Case ID: f_167/html/0574-01.html
Source: Caselaw Access Project
Author: {"author": "HOLLAND, District Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In re RESNEK et al.
    (District Court, E. D. Pennsylvania.
    February 9, 1909.)
    No. 3,069.
    Bankruptcy (§ 287) — Liens Acquired by Legal Proceedings — Effect op Levy and Sale Bepore Bankruptcy — Remedy of Trustee.
    Where an execution was issued against an insolvent debtor within four months prior to his bankruptcy, and a levy and sale made, and the proceeds paid over to the Judgment creditor before the filing of the petition, the case does not fall within Bankr. Act- July 1, 1898, c. 541, § 67f, 30 Stat. 565 (TJ. S. Comp. St. 1901, p. 3450), avoiding liens obtained through legal proceedings, and the referee is without power to summarily direct a repayment of the money; the remedy of the trustee, if any, being by a plenary action to recover the amount as a preference under section 60b.
    [Ed. Note. — For other cases, see Bankruptcy, Cent. Dig. § 444; Dee. Dig. § 287.*]
    In Bankruptcy. On certificate of referee.
    Calvin F. Smith, for Albert H. Resnek.
    Frank Reeder, Jr., for trustee.
    
      
       For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes
    
   HOLLAND, District Judge.

In this case the judgment had been entered in the court of common pleas of Northampton county, the levy and sale made, and the money paid over to Albert H. Resnek on the 9th day of December, 1907, within four months of the filing of the petition in bankruptcy against the alleged bankrupts, which took place on the 16th day of March, 1908, and the adjudication was entered April 16, 1908. Upon the presentation of á petition, the referee summarily directed Albert H. Resnek to pay over to the trustee in bankruptcy the net proceeds received from the sheriff on the execution, to which order Resnek excepted, and the question is- certified to this court for determination as to whether the referee, under the circumstances, had jurisdiction to make this summary order.

Where, within four months before the filing of a petition in bankruptcy against an insolvent debtor, an execution has been issued and levy and sale made and the proceeds paid over to the judgment creditor before the filing of the petition, the case does not fall within the provisions of section 67f of the bankrupt act (Act July 1, 1898, c. 541, 30 Stat. 565 [U. S- Comp. St. 1901, p. 3450]), and the lien created by the judgment and levy is not rendered void by the adjudication. The remedy, if any, the trustee has against the creditor, is under the provisions of sections 60a and 60b of the bankrupt act in a plenary action, where it will be necessary to allege and show that the creditor had reasonable cause to believe that the bankrupt, by suffering judgment to be taken against him, intended to give a preference. In re Blair (D. C.) 102 Fed. 987; In re Bailey (D. C.) 144 Fed. 214. And this is true, even though the proceeds of the execution are insufficient to satisfy the claim of the judgment creditor. In re Knickerbocker (D. C.) 121 Fed. 1004.

It follows, therefore, that the order of the referee must be reversed. It is so ordered.