Finney v. Knapp Co

• Decision Date: 20 June 1916
• Docket Number: (No. 499.)
• Citation: 89 S.E. 413,145 Ga. 400
• Parties: FINNEY et al. v. KNAPP CO.
• Court: Georgia Supreme Court

89 S.E. 413

(145 Ga. 400)

FINNEY et al.

v.KNAPP CO.

(No. 499.)

Supreme Court of Georgia.

June 20, 1916.

(Syllabus by the Court.)

Error from Superior Court, Baldwin County; J. B. Park, Judge.

Action by the Knapp Company against T. J. Finney and others. Judgment for plaintiff, and defendants bring error. Reversed.

D. S. Sanford, of Milledgeville, for plaintiffs in error.

Livingston Kenan, of Milledgeville, for defendant in error.

LUMPKIN, J. Knapp Company obtained a judgment against the Union Dry Goods Company, on February 27, 1913, in a county court. Certiorari was taken out, but was dismissed on August 13th thereafter, and execution was issued on October 8, 1913. In the meantime, on May 20th (written 1914, but from the context evidently 1913), a petition in involuntary bankruptcy was filed against the Union Dry Goods Company, and it was adjudicated a bankrupt. A trustee was appointed and under order of the court of bankruptcy he sold the property of the bankrupt; the order specifying that the sale should be free from liens. The sale took place in June. After the dismissal of the certiorari in the superior court, an execution issued and was levied on the goods. A claim was interposed by persons who had bought the property from the purchaser at the sale of the trustee in bankruptcy. At the time when the judgment was obtained the defendant was insolvent. The purchasers at the sale and the claimant were stockholders in the bankrupt corporation. There was substantially no issue in regard to the facts. The presiding judge directed a verdict in favor of the plaintiff, and the claimants excepted.

Treating the judgment as of the date when it was originally rendered, it was within four months of the filing of the petition, which was followed by the adjudication in bankruptcy, and when it was obtained the defendant was insolvent. Under section 67f of the Bankruptcy Act of 1898 (Collier on Bankruptcy [9th Ed.] 1358), the lien of such judgment obtained by the plaintiff against the defendant was "null and void, " and the property affected by it passed to the trustee as part of the estate of the bankrupt. There was no order of the court of bankruptcy in this case seeking to preserve the lien for the benefit of the estate. Nor was the right of any bona fide purchaser under the judgment involved. The fact that the debt was not scheduled, and that the creditor did not have notice or knowledge of the proceedings in bankruptcy, and did not prove its claim, would prevent a...