In re Pemberton

260 F. 521 | S.D. Fla. | 1919

CALL-, District Judge.

The order of the referee adjudging the American National Bank of Tampa to have a lien by virtue of the bill of complaint filed by it July 10, 1918, is brought before me for review. The question of law to be decided is: Did the creditor, by filing its bill and notice of lis pendens, acquire an equitable lien upon the property sought to be subjected to its debt, and thereby is entitled to a preference over the general creditors of the bankrupt ?

There is no question but that the bill was filed more than four months before any proceedings in bankruptcy were taken to subject the property theretofore conveyed away by the bankrupt and a lis pen-dens filed, an action at law commenced seeking to reduce its claim to judgment, and that said action at law subsequently resulted in a judgment in favor of the bank. Under well-recognized rules of law the filing by a judgment creditor of a bill to accomplish the object of the bill in this case, would constitute an equitable lien.

The contention in this case is that because the complainant did not at the time of filing its bill have such judgment, nor a receiver appointed, nor injunction issued, but filed its bill in the state court, pursuant to authority given in the state statute (section 1961, General Statutes of Florida), no such equitable lien exists. There can scarcely be any doubt that, had the bank procured the appointment of a receiver or the issuance of an injunction on its bill, such an equitable lien would have entitled the bank to a preference, although no judgment at law had been obtained prior to the filing of the bill. As I understand the law, the filing of such a bill by a creditor to subject property, the title to which is not in the name of the debtor, is an equitable levy upon such property, and vests in the complainant the right to have such property first applied to the payment of his debt, if he prevails.

Under the general rules of law a creditor before judgment could not maintain such a bill, nor does the act of the Legislature of Florida vest the chancery side of this court with jurisdiction to entertain such a bill, but it does vest such jurisdiction in the state circuit court, and the bankruptcy law recognizes and enforces such liens given by state laws. Chancery was without jurisdiction to entertain such suits because no lien existed prior to the creditor obtaining judgment, but the section of the General Statutes of Florida referred to vests this jurisdiction in the state circuit courts where action at law has been commenced. It was not the lien of judgment that gave priority to the creditor, but equitable lien created by the filing of the bill. I can see no just reason why the same effect should not be given to the bill filed in the state court and the state statute.

The order of the referee is affirmed: