Fidelity & Deposit Co. v. Shepherd

• Decision Date: 01 March 1926
• Docket Number: No. 4315.,4315.
• Citation: 11 F.2d 563,56 App. DC 117
• Parties: FIDELITY & DEPOSIT CO. OF MARYLAND v. SHEPHERD.
• Court: U.S. Court of Appeals — District of Columbia Circuit

56 App. DC 117, 11 F.2d 563 (1926)

FIDELITY & DEPOSIT CO. OF MARYLAND v. SHEPHERD.

No. 4315.

Court of Appeals of District of Columbia.

Submitted February 4, 1926.

Decided March 1, 1926.

G. E. Hamilton, J. J. Hamilton, G. E. Hamilton, Jr., Edmund Brady, H. R. Gower, and W. A. Johnston, all of Washington, D. C., for appellant.

J. M. Chamberlin, J. L. Smith, A. L. Bennett, and G. L. Munter, all of Washington, D. C., for appellee.

Before MARTIN, Chief Justice, and ROBB and VAN ORSDEL, Associate Justices.

MARTIN, Chief Justice.

Frank Shepherd, as plaintiff in the lower court, sued the United Phonograph Stores, Incorporated, claiming damages in the sum of $4,100, because of an alleged breach of contract of employment between the parties. The defendant pleaded the general issue.

A writ of attachment was issued with the summons, and on February 27, 1922, the marshal levied upon certain chattel property of the defendant, appraised at $2,876.50. A few days after the levy the defendant, together with the Fidelity & Deposit Company of Maryland, as surety, procured a discharge thereof by the execution of a bond reading in part as follows, to wit:

"The defendant, and Fidelity & Deposit Company of Maryland, surety, in consideration of the discharge from the custody of the marshal of the property seized by him, upon the attachment sued out against the defendant on the 21st day of February, A. D. 1922, in the above-entitled cause, appear, and, submitting to the jurisdiction of the court, hereby undertake, for themselves and each of them, their and each of their heirs, executors, and administrators, successors, or assigns, to abide by and perform the judgment of the court in the premises in relation to said property, which judgment may be rendered against all the parties whose names are hereto subscribed."

Before the case came to trial the defendant moved the court to stay the cause upon the ground that on May 15, 1922, being a day within four months after the levy of the attachment, the defendant was adjudged a bankrupt and a receiver was appointed to take charge of its assets, and that this action was founded upon a claim which would be released by a discharge in bankruptcy. The court overruled this motion, and also refused to substitute the trustee in bankruptcy for the defendant in the case.

The case was then tried, and a verdict was returned for plaintiff in the sum of $3,750. The court entered a judgment on the verdict against the defendant and the Fidelity & Deposit Company, as surety, in the sum of $3,750, at the same time perpetually enjoining the issuing of execution against the bankrupt defendant. Execution was allowed against the surety company, provided nevertheless that said company might satisfy the same by redelivering the attached property to the marshal, or by the payment to plaintiff of the sum of $2,876.50, that being the appraised value of the attached property. The surety company appealed.

The appellant first presents certain assignments of error relating to the admission or rejection of testimony tendered at the trial. We think it unnecessary to discuss these in detail, for in our opinion there was no prejudicial error in any of the rulings in question.

The appellant next contends that inasmuch as the bankruptcy took place within four months after the attachment was levied it would have invalidated the levy, under section 67f of the Bankruptcy Act (Comp. St. § 9651), which provides that all attachments, or other liens, obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt, and the property affected by the attachment or other lien shall be deemed wholly discharged and released from the same, and shall pass to the trustee as a part of the estate of the bankrupt.

Appellant contends that this provision should similarly invalidate the present bond, since it was no more than a substitute for the levy. The appellant also claims that the taking over of defendant's property by the trustee in bankruptcy, and its subsequent sale under court orders, operated to release appellant as surety, since its undertaking was to abide and perform the judgment of the court relating to said property, whereas the bankruptcy proceedings had not only made it impossible for the defendant or the surety to redeliver the property to the marshal, but in effect had deprived the court of jurisdiction over the property, thus preventing it from entering any judgment "in relation to said property." This contention was presented to the lower court and...