Joseph J. Ricotta, as Trustee of L. E. Kimball Construction Co., .Inc., Bankrupt v. Burns Coal & Building Supply CompanyJoseph J. Ricotta, as Trustee of L. E. Kimball Construction Co., .Inc., Bankrupt v. Burns Coal & Building Supply Company
Defendant appeals from a judgment, D.C.W.D.N.Y.,
It is conceded, that at the time each payment was made defendant could have filed a materialman’s lien for thе same debt under N.Y. Lien Law, §§ 3 and 10. By virtue of § 67b of the Bankruptcy Act, 11 U.S.C. § 107(b), neither the filing nor the enforcement of such a lien would have constituted a preference. Morеover, had the liens been filed, payment merely discharging them, without improving the creditor’s position as against the general creditors of the bankrupt, would likewise have been immune from attack. See 3 Collier on Bankruptcy ¶60.22 and eases citеd n. 1 (14th Ed. 1956). It would be absurd to treat differently payments for the same debts obtained without filing liens, аnd the law does not do so. Consistent with common sense the courts have upheld payments where at the time the payments were made the creditor could have equally protected himself by filing a nonpreferential lien. Greenblatt v. Utley, 9 Cir.,
Plaintiff seeks to distinguish the eases just cited on the grounds that the creditors there had inchоate liens at the time payment was made and that under the state laws there involved filing merely perfected these already existing liens. Under the New York law here relevant, it is contended, defendant had no lien at all, inchoate or othеrwise, prior to filing, but had merely a right to obtain such a lien by filing a notice. So subtle a distinction, if existent, cannot turn aside the compelling thrust of these decisions. Both therе and in this case the filing of the lien is permitted by § 67b of the Bankruptcy Act, 11 U.S.C. § 107(b). The sole purpose of filing these liens is to secure payment. Surely receipt of payment itself should not be less secure than the lien which could have se
On the present record, however, there remains the possibility that these payments, and thе other $8,979.98 received by defendant within four months of bankruptcy as well, may be preferential in part.
1
We are unable to determine either as to individual payments оr as to the aggregate the value of the property subject to the material-man’s liens which defendant could have filed on the date each payment was received. If the amounts it received during the four months prior to bankruptcy еxceed that which it could have obtained through the filing and enforcing of
liens
for the same debts, then to the extent of that excess the estate available to the general creditors was depleted and the payments preferential. Cf. Perkins v. Lakeport Nat. Bank, D.C.N.H.,
Reversed and remanded.
Notes
. Defendant states in its brief that “the sum of $8,979.98 was paid for materials furnished after July 7, 1956 [four months befоre the date of bankruptcy] and, therefore, coneededly not preferential.” But § 60a of the Act, 11 U.S.C. § 96 (a), requires only that the debt arise prior to the date of payment, not prior to four months of bankruptcy. And while some of the materials dеlivered during the four months preceding the bankruptey were paid for within a few days оf delivery, any payment later than the date of delivery (making the purchase оther than cash) is payment of an antecedent debt under § 60a. See 3 Collier on Bankruptcy ¶60.23 n. 2 (14th Ed. 1956). On the proceedings following the remand of this case the trustee of course will not be precluded from broadening his attack to include these payments if he sees fit to do so.