Court Opinion

ID: 8770045
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:40:07.061664+00
Date Added: 2024-06-11T17:02:09.258950
License: Public Domain

HOLLAND, District Judge.
In this case the judgment had been entered in the court of common pleas of Northampton county, the levy and sale made, and the money paid over to Albert H. Resnek on the 9th day of December, 1907, within four months of the filing of the petition in bankruptcy against the alleged bankrupts, which took place on the 16th day of March, 1908, and the adjudication was entered April 16, 1908. Upon the presentation of á petition, the referee summarily directed Albert H. Resnek to pay over to the trustee in bankruptcy the net proceeds received from the sheriff on the execution, to which order Resnek excepted, and the question is- certified to this court for determination as to whether the referee, under the circumstances, had jurisdiction to make this summary order.
Where, within four months before the filing of a petition in bankruptcy against an insolvent debtor, an execution has been issued and levy and sale made and the proceeds paid over to the judgment creditor before the filing of the petition, the case does not fall within the provisions of section 67f of the bankrupt act (Act July 1, 1898, c. 541, 30 Stat. 565 [U. S- Comp. St. 1901, p. 3450]), and the lien created by the judgment and levy is not rendered void by the adjudication. The remedy, if any, the trustee has against the creditor, is under the provisions of sections 60a and 60b of the bankrupt act in a plenary action, where it will be necessary to allege and show that the creditor had reasonable cause to believe that the bankrupt, by suffering judgment to be taken against him, intended to give a preference. In re Blair (D. C.) 102 Fed. 987; In re Bailey (D. C.) 144 Fed. 214. And this is true, even though the proceeds of the execution are insufficient to satisfy the claim of the judgment creditor. In re Knickerbocker (D. C.) 121 Fed. 1004.
It follows, therefore, that the order of the referee must be reversed. It is so ordered.