Dickinson v. Orr

94 F.2d 536, 1938 U.S. App. LEXIS 4453
CourtCourt of Appeals for the Eighth Circuit
DecidedFebruary 8, 1938
DocketNos. 11043, 11053
StatusPublished
Cited by7 cases

This text of 94 F.2d 536 (Dickinson v. Orr) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dickinson v. Orr, 94 F.2d 536, 1938 U.S. App. LEXIS 4453 (8th Cir. 1938).

Opinion

THOMAS, Circuit Judge.

This case presents for determination primarily the problem of whether or not under the circumstances present a judgment of the state court of Oklahoma rendered less than four months before the bankruptcy of defendant therein, and enforcing an attachment lien created more than four months prior to bankruptcy, is res judicata in a suit brought by the trustee in the federal court to enjoin an execution sale under the judgment. Some subordinate questions will require brief attention; and, preferring to base our decision on the merits, we shall pass by certain procedural objections raised by appellee.

The facts necessary to a solution of the question presented are not in dispute.

W. D. Dickinson, appellant, is trustee in bankruptcy of Cherokee Public Service Company whose affairs are being administered in the District Court for the Eastern District of Arkansas. The bankrupt owned property and carried on business in Wagoner county, Oklahoma.

On July 18, 1929, H. H. Orr, appellee, a resident of Oklahoma, brought suit on contract in the district court of Wagoner county, Oklahoma, against Cherokee Public Service Company, a nonresident corporation, and on the same day sued out a writ of attachment under which the sheriff levied on the property in controversy on July 22, 1929. The company, aftterwards bankrupt, appeared in that case. There was a trial to a jury and a verdict returned in favor of Orr on which judgment was entered on November, 28, 1931, for $5,000 and costs. Omitting the description of the property, the judgment provided:

“And it appearing to the Court from the return of the Sheriff that he attached the following described property in this action, to-wit:

“ * * * (description of attached property) and now has same in his possession, subject to the judgment and order of .this court,

“It is therefore, Ordered, Adjudged and Decreed by the Court, that said property, or so much thereof as may be necessary to satisfy the judgment herein rendered, and the costs of this action, be sold by the Sheriff of Wagoner County at public sale after advertising same in the manner sales under execution are required to be advertised, and that out of the proceeds of said sale he pay to the plaintiff the amount of said judgment, with costs. It is further ordered, adjudged and decreed that if said property shall not sell for enough to discharge the judgment in favor of plaintiff that execution shall issue for whatever portion thereof remains unpaid; to all of which the defendant in open court excepts.”

On January 8, 1932, the Cherokee Public Service Company Was adjudicated bankrupt and appellant was appointed trustee. Afterwards the case of Orr v. Cherokee Public Service Company was appealed to the Supreme Court of Oklahoma, where the judgment was affirmed on November 4, 1936. 178 Okl. 96, 62 P.2d 58, 60. Dickinson, the trustee, at his request was made a party in the Supreme Court and participated in the appeal.

On December 12, 1936, Orr got out an execution and order of sale for the attached property, and the property was advertised to be sold on February 8, 1937. The present suit was instituted in the district court on the 6th day of February, 1937,. seeking to enjoin and restrain the sheriff of Wagoner County, Oklahoma, from selling the property. A temporary restraining order was issued, which upon final hearing was dissolved and the com7 plaint was dismissed.- This appeal followed.

The appellant contends here, as he did in the lower court, that: (1) The judgment in the state court, having been rendered within four months .before the filing of the petition in bankruptcy, is null and void under section 67f of the Bankruptcy Act, as amended, 11 U.S.C.A. § [538]*538107(f); (2) the statute of limitations had run on appellee’s judgment at the time execution was issued thereunder; (3) appellee abandoned his claim by failure to file it within the time fixed for filing claims; (4) the adjudication in bankruptcy vested the title to the attached property in appellant free from appellee’s lien; - and (5) the attachment was invalid and created no lien upon the property because (a) the sheriff levying the attachment did not take possession of the property and (b) Orr did not 'pay or deposit the money to pay certain outstanding mortgages, all as required by the statutes of Oklahoma.' In reply to appellant’s last contention the appellee says the validity of the attachment lien was settled in the state court case and that the judgment therein rendered is res judicata in this suit.

Appellant’s first contention is without merit. It has been long and well established that a judgnient or decree in enforcement of a valid preexisting lien is not the judgment denounced by section 67f of the bankruptcy statute, which is confined to judgments creating liens. Metcalf Bros. v. Barker, 187 U.S. 165, 174, 23 S.Ct. 67, 47 L.Ed. 122; In re Crafts-Riordon Shoe Co., 185 F. 931, 936, D.C., D.Mass.; In re Snell, 125 F. 154, D.C., N.D.Cal.; Taubel-Scott-Kitzmiller Co. v. Fox, 264 U.S. 426, 430, 44 S.Ct. 396, 398, 68 L.Ed. 770.

The contention that the judgment was dormant because the statute of limitations had run at the time the execution was issued is also untenable. The Oklahoma statute, section 442, O.S.1931, 12 Okl.St.Ann. § 735, provides that, “If execution shall not be sued out within five years * * * such judgment shall become dormant.” After judgment was entered motions for a new trial were filed and overruled May 9, 1932. The order overruling the motion stayed execution for a period of thirty days pending the giving of a supersedeas bond. Under the decisions of the Supreme Court of Oklahoma the five-year period had not expired at the time the execution was issued. Smith v. Stroud State Bank, 127 Okl. 3, 259 P. 256; Mitchener v. City Commissioners, 100 Okl. 98, 228 P. 159.

The contention that the appellee has abandoned his claim against the bankrupt estate because he failed to file it within the statutory period is not germane. Besides, the filing of a claim in bankruptcy is not essential to the preservation of a lien. Ward v. First National Bank, 6 Cir., 202 F. 609. The further argument that the adjudication in bankruptcy vested title in the property in the trustee free from appellee’s lien is without substance.

The contention urged with greatest earnestness by appellant is that appellee’s attachment was invalid and that no lien was ever created thereby because the provisions of the Oklahoma statute requiring the sheriff to take possession of the attached property and the attaching creditor to pay or deposit the money to pay outstanding mortgages were not complied with. The judgment in the state court and the special execution issued thereunder are predicated upon the validity of the attachment from the date of the levy, thus negativing noncompliance with the statutes in respect to possession and payment of mortgages.

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Bluebook (online)
94 F.2d 536, 1938 U.S. App. LEXIS 4453, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dickinson-v-orr-ca8-1938.