Hardt v. Schuylkill Plush & Silk Co., 74 N.Y.S. 549

Hardt v. Schuylkill Plush & Silk Co.

74 N.Y.S. 549 | N.Y. App. Div. | 1902

Ingraham, J.:

The plaintiffs commenced an action against the defendant to recover damages for á breach of a contract and obtained an attach*91meut against the property of the defendant as a foreign corporation, and the sheriff of the city and county of Hew York, under such attachment, levied upon the property of the defendant. This attachment was obtained on the 15th of March, 1901, and a levy seems to have been made under it on the same day. The respondent, as the trustee in bankruptcy of the defendant, moved to vacate this attachment upon his affidavit which alleged that a petition was filed on the 29th day of March, 1901, by certain creditors of the defendant in the District Court of the United States for the eastern district of Pennsylvania, praying that the defendant be adjudicated a bankrupt, and that subsequently, and on the 17th day of July, 1901, the defendant was duly declared a bankrupt under the act of Congress relating to bankruptcy; that subsequently the respondent was duly elected trustee of the said bankrupt estate and qualified as such; and that “ at the time of the issue of said attachment and the levy thereof the defendant was insolvent, the aggregate of its property exclusive of any property which it may have conveyed, transferred, concealed or removed or permitted to be concealed or removed, with intent to defraud, hinder or delay its creditors was not at a fair valuation sufficient in amount to pay its debts.” It is provided by subdivision f of section 67 of the Bankruptcy Law (30 U. S. Stat. at Large, 565) that “ all 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.” Although by the express provision of the statute the attachment is to be deemed null and void and the property affected by the attachment deemed wholly discharged and released from the same, we agree with the court below that it was the proper practice to apply t‘o the court for an order formally discharging the attachment and releasing the goods of the bankrupt from the levy. Certainly the sheriff could not be required to assume the responsibility of releasing a levy valid but for the adjudication of bankruptcy. It is the duty of the court, upon these facts being called to its attention, to vacate the attachment and *92remove the lien so that the trustee in bankruptcy can take the proper proceedings to recover the property of the bankrupt’s estate.

The substantial question presented is whether upon those papers there is sufficient proof that the bankrupt was insolvent at the time the attachment was granted. The attachment was granted on the fifteenth day of March and the petition to have the defendant adjudicated a bankrupt was filed on the twenty-ninth day of March, fourteen days thereafter. There is no allegation as to the ground upon which it is sought to have the defendant adjudicated a bankrupt, but the trustee in bankruptcy alleges th^t at the time of the issue of such attachment and the levy thereof the defendant was insolvent. This Was a positive allegation, under oath, by the trustee appointed to administer the estate in bankruptcy, and there is nothing to show that he did not have knowledge of the bankrupt’s condition at the time the attachment was obtained. There is no evidence in opposition to this allegation, and under the circumstances there was sufficient proof to justify the court below in finding that this attachment was within those affected by the provisión of the Bankrupt Law to which attention has been called. I know of no laches on the part of the trustee that would make this attachment valid, which is made void by the provision of the Bankrupt Act.

I think, therefore, the order appealed from should be. affirmed, with ten dollars costs and disbursements.

Yak Brukt; Pi J., Pattbrsok, Hatch and Laughlin, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.