In re Preston

19 F. Cas. 1291
District Court, D. Washington·Decided July 1, 1873·No. Case No. 11,394·Published

Opinion

GREEN, J.

Under this special case, submitted to me on the twentieth day of June, eighteen hundred and seventy-one, it is assumed that the attachment proceedings were regular up to the time of the commencement of proceedings in bankruptcy; and that at the commencement of the latter proceedings the attachment suit had not proceeded to judgment.

I answer to the first question, that the attachment was dissolved from the date to which the assignment in bankruptcy relates —that is, from the time of the commencement of bankruptcy proceedings. The operation of the assignment in reference to the attachment was, not to avoid it ab initio, but to arrest all proceedings under it; to dissolve it as of the date of the filing of the petition in the supreme court; to leave untouched all -previously accrued rights; to prevent the subsequent aecrument of rights, under the attachment. From the date of the dissolution of the attachment the sheriff or other person having then actual possession of the attached property became divested of ail official relation to that property, and became a simple bailee thereof to the use of the person by virtue of the bankrupt act entitled to the same. If he afterwards, by sale or in any other way, disposed of the property, otherwise than to transfer the bankrupt’s estate in the same to him to whom by the bankrupt law it fell, his act had no official character, and needed to make it valid the ratification of the person having title under the law. The court will not in this proceeding hold it valid, but suggests that in order to such validity it would need such a ratification. Such ratification does not appear.

Coming to the first part of the second question: An alleged debtor cannot personally be compelled to pay costs, except of his own making, until he has been adjudged a debtor or costs have been adjudged against him. And until such judgment, of course costs not made at his instance cannot be collected out of his general property as a debt owing from him to the officer. Section 15) of the bankrupt law [of 1867 (14 Stat, 5251] contains an exhaustive enumeration of all claims that may be proved against the bankrupt’s estate or any part of it The enumeration compris es only claims owing by the bankrupt to creditors. No other kind of claim — no charge on specific property unless to secure a personal debt from the bankrupt, is good against the unexcepted articles in court; and it is just to conclude that what could not be enforced against an article if in court, cannot be a charge against it out of court, excepted by the assignee. Excepted articles have at least that measure of exemption that they would have if subject to distribution. Section 20 agrees with section 19; recognizes mortgages or pledges of real or personal estate, and liens, “for the securing of debts owing to the creditor from the bankrupt,” as good charges on the bankrupt’s estate, and by implication rejects all other charges. [1293] The sheriff here has no lien answering the description of the law. His costs were at plaintiff’s instance, and do not properly before judgment constitute a debt owing from the bankrupt defendant to the officer (in fact they cannot eren after judgment properly be said to), and such costs could not anywhere, it is beiieved, before judgment, be collected by the officer against the defendant, unless, through the specific property attached. It vrould, indeed, be unjust to allow the sheriff to satisfy his costs out of the property of the bankrupt defendant in attachment, -when those costs were incurred at the request of plaintiff, and when the suit being summarily superseded, the law creates no presumption in favor of the title of plaintiff to costs as against the defendant. Where a suit is thus superseded, the law creates no presumption in favor of either party. It might very well be, that defendant in the attachment suit would, if permitted, have been able to prove himself unindebted. How inequitable, in such a case, would be.a diminution of the assets of the bankrupt, by the necessarily considerable expenses of an attachment certainly groundless, possibly malicious! It is to be noted that, under the laws of this territory, if the attaching plaintiff should fail in his attachment suit, the defendant would be entitled to a restoration of all his property attached, wdthout diminution and subject to no lien growing out of the suit.

Prom these considerations, I am of opinion that the costs that accrued under the attachment prior to the filing of the bankrupt’s petition are not a valid lien upon the property in controversy; unless, indeed, some of those costs were incurred at defendant’s request, In which case there might be a lien for so much thereof so long as the sheriff retained the property. A release, voluntarily, of the property would be an abandonment of any lien upon it.

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In re Preston, 19 F. Cas. 1291 (washd 1873).

19 F. Cas. 1291 (In re Preston) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.