Bradley v. United Wireless Telegraph Co.

79 N.J. Eq. 458 | New York Court of Chancery | 1911

Leaking, Y. C.

Whatever doubts may have formerly existed touching the effect of the bankrupt of a defendant pending certain classes of actions in a state court, it is now settled that an adjudication of bankruptcy is not operative to destroy or impair the jurisdiction of a state court in a pending suit for the enforcement of a specific lien against assets of a bankrupt, when such lien has been acquired more than four months before the filing of the petition in bankruptcy. Pickens v. Roy, 187 U. S. 177.

It is also well settled that the filing of a judgment creditor’s bill for the purpose of setting aside a fraudulent conveyance, and thereby subjecting the property to the payment of the judgment of the creditor, and the service of process thereunder, creates a lien in equity upon the equitable estate of the debtor, in the property so conveyed, and that a lien of that nature is unaffected by bankruptcy of the debtor pending the suit and more than four months after the date of the entry of the judgment. The state, court appropriately enforces the lien against the res. The trustee in bankruptcy administers all claims which are in personam, but does not succeed to the rights of secured creditors. Metcalf v. Barker, 187 U. S. 165; Taylor v. Taylor, 59 N. J. Eq. (14 Dick.) 86.

It has also been determined in this state that a receiver of an insolvent corporation appointed by this court may file a bill as the representative of the insolvent corporation to set aside illegal or fraudulent transfers of property of the corporation of which he is receiver, and in that manner subject the assets to the payment of creditors of the insolvent corporation, and that such a suit is operative to create an equitable lien similar to that created by a creditor’s bill filed by a judgment creditor. Receiver Graham Button Co. v. Spielmann, 50 N. J. Eq. (5 Dick.) 120; affirmed, Ibid. 796.

Under the authorities above cited, and the several cases there reviewed, it is manifest that the adjudication of insolvency of the United Wireless Telegraph Company is not operative to destroy or impair the jurisdiction of this court for the enforcement of the equitable lien asserted by complainant; on the contrary, the trustees in bankruptcy take the property of the bankrupt subject to the equitable lien asserted by the present bill should such lien be established in the suit now pending in this court.

I am obliged to deny the stay sought by the petition filed in. behalf of the trustees in bankruptcy.