Snyder v. Smith

69 N.E. 1089, 185 Mass. 58, 1904 Mass. LEXIS 745
CourtMassachusetts Supreme Judicial Court
DecidedFebruary 24, 1904
StatusPublished
Cited by38 cases

This text of 69 N.E. 1089 (Snyder v. Smith) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Snyder v. Smith, 69 N.E. 1089, 185 Mass. 58, 1904 Mass. LEXIS 745 (Mass. 1904).

Opinion

Knowlton, C. J.

The motion to dismiss the appeal of the defendant James M. Smith for want of prosecution and the petition of Kimball the trustee in bankruptcy to be allowed to intervene in the suit were heard together. The motion was allowed, and the petition was denied except so far as it related to any surplus that might remain after the debts of the various parties had been paid. At the hearing the plaintiff filed requests for rulings, all of which were given by the judge. One of these was that under the bankruptcy act of 1898 the creditors who were parties to this suit “obtained good equitable liens valid as against the trustee in bankruptcy” of the defendant Smith. We infer that the decision of the judge both upon the motion [60]*60and the petition was founded largely, if not entirely, upon his ruling made in accordance with this request, and was not made merely as a matter of discretion. The trustee in bankruptcy legally represented the bankrupt as the assignee of his property, and was entitled to be heard, upon proper proceedings in court, on his claim to the property referred to in the decree. We shall therefore assume in his favor, against the plaintiff’s contention, that he is rightly before us on his exception to the order denying his petition, and upon his appeal from that order.

The important question in the case is whether the proceedings gave the plaintiff an equitable lien upon the assets mentioned in the bill, which was good against the trustee in bankruptcy. The suit was brought under Pub. Sts. c. 151, § 2, cl. 11, (R. ‘L. c. 159, § 3, cl. 7,) to reach and apply certain equitable assets of the defendant Smith in the possession of the defendants Batt and Dickinson, trustees. A temporary injunction was issued on May 15, 1901, soon.after the commencement of the suit, restraining the defendant Smith and the defendants who held the property from disposing of it. On March 27, 1903, a decree was entered settling the rights of the parties in favor of the plaintiff ; the defendant Smith appealed, but failed seasonably to prosecute his appeal, and on May 7, 1903, he was adjudicated a bankrupt on his voluntary petition; and on May 21, Kimball was duly appointed his trustee.

The United States bankruptcy act of 1898, at § 67 e and § 67/, in differing language recognizes liens “ created by or obtained in or pursuant to any suit or proceeding at law or in equity,” and liens “ obtained through legal proceedings.” The provisions of this section are somewhat broader than those of the bankruptcy act of 1867. They are unlike the insolvency law of Massachusetts. This law, as it is found in the Gen. Sts. c. 118, § 44, discharged all liens obtained in legal proceedings, unless the suit had gone to judgment and the lien by attachment had been perfected by a levy. It is expressly said that the assignment shall be effectual to discharge any attachment on mesne process, subject to a special exception permitting the attachment to be preserved in certain cases for the benefit of the general creditors. By the St. of 1880, c. 246, § 7, this statute was amended by adding a provision as follows: “The assignment named in section [61]*61forty-four of said chapter one hundred and eighteen shall not dissolve an attachment on mesne process, made more than four months prior to the time of the first publication of the notice of issuing the warrant, in case of voluntary proceedings; and in case of involuntary proceedings such assignment shall not dissolve such an attachment made more than four months prior to the time of the first publication of the notice of the filing of the petition.” This provision has been embodied without material change in the "Pub. Sts. c. 157, § 46, and in the R. L. c. 163, § 54. Until this amendment was made, the statute not only in express terms provided that the lien created by an attachment on mesne process should be ineffectual against the rights of the assignee, but declared by implication that equitable liens of a similar character, obtained through legal proceedings in the nature of an attachment, would not be enforceable in proceedings in insolvency. By the amendment an exception was made in favor of attachments on mesne process made more than four months before the commencement of insolvency proceedings, but there was no exception of equitable liens obtained in proceedings to collect a debt.

The first question under § 67 of the bankruptcy act is what is meant by the word “ lien.” It is plain that a lien created by a suit in equity stands as well as any other kind of lien. Such a lien that has been in existence more than four months is good against the assignment to the trustee. An attachment on mesne process under our statute creates a lien. Davenport v. Tilton, 10 Met. 320. Taylor v. Mixter, 11 Pick. 341, 348. Denny v. Willard, 11 Pick. 519, 524 et sey. In the first of these cases it is held that such a lien is preserved by the bankruptcy act of 1841. This lien does not depend upon possession; it is created by operation of law, sometimes by a record of the doings of the officer, as in the case of attachments of real estate, (see R. L. c. 167, § 59,) and of personal property that cannot easily be removed. See R. L. c. 167, § 45. Undoubtedly an attachment by trustee process gives a lien upon property which will be good against bankruptcy if more than four months old. Kimball v. Morris, 2 Met. 573, 578, 579.

Proceedings in cases like the present are often called in the books an equitable attachment. If the facts warrant it, it is the [62]*62practice to issue a temporary injunction, whereby the property, by judicial order, is charged with an equity for the security of the plaintiff, and is taken directly into the control of the court. In this respect the control of it and its appropriation for security are in all particulars as effectual as in an attachment at law by trustee process.

A bill brought under our statute is like a creditors’ bill under general equity practice, though it may be brought by a single creditor for his own benefit without having obtained a judgment, and without making other creditors parties. That equitable liens upon property can be enforced when there is no other control of the property than by the process of a court of equity has been decided repeatedly in this Commonwealth. Wiggin v. Heywood, 118 Mass. 514. Western Union Telegraph Co. v. Caldwell, 141 Mass. 489. Desmond v. Fisher, 152 Mass. 521. The power of the court to appropriate property under this statute has been maintained effectually in a variety of cases. McCann v. Randall, 147 Mass. 81. Wilson v. Martin-Wilson Automatic Fire Alarm Co. 151 Mass. 515. Pettibone v. Toledo, Cincinnati, & St. Louis Railroad, 148 Mass. 411, 417. Wilson v. Martin-Wilson Automatic Fire Alarm Co. 149 Mass. 24, 27.

The trustee in bankruptcy relies upon Trow v. Lovett, 122 Mass. 571, Squire v. Lincoln, 137 Mass. 399, Powers v. Raymond, 137 Mass. 483, Fish v. Fiske, 154 Mass. 302, and Titcomb v. Bradlee, 159 Mass. 190, as tending to show that in this case there is no equitable lien which can be recognized under the bankruptcy act of 1898. The first of these cases was brought under the St. of 1875, c. 235, which confers jurisdiction in equity to reach and apply in payment of a debt property fraudulently conveyed by a debtor with intent to defeat, delay or defraud his creditors.

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Bluebook (online)
69 N.E. 1089, 185 Mass. 58, 1904 Mass. LEXIS 745, Counsel Stack Legal Research, https://law.counselstack.com/opinion/snyder-v-smith-mass-1904.