Jones v. Emblem, Inc.

106 So. 2d 481, 1958 La. App. LEXIS 732
CourtLouisiana Court of Appeal
DecidedNovember 17, 1958
DocketNo. 21110
StatusPublished
Cited by2 cases

This text of 106 So. 2d 481 (Jones v. Emblem, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jones v. Emblem, Inc., 106 So. 2d 481, 1958 La. App. LEXIS 732 (La. Ct. App. 1958).

Opinion

JANVIER, Judge.

Plaintiff, Victor Jones, a judgment debt- or, seeks to prevent by injunction the sale under a fieri facias of certain household and domestic appliances, and the defendant, Emblem, Inc., and the Constable of the First City Court of New Orleans have appealed from a judgment granting the injunction.

The facts are not in dispute and the controversy arises over a question which is presented by a certain section of the Bankruptcy Act of the United States, the particular section with which we are concerned being 67 sub. a(l), 11 U.S.C.A. § 107, sub. a(l). That section reads as follows:

“(1) Every lien against the property of a person obtained by attachment, judgment, levy, or other legal or equitable process or proceedings within four months before the filing of a petition in bankruptcy or of an original petition under chapters 10, 11, 12 or 13 of this title by or against such person shall be deemed null and void (a) if at the time when such lien was obtained such person was insolvent or (b) if such lien was sought and permitted in fraud of the provisions of this title: Provided, however, That if such person is not finally adjudged a bankrupt in any proceeding under this title and if no arrangement or plan is proposed and confirmed, such lien shall be deemed reinstated with the same effect as if it had not been nullified and avoided.”

The facts are as follows: On November 16, 1954, the present appellant, Emblem, Inc., as plaintiff, obtained a final judgment in the sum of $310.76 against the present plaintiff in injunction, Victor Jones. On March 21, 1957, Emblem, Inc., in the suit in which it had obtained the judgment against Jones provoked the issuance of a writ of fieri facias, and, under it, caused the seizure, by the Constable of the First City Court, of the personal property which is herein involved.

On April 8, 1957, Jones, in the United States District Court for the Eastern District of Louisiana, filed a petition praying for an adjudication in bankruptcy. In that bankruptcy proceeding the referee found no need for an administration and disclaimed “all right, title and interest to and into all of the household furniture therein involved.”

By reference to the dates which we have already shown, it appears that the lien, resulting from the seizure under the writ of fieri facias, was acquired only 18 days before the filing of the petition in bankruptcy, thus well within the four month period preceding the filing of the petition in bankruptcy.

Since the lien resulted only from the seizure, it was within the contemplation of the Bankruptcy Act, and since, it is conceded that at the time of the seizure Jones was insolvent, the lien, as a result of the first proviso, could be “deemed null and void” since, “at the time such lien was • obtained, such person (Jones) was insolvent.”

If the lien became null and void as a result of the mere filing of the petition in [483]*483bankruptcy without the necessity of any action by the referee or the trustee, obviously there could be no further proceeding as a result of the writ of fieri facias; in other words, no Constable’s sale could be held as a result of the judgment in the former suit against Jones, and, since the debt on which that seizure was based was shown on the bankrupt’s schedules, the discharge in bankruptcy of Jones released him from any obligation to Emblem, Inc.

However, Emblem, Inc., and the Constable herein contend that, although the quoted portion of section 67, subdivision a of the Bankruptcy Act seems to provide that, as a result of the mere filing of the petition in bankruptcy, such a lien as is here involved by that fact alone becomes null, as a matter of fact that provision really means and has been held to mean that such a lien is merely voidable and that if it is to be annulled there must be in the bankruptcy proceeding or in some other appropriate proceeding some action seeking to accomplish that result. It is contended that since not only was there no such action here, and since the referee in behalf of the bankrupt’s estate disclaimed any interest in the property, the lien resulting from the seizure was not nullified, remained in full force and effect and that* therefore the sale of the property under-, the writ of fieri facias may be proceeded with.

However, counsel for Jones points to the last section of the above quoted provision which we now repeat:

“ * * * Provided, however, That if such person is not finally adjudged a bankrupt in any proceeding under this title and if no arrangement or plan is proposed and confirmed, such lien shall be deemed reinstated with the same effect as if it had not been nullified and avoided.”

Counsel says that, as a result of this provision, it necessarily follows that it is only where there is no final adjudication in bankruptcy that such a lien as this becomes reinstated and is as effective as if it had never been nullified and avoided.

The entire question then is whether or not such a lien is nullified automatically by the filing of the petition, or whether it is merely voidable and remains in full force and effect unless and until, in the bankruptcy or in some other appropriate proceeding, there is some action looking towards its nullification.

The Supreme Court of the United States in Fischer v. Pauline Oil & Gas Co., 309 U.S. 294, 60 S.Ct. 535, 84 L.Ed. 764, discussed this question and clearly held that there must be a proceeding of some kind on behalf of the bankrupt estate either in the bankruptcy proceeding or elsewhere looking to the nullification of such a lien as this.

While the facts of that case were somewhat complicated, the Supreme Court clearly held that whether such a lien is annulled by the mere filing of the petition in bankruptcy is a question which must be judicially determined. It is true that that decision was rendered prior to the enactment of the amendment with which we are now concerned, but in spite of the very able argument of counsel for Jones, we are unable to see that there is any distinction between the earlier statute and the one which is now involved.

Before the amendment with which we are concerned, the Bankruptcy Act, section 67, sub. f, as the Supreme Court said in the Fischer case [309 U.S. 294, 60 S.Ct. 539], “unequivocally declares that the lien shall be deemed null and void * * Referring to' this language the Supreme Court said that:

“The question is whether the state court was right in holding that, by force of § 67, sub. f, the adjudication in bankruptcy automatically discharged the lien of the levy, irrespective of any action on the part of the trustee. sfe s|< íjí ff

[484]*484The contention was that, as a result of the mere adjudication in bankruptcy, “the lien was absolutely void.” The Court said that the lien was not automatically nullified and made void since there were certain specified conditions as a result of which nullity of the lien might be accomplished. And the Court said:

“ * * * • These conditions create issues of fact which, as between the trustee, or one claiming under him, and the lienor, or one claiming by virtue of the lien, the parties are entitled to have determined judicially.”

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Marks v. Demarest
174 So. 2d 160 (Louisiana Court of Appeal, 1965)
Huff v. Justice
174 So. 2d 164 (Louisiana Court of Appeal, 1965)

Cite This Page — Counsel Stack

Bluebook (online)
106 So. 2d 481, 1958 La. App. LEXIS 732, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jones-v-emblem-inc-lactapp-1958.