Ableman v. Conoway
| Decision Date | 02 May 1938 |
| Citation | 39 Del. 324,199 A. 278 |
| Court | Delaware Superior Court |
| Parties | MEYER ABLEMAN, Trustee in Bankruptcy of Max Cohen, trading as Barros and Cohen, Bankrupt, v. HARLEY J. CONOWAY, Sheriff of Sussex County |
Superior Court for Sussex County, February Term, 1938.
Petition for a rule to show cause why return of Sheriff on a writ of fieri facias should not be quashed, and the respondent be ordered to pay amount realized from sale of personal property to Trustee in Bankruptcy. Motion by respondent to dismiss the petition.
The petition, inter alia, averred that the petitioner was Trustee in Bankruptcy of Max Cohen, who was adjudicated a bankrupt on January 14, 1938; that on October 7, 1937, within four months of the adjudication, Milford Trust Company obtained a judgment in the Superior Court, being No. 14 to October Term 1937, in the sum of $ 4000.00, against the bankrupt and another; that a writ of fieri facias was issued, returnable to the February Term, 1938, by virtue of which the Sheriff levied upon the goods and chattels of the defendant Cohen, in the writ, and sold them on November 22, 1937, for the sum of $ 4050.00; that in violation of the command of the writ, and of his duties generally, on or about November 22, 1937, the Sheriff permitted the purchaser to pay directly to Milford Trust Co. all the purchase money except $ 800, which sum was paid to the Sheriff and by him paid to the execution plaintiff, the latter, in turn, paying to the Sheriff the costs and an amount due for rent; that on January 17, 1938 before the return day of the writ, the Sheriff was notified in writing by the Referee in Bankruptcy that Max Cohen had been adjudicated a bankrupt, and that he, the Sheriff, should retain the funds realized from the sale for disposition according to law; that under the Bankruptcy Act, § 67f, as amended, 11 U.S.C. A., § 107(f), the judgment and levy was null and void; that the Sheriff made return of his execution at the February Term which showed that he had applied the proceeds of sale to costs, rent, and the balance, $ 3587.28, to the execution in hand; that, upon information and belief, Milford Trust Company, agreed to save the Sheriff harmless if he should be compelled to pay over the money realized from the sale, which agreement was given in anticipation of a probable demand by the Trustee in Bankruptcy; that the Trustee has made demand upon the Sheriff for the sum of $ 4050.00, which demand was refused.
At the argument, it was admitted that the petitioner was not elected Trustee of the bankrupt's estate until March 18, 1938, some weeks after the return day mentioned in the writ of execution; and that the indemnity agreement was not made until long after the sale and distribution.
Section 67f of the Federal Bankruptcy Act, as amended, 11 U.S.C. A., § 107(f), provides inter alia, "That all levies, judgments, 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 levy, judgment, 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."
Section 4781, Rev. Code 1935 is, in part, as follows: Section 4781, "When the sheriff, or other officer, to whom an execution is directed, levies, or receives the sum due thereon, or any part thereof, or obtains a settlement of the execution, he shall make return of such receipt, or settlement, under his hand, endorsed upon the execution, with the sum and date of each payment, if the execution be not fully satisfied". Section 4848 reads, "Every fieri facias shall be actually returned by the sheriff to whom the same was delivered before the rising of the Court, to which it is returnable, on the second day after the return day mentioned in the writ, with the said sheriff's certificate of what he has done thereon in usual and legal form".
Rule 99 of the Superior Court provides that, "The Sheriff or other officer executing any writ, order or process issuing out of this Court under which real or personal property shall be sold, shall endorse upon such writ, order or process an itemized statement of the application of the proceeds received from such sale".
The form of the writ of fieri facias commands the Sheriff to make the debt expressed by the judgment on which the execution was issued, with costs; and it runs, "and have you that money before the judges of our Superior Court, at -----, on Monday, the day of ----- next, to render to the said ----- for his debt and damages aforesaid, and this writ".
The petition is dismissed.
Meyer Ableman, in propria persona.
Isaac D. Short, 2nd, for respondent.
OPINION
The theory of the petitioner is, that it was the absolute duty of the Sheriff to have in hand the proceeds of the sale of the debtor's property at the return day of the writ of execution under which it was sold; that under Section 67f of the Bankruptcy Act, as amended, 11 U. S. C. A., § 107(f), the levy made by the Sheriff against the debtor's property was void as against him, the trustee, it having been made within four months of the filing of the petition in bankruptcy against the execution debtor; that he, upon his appointment as trustee, became entitled to the money as a part of the bankrupt's estate, the Sheriff having been notified of the adjudication prior to the return day of the writ of execution; and that the Sheriff, by summary proceeding, should be compelled to pay to him the entire proceeds of the sale.
Whether the Sheriff may distribute the proceeds of a sale of personal property sold under execution before the return day of the writ, is a question upon which there is a dearth of authority in this State.
In 2 Woolley, Pr., § 1081, it is said, "It is the duty of the Sheriff at the return term of the writ on which he has held a sale, to distribute the proceeds to and among the parties entitled." Literally, this language is susceptible of the meaning that the distribution properly cannot be made until the return term; but the statement is followed immediately by reference to the statute, Rev. Code 1935, § 1504, making the Sheriff liable for the amount due the proper claimant of the fund together with twenty per cent. interest thereon for neglect to pay over money "at the time when the same is payable", and giving to the Sheriff the right and privilege, in certain cases, to pay the money into Court. What was meant, undoubtedly, was that the Sheriff was bound to distribute not later than the return term, or pay the money into Court at that term, if that course was permitted under the statute, or incur the statutory penalty. See State v. Records, 5 Del. 146, 5 Harr. 146.
Section 4848 requires the Sheriff to return his writ on the second day after the return day mentioned therein, with his "certificate of what he has done thereon in usual and legal form"; and in 2 Woolley, Pr., § 977, it is said, "The Sheriff in his return must not only indicate the manner in which he has executed the writ, and show to what executions he has applied the proceeds of sale held thereunder, but must endorse * * * his fees for all services * * *". There is no statute requiring formal confirmation of execution sales of personal property. Rule 99 of the Superior Court directs the Sheriff to endorse upon the writ an itemized statement of the application of the proceeds received from the sale. By rule 51, application to set aside Sheriff's sales must be made on or before the first Thursday of the term, and by universal practice a sale is automatically confirmed on the first Friday if no application has been made to set it aside. The Sheriff is not required by statute to have in hand, or before the Court, at the return day of the writ the proceeds of a sale of property sold under execution process; and, on the contrary, the statute and authority, above cited, are indicative of discretion and privilege vested in the Sheriff to make, at his own risk and peril, distribution before the return day.
At common law, all writs of execution which were to be executed by the sole authority of the Sheriff, such as a writ of fieri facias, when duly executed, were good, though never returned by the Sheriff, for the plaintiff had the effect of his suit, and hence, it was said, that an execution executed is the end of the law. Bacon's Abridg., "Execution," 710; Hoe's Case, 4 Coke 67. The Sheriff might, however, be ruled to return executed writs of execution, and for neglect so to do, an attachment would issue. 1 Arch. Pr. 262. The statute, Section 4848, and the practice requires the Sheriff to return his writs of execution in the same manner, and in about the same time as he is required to return original writs. 2 Woolley, Pr., § 976. The statutory provision is, however, for the benefit of plaintiffs by affording them a remedy for the neglect of officers in making returns. State v. Clymer, 8 Del. 20, 3 Houst. 20. With respect to constables, it has been held that a return of execution process before the return day is not irregular, unless a further levy is thereby prevented. Lord v. Townsend, 5 Del. 457, 5 Harr. 457.
The petitioner stresses the form of the mandate of the writ. This form furnishes strong evidence of what the law was when the writ was devised, and of the duty of the officer to whom it was directed. Originally, it was the duty of the Sheriff to have the money in Court, and not even payment to the creditors excused the non-performance of this duty. Turner v. Fendall, 5 U.S. 117, 1 Cranch 117, 2 L.Ed....
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