Case Name: Summit Motor Co., to use, v. Modern Tire Repair Shop. Malcolm's Appeal
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1928-04-09
Citations: 293 Pa. 33
Docket Number: Appeal, No. 18
Parties: Summit Motor Co., to use, v. Modern Tire Repair Shop. Malcolm’s Appeal.
Judges: Before Moschzisker, C. J., Frazer, Walling, Simpson, Kephart, Sadler and Schaefer, JJ.
Reporter: Pennsylvania State Reports
Volume: 293
Pages: 33–37

Head Matter:
Summit Motor Co., to use, v. Modern Tire Repair Shop. Malcolm’s Appeal.
Argued March 20, 1928.
Before Moschzisker, C. J., Frazer, Walling, Simpson, Kephart, Sadler and Schaefer, JJ.
Wm. M. Ruddock, with him Robt. M. Fisher, Fee & Tomb and James W. Mack, for appellant. —
W. C. Chapman, for appellee,
April 9, 1928:

Opinion:
Opinion by
Me. Justice Walling,
On January 18, 1927, three judgments were entered in the Court of Common Pleas of Indiana County and three executions thereon issued against Jack Walker, individually and doing business as the Modern Tire Repair Shop, upon which the sheriff seized, advertised and sold his personal property for $3,965.92. The sale thereof took place on the 25th to 28th days of the same month inclusive. Meantime on January 24th, another judgment was entered and execution issued against the same defendant. The writs of execution were all returnable to the first Monday in March, 1927. On January 29, 1927, the sheriff, on receipt of a sufficient bond of indemnity, paid the net proceeds of the sale to the attorneys of the execution creditors, by check on the First National Bank of Indiana, Pa., which was presented to the bank and paid February 5th. That Walker was insolvent was known to the sheriff and the execution creditors, prior to the sale above mentioned, and on February 1st, an involuntary petition in bankruptcy was filed against him in the proper United States Court and a restraining order, forbidding the disposal of the fund in suit, issued out of said court, was served on the sheriff and execution creditors on February 4th. Tbe sheriff could then have stopped payment on the check but did not do so. On March 28,1927, Walker was duly adjudged a bankrupt and Howard D. Creps was appointed trustee in bankruptcy of his estate. In May following, the trustee petitioned the Court of Common Pleas of Indiana County for an order on the sheriff to turn over to him the net proceeds of the sheriff's sale, to which an answer was filed and testimony taken. Upon a finding of the facts, inter alia, as above stated, the court granted the prayer of the trustee and therefrom the sheriff brought this appeal.
The record discloses no error. The sheriff violated his duty in making distribution of the proceeds' of the sale prior to the return day of the writs and, so doing, he assumed the risk of a proper disposition: Appeal of James O. Frazier, Sheriff, 6 Sadler 492; Williams's App., 9 Pa. 267; McDonald v. Todd, 1 Grant's Cases 17. See also opinion of Judge Hare in Fisher v. Allen, 2 Phila. 115. After the return day, it is customary for the sheriff to make distribution unless notified of a contest: Bastian's Case, 90 Pa. 472, 476; Franklin Twp. v. Osler, 91 Pa. 160.
Walker being insolvent, the judgments entered against him and executions issued thereon within four months of the time the petition in bankruptcy was filed were void as to other claimants and gave the judgment creditors so doing no preference over them. The purchasers of the Walker property at the sale were presumably bona fide and acquired a good title, but the proceeds took the place of the property and became a part of the Walker Estate, in which all the creditors were entitled to share. Under the existing facts it was the plain duty of the sheriff to retain the fund to answer the demand of the trustee in bankruptcy, who, on qualifying as such, was entitled to its possession. Section 67, clause f of the Federal Bankruptcy Act (U. S. Compiled Statutes Annotated, vol. 9, p. 11,636) provides, inter alia: "That all levies, judgments, attachments, or other liens, obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt, and the property affected by the levy, judgment, attachment, or other lien shall be deemed wholly discharged and released from the same, and shall pass to the trustee as a part of the estate of the bankrupt." Because of this act the judgment creditors in the instant case acquired no preference and the title to the fund raised by the sheriff's sale vested in the trustee: Clarke v. Larremore, 188 U. S. 486; Greenberger et al. v. Schwartz, 261 Pa. 265; Bank of N. A. v. Penn M. C. Co., 235 Pa. 194; In re Cowen Hosiery Co., Inc., 286 Fed. 351; In re Community Stores of Iowa, 282 Fed. 328. The sheriff protected himself by a bond,— as, on the return of the writ, he might have done by paying the money into court on leave obtained for that purpose.
The trustee asked for an order on the sheriff to pay him the fund; but whether that was good practice we will not consider for no such question was raised in the trial court. In any event, it was a matter of form rather than of substance.
The court found inter alia, "That the legal fees, as we understand, due the sheriff, amount to $60.08, leaving a balance due the bankrupt estate of $3,905.84. If this is error we will be glad to modify it." The sheriff complains that this does him an injustice as to fees. In view of the order it would seem proper to give him an opportunity to present his complaint to the trial court.
The decree is affirmed at the costs of appellant, reserving to him the right to have the trial judge reexamine and, if necessary, readjust the amount of sheriff's fees to which he is entitled.