9 F. 493 | S.D.N.Y. | 1881
Markowitz, the moving creditor, by virtue of a judgment, execution, and levy prior to the commeneement of proceedings in bankruptcy, obtained a legal lien upon the goods and chattels of the bankrupt. The goods were under advertisement for sale under this execution, and others, at the time of the filing of the petition in bankruptcy, on December 8, 1874. On that day an injunction was issued out of this court in those proceedings, restraining further proceedings by the sheriff. Afterwards it was so modified as to permit the 'sheriff to sell all the goods and chattels of the bankrupt levied on, and to retain the proceeds to abide the further order of the court. He was also permitted to pay two judgments prior to that of Markowitz, there being no controversy about them. After paying those judgments and the expenses of sale, a net balance of $611.39 remained in his hands, which was then, and has ever since been, claimed by Markowitz under his judgment of $2,040, which was next in order of lien. Payment to him has been prevented by the original injunction, which, as respects this judgment, has never been vacated, it being claimed, not only on behalf of the assignee in bankruptcy, but also in behalf of two subsequent judgment creditors, that that judgment was fraudulent and collusive, and designed to give an unlawful preference to Markowitz, who is a brother-in-law of the bankrupt.
The papers on file, referred to on this motion, show that in April, 1875, the assignee, in his original application for the balance of the money, was apprised of the alleged collusion and fraudulent character of the judgment. The affidavit of Clark, the attorney of the petitioning creditors, not only stated the fact, but gave some evidence of it. No suit, however, has ever been commenced to assail the legal lien of this judgment. More than six years have elapsed since the charge of its fraudulent character was made by the assignee, and since he was apprised by the court that it could be assailed only by plenary suit. The assignee has appeared in opposition to this motion, but there is no evidence that he is any better prepared to commence such a suit now than he was six years ago, or is even proposing to recover this money. No reason appears why such suit should not have been commenced long ago, if it was desired or intended to contest the lien of this judgment, except, possibly, the assignee’s want of the necessary funds to do so, which it must be assumed the creditors were not willing to advance. This cannot extend the statute of limitations. The object of the statute was to secure the speedy liquidation of bankrupts’ estates. The injunction of December 8, 1874, was not an injunction upon the assignee’s proceedings, but was for the benefit of the assignee to be thereafter chosen. He has not availed himself of
I cannot perceive anything possibly useful to the bankrupt’s estate in continuing the injunction longer, and it ought, therefore, to be dissolved. By the operation of the statute of limitations the question of the validity of the judgment has long since passed beyond the scope of proceedings in bankruptcy; and the special interest of the two subsequent judgment creditors, in contesting the judgment, cannot be here considered, as it does not concern the general creditors.
The motion should be granted.