Case Name: Oliver W. Buckingham, Leonard Paulson, James Hooker, and Ephraim B. Bogardus (Doing Business under the Name and Style of Buckingham, Paulson & Co.), Plaintiffs, v. The Schuylkill Plush & Silk Co., Defendant. Matter of the Application of Thomas L. O'Donnell, Trustee in Bankruptcy of the Defendant Corporation, to Vacate an Attachment
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1902-06
Citations: 38 Misc. 305
Docket Number: 
Parties: Oliver W. Buckingham, Leonard Paulson, James Hooker, and Ephraim B. Bogardus (Doing Business under the Name and Style of Buckingham, Paulson & Co.), Plaintiffs, v. The Schuylkill Plush & Silk Co., Defendant. Matter of the Application of Thomas L. O’Donnell, Trustee in Bankruptcy of the Defendant Corporation, to Vacate an Attachment.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 38
Pages: 305–309

Head Matter:
Oliver W. Buckingham, Leonard Paulson, James Hooker, and Ephraim B. Bogardus (Doing Business under the Name and Style of Buckingham, Paulson & Co.), Plaintiffs, v. The Schuylkill Plush & Silk Co., Defendant. Matter of the Application of Thomas L. O’Donnell, Trustee in Bankruptcy of the Defendant Corporation, to Vacate an Attachment.
(Supreme Court, New York Special Term,
June, 1902.)
^Bankruptcy Law of 1898 — Debt secured by an attachment not provable — Trustee’s title defeated by insufficient number of petitioning creditors.
A debt is not provable in bankruptcy where the creditor is then maintaining in a State court an attachment against the property of his debtor, the debt being deemed a preference under such circumstances.
Where such a creditor is one of the three creditors who must petition that the debtor be adjudicated a bankrupt, in a case where there are more than twelve creditors, the title of the trustee in bankruptcy fails as the sufficiency of the number of creditors is a jurisdictional fact and it may be questioned.
It may be questioned by senior attachment creditors of the bankrupt— provided they did not appear on the adjudication — in order to defeat the trustee’s attempt to vacate their attachment.
The plaintiffs above named commenced an action in the New York Supreme Court against the defendant on the 22d day of March, 1901, on account of goods sold and delivered and on that date obtained an attachment in the sum of $2,425.54, against the defendant on the ground that it was a foreign corporation. Pursuant to that warrant, the sheriff of New York county levied on a stock of goods in the hands of Spielman & Co., valued at about $26,655, in which the defendant had an admitted equity of about $8,000.
Prior to this date on the 15th day of March, 1901, an attachment was issued out of this court against the defendant in the sum of $3,631.39 in favor of Hardt, Von Bernuth & Co., and another in favor of Arthur Ryle for $3,49'5.65 was issued on the 19th day of March, 1902, under which warrants levy was made upon the same stock of goods.
Subsequent to the plaintiffs’ attachment, one was issued out of the City Court of the city of New York, for $279, in favor of James D. Olier, Jr., and another in favor of Hamilton de Veer, out of this court, for $4,032.15, under each of which levy was also made on this stock of goods.
In each of these actions judgments were subsequently entered on default and execution issued thereon against the attached property, with the exception of the City Court case.
In May the attorneys for Hamilton de Veer, the last in order of the attaching creditors, made a motion in this court to vacate the first attachment, that in favor of Hardt, Von Bernuth & Co., which motion was denied by Mr. Justice Freedman. From the order entered an appeal was taken by Mr. de Veer, to the Appellate Division of the Supreme Court for this department, which resulted in an affirmance of the order. Hardt v. Schuylkill Plush & Silk Co., 105 N. Y. St. Repr. 1137.
The said de Veer also made a motion to vacate the Ryle attach- . ment, the second in order of precedence, which motion was also denied. N. Y. L. J., June 18, 1901; opinion by Justice Gildersleeve.
On the 29th day of March, 1901, a petition in involuntary bankruptcy was filed in the District Court of the United States, for the eastern district of Pennsylvania against the Schuylkill Plush & Silk Co. by Hamilton de Veer, Charles W. Jacobs & Allison, and Abram Deronde & Co., all of Hew York city. The corporation alleged to be bankrupt neither appeared nor answered in the bankruptcy proceedings which resulted in an adjudication in bankruptcy by the said District Court on July 17, 1901. Subsequently, Thomas L. O’Donnell of Pottsville, Pennsylvania, was appointed trustee in bankruptcy by said court and after qualifying as such, he made a motion in this court on Hovember 11, 1901, to vacate the attachment procured by Hardt, Von Bernuth & Co. That motion was granted by Mr. Justice Lawrence. N. Y. L. J., Dec. 17, 1901.
From the order entered an appeal was taken to the Appellate Division of this court which resulted in an affirmance of the order. Hardt v. Schuylkill Plush & Silk Co., 63 App. Div. 615.
At the instance of the trustee in bankruptcy all of the other attachments against the defendant with the single' exception of the one procured by these plaintiffs were vacated on consent. The trustee then made a motion to vacate the attachment procured by these plaintiffs.
Roger Lewis, for motion.
William B. Ellison and Arnold L. Davis, opposed.

Opinion:
Blanchard, J.
This is an application by a trustee in bankruptcy of the defendant for leave to intervene and to vacate an attachment issued out of this court, and for the release from the said attachment and the levy thereunder of the property affected thereby. This action was commenced March 22, 1901, and an attachment issued on that day and levied on property of the defendant. Subsequently, and on May 20, 1901, judgment was obtained by the plaintiff against the defendant, and execution issued to the sheriff, who has not yet made return thereof. That thereafter an action was commenced by Hamilton de Veer against this defendant, in -which a- warrant of attachment was issued to the sheriff of the county of New York, who, pursuant thereto, made a levy upon property of the defendant in the county of New York. Judgment was obtained in said action on June 17, 1901, and an execution issued to the sheriff of New York county directing him to satisfy the judgment out of the attached property. On May 10, 1901, a motion was made in this court on behalf of said Hamilton de Veer to vacate a prior attachment theretofore issued out of this court against this defendant, which motion was denied, and an order entered thereon May 22, 1901. An appeal was taken by said de Veer, but the order was affirmed by the Appellate Division at the June, 1901, term. On December 24, 1901, the sheriff was notified that said warrant of attachment and execution were withdrawn. On July 17, 1901, this defendant was adjudicated a bankrupt in the District Court of the United States for the eastern district of Pennsylvania upon the petition of Hamilton de Veer and two other creditors. The defendant interposed no answer to the petition. There being more than twelve creditors, three creditors were necessary to join in the petition. The plaintiffs, opposing this application, attack the adjudication in bankruptcy, and hence the title of the trustee, claiming that the court was without jurisdiction in that three creditors whose debts were provable in bankruptcy were necessary to adjudicate defendant a bankrupt,, and that as Hamilton de Veer was maintaining a levy upon his attachment in this court at the time he joined with two others in the petition to have defendant adjudicated a bankrupt, his debt was not provable in bankruptcy, and hence the court was without jurisdiction to make the adjudication. The plaintiffs may properly question the judgment of the District Court of Pennsylvania. Matter of Kimball, 155 N. Y. 62; Hammond v. National L. Assn., 31 Misc. Rep. 182; affd., 58 App. Div. 453. The adjudication is not binding upon creditors who do not appear. Matter of Elmira Steel Co., 109 Fed. Repr. 456. By section 59b of the Bankruptcy Act, where, as here, there are more than twelve creditors, three creditors are required to join in the petition in order to give the court jurisdiction. The, sufficiency of .the number of creditors joining in the petition is a jurisdictional fact which may be questioned. Matter of Schenkein, 113 Fed. Repr. 421; Matter of Burlington Malting Co., 109 id. 777. It has been decided that a creditor of an alleged bankrupt, who obtains an attachment, has, in substance and effect, a lien on the property until the attachment is vacated or becomes null and void by the adjudication, and to such extent, ' and up to that period, must be deemed to have a preference, and therefore not a provable debt, and, the attachment not being surrendered, he has no standing to maintain a petition in involuntary bankruptcy. Matter of Schenkein, supra; Matter of Burlington Malting Co., supra. Hamilton de Yeer having maintained his attachment in New York at the same time that he was a petitioning creditor in bankruptcy in the District Court of Pennsylvania, and he being one of the three creditors necessary to confer jurisdiction upon that court, it follows by virtue of the foregoing decisions that the court was without jurisdiction to make the adjudication, and hence that the trustee's title must fail. The motion should be denied, with ten dollars costs.
Motion denied, with $10 costs.