Case ID: va_76/html/0195-01.html
Source: Caselaw Access Project
Author: {"author": "Staples, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Richmond.
    Ferrell v. Madigan for, &c.
    February 2, 1882.
    1. Bankruptcy—Jurisdiction of State court—Judgment.—A judgment of State court, regularly docketed, before debtor was adjudicated a bankrupt, was assigned to third person, who had no notice of the proceedings in the bankrupt court, made no claim and received nothing from the bankrupt’s funds there administered. Judgment debtor afterwards sold to purchaser, for value, land owned by him at time of his bankruptcy. On bill filed in State court for benefit of assignee of the judgment against judgment debtor, his assignee in bankruptcy, and the purchaser, to subject the land to pay the judgment—
    Held :
    1. The judgment having been obtained before the bankruptcy, State court has jurisdiction to enforce its lien on the land in possession of the alienee of the bankrupt.
    2. Conceding that the bill should have been filed in the name of the assignee in bankruptcy, yet he, being a defendant, made no objection to the jurisdiction. Had the point been made at proper time the difficulty would have been removed. It is too late to raise the objection for the first time here in argument.
    2. Bankrupt Court.—Judgments.
    
      Quaere: Have the decisions of the supreme court of the U. S. application to judgments of State courts prior to the adjudication in bankruptcy, the liens whereof have not been affected by the proceedings of the bankrupt court ?
    Appeal from decree of circuit court of Halifax county iu suit of D. T. Madigan, for W. W. Wood, against H. O. Ferrell, C. C. Anderson, E. C. Ferrell, Patrick Edmunds, A. Barksdale, Jr., assignee in Bankruptcy of E. C. Ferrell, Bankrupt; and H. A. Edmundson, sheriff and administrator of CaleB Anderson, deceased. This suit was to enforce the lien of a judgment obtained by Madigan against C. C. and Caleb Anderson, and E. C. Ferrell, in 1867, and assigned to Wood, on tbe land of E. C. Ferrell, owned by bim at time of bis adjudication, and subsequently sold for value to H. O. Ferrell. It does not appear bow be retained tbe land after bis adjudication. Court below decreed tbat tbe land was bound by tbe judgment, and decreed its sale. II. O. Ferrell appealed to tbis court. Opinion of tbe court states tbe remaining facts.
    
      W. W. Henry, Henry Edmunds, for the appellant.
    
      Wood Bouldin, Jr., for the appellees.
   Staples, J.,

delivered tbe opinion of tbe court.

Tbe appellee, Madigan, in tbe year 1867, recovered a judgment against E. C. Ferrell and others in tbe circuit court of Halifax county for tbe sum of $471.41.

Tbe judgment was regularly docketed, and constituted a lien on all tbe real estate of tbe debtors. In tbe year 1870-71 Ferrell filed bis petition in bankruptcy, and was adjudicated a bankrupt. In tbe year 1873 tbe appellant purchased from Ferrell tbe tract of land in controversy, paid bim tbe purchase monéy, and received a conveyance, which was duly recorded.

In the year 1875, tbe appellee, for tbe benefit of W. W. Wood, to whom tbe judgment bad been assigned, filed tbis bill in tbe circuit court of Halifax, for tbe purpose of subjecting tbe tract sold tbe appellant to tbe lien of tbe judgment, and in tbe year 1878 be obtained a decree for its sale.

It is from tbis decree tbe appeal was taken to tbis court. It is assailed on various grounds. Among others, it is claimed tbat tbe appellee’s debt was proved in tbe bankrupt court, and an order there entered directing tbe proceeds of the real estate sold to be applied to the prior liens, of which the appellee’s was the first. It is in proof, however, that neither of the parties interested in the debt had any notice of the proceedings in the bankrupt court, and that they asserted no claim in that court to any of the funds under its control. The commissioner who took an account of the liens obtained his information from the records of the State court, and reported the judgment as belonging to Madigan, who had previously disposed of his entire interest. What became of the proceeds of the bankrupt’s lands actually sold does not appear. It is very certain that the present owner of the debt received no part of them. It would seem, also, that the land in controversy, although then in possession of the bankrupt, was not surrendered in the bankrupt court.

At all events, no sale of it was made by the assignee, but the bankrupt was permitted to retain it, and afterwards sold and conveyed it to appellant. This statement is sufficient to show that the appellees’ lien is not affected by anything done in the bankrupt court, and that his lien is still in force, and binds the land in the possession of the appellant.

The main ground of error is, that the State court has no jurisdiction of the case, and that the appellees’ remedy is through the assignee in the bankrupt court, which is vested with exclusive jurisdiction of the subject matter of controversy. The case of Glenny v. Langdon, 8 Otto, page 20, is relied upon in support of this position. In that case, however, no judgment had been obtained against the bankrupt prior to the adjudication in bankruptcy.

In the present case the very reverse is true. A very interesting question, therefore, arises, whether the decisions of the supreme court of the United States have any application to the case of a creditor whose judgment was rendered prior to the adjudication in bankruptcy, and whose lien has not been affected by any of tbe proceedings in tbat court. We do not deem it necessary to pass upon tbat question bere. Let it be conceded tbat in tbis case tbe bill was improperly filed in tbe name of tbe creditor, there is no doubt tbe defect may be cured by tbe express or implied consent of the parties. Tbe assignee was made a party defendant to tbe bill, and thus every difficulty, witb respect to tbe legal title, was removed. He made .no objection to tbe jurisdiction, or to tbe suit; be asserted no claim to tbe property or tbe proceeds; be never at any time thought it incumbent upon him or worth his while to interfere witb tbe appellee in tbe enforcement of his lien. Tbe bill was filed in July, 1875. Tbe appellant answered tbe following October. In tbat answer tbe proceedings in bankruptcy are stated, and tbe ground is taken tbat tbe appellee bad appeared in tbe bankrupt court, asserted bis lien, recovered part of the proceeds of tbe bankrupt’s effects, and is, therefore, now estopped to set up bis judgment in any court.

It has already been seen tbat tbis objection was not well taken, and is not sustained by tbe facts. It was, however, tbe sole ground relied upon by tbe appellant to avoid tbe legal right of tbe appellee to maintain tbe suit. It was not claimed or even suggested tbat tbe bill ought to have been filed in tbe name of tbe assignee, and was, therefore, defective for want of proper parties. Tbe point is not even suggested during tbe progress of tbe suit in tbe court below. And when tbe appeal was taken to tbis court, in 1879, tbe petition set forth various grounds of error, but it makes no reference whatever to tbe objection already mentioned. Tbat objection is, for tbe first time, found in a printed brief filed in December, 1881, six years after tbe suit was instituted. If tbe point bad been raised at tbe proper time, tbe difficulty would have been removed by a new bill or an amendment of the old. To allow it now to be made is to permit a party to avail himself of his own laches ; or, what is more, to gain every advantage which the lapse of time may afford him, and at last defeat his adversary by an objection founded upon the merest technicality. The appellant, as purchaser of the land, is the only person having any interest in the subject matter of controversy, and the only one at all concerned to make this objection. We think he has waived it, and in this court he cannot be heard now to insist upon it. Tor these reasons we are of opinion to affirm the decree of the circuit court.

Decree affirmed.