12 F. Cas. 537 | U.S. Circuit Court for the District of Connecticut | 1842
The facts in this case .present the question, how far proceedings under the state insolvent law of Connecticut are valid, since the enactment of the bankrupt law of August 19th, 1841 [5 Stat. 440], In order to determine this question, it is necessary to recur to the last proviso to the second section Of the act of congress, which reads as follows: “And provided also, that nothing in this act contained shall be construed to annul, destroy, or impair any lawful rights of married women or minors, or any liens, mortgages, or other securities on property, real or personal, which may be valid by the laws of the states respectively, and which are not inconsistent with the second and fifth sections of this act.” Was the assignment made by Horton to Waldo as trustee in December, 1841, and the proceedings upon that assignment in the probate court a lien on this property, such as the bankrupt act does not annul? We think it was. The bankrupt law did not go into operation until the 1st day of February, 1842, and must be considered the same as if it had been enacted on that day. The seventeenth section"provides, that the act shall take effect from and after the 1st day of February. By this we are to understand that the act is to have no effect until that day. It is therefore to have no influence upon or control over any party or transaction up to that day. The words “no effect” are significant, and cannot be construed to reach any proceeding anterior to the 1st day of February. The assignment in question was made in December, 1841, and being then valid by the laws of .Connecticut, must be held valid now. The consequence is, that all assignments under the state insolvent law, commenced before the 1st day of February, 1842, constitute a lien within the terms of the last proviso to the second section of the act, but that all assignments under the state insolvent law, commenced after the 1st day of February, 1842, are inconsistent with the second and fifth sections of the bankrupt act, and are rendered void by proceedings in bankruptcy. The assignee in bankruptcy cannot claim this property, but it must be left in the hands of the trustee under the state law.
