Gray v. Arnot

| N.D. | Sep 16, 1915

Bruce, J.

(after stating tbe facts as above). There can be no question that the defendant in this action can place no reliance on the lien of the attachment nor upon the judgment which was rendered in the action in which the attachment was issued. The language of § 67 of the bankruptcy act of 1898 is too clear to admit of any dispute. It expressly provides that “levies, judgments, attachments, or other liens, obtained through- legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt, and the property affected by the levy, judgment, attachment, or other lien shall' be deemed wholly discharged and released from the same, and shall pass to the trustee as a part of the estate of the bankrupt,” etc. [30 Stat. at L. 565, chap. 541]. There is no dispute that the levy and judgment were made and rendered within the time mentioned in the statute, and that said James P. Johnson was in fact a bankrupt.

The statute mentioned, however, relates merely to levies, judgments, attachments, and liens which are acquired through legal proceedings. It certainly does not by its terms, and in all logic and justice cannot be held, to affect contractual liens or quasi contractual liens or rights, except perhaps as to matters of procedure. “A most scrupulous care is in fact evinced throughout § 67 of the bankruptcy act of 1898 to save all rights and liens obtained in good faith from the bankrupt.” See 3 R. C. L. 298.

But had the Bristol & Sweet Company, and has the sheriff now, any such lien ? We think not. Plaintiff had no lien except by virtue of the levy of attachment. The Code nowhere gives a special lien to a vendor of chattels, after a delivery to his vendee, except as he may acquire such lien by the levy of an attachment or execution in an action to recover the purchase price, and- that attachment being rendered null and void by the Federal statute, no such lien can be deemed to exist, or in fact .to ever have existed. Northern Shoe Co. v. Cecka, 22 N.D. 631" court="N.D." date_filed="1912-02-26" href="https://app.midpage.ai/document/northern-shoe-co-v-cecka-6736695?utm_source=webapp" opinion_id="6736695">22 N. D. 631, 635, 135 N. W. 177.

Nor was the plaintiff precluded from bringing the present action by reason of the fact that he had not intervened in the action of Bristol & Sweet Company v. Johnson. That action could not, in any view of the case, be deemed to have been an action for the possession of the property, nor to try the title thereto. Not only was it fundamentally an action-'for the recovery of money, and not only was thn attachment merely subsidiary thereto, but the lien of the writ or warrant of attachment having been nullified by the filing of the petition in bankruptcy, nothing thereafter remained in the action and for adjudication but the money claim, and this, even if we concede that there was a personal service or appearance in the case. The plaintiff therefore could not have intervened even if he had desired. He could not turn an action for money only into an action for the recovery of personal property or to try the title thereto. Jewett Bros. v. Huffman, 14 N.D. 110" court="N.D." date_filed="1905-02-18" href="https://app.midpage.ai/document/jewett-bros-v-huffman-6735633?utm_source=webapp" opinion_id="6735633">14 N. D. 110, 103 N. W. 408.

Nor. was the trustee precluded from bringing the present action in the' state court. It may be possible that an application to the bankruptcy.court for a summary order to the sheriff to turn over the property might have been a proper remedy, but we find no statute or rule of law which in terms, prescribes such a procedure, or ,in any way makes it exclusive.

Nor'-is there any merit in the contention that the sheriff held the property under the judgment of the district court and its order to sell. It is sufficient to say that it was not sold, and that the rights of no innocent .third. party were- involved until after the lien of the attachment and the judgment had been nullified by the filing of the petition in bankruptcy. King v. Loudon, 53 Ga. 64" court="Ga." date_filed="1874-07-15" href="https://app.midpage.ai/document/king-v-loudon-5557211?utm_source=webapp" opinion_id="5557211">53 Ga. 64; D. C. Wise Coal Co. v. Columbia Lead & Zinc Co. 123 Mo. App. 249" court="Mo. Ct. App." date_filed="1907-03-05" href="https://app.midpage.ai/document/d-c-wise-coal-co-v-columbia-lead--zinc-co-8264442?utm_source=webapp" opinion_id="8264442">123 Mo. App. 249, 100 S. W. 680; Re Beals, 116 F. 530" court="D. Ind." date_filed="1902-06-17" href="https://app.midpage.ai/document/in-re-beals-8747860?utm_source=webapp" opinion_id="8747860">116 Fed. 530; Re Goldberg, 121 Fed. 581; Lehman, S. & Co. v. E. Martin & Co. 132 La. 231" court="La." date_filed="1912-10-21" href="https://app.midpage.ai/document/lehman-stern--co-v-e-martin--co-7168461?utm_source=webapp" opinion_id="7168461">132 La. 231, 61 So. 212.

Nor.is there any merit in the contention that the property was still ;iú custodia, legis, and that therefore the present action of claim and .delivery co.uld not'be maintained. “It goes without saying, that the attachment sued out by the plaintiff [Bristol & Sweet Company] was stricken with the nullity denounced by the Federal statute,-and the property affected by the attachment was discharged and released from the; same. . Under . . . [§ 67 of the United States bankruptcy act (Act of July 1, 1898, chap. 541, 30 Stat. at L. 565)] which is the supreme law of the land. After an adjudication in bankruptcy, a state could has no jurisdiction to hold property under an attachment for any purpose.” Lehman, S. & Co. v. E. Martin & Co. 132 La. 231, 61 So. 212. The defendant therefore held the property not as an officer of the law, hut as an involuntary bailee or trustee, — at the will of and for the benefit of him who was entitled to the possession thereof, and who in the case at bar was the trustee in bankruptcy.

The judgment of the District Court is affirmed.