Court Opinion

ID: 8263297
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:57:39.759419+00
Date Added: 2024-06-11T16:43:15.118518
License: Public Domain

REYBURN, J.
1. This ease is brought to this court upon the contracted transcript permitted by section 813 of the statutes, and the abstract in print filed by appellant is assailed by respondent as insufficient, *396but tbe infirmities, if present and material in the original abstract, have been removed and any defects supplied by the supplemental abstract now on file establishing without challenge or contradiction by respondent the perfecting, of the appeal in lawful manner. Taken together these abstracts contain the substantial requirements pointed out by this court and we are now authorized to review the case on its merits.
2. Appellant urges that the adjudication in bankruptcy is conclusive upon respondent, asserting that the question in issue in the present case was the identical question decided by the bankruptcy court. The bankruptcy court had no lawful authority to' pass upon any but the sole issue before it:'whether within four months next before the petition Good committed an act of bankruptcy by suffering defendant to obtain judgment against him on March 24, 1899, and no adjudication upon any other issue was sought or rendered in the proceeding. A judgment is conclusive upon all parties in privity to the litigation and privity is defined, by eminent authority to be a mutual or successive relationship to the same rights of property; but the same authority declares that to create this relationship two requisites must concur: first, the party to be thus connected with the judgment must be one who- claims an interest in the subject affected, through or under one of the parties, and, second, privies bound by the judgment are those who acquired an interest in the subject-matter after the rendition of the judgment and if their title or interest antedated such judgment they are not bound unless made actual parties. 2 Black, Judgments (2 Ed.), sec. 549; 1 Freeman, Judgments (4 Ed.), sec. 162.
It may be conceded that plaintiff, upon his election as trustee of the bankrupt’s estate by the creditors of the latter, became successor to the rights and interests of the general creditors in such estate, but, the defendant was no party, direct or intermediate, to the bankruptcy proceedings, and whatever rights it possessed *397in that portion of the bankrupt’s property herein involved, had attached prior to the adjudication. Subject to the determination of the further question hereinafter taken up, the defendant’s succession to such rights of property claimed by it having occurred prior to the institution of the bankruptcy proceeding, it could not be privy to any judgment ensuing therein. Nor is the effect of the adjudication amplified so as to- reach and conclude defendant by the resistance through counsel in its employ to the bankruptcy proceeding. In such conduct, it was merely in the lawful exercise of the right expressly recognized and accorded to all creditors by the terms of the bankrupt act to oppose an adjudication. Bankruptcy Law of 1898, chap. 4, sec. 18. The defendant is concluded and bound by the adjudication in bankruptcy to the same extent as the rest of the world, and no farther, and as against it as other parties concerned, and in the same manner as against other creditors, the judgment of the issue of Good’s bankruptcy under the bankruptcy law is final and can not be questioned.
3. The bankrupt act provides that all levies, judgments, attachments or other liens obtained through legal proceedings against an insolvent within four months of the inception of the proceedings in bankruptcy, shall be annulled and avoided. Chap. 7, sec. 67-f. By necessary implication, all levies, judgments, attachments and other liens secured earlier that four months prior to the commencement of the bankruptcy, are excluded from the operation of the act. It has been held that even a release of the debtor by his discharge in bankruptcy will not bar a creditor from enforcing by judgment <a lien secured by attachment more than four months before the bankruptcy proceeding was inaugurated. Powers, etc. v. Nelson, 7 Am. Bank. Rep. 506; Stickney et al. v. Goodwin, 95 Me. 246; s. c., 85 Am. State Rep. 408. Also that the equitable lien, acquired by a creditor of an insolvent by filing a creditor’s bill to set aside *398a fraudulent conveyance, has its date from the filing of such bill, and not from date of decree, and is not avoided ay the bankruptcy proceeding, where the bill is filed more than four months prior to the petition in bankruptcy, although the decree is rendered within four months. Doyle v. Heath, 47 Atl. 213; Taylor v. Taylor, 45 Atl. 440; In re Kavanaugh, 99 Fed. 928. Under the interpretation of the statutory provisions by the courts of this State, a specific lien is secured from the moment of levy by attachment upon the property seized, matured by the judgment and the execution thereunder related back to the time of the levy, so that a sale thereunder passes a title divested and discharged, of all succeeding- incumbrances: the lien is created by the attachment levy and bears date thereof, but is fixed by the judgment. Winningham v. Trueblood, 149 Mo. 572; Hall v. Stephens, 65 Mo. 670; Huxley v. Harold, 62 Mo. 576; Lackey v. Seibert, 23 Mo. 85.
The judgment does not create a new lien nor discharge the lien existing .bey virtue of the attachment levy but merely directs its enforcement. A proper construction of the bankrupt act makes it evident that the preferential lien of a judgment, where a lien is obtained as the effect of a judgment, was intended to be destroyed by the adjudication in bankruptcy, but the purpose of the law was not to render void the judgment itself as such. The bankrupt act does not annul an attachment lien obtained more than four months before the bankruptcy proceeding was inaugurated, but recognizes an attachment as a lien and provides especially that liens given or accepted in good faith and not in contemplation of or in fraud upon the act and for a present consideration, recorded, if record thereof be required to impart notice, shall not be affected. The present bankrupt law also contemplates that judgment may be recovered against the bankrupt after the adjudication and established against his estate. Chap. 7, sec. 63 (5). A literal and different construction of this section of the statute would *399invalidate a lien obtained more than four months prior to the bankruptcy proceedings and protected by the express terms of the act.
The question here presented has been before various Federal courts. In the United States District Court' of Massachusetts, it is held that an attachment on mesne process under the statutes of that State which create a lien, enforcible, however, only by obtaining judgment and issuing execution thereon within a fixed time, is not discharged under the bankrupt act by the filing of a petition in bankruptcy against the defendant more than four months after such attachment was levied, although judgment was not obtained until within the four months; nor are the judgment and execution issued thereon rendered void since they do not affect with a lien the property attached, but only enforce a lien existing and attached more than four months prior to the filing of the petition and by necessary implication preserved by the act. In re Blair, 108 Fed. 529.
This rule is also adopted by the United States District Court of Oregon, reversing a former ruling of the same court; In re Beaver Coal Company, 110 Fed. 630, which latter case was affirmed by the United States Circuit Court of Appeals, Ninth Circuit. In re Beaver Coal Co., 113 Fed. 889.
The State appellate court of Maine also has adopted the interpretation of the bankrupt law herein upheld. Stickney v. Goodwin, 95 Me. 246, s. c., 85 Am. St. 408.
■ The decision in conflict with the views herein expressed might be distinguished by the language of the States under which the questions are presented, but in any aspect, we are of the opinion that the reasoning of the cases above is more satisfactory and more in consonance with the spirit and purposes of the bankrupt act than the opinions expressed in the opposing cases. In re Lesser, 100 Fed. 433; In re Lesser, 108 Fed. 201, and In re Johnson, 108 Fed. 373.
*400The judgment below will be affirmed.
Bland, P. J., concurs; Goode, J., having been of counsel in some litigation involving the same matters, does not sit.