Court Opinion

ID: 8634019
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:42:13.338966+00
Date Added: 2024-06-11T16:55:52.184180
License: Public Domain

DILLON, Circuit Judge.
In the case of Bracken v. Johnston [Case No. 1,761], it was decided by Mr. Justice Miller that a creditor who proceeds in the state court by a writ of attachment on which he seizes the property of his debtor and collects the judgment obtained in such suit by a sale of the property attached, is liable to the assignee in bankruptcy of the debtor appointed under proceedings comifienced in the bankruptcy court within four months of the levy of the attachment, although the assignee did not appear or defend the attachment suit or make any attempt to arrest the attachment proceedings.
The case just cited was deliberately considered, and it may not be improper to state, as illustrating the difficulty of the question involved, that the record in that case was informally laid before the judges of the supreme court, and that they were equally divided in opinion. , I had decided the same principle in Bradley v. Frost [Id. 1,780]. In the argument of the present case the learned counsel for the plaintiffs in error admitted that those cases were within section 5044 of the Revised Statutes, and decisive against him unless this case can be distinguished. He insists that this case can be distinguished from those on the ground that under section 5044 it is the deed of assignment which relates back to the commencement of the proceedings in bankruptcy, and which has the effect to dissolve any attachment of property on mesne process made within four months next preceding the commencement of the bankruptcy proceedings.
In this case the property attached had been sold pending the suit in the state court, three days before the petition in bankruptcy was filed, and the money, which was the proceeds of the attached property, was actually paid over to the creditor by order of the state court before the assignment was made, although the date of such payment was after the institution of the bankruptcy proceedings, and after the adjudication of bankruptcy had passed. It is admitted by the counsel for the creditor that if the property attached had not been sold prior to the filing of the petition in bankruptcy, the case would fall within Bracken v. Johnston [supra], and that the assignee in bankruptcy would be entitled to recover. But he claims that, having been sold before the commencement of the proceedings in bankruptcy, it was not “then attached” (section 5044), that is, was not under attachment at the time the bankruptcy proceedings were instituted, and that the order of the state court to pay the proceeds to the cred*1303itor on his judgment is valid and effectual as against the assignee. It is my opinion that this narrow distinction cannot be maintained. The proceeds of the attached property stand in the place of the property attached, and these proceeds, or the right to them, passed to the assignee by virtue of the assignment, which related back to the commencement of the proceedings in bankruptcy, at which last mentioned time the money was in the custody of the state court, the same as the property had beeii out of which the money arose.
I may add that I submitted to Mr. Justice Miller the point here made by the counsel for the creditor, and that he was of opinion that no solid distinction in this respect could be found between the present case and that of Bracken v. Johnston. Affirmed.