Court Opinion

ID: 6684919
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:31:58.550964+00
Date Added: 2024-06-11T16:00:56.418052
License: Public Domain

HaioltoN, Judge,
delivered the following opinion:
The consideration previously given this case brought us to the conclusion that an attachment lien in the United States is of substantially the same nature as the proceeding to secure the effectiveness of judgment under the Porto Pican Law of March 1, 1902. Compilation, page 849. See opinion in this case of May 12, 1916.
The question now comes up whether an attachment issued more than four months prior to the bankruptcy, upon which a judgment and execution followed within four months, gives a lien upon the property attached which will be respected under Bankruptcy Act, § 67f, which is as follows: “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. . . .” 30 Stat. at L. 544, 565, chap. 541, Comp. Stat. 1916, §§ 9585, 9651.
There is no doubt that the attachment or embargo, being more than four months before the bankruptcy, is valid so far as it goes. The question is .whether the judgment and levy which were within the four months are necessary to make up the lien *214of the attachment. If not, the lien is upheld under the Bankruptcy Act; otherwise, the attachment lien is avoided by the Bankruptcy Law.
If there is a lien complete in itself, it is immaterial that it may be defeated by a subsequent adverse judgment. Thus, under equity practice the lien of a creditor’s bill is complete,— is vested, so to speak, from the date of the filing of the bill; and the fact that the bill may not be proved and so decree may not be had will act to destroy the lien as created, but it will not destroy the fact that a lien was created. Thus, in Metcalf Bros. v. Barker, 187 U. S. 165, 47 L. ed. 122, 23 Sup. Ct. Rep. 67, where a judgment creditor’s bill in equity was filed prior to four months before bankruptcy, it was held that the creditor thereby obtained a lien on specific assets, although the final judgment was not had until within the four months of bankruptcy.
It is true that if a lien is created, whether by statute or otherwise, and its original method of enforcement becomes impossible, a court of equity will use its own procedure in order to enforce the lien. This, however, is on the idea that a lien is vested, and should therefore be enforced.
The ease at bar, however, is of a different character. Here, as in the Metcalf case, the inception of the lien was previous to four months of the bankruptcy, but the lien itself was of a different character. It was not a vested lien subject to devestment, but a lien which was not vested and would not become vested until judgment and execution thereon, which were within the four months of bankruptcy. An analogous point has been decided in Clarke v. Larremore, 188 U. S. 486, 47 L. ed. 555, 23 Sup. Ct. Rep. 363. There an attachment was levied in the *215state of New York, and, after judgment and sale under attachment but before tbe money was paid over to tbe judgment creditor, a petition in bankruptcy was filed against tbe judgment debtor. Tbe question was presented whether tbe right of tbe judgment creditor under these proceedings was so complete that tbe money belonged to tbe judgment creditor, or, under § 6 If, to tbe trustee in bankruptcy. In other words, did tbe money under those circumstances belong to tbe plaintiff or to tbe defendant? Tbe supreme court held, affirming tbe judgment of tbe New York court of appeals, that tbe right of tbe attaching plaintiff did not become absolute, or vested as we have named it above, until tbe money was actually paid by tbe sheriff over to him. A man owns bis property until it is taken away from him by due process of law, and that process is not complete until tbe sheriff has turned over tbe property or tbe proceeds, as tbe case may be, to tbe judgment creditor. Tbe case here is even stronger, for tbe plaintiff bad gone no further than incipient attachment. There bad been no sale and tbe marshal bad no money.
It follows, therefore, that Yumet & Company bad not acquired a lien which will be protected within tbe meaning of § 6If of tbe Bankruptcy Act. Tbe action of tbe referee must, therefore, be reversed, and it is so ordered.
Tbe decision of tbe referee in regard to bow Yumet & Company might bid becomes immaterial, and need not be discussed.