Lockwood v. Exchange Bank

Status

52 later cases cite Lockwood v. Exchange Bank; 52 of those citations sat close to treatment language and were flagged for reading, and all of them have been read. Citations that did not sit near treatment language were not flagged and were not read one by one, so a court that weakened this case without using any of that language would not appear here.

Treatments

Superseded by statute

• The bankruptcy court held that § 541 of the Bankruptcy Reform Act of 1978 displaced Lockwood’s rule that exempt property did not enter the bankruptcy estate.

  Matter of Upright · United States Bankruptcy Court for the Southern District of New York · filed December 19, 1979

  Pursuant to Code § 541, all property of the debtor becomes property of the estate upon the filing of a petition for relief; even property needed for a fresh start, thereby overruling Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903) and Lines v. Frederick, 400 U.S. 18, 91 S.Ct. 113, 27 L.Ed.2d 124 (1970).

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• The bankruptcy court held that § 541 of the later Bankruptcy Code displaced Lockwood’s rule that exempt property did not enter the bankruptcy estate.

  In Re Dardar · United States Bankruptcy Court for the Eastern District of Virginia · filed April 28, 1980

  11 U.S.C. § 541(a) provides that the commencement of a case creates an estate comprised of all legal and equitable interests of the debtor as of the date of filing. Analytically, all property interests of the debtor pass to the estate. Section 541 significantly changes prior law and has the effect of overruling Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903). H.R.Rep. No. 95-595, 95th Cong., 1st Sess. (1977) p. 368, U.S.Code Cong. & Admin.News 1978, p. 6323.

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• The bankruptcy court held that § 541 of the new Bankruptcy Code brings exempt property into the estate, displacing Lockwood’s contrary rule under the 1898 Act.

  Leech v. Nichols (In Re Nichols) · United States Bankruptcy Court for the Eastern District of Michigan · filed June 25, 1980

  The House Report is also clear that § 541 has made a drastic change in the law in that the holding in Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903), which held that title to exempt property remained in the bankrupt and was not subject to administration by the trustee or bankruptcy court, has been overruled. ... From the foregoing discussion it is evident to this court, and we so hold, that income tax refunds, wage withholdings, accrued vacation pay as well as other items not formerly considered to be part of a debtor’s estate are now so by virtue of the “dragnet” clause of the Code.

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• The bankruptcy court held that § 541 of the 1978 Bankruptcy Code displaced Lockwood’s rule under the earlier Bankruptcy Act by bringing exempt property into the bankruptcy estate before exemption.

  Day v. Boteler (In re Boteler) · United States Bankruptcy Court for the Southern District of Alabama · filed August 5, 1980

  “Paragraph (1) has the effect of overruling Lockwood v. Exchange Bank, 190 U.S. 294 [23 S.Ct. 751, 47 L.Ed. 1061] (1903), because it includes as property of the estate all property of the debtor ... Section 541 is therefore a departure from its predecessor Section 70a, Bankruptcy Act, under which title to all property of the debtor, wherever located, except exempt property, vested in the trustee as of the date of bankruptcy.

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• The bankruptcy court held that the 1978 Bankruptcy Code displaced Lockwood’s restriction on bankruptcy court jurisdiction over exempt property and allowed it to hear the complaint.

  Old Colony Cooperative Bank v. Replogle (In re Replogle) · United States Bankruptcy Court, Middle District of Florida · filed August 11, 1980

  Thus, it is evident that the Code specifically overrules Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903), in which the Supreme Court held that the jurisdiction of the Bankruptcy Court, with regard to properties which were claimed as exempt, was limited to merely determining the right to claim the exemptions. The Court in Lockwood, supra decided that once the property was allowed and set aside as exempt, the Bankruptcy Court’s jurisdiction was exhausted. Thus, under the new Code, whether the subject property is exempt or not is of no consequence and has no effect on this Court’s jurisdiction to entertain the complaint under challenge.

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• The bankruptcy court held that section 541 of the 1978 Bankruptcy Reform Act brings debtor property into the estate before exemptions are claimed, displacing Lockwood’s rule that exempt property never entered the estate.

  In re DeVoe · United States Bankruptcy Court for the Southern District of Ohio · filed August 12, 1980

  In addition to the words of the statute, Congress recorded its legislative intent in the reported legislative history: ... “Paragraph (1) has the effect of overruling Lockwood v. Exchange Bank, 190 U.S. 294, [23 S.Ct. 751, 47 L.Ed. 1061] (1903), because it includes as property of the estate all property of the debtor, even that needed for a fresh start. After the property comes into the estate, then the debtor is permitted to exempt it under proposed 11 U.S.C. § 522, and the court will have jurisdiction to determine what property may be exempted and what remains property of the estate. ... Through the words of § 541 and the legislative history, it is clear that the debtor’s estate includes any and all interest in property he owned, claimed or possessed as of the date of filing his voluntary petition in bankruptcy. ... Of course, debtor is entitled to claim his exemptions against the portion of the refund in the estate.

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• The bankruptcy court held that the 1978 Bankruptcy Code displaced Lockwood’s rule allowing a homestead waiver creditor to delay discharge and pursue exempt property, and used that change to sustain the debtor’s lien avoidance.

  Beneficial Finance Co. of Virginia v. Rodgers (In Re Rodgers) · United States Bankruptcy Court for the Western District of Virginia · filed September 11, 1980

  Under prior law, a homestead waiver note holder could stay discharge and pursue property sought to be exempt by homestead deed. See Lockwood v. Exchange Bank (1903) 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061, 10 ABR 107. The legislative history of 11 U.S.C. § 541 states that the new Code specifically overrules Lockwood. This is additional support for the exception claimed by the Debtor, Rodgers, and sustained herein.

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• The bankruptcy court held that the Bankruptcy Reform Act of 1978 displaced Lockwood’s rule that exempt property never entered the bankruptcy estate, so the debtor could exempt only his equity in the mobile home.

  In re Morgan · United States Bankruptcy Court for the Middle District of Tennessee · filed October 27, 1980

  In the Bankruptcy Reform Act of 1978, however, the Congress made a fundamental change in the approach to exempt property by providing that it first passes into the bankruptcy estate and then is exempted from it. Section 522(b) authorizes an individual debtor to “exempt from property of the estate” either property specified in a new federal bankruptcy exemption or property exempt from execution under non-bankruptcy law. The provision in the old Act specifically excepting exempt property from the estate has been deleted, so that the estate is now comprised of “all legal or equitable interests of the debtor in property as of the commencement of the case.” 11 U.S.C. § 541(a)(1). Congress has overruled Lockwood, as the committee reports of both houses specifically point out:

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• The bankruptcy court held that the Bankruptcy Code made exempt property pass to the trustee, displacing Lockwood’s contrary rule under the 1898 Act.

  Public Finance Corp. v. Lantz (In Re Lantz) · United States Bankruptcy Court for the Southern District of Ohio · filed November 3, 1980

  It is also axiomatic that even exempt property passes to the Trustee, overruling Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 *80 L.Ed. 1061 (1903). See House Report No. 95-595, at page 368, U.S. Code Cong. & Admin. News 1978, p. 5787, and the jurisdictional grant under 28 U.S.C. § 1471(b).

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• The bankruptcy court held that the Bankruptcy Reform Act displaced Lockwood’s rule restricting bankruptcy court jurisdiction over exempt property and exercised jurisdiction over the debtors’ resulting claims.

  Pickus v. Vitagliano (In Re Pickus) · United States Bankruptcy Court for the District of Connecticut · filed December 31, 1980

  The legislative history clearly indicates that the Bankruptcy Reform Act codifies a rejection of the rule in Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903) to the effect that once exemptions had been set aside, the bankruptcy court no longer had jurisdiction over such property to protect it against the claims of creditors. ... It follows that if a creditor by his post-petition acts impairs the exemptions of a debt- or, the bankruptcy court has jurisdiction to resolve the ensuing dispute

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• The bankruptcy court held that Section 541 of the 1978 Bankruptcy Code broadened estate property beyond the repealed Act and adopted the legislative explanation that this change displaced Lockwood’s exemption rule.

  Matter of Haynes · United States Bankruptcy Court for the Northern District of Indiana · filed March 6, 1981

  However, the advent of the Bankruptcy Code of 1978 diminishes the relevance of this analysis due to the broadened scope of paragraph (1) of subsection (a) of Section 541. The Senate Judiciary Committee reporting on Section 541 of Senate Bill 2226 stated: 8 Paragraph (1) has the effect of overruling Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903), because it includes as property of the estate all property of the debtor, even that needed for a fresh start. After the property comes into the estate, then the debtor is permitted to exempt it... The House Report on Section 541 of House Bill 8200 recites the above language verbatim. 9 Accordingly, the legislative history indicates Congress’ intent that the purposes of the Bankruptcy Code would not control what constitutes property in the same manner that the purposes were controlling under the repealed Bankruptcy Act. However, the principle that future wages do not constitute property at the time of the filing of the debtor’s petition remains sound.

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• The bankruptcy court held that the 1978 Bankruptcy Code brings exempt property into the estate, displacing Lockwood’s contrary rule under the 1898 Act.

  Matter of Harter · United States Bankruptcy Court for the Northern District of Indiana · filed April 13, 1981

  However, the advent of the Bankruptcy Code of 1978 diminishes the relevance of this analysis due to the broadened scope of paragraph (1) of subsection (a) of Section 541. The Senate Judiciary Committee reporting on Section 541 of Senate Bill 2266 stated: 9 Paragraph (1) has the effect of overruling Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903), because it includes as property of the estate all property of the debtor, even that needed for a fresh start. After the property comes into the estate, then the debtor is permitted to exempt it. . . The House Report on Section 541 of House Bill 8200 recites the above language verbatim. 10 Accordingly, the legislative history indicates Congress’ intent that the purposes of the Bankruptcy Code would not control what constitutes property in the same manner that the purposes were controlling under the repealed Bankruptcy Act.

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• The bankruptcy court held that Section 541(a)(1) of the later Bankruptcy Code displaced Lockwood’s rule that exempt property remained outside the bankruptcy estate.

  Joelson v. Tiffin Savings Bank (In Re Everhart) · United States Bankruptcy Court for the Northern District of Ohio, Western Division · filed May 5, 1981

  Under the present Bankruptcy Code, Section 541(a)(1) has the effect of overruling Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903), in that Section 541 expressly includes in the estate all the property of the debtor, even that needed for a fresh start. Only after the property comes into the estate, may the debtor exempt his share under Section 522.

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• The bankruptcy court held that the Bankruptcy Reform Act of 1978 displaced Lockwood’s exclusion of exempt property from the bankruptcy estate.

  In Re Donaghy · United States Bankruptcy Court, Southern District of New York · filed June 12, 1981

  Since the adoption of the Bankruptcy Reform Act of 1978 it is no longer crucial to determine who has title or possession regarding property claimed by the trustee as an asset of the estate. Code § 541(a)(1) defines property of the estate in broad scope to include “all legal or equitable interests of the debtor in property as of the commencement of the case.” Thus, even exempt property must first come into the estate, subject to the claim of exemption, thereby overruling Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1933) which excluded exempt property from the estate.

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• The bankruptcy court held that the Bankruptcy Reform Act of 1978 displaced Lockwood’s rule that bankruptcy courts lacked jurisdiction over exempt property.

  Commerce Union Bank v. Haffner (In Re Haffner) · United States Bankruptcy Court, Middle District of Tennessee · filed June 25, 1981

  Although Lockwood has been overruled by the Reform Act, see S.Rep.No.95-989, 95th Cong., 2d Sess. 82 (1978) and H.R.Rep.No.95-595, 95th Cong., 1st Sess. 368 (1977), U.S.Code Cong. & Admin.News 1978, p. 5787, and this court now has jurisdiction over exempt property, it must look to the state court decisions for guidance.

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• The bankruptcy court held that the 1978 Bankruptcy Code brings entireties property into the estate and removes the need for the Lockwood discharge stay procedure for joint creditors.

  Michigan National Bank—Michiana v. Chrystler (In Re Trickett) · United States Bankruptcy Court for the Western District of Michigan · filed September 10, 1981

  “Paragraph (1) has the effect of overruling Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903), because it includes as property of the estate all property of the debtor, even that needed for a fresh start. After the property comes into the estate, then the debtor is permitted to exempt it under proposed 11 U.S.C. Section 522, and the court will have jurisdiction to determine what property may be exempted and what remains as property of the estate. The broad jurisdictional grant in proposed 28 U.S.C. 1471(b) would have the effect of overruling Lockwood independently of the change made by this provisions.” H.R.Rep.No.95-595, 95th Cong., 1st Sess. 368 (1977). ... It is, therefore, my conclusion that the entireties property comes into the bank *90 ruptcy estate by operation of 11 U.S.C. Sec. 541, and may be claimed as exempt as to joint creditors who, under Michigan law could have obtained a joint judgment and satisfied the judgment out of the entireties property only to the extent of the $3,500 homestead exemption. ... Under the old Act it was necessary to follow the somewhat clumsy procedure of granting to those joint creditors who filed complaints relief from stay and a stay of discharge so that action could be taken in the State courts. In my opinion, such an inadequate device is no longer necessary.

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• The bankruptcy court held that the Bankruptcy Reform Act of 1978 displaced Lockwood’s rule that automatically exempt property never entered the bankruptcy estate.

  Waldrop v. Phillos (In Re Phillos) · United States Bankruptcy Court for the Western District of Virginia · filed October 23, 1981

  Under the former Bankruptcy Act (the Act), certain property, including interests of the debtor in property held as a tenant by the entirety, did not become a part of the bankruptcy estate. The trustee could not reach these automatically exempt property interests. See Lockwood v. Exchange Bank, 190 U.S. 294, 299, 23 S.Ct. 751, 753, 47 L.Ed. 1061 (1931). Lockwood was overruled on that point by enactment of the Bankruptcy Reform Act of 1978 (the Code). See 11 U.S.C. § 541(a); H.R.Rep. No.595, 95th Cong., 1st Sess. 367 (1977), U.S. Code Cong. & Admin.News 1978, pp. 5787, 6323.

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• The bankruptcy court held that the 1978 Code displaced Lockwood’s jurisdictional rule for exempt property and required this creditor to enforce its privilege in bankruptcy court.

  In re Gagnard · United States Bankruptcy Court for the Western District of Louisiana · filed February 23, 1982

  However, the Bankruptcy Reform Act of 1978 brought about substantial changes in the law. Lockwood and related cases appear to be founded upon the rule that, since exempt property did not become part of the property of the estate, the Bankruptcy Court did not have jurisdiction. This foundation has now been changed. Congress, in 28 U.S.C. 1471, gave the Bankruptcy Courts a broad jurisdictional grant over the proceedings under title 11 and over the property involved. 28 U.S.C. 1471(b) and (c) confer jurisdiction over all proceedings under title 11. ... Because the action was against the property of the debt- or, and because 28 U.S.C. 1471(e) gives exclusive jurisdiction to the Bankruptcy Court over all property of the debtor, the action to enforce the vendor’s privilege should have been brought in the Bankruptcy Court. The jurisdictional scope of 28 U.S.C. 1471 clearly includes claims based on both federal and state law.

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• The bankruptcy court held that the 1978 Bankruptcy Code displaced Lockwood’s exemption rule, so the debtors’ vehicle entered the bankruptcy estate and was subject to surrender to the trustee pending an exemption determination.

  In re Cattell · United States Bankruptcy Court, Southern District of Ohio · filed August 12, 1983

  Contrary to the position urged in behalf of the Debtor(s), the conclusion is inescapable that the motor vehicle disposed of prior to the § 341 meeting was property of the estate and subject to surrender to the Trustee. The case precedents cited which antedate the enactment of the Bankruptcy Code on November 6, 1978, repealing Section 70 of the Bankruptcy Act and overruling Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903) and Lines v. Frederick, 400 U.S. 18, 91 S.Ct. 113, 27 L.Ed.2d 124 (1970), are no longer pertinent.

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• The Fourth Circuit held that the 1978 Act changed the Lockwood rule under the 1898 Act that entireties property was outside the bankruptcy estate.

  Chippenham Hospital, Inc. v. Bondurant (In re Bondurant) · United States Court of Appeals for the Fourth Circuit · filed September 7, 1983

  Under the 1898 Bankruptcy Act property owned by the bankrupt and his nonbank-rupt spouse as tenants by the entireties was not included in the bankruptcy estate. Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903). Under the 1978 Act, however, this is no longer the case.

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• The bankruptcy court held that the 1978 Bankruptcy Code brought exempt property into the estate before exemption, displacing Lockwood’s contrary rule under the 1898 Act.

  In re Lillard · United States Bankruptcy Court for the Western District of Arkansas · filed March 12, 1984

  In the Bankruptcy Reform Act of 1978, Congress made a fundamental change in the approach to exempt property by providing that it first passes into the bankruptcy estate and then is exempted from it. ... The committee report's of • both Houses of Congress specifically point out: Paragraph (1) [of 11 U.S.C. 541(a)] has the effect of overruling Lockwood v. Exchange Bank, 190 U.S. 294 [23 S.Ct. 751, 47 L.Ed. 1061] (1903), because it includes as property of the estate all property of the debtor, even that needed for afresh start. ... Thus, Section 541 takes every possible “interest” of the debtor under consideration when the estate is created, but Section *438 522(b) 3 qualifies and limits that section by permitting the debtor to exempt certain property from the reach of Section 541.

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• The Fourth Circuit held that the Bankruptcy Reform Act of 1978 displaced Lockwood’s rule that exempt property does not enter the bankruptcy estate.

  Henry Clay Tignor v. William C. Parkinson, Jr., in Re Henry Clay Tignor, Debtor · United States Court of Appeals for the Fourth Circuit · filed March 15, 1984

  Under the old Act only non-exempt property was in-eluded as a part of the bankrupt estate under Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed.2d 1061 (1903). Under the Reform Act, however, all property of the debtor is included in the bankrupt estate, including exempt property. “After the property comes into the estate, then the debtor is permitted to exempt it under proposed 11 U.S.C. § 522, and the court will have jurisdiction to determine what property may be exempted and what remains as property of the estate.” Legislative History, 1978 U.S.Code Cong. & Ad.News at 5787, 5868, 6324 [hereinafter Leg.Hist.]. The Reform Act thus overrules Lockwood, Leg.Hist. at 5868, 6324, and we have previously so acknowledged in Shirkey v. Leake, 715 F.2d 859, 863 (4th Cir.1983).

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• The bankruptcy court held that 11 U.S.C. § 541(a)(1) displaced Lockwood’s exclusion of exempt property from the bankruptcy estate and included the disputed garnished wages in the estate.

  White v. Stephens (In Re Stephens) · United States Bankruptcy Court for the Northern District of Alabama · filed October 4, 1984

  Sect. 541(a)(1) has the effect of overruling the Supreme Court’s holding in Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903), in that it includes as property of the estate all property of the debtor, including that necessary for a fresh start.

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• The Fourth Circuit held that the new Bankruptcy Code displaced Lockwood’s 1898 Act rule excluding an individual debtor’s entireties interest from the bankruptcy estate because section 541 now includes that interest.

  Sumy v. Schlossberg · United States Court of Appeals for the Fourth Circuit · filed November 21, 1985

  In contrast to a joint filing, if only one spouse filed for bankruptcy under the 1898 Act, entireties property was treated as exempt and thus never became part of the individual bankrupt’s estate. E.g., Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903); Phillips v. Krakower, 46 F.2d 764 (4 Cir.1931). Lockwood ’s holding on this point was specifically overruled by the new Code, see H.R.Rep. No. 595, 95th Cong., 1st Sess. 368 (1977), reprinted in 1978 U.S.Code Cong. & Ad.News 5963, 6324; S.Rep. No. 989, 95th Cong., 2d Sess. 82, reprinted in 1978 U.S.Code Cong. & Ad.News 5787, 5868, and § 541 now includes the debtor’s interest in entireties property as part of the estate.

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• The bankruptcy court held that the Bankruptcy Code displaced Lockwood’s rule excluding exempt property from the bankruptcy estate.

  In Re Hockinson · United States Bankruptcy Court for the Northern District of Illinois · filed April 21, 1986

  It is true, as the Bank argues, that the Code overruled Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903), and included exempt property as property of the estate. This means that property that is not property of the estate on the petition date cannot be exempted by the debtor. It also means that the bankruptcy court has full jurisdiction over exempt property even after it is determined to be exempt under applicable state or federal law.

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• The bankruptcy court held that the Bankruptcy Reform Act of 1978 displaced Lockwood’s exclusion of exempt property from the bankruptcy estate by bringing such property into the estate for administration.

  In Re Townsend · United States Bankruptcy Court for the Western District of Missouri · filed May 5, 1987

  Under the Bankruptcy Act of 1898 [hereinafter “Act”] and the prior Bankruptcy Act of 1867, property held in tenancy by the entirety did not become part of the bankruptcy estate when only one of .the spouses was in bankruptcy. This is because the bankruptcy court neither administered nor distributed exempt property. Such property was simply excluded from the bankruptcy estate. Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903). ... However, the Bankruptcy Reform Act of 1978 [hereinafter “Code”] differs from the old Act in that it includes in the bankruptcy estate much of the property that had previously been exempt. Because debtor’s undivided interest in the whole of the entirety property becomes part of the estate under *964 the Code, this non-exempt entirety property itself now becomes subject to estate administration.

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• The bankruptcy court adopted the Reform Act analysis displacing Lockwood’s exemption rule and held that the personal injury settlement proceeds were property of the bankruptcy estate.

  Matter of Young · United States Bankruptcy Court for the Southern District of Ohio · filed October 18, 1988

  A complete discussion of the differences between § 70(a) of the Bankruptcy Act and § 541(a) of the Bankruptcy Code as they relate to the personal injury claims of debtors appears in the Fourth Circuit’s Tignor decision: Under the old Act only non-exempt property was included as a part of the bankrupt estate under Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903). Under the Reform Act, however, all property of the debtor is included in the bankrupt estate, including exempt property. ... The Reform Act thus overrules Lockwood, ... Accordingly, the trustee is correct in his assertion that the proceeds from the settlement of the debtors’ personal injury claims are property of this bankruptcy estate.

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• The bankruptcy court held that the 1978 Bankruptcy Code brought exempt property into the estate, displacing Lockwood’s contrary rule under the 1898 Act.

  In Re Nadler · United States Bankruptcy Court for the District of Massachusetts · filed December 4, 1990

  The reports of the Committees on the Judiciary for the House and Senate bills leading to the present Bankruptcy Code both state: ... Paragraph (1) [of § 541] has the effect of overruling Lockwood v. Exchange Bank, 190 U.S. 294 (1903) because it includes as property of the estate all property of the debtor, even that needed for a fresh start. ... Here is clear proof, if any is needed beyond the wording of §§ 541 and 522, that Congress intended to include within the bankruptcy estate all property for which a right of exemption is granted.

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• The bankruptcy court held that § 541(a)(1) displaced Lockwood’s exclusion of exempt property from bankruptcy estate administration.

  Landmark Bank v. Charles (In Re Charles) · United States Bankruptcy Court for the Eastern District of Missouri · filed January 22, 1991

  Section 541(a)(1) effectively overruled Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1933) which excluded exempt property from Bankruptcy Court administration.

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• The bankruptcy court held that Bankruptcy Code § 541(a)(1) displaced Lockwood’s exclusion of exempt property from the bankruptcy estate and applied the Code’s broader estate rule.

  Matter of Davis · United States Bankruptcy Court for the Southern District of Iowa · filed October 3, 1991

  Section 541(a)(1) had the effect of overruling Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903), because it includes as property of the estate all property of the debtor, even that needed for a fresh start.

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• The bankruptcy court held that § 541(a) brought the debtors’ earned income credit into the estate before exemption, adopting the statutory departure from Lockwood’s rule that exempt property stayed outside the estate.

  In re Goldsberry · United States Bankruptcy Court for the Eastern District of Kentucky · filed May 22, 1992

  However, in Matter of Davis, 136 B.R. 203, 207 (Bkrtcy.S.D.Iowa 1991), the court held that an earned income credit was property of the bankruptcy estate. It based its decision on the fact the 11 U.S.C. § 541(a)(1) makes all property of the debt- or, even that needed for a fresh start, property of the bankruptcy estate. As stated in the Legislative History of § 541: Paragraph (1) has the effect of overruling Lockwood v. Exchange Bank, 190 U.S. 294 [23 S.Ct. 751, 47 L.Ed. 1061] (1903), because it includes as property of the estate all property of the debtor, even that needed for a fresh start. After the property comes into the estate, then the debtor is permitted to exempt it under proposed 11 U.S.C. § 522, and the court will have jurisdiction to determine what property will be exempted and what remains as property of the estate. The Davis court went on to determine that the earned income credit was exempt under Iowa law. This Court agrees that the earned income credit is included in the bankruptcy estate pursuant to § 541(a).

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• The bankruptcy court held that § 541(a)(1) displaced Lockwood’s rule by bringing exempt property into the bankruptcy estate.

  Lowe v. Yochem (In re Reed) · United States Bankruptcy Court for the Western District of Texas · filed July 13, 1995

  In this way section 541(a)(1) has the effect of overruling the United States Supreme Court’s holding in Lockwood v. Exchange Bank, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903). Under 541(a)(1) all property of the debtor becomes property of the estate, including exempt property.

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• The district court held that the Bankruptcy Code displaced Lockwood’s rule that bankruptcy courts lack jurisdiction to adjudicate creditors’ rights in exempt assets.

  Nino v. Moyer · United States District Court for the Western District of Michigan · filed February 18, 2009

  In Lockwood v. Exchange Bank of Fort Valley, 190 U.S. 294, 23 S.Ct. 751, 47 L.Ed. 1061 (1903), the Supreme Court held that, under the 1898 Act, because exempt assets are not part of the bankruptcy estate, the bankruptcy court does not have jurisdiction to consider a creditor’s rights in those assets. The bankrupt party in Lockwood had apparently waived the right to claim an exemption in a contract. Id. at 295, 23 S.Ct. 751. However, the court held that the issue of waiver of the exemption must be pursued in state court because the bankruptcy court lacked jurisdiction to adjudicate rights to exempt assets. Id. at 299, 23 S.Ct. 751. The Bankruptcy Code overrules Lockwood and now allows the bankruptcy court to adjudicate such rights.

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