# Petition — Crist v. Crist

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1981
- **Citation:** 451 U.S. 986

## Text

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.

II
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

IV

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

V

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.

2

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

3
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

4
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

5
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

6
$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

7

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

8
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

9

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).

10
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.

11

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.

12

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

13

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

14
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

15

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.

16
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

17

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

18

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

19

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

20

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

21
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

Al
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.

A2

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.

A3
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,

AG

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

In

AS

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

A6

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."

A7

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

A8
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.

A9

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
DISTRICT JUDGE ©

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.

A71

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.

A72

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

A73
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

A74
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

A75
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

A76
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.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_1507%3A1. Public record. Not legal advice.