Powers Dry Goods Co. v. Nelson

58 L.R.A. 770, 88 N.W. 703, 10 N.D. 580, 1901 N.D. LEXIS 77
CourtNorth Dakota Supreme Court
DecidedNovember 9, 1901
StatusPublished
Cited by22 cases

This text of 58 L.R.A. 770 (Powers Dry Goods Co. v. Nelson) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Powers Dry Goods Co. v. Nelson, 58 L.R.A. 770, 88 N.W. 703, 10 N.D. 580, 1901 N.D. LEXIS 77 (N.D. 1901).

Opinion

Young, J.

The complaint states a cause of action for goods sold and delivered by plaintiff to defendant between February i- and May 6, 1900. A warrant of attachment was issued at the commencement of the action under subdivision 8, § 5352, Rev. Codes 1899, which subdivision provides that an attachment may be issued and levied upon personal property sold, in actions to recover the purchase price therefor. Under such warrant of attachment the sheriff of Richland county, wherein the action was pending, levied upon the goods sold, and also other personal property, and took the same into his possession. The defendant, in an amended answer, pleads as his sole defense a discharge in bankruptcy by the district court of the United States for the district of North Dakota, which discharge is claimed to have had the effect of canceling both the debt sued upon and the lien of the attachment as well. The case was tried to the court without a jury, upon a written stipulation of facts. The trial court found, as a conclusion of law from the facts found, “that the plaintiff is entitled to judgment against the defendant for the amount claimed in the complaint, with interest and costs; such judgment, however, to be enforced solely against the property attached herein and held by the sheriff of Richland county * * * under the warrants of attachment herein.” In pursuance thereof, a qualified form of judgment was entered, providing that it should be enforced only against the property held by the sheriff under the warrant of attachment, and further providing that upon a sale of personal property, and a return of execution showing such sale and the amount realized from said property, “said judgment should thereby be satisfied in full.” The defendant has appealed from the judgment, and in a settled statement of the case, containing- all the evidence offered, demands a review of the entire case by this court.

The case turns upon facts which are not in dispute. So far as they are material to a determination of the questions involved, they may be stated chronologically as follows: On June 23, 1900, the defendant filed a petition to be adjudged a voluntary bankrupt, together with a schedule of all his assets and liabilities, with the clerk of the district court of the United States for the district of North Dakota, in conformity with the acts of congress relative to bankruptcy. The plaintiff was listed as a creditor, and his claim was listed in the schedule of liabilities. The present action was commenced in the district court of Richland county on June 27, 1900; and on .the following day the sheriff levied upon the goods sold by plaintiff, and took them into his custody. On [582]*582June 30th, 1900, the district court of Richland county, upon defendant’s application setting forth the pendency of the bankruptcy proceedings, stayed all further proceedings in the action until further order. On July 2, 1900, defendant was duly adjudged bankrupt by the United States court. On August 6, 1900, the United States court made an order requiring the trustee in the bankruptcy proceedings, Charles G. Bade, to set aside, under the acts of congress and the laws of the state, as exempt, to the defendant, and as his own property, certain personal property, including all of the chattels taken by attachment in this action. On August 9th thereafter said trustee set aside all of said property as exempt, as required by said order. On August 22, 1900, the plaintiff caused a second warrant of attachment to be issued, and on the following day the same was levied by the sheriff upon the same property seized under the first attachment, which property had continued in his actual custody at all times after its seizure in the first instance. On September 22, 1900, the United States district court made an order in the bankruptcy proceeding discharging the defendant from all debts and claims which existed on June 23, 1900, the day the petition was filed, which were provable by the bankruptcy act against his estate, excepting therefrom such debts as are by law exempt from the operation of a discharge in bankruptcy. It is stipulated that the facts alleged in plaintiffs complaint are true, and, further, that the property seized by the sheriff under the attachment was in part property sold to defendant by plaintiff. It is also stipulated that during the pendency of the bankruptcy proceedings the defendant made a petition in said bankruptcy court for an order directing the trustee to set out as exempt all of the personal property by him listed in his schedule, and that such order was made on August 6, 1900, as hereinbefore stated. It is also agreed that the question of the right of the defendant to claim the property attached as exempt as against the claim of the plaintiff has never been litigated or determined, unless the same was, as matter of law, determined or litigated1 in the bankruptcy proceedings in which the plaintiff took no part. The judgment here appealed from was rendered and entered on March 26, 190 t.

Defendant contends that his discharge in bankruptcy by the United States court on September 22, 1900, was a complete bar to the recovery of any judgment whatever by plaintiff. This claim proceeds necessarily upon the theory that both the debt and the lien of the attachment were wiped out of existence by the discharge of the bankruptcy court. As to the debt sued upon, it is conceded that it was provable at the time defendant filed his petition, and that it was not of such a nature as to be exempt from a discharge. So far, then, as the debt stands alone, unaided by the lien of the attachment, it clearly was not enforceable as-against the defense of a discharge. But the discharge of the lien is an entirely different matter. Counsel for defendant urge that, if payment [583]*583of the debt cannot be enforced directly, it cannot be enforced through the aid of. an attachment lien. It is claimed that, inasmuch as an attachment is generally defeated by anything that defeats the recovery of a valid money judgment, the attachment lien in this case must fall with the failure of the right to a money judgment. This rule clearly does not apply to liens securing debts which have been discharged by proceedings under the national bankruptcy act. A discharge under that act cancels some debts, and preserves others, according as they come within its provisions. It also provides that certain liens are rendered void and of no effect by the bankruptcy proceedings. Other liens are not disturbed. The act deals with both debts and liens, and it is now too well settled to require extended discussion that á mere discharge of the debt does not of itself discharge the lien securing it. The lien, to fail, must be one that is stricken down by the terms of the act. It is held that, where bankruptcy acts recognize the lien of an attachment as valid, “a discharge in bankruptcy does not prevent the attaching creditors from taking judgment against the debtor in such limited form as may enable them to reap the benefit of their attachment. When the attachment remains in force, the creditors, notwithstanding the discharge, may have judgment against the bankrupt to be levied only upon the property attached.” Hill v. Harding, 130 U. S. 699, 9 Sup. Ct. 725, 32 L. Ed. 1083, and cases cited. Bank v. Elliot, (Wis.) 85 N. W. Rep. 417, is directly in point. The question in that case was as to the right of a creditor to enforce the equitable lien of a garnishment when the debt sued upon had been discharged by a discharge under the present national bankruptcy act. The court, after careful consideration, reached the conclusion that he had such right.

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Bluebook (online)
58 L.R.A. 770, 88 N.W. 703, 10 N.D. 580, 1901 N.D. LEXIS 77, Counsel Stack Legal Research, https://law.counselstack.com/opinion/powers-dry-goods-co-v-nelson-nd-1901.