In re Meade

60 F. Supp. 69, 1945 U.S. Dist. LEXIS 2335
CourtDistrict Court, D. Massachusetts
DecidedMarch 29, 1945
DocketNo. 67915
StatusPublished
Cited by1 cases

This text of 60 F. Supp. 69 (In re Meade) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Meade, 60 F. Supp. 69, 1945 U.S. Dist. LEXIS 2335 (D. Mass. 1945).

Opinion

WYZANSKI, District Judge.

This case arises on petitions for review of an order of Referee Black discharging three attachments against funds of the bankrupt, Raymond J. Meade. Jurisdiction is conferred on this court by 11 U.S.C.A. §§ 66, 67, sub. c, 107, sub. a(4).

September 1941 Meade mortgaged chattels to General Ice Cream Corporation to secure a debt. May 22, 1942, General Ice Cream Corporation took possession under its mortgage; and June 2, 1942, it foreclosed. After payment of all sums due it, General Ice Cream Corporation had a surplus of $341.20. This surplus was attached by McKesson & Robbins May 25, 1942, by Rachel Ehrenfried May 26, and by Gilman Brothers June 2. At the time of these attachments Meade was insolvent and the attaching creditors knew it.

Meade entered the military service of the United States July 3, 1942, and remained there until November 5, 1942, when he was honorably discharged. December 18, 1942, he filed a voluntary petition in bankruptcy. A trustee in bankruptcy was appointed. He petitioned the referee to dissolve the three attachments.

The question is whether the period of Meade’s military service shall be included in computing the period of “four months before the filing of a petition in bankruptcy” which attachments must have stood in order not to be null and void under the provisions of § 67, sub. a, of the Bankruptcy Act, 11 U.S.C.A. § 107, sub. a.

The referee excluded the period of Mieade’s military service and dissolved the attachments. The three attaching creditors now seek a review of the referee’s order.

Section 205 of the Act of October 17, 1940, 54 Stat. 1181, provided: “The period of military service shall not be included in computing any period now or hereafter to be limited by any law for the bringing of any action by or against any person in military service or by or against his heirs, executors, administrators, or assigns, whether such cause of action shall have accrued prior to or during the period of such service.”

These provisions were retained and amplified by the amendatory Act of October 6, 1942, 56 Stat. 770, 50 U.S.C.A.Appendix, § 525, which provides: “The period of military service shall not be included in computing any period now or hereafter to be limited by any law, (regulation, or order) for the bringing of any action (or proceeding in any court, board, bureau, commission, department, or other agency of government) by or against any person in military service or by or against his heirs, executors, administrators, or assigns, whether such cause of action (or the right or privilege to institute such action or proceeding) shall have accrued prior to or during the period of such service, (nor shall any part of such period which occurs after the date of enactment of the Soldiers’ and Sailors’ Civil Relief Act Amendments of 1942 be included in computing any period now or hereafter provided by any law for the redemption of real property sold or forfeited to enforce any obligation, tax, or assessment.)” [material in parentheses indicates amplifications of statute]

The first issue is whether the amendment of October 6, 1942, applies to this case. I am of opinion that it does not apply. All the attachments here involved were made on or before June 2, 1942. Unless prolonged by the original Soldiers’ and Sailors’ Civil Relief Act of October 17, 1940, the four months’ period referred to in § 67, sub. a, of the Bankruptcy Act would have expired by October 2, 1942. In other words, the normal period for potential nullification of the liens would have fully elapsed prior to the passage of the amendment of October 6, 1942. Nothing in that amendatory statute indicates that it was designed to reopen an already closed period. Indeed there is a precisely opposite indication in the last clause of the amendment. Moreover, the common rule is that statutes are ordinarily to be construed as prospective in operation. Ebert v. Poston, 266 U.S. 548, 554, 555, 45 S.Ct. 188, 69 L.Ed. 435. Therefore, in the case at bar if the normal period of four months has been extended the extension must have been by the Act of October 17, 1940.

The next issue is whether literally § 205 of the Act of October 17, 1940, covers this case. It is clear that Meade was a “person in military service” and that his trustee in bankruptcy is, by law, his as[71]*71sign. Bankruptcy Act § 70, 11 U.S.C.A. § 110. But, strictly speaking, the rule of § 67, sub. a, of the Bankruptcy Act, that under certain circumstances “every lien against the property of a person obtained by attachment * * * within four months before the filing of a petition in bankruptcy * * * shall be deemed null and void” does not constitute a “period * * * limited by * * * law for the bringing of any action.” The rule of § 67, sub. a, is not a statute of limitation. Compare Bell v. Buffinton, 244 Mass. 294, 295, 137 N.E. 287. Rather it is a substantive clog on the attaching creditor’s title. It gives the attaching creditor a defeasible right which becomes absolute if the debtor is not involved in bankruptcy within four months. It gives the trustee in bankruptcy power to nullify attachments within four months of bankruptcy. That power is what Mr. Justice Brandéis has called “a primary right as distinguished from a remedy.” Ebert v. Poston, 266 U.S. 548, 553, 45 S.Ct. 188, 190, 69 L.Ed. 435. Hence literally § 205 of the Act of October 17, 1940, does not cover this case.

There remains the issue whether the broad purpose of the act declared in § 100, 54 Stat. 1179, 50 U.S.C.A. § 510 demands that § 205 be liberally construed beyond its letter to include the situation presented in this case. In approaching this issue as presented in this case it is essential to have in mind the relationship not only of § 67, sub. a, of the Bankruptcy Act, but of the entire Bankruptcy Act to the Soldiers’ and Sailors’ Civil Relief Act. As stated in § 100 of the Relief Act, 50 U.S.C.A. § 510, the purpose of the statute is “to suspend enforcement of civil liabilities, in certain cases, of persons in the military service of the United States in order to enable such persons to devote their entire energy to the defense needs of the Nation.” Consistent with that purpose, § 205 of the Relief Act extends the period of time in which actions can be brought against as well as by persons in the military service. Compare Blazejowski v. Stadnicki, Mass., 58 N.E.2d 164. As applied to bankruptcy, this means that, although § 3, sub. b, of the Bankruptcy Act, 11 U.S.C.A. § 21, sub. b, enunciates that “a petition may be filed against a person within four months after the commission of an act of bankruptcy”, the four months’ period is not adhered to if the person has entered military service within four months after an act of bankruptcy. Thus, for example, if an attaching creditor obtains a lien upon an insolvent debtor’s property and within four months thereafter the debtor enters the military service, other creditors have an extension of their right to file a petition for involuntary bankruptcy. It is obviously part of the scheme of the Bankruptcy Act that the right of the other creditors to invoke the lien as a ground for a petition for involuntary bankruptcy, a right given by § 3, sub. a(3) and § 3, sub. b, of the Bankruptcy Act, shall be correlated with the right of the trustee to have the lien declared void, a right given by § 67, sub. a, of the Bankruptcy Act.

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Bluebook (online)
60 F. Supp. 69, 1945 U.S. Dist. LEXIS 2335, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-meade-mad-1945.