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filed: March 29, 1985.


NO. 03570 PHILA. 1982, Appeal from th Order in the Court of Common Pleas of Philadelphia County, Civil No. 2437 October Term, 1971


Louis S. Criden, Philadelphia, for appellants.

William F. Livingston, Norristown, for appellee.

Spaeth, President Judge, and Brosky and McEwen, JJ.

Author: Spaeth

[ 342 Pa. Super. Page 400]

This is an appeal from an order permitting appellee as a judgment lienor to foreclose against appellants' real estate, including appellants' residence. Appellants' principal argument is that their residence should be exempt from foreclosure because they claimed it as exempt in Federal bankruptcy proceedings. This argument is without merit, for when the judgment was initially entered, the Federal Bankruptcy Reform Act of 1978, Act of November 6, 1978, Pub.L. No. 95-598, 92 Stat. 2549 (1978), effective generally October 1, 1979, 11 U.S.C. § 101 et seq.,*fn1 which contains the exemption on which appellants rely, had not been enacted. We therefore affirm.

On October 19, 1971, appellee filed a complaint in confession of judgment against appellants. The judgment, which was later revived, was secured by appellants' real estate, consisting of appellants' residence at 7145 Large Street, Philadelphia, and another property at 644 Durfor Street, Philadelphia.

In July 1979 the parties entered into a stipulation that, for an agreed upon time period, appellee would refrain from execution against the residence while appellants tried to obtain financing or sell the property, and that appellants would refrain from filing any proceedings to delay or avoid foreclosure of the residence. When appellants were unable

[ 342 Pa. Super. Page 401]

    to finance or sell the property, an order was entered on November 28, 1979, directing the sheriff to sell appellants' residence.

On or about November 29, 1979, appellants jointly filed for bankruptcy in the United States District Court for the Eastern District of Pennsylvania. The petition listed appellee as a creditor and the residence as security for the debt. The residence was valued at approximately $30,000. Of this value, appellants claimed $15,000 as exempt. This claim was based on Section 522(b) of the Bankruptcy Act, which provides that a debtor may exempt from property of the estate either property that is exempt under State law or property that is exempt under Federal law.*fn2 Appellants claimed that their residence was exempt, up to $15,000, under Section 522(d)(1) of the Bankruptcy Act.*fn3

As a consequence of the bankruptcy proceeding, proceedings against appellants' real estate were automatically

[ 342 Pa. Super. Page 402]

    stayed. 11 U.S.C. § 362.*fn4 On April 15, 1981, the bankruptcy court modified the automatic stay and permitted appellee to proceed against the property at 644 Durfor Street,*fn5 although apparently appellee did not so proceed. The bankruptcy court also approved the report of the interim trustee.*fn6

[ 342 Pa. Super. Page 403]

Although the record does not disclose any further proceedings in bankruptcy,*fn7 appellants were apparently discharged in bankruptcy on or about June 30, 1981. Appellee then revived the judgment, and after further proceedings, the trial court entered an order allowing appellee to proceed to foreclose both properties. This appeal followed.

In regard to the property at 644 Durfor Street, appellants' argument is unclear. They refer to both properties throughout their main argument, and seem to contend that the 644 Durfor Street property is exempt from foreclosure on the basis of their exemption claim in the bankruptcy court. However, they concede that "[i]f . . . the debt due [appellee] from [appellants] exceeds the amount of the exemption allowed [appellants] under the Bankruptcy Code . . ., [appellee's] recovery should be against the 644 Durfor Street property only." Brief for Appellants at 10. Since the Durfor Street property was not claimed as exempt in bankruptcy, and since the bankruptcy court by its order of April 15, 1981, allowed appellee to proceed against it, we can find no basis for appellants' argument that appellee may not now proceed against it. We also note that in a prior pleading appellants admitted, or asserted, that appellee's action "must be limited to the property at 644 Dufor [sic] Street . . . ." Defendants' Motion to Dismiss Plaintiff's Petition to File Certificate of Readiness Nunc Pro Tunc, filed Oct. 4, 1982.

In regard to their residence, appellants argue that property claimed as exempt in a bankruptcy proceeding is

[ 342 Pa. Super. Page 404]

    protected from "collateral attack in state court by the bankrupt's creditors." Brief for Appellants at 8. We are not persuaded by this argument. It assumes that the exemption for residential real estate provided by the Bankruptcy Act will be recognized as consistent with Pennsylvania law, which provides no counterpart to the Federal exemption, although 42 Pa.C.S. § 8123(a) allows a debtor to exempt property, including real estate, from judgment up to a value of $300. This assumption may or may not be correct. Cf. Beneficial Consumer Discount Co. v. Hamlin, 263 Pa. Super. 393, 398 A.2d 193 (1979); and see Pa.R.Civ.P. 3123.1, note (noting "Pennsylvania and Federal law provide numerous exemptions of property from execution" and listing examples); 13 Std.Pa.Practice 2d § 74:13 (noting exemptions permitted under Bankruptcy Act as well as other federal statutes). We need not decide the point. For the Federal exemption for residential real estate on which appellants rely did not become effective until October 1, 1979, the effective date of the Bankruptcy Reform Act of 1978, supra, and appellee's judgment was initially entered against appellants' real estate in 1971. We will not give retroactive effect to a Federal exemption that has no State counterpart. "No bankruptcy law shall be construed to eliminate property rights which existed before the law was enacted in the absence of an explicit command from Congress." United States v. Security Industrial Bank, 459 U.S. 70, 81, 103 S.Ct. 407, 408, 74 L.Ed.2d 235 (1982).


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