Separation Agreement and Order was intended

by the parties to that Agreement to provide

fv c and contribute towards the maintenance

and support of the Defendant-wife.

23. The transfer to the Defendant of

the 1974 Oldsmobile Vista Cruiser Station

Wagon and all those items listed in Exhibits

"B" and "G" of the Separation Agreement

not already owned by the Defendant pursuant

to the Separation Agreement and Order were

intended by the parties to that Agreement

to cushion the Defendant during the tran-

Sition period following the divorce, to

help her re-establish herself economically,

A66

and to contribute toward her maintenance

and support.

24. Neither Defendant nor her agent had

reasonable cause to believe that the

Debtor was insolvent at the time of any

transfers of property and money by the

Debtor to the Defendant pursuant to the

Separation Agreement and Order and the

documents created and executed pursuant

thereto.

CONCLUSIONS OF LAW

1. Section 17a(7) of the Bankruptcy Act

(11 U.S.C. Section 35(a)(7) does not

violate the Due Process clause of the

Fifth Amendment to the Constitution of the

United States.

2. The gender-based classification con-

tained in Section 17a(7) of the Bankruptcy

Act 1s constitutional because it has a

fair and substantial relation to the

A67

important governmental objective of insur-

ing the continued support of the dependent

wife of a broken marriage.

3. The $350.00 per month alimony payment

required to be made by the Debtor to the

Defendant by Paragraph 4.B. of the Separa-

tion Agreement and Order was intended by

the parties to that Agreement to provide

for and contribute towards the maintenance

and support of the Defendant and is not

dischargeable by the Debtor in Bankruptcy,

but 1s protected from discharge by Section

17a(7) of the Bankruptcy Act (11 U.S.C.

Section 35(a)).

4. The $5000 in attorney's fees required

to be paid by the Debtor to the Defendant

and her attorney by Paragraph 4.G. of the

Separation Agreement and Order is a part

of temporary alimony awarded for the

purpose of enabling the Defendant to

contest the issues raised in the divorce

A68

proceeding, and as such these attorney's

fees are not dischargeable by the Debtor

in Bankruptcy, but are protected from

discharge by Section 17a(7) of the Bankrupt-

cy ACt.

5. The $30,000 cash payment required to

be made by the Debtor to the Defendant

herein by Paragraph 4.A. of the Separation

Agreement and Order was intended by the

parties to that Agreement to cushion the

Defendantwife during the transition period

following the divorce, to help her re-

establish herself economically and to

contribute towards her maintenance and

Support; and as such this cash award and

any partial payment of the same is not

dischargeable in Bankruptcy by the Debtor,

but is protected from discharge by Section

17a(7) of the Bankruptcy Act.

6. The required transfer to the Defendant

of the 1974 Oldsmobile Vista Cruiser

A69

Station Wagon and all those items listed

in Exhibits "B" and "G" of the Separation

Agreement not already owned by the Defendant

pursuant to the Separation Agreement and

Order was intended by the parties to that

Agreement to cushion the Defendant-wife

during the transition period following the

divorce, to help her re-establish herself

economically, and to contribute toward her

maintenance and support, and as such these

obligations are not dischargeable in

Bankruptcy by the Debtor, but are protected

from discharge by Section 17a(7) of the

Bankruptcy Act.

7. The Debtor's March 29, 1977, payment

to the Defendant of $7,500.00, five thousand

of which was pursuant to the $30,000.00

Note (Joint Exhibit 5) and Paragraph 4.A.

of the Separation Agreement and Order and

$2,500.00 of which was pursuant to the

$5,000 Note (Joint Exhibit 6) and Paragraph

A70

4.G. of the Separation Agreement and Order

did not have the effect of enabling the

Defendant to obtain a greater percentage

of her debt than some other creditor of

the same class and did not, and does not,

constitute a voidable preference under

Section 60 of the Bankruptcy Act.

8. The Debtor's April 29, 1977 payment

to the Defendant of $2,500.00 pursuant to

the $30,000.00 Note (Joint Exhibit 5) and

Paragraph 4.A. of the Separationa Agreement

and Order did not have the effect of

enabling the Defendant to obtain a greater

percentage of her debt than some other

creditor of the same class and did not,

and does not, constitute a voidable prefer-

ence under Section 60 of the Bankruptcy

Act.

9. It 1s not equitable or just under

the facts of this case to subordinate the

claims of the Defendant to those of the

other creditors as requested by Debtor.

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10. The Final Judgment and Decree as em-

bodied in the Separation Agreement and

Order awarding alimony and Support and

maintenance to the Defendant-wife and

child, is not a debt put in the form of a

judgment, but is rather a legal means of

enforcing the obligation and duty of the

Debtor-husband and father to support his

wife and child. He owes this duty and

obligation not because of any debt due the

Defendant, but because of the policy of

the law, and it is the obligation based on

this duty which is saved from discharge in

bankruptcy by Section 17a(7) of the Bank-

ruptcy Act.

ll. The transfers of property and money

by the Debtor to the Defendant pursuant to

the Separation Agreement and Order and the

documents created and executed pursuant

thereto were not on account of an antecedent

debt.

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12. The March 30, 1977 Order incorpora-

ting the Separation Agreement constituted

the final step in a novation which created

an entirely new obligation running from

the Debtor to the Defendant and extinguished

the old one.

13. The Debtor's Creation and execution

of the Debt Obligation (Joint Exhibit 7),

the $30,000.00 note (Joint Exhibit 5) and

the $5,000.00 note (Joint Exhibit 6) and

his creation and execution of the Deed to

Secure Debt (Joint Exhibit 8) securing

these obligations did not, and does not,

constitute a voidable preference under

Section 60 of the Bankruptcy Act.

May 16, 1978

Atlanta, Ga.

/S/ Hugh Robinson

HUGH ROBINSON

Bankruptcy Judge

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

IN THE MATTER OF:

JAMES F. CRIST, JR.,: CASE NO. B77-1759A

Debtor,

JAMES F. CRIST, JR., 3

Debtor in pos-

session, Plain:

tiff

Vv.

JANE S. CRIST, : Chapter xII

Defendant. > proceedings

FINAL JUDGMENT

The within and foregoing matter having

come on regularly before this Court for

trial on February 24, 1978, and the same

having been fully tried at that time with

counsel for both the Plaintiff and Defen-

dant present and Participating; and upon

the conclusion of Said trial and submis-

Sion of legal briefs on the testimony and

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issues by all parties, it appearing to the

Court that the Defendant is entitled to a

Judgment against the Plaintiff James F.

Crist, Jr. on all of the allegations of

the Complaint:

IT IS HEREBY ORDERED, ADJUDGED AND

DECREED that Judgment be, and the same

hereby is, entered in favor of Defendant

Jane S. Crist and against Plaintiff James

F. Crist, Jr. on all of the allegations of

Plaintiff's Complaint;

IT IS FURTHER ORDERED, ADJUDGED AND DE-

CREED that the Findings of Fact and Con-

clusions of Law entered in this action on

May 16, 1978, be made a part of this Final

Judgment by reference and that the costs

of this action be taxed against the Plain-

tiff James F. Crist, Jr.

This 23rd day of May, 1978.

/S/ Hugh Robinson

HUGH ROBINSON

Bankruptcy Judge

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THE BANKRUPTCY ACT OF 1898

SECTION SEVENTEEN

(11 U.S.C. § 35)

§ 17. Debts Not Affected by a Discharge.

a. A discharge in bankruptcy shall release

a bankrupt from all of his provable debts,

whether allowable in full or in part,

except such as (1) are taxes which became

legally due and Owing by the bankrupt to

the United States or to any State or any

Subdivision thereof within three years

preceeding bankruptcy: Provided, however,

That a discharge in bankruptcy shall not

release a bankrupt from any taxes (a)

which were not assessed in any case in

which the bankrupt failed to make a return

required by law, (b) which were assessed

within one year preceding bankruptcy in

any case in which the bankrupt failed to

make a return required by law, (c) which

were not reported on a return made by the

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bankrupt and which were not assessed prior

to bankruptcy by reason of a prohibition

On assessment pending the exhaustion of

administrative or judicial remedies avail-

able to the bankrupt, (d) with respect to

which the bankrupt made a false or fraudu-

lent return, or willfully attempted in any

manner to evade or defeat, or (3) which

the bankrupt has collected or withheld

from others as required by the laws of the

United States or any State or political

Subdivision thereof, but has not paid

over; but a discharge shall not be a bar

to any remedies available under applicable

law to the United States or to any State

or any subdivision thereof, against the

exemption of the bankrupt allowed by law

and duly set apart to him under this Act:

And provided further, That a discharge in

bankruptcy shall not release or affect any

tax lien; (2) are liabilities for obtaining

A77

money or property by false pretenses or

false representations, or for obtaining

money Or property on credit Or obtaining

an extension or renewal of credit in

reliance upon a materially false statement

in writing respecting his financia] condi-

tion made or Published or caused to be

made or published in any manner whatsoever

with intent to deceive, or for willful and

malicious conversion of the property of

another; (3) have not been duly scheduled

in time for Proof and allowance, with the

name of the creditor, if known to the

bankrupt, unless such creditor had notice

Or actual knowledge of the proceedings in

bankruptcy; (4) were created by his fraud,

embezzlement, misappropriation or defalca-

tion while acting as an officer or in any

fiduciary Capacity; (5) are for wages and

commissions to the extent they are entitled

to priority under Subdivision a of section

A78

64 of this Act; (6) are due for moneys of

an employee received or retained by his

employer to secure faithful performance by

Such employee of the terms of a contract

of employment; (7) are for alimony due or

to become due, or for maintenance or

Support of wife or child, or for seduction

of an unmarried female, or for breach of

Promise of marriage accompanied by seduc-

tion, or for criminal conversation; or (8)

are liabilities for willful and malicious

injuries to the person or property of

another other than conversion as excepted

under clause (2) of this subdivision.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.