In re Lady Bryan Min. Co.

14 F. Cas. 928 | D. Nev. | 1870

BY THE COURT.

The first ground upon which the motion to dissolve is based is that said injunction is not addressed to any person. Section forty gives this court power, upon making an order to show cause, to restrain by its injunction the debtor and any other person from transferring, disposing of, or interfering with the debtor’s property— between the time of filing the petition and the hearing of the order to show cause. This order may be made without notice,- and its office is to preserve the property of the debtor until the question of bankruptcy is determined. In the present case the injunction is in the form of an order, and is addressed to the Lady Bryan Mining Co. and all other persons who may attempt to transfer or interfere with the property of that company, and when served upon the sheriff and Johnson, as it was. it plainly apprised them of what they were restrained from doing. The fact that they were not named in tlie order can make no substantial difference. Any distinction between a writ of injunction and an order in tbe nature of one, bas been disregarded in practice. Hil. Inj. 42; Erie & N. E. R. Co. v. Casey, 26 Pa. St. 292. Tbe second ground is that tbis court has exceeded its just power, and cannot lawfully restrain tbe judgment-creditor, or tlie sheriff, from selling tbe property under tbe execution issued out of tbe state court. Johnson having obtained a judgment, and it having been docketed before tbe filing of the petition in bankruptcy, tbe judgment, not being impeachable for fraud or as a preference, is a lien which this court must protect. But it is only a lien, for neither the judgment nor the levy of execution divests the bankrupt of its property in the estate levied upon, and it would be bound to include such estate in its inventory as part of the assets. I am fully satisfied that this court may, in the exercise of a lawful jurisdiction, restrain by injunction the sale of property under an execution issued from a state court before the commencement of proceedings in bankruptcy, and that this may be done by restraining the judgment creditor or the officer about to make the sale, or both. Looking at the first section of the bankrupt act, it is difficult to imagine how a more unrestricted jurisdiction over matters in bankruptcy could have been granted. All the assets and all the parties in interest are to be brought betore the court, priorities adjusted, liens ascertained and liquidated, and the different funds and assets marshalled and distributed. The grant of these powers carries with it the right to employ such process, mode of procedure and remedies, as are indispensable to make the grant effectual. In this case the real estate levied on is assets, and power to collect the assets is given. But this power is of no avail in this proceeding, unless the court can preserve the assets until the question of bankruptcy is determined. By section fourteen, the assignee has power under the direction and order of the court to sell encumbered property. Can it be doubted that the court may make this provision effectual? Section twenty gives the court power to direct a sale of property upon which a creditor has a lien, which can be wholly defeated if the position of the sheriff in this case is correct. The judgment creditor claims a lien upon the property under levy, but whether it is a valid lien or not. the law says the court of bankruptcy shall ascertain, and that if it is found valid it shall be liquidated in that court — provisions which would be rendered nugatory unless the sheriff can be restrained. There may. no doubt, be eases where no good could be accomplished by issuing an injunction, but this is not such a case. Johnson’s debt does not exceed three thousand dollars, for which he has a judgment bearing ten per cent, interest. His lien embraces property valued at some twenty thousand dollars, and it appears that it would be most advantageously sold in one parcel at private sale. The only damage to the judgment creditor will be a little delay, while the general creditors may suffer a serious loss by the forced sale of this large amount of property to satisfy so small a debt. Motion denied.