Court Opinion

ID: 8630403
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:36:44.632503+00
Date Added: 2024-06-11T16:55:44.955533
License: Public Domain

BLATCHFORD, District Judge.
It is impossible to read the provisions of the act in connection with each other, as a systematic whole, without seeing that it is not the intention of the statute that the performing of the labor or the furnishing of the materials, shall, of itself, constitute a lien for the debt, upon the building or the land. The creating of the debt by such means only gives a right to the creditor to constitute the lien, by filing the claim within the time and in the manner specified. If he does not, as the 9th section declares, comply with the provisions of the act which are made requisite to constitute the lien, there is no lien; and the 12th section expressly declares, that the debt shall not be a lien, that is, shall not become at all a lien, unless the claim is filed in accordance with the 6th section, and within one year from the furnishing of the materials or the performing of the labor. It is true, that the 11th section of the act provides that the deed to be given on a sale of a building and lot on a special writ of fieri facias on a judgment against such building and lot, shall convey- the estate m the lot which the owner *627had at or any time after the commencement of the building, within one year before the filing of the claim in the clerk’s office. But this is merely a provision that, when the lien is created or constituted by the due j filing of a claim, it becomes a lien by relation, as of the time of the commencement of the building. Until the claim is filed, the lien rests only in posse. When such claim is filed, it becomes a lien in esse, as of the time when the building was commenced. That there is no lien until the claim is filed, is the view held of the statute by the court of chancery of New Jersey. In the case of Morris County Bank v. Rockaway Manuf’g Co., 1 C. E. Green [16 N. J. Eq.] 150, 161, the court (Chancellor Green,) held, that a claim not filed according to the requirement -of the statute, constituted, under the provisions of the law, no encumbrance on the premises; and that the fact that a judgment at law had been entered upon the lien, when the lien claim had not been filed pursuant to the statute, did not give the debt any priority in payment or advantage over liens upon which judgment had not been rendered. No decision of any court in New Jersey was cited, on the argument, in conflict with these views. !
[NOTE. This case was subsequently brought up in the circuit court on a petition for review of the order of the district court. See Case No. 3,-873. The decree of the district court was so modified as to secure to the petitioners the payment of their liens, in preference to the claims of the mortgagees and the rights of the assignee.]
There was, therefore, no lien, in this case, in respect to any of the alleged mechanics’ liens, at the time the petition in bankruptcy was filed. The filing of such petition, followed by an adjudication of bankruptcy, is made, by section 38 of the bankruptcy act, the commencement of proceedings in bankruptcy under the act. By section 14 of the act, the assignment to the assignee in bankruptcy relates back to the commencement of the proceedings in bankruptcy. It is claimed, on the part of the holders of the alleged mechanics’ liens, that, although their lien claims were filed after the commencement of the proceedings in bankruptcy, yet, as they were filed within the time limited by the statute of New Jersey, they became, by .such filing, liens which must be respected and allowed by this court. The law is otherwise. Any lien, to be recognized by the bankruptcy court as a valid lien on property which passes from the bankrupt to the as-signee by virtue of the proceedings in bankruptcy, must be a lien at the time of the commencement of the proceedings in bankruptcy. In re Bernstein [Case No. 1,350]; In re Schnepf [Id. 12,473]; In re Smith [Id. 12,973]; Pennington v. Sale [Id. 10,939]; Jones v. Leach [Id. 7,475]; In re Ellis [Id. 4,400]; In re Housberger [Id. 6,734], The property in question passed under the jurisdiction of this court on the 17th of May, 1SG9. so as to cut off any liens subsequently sought to be imposed on it, and no proceeding thereafter, under the state law, to impose on it a lien not then created or constituted, was valid. If the subsequent imposition of the lien in this case were to be upheld, it would be difficult to deny, on principle, the right of a judgment creditor, by a judgment recovered before the commencement of the proceedings in bankruptcy, to create, a's against the assignee in bankruptcy, a lien on personal property, by issuing or levying an execution thereon after the commencement of such proceedings, but within the time allowed by the law of the state therefor.
It results, that the assignee must distribute the estate without reference to the alleged mechanics’ liens, as liens.