In re Beaver Coal Co.

• Citation: 113 F. 889
• Decision Date: 03 March 1902
• Docket Number: 740.
• Parties: In re BEAVER COAL CO.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

113 F. 889

In re BEAVER COAL CO.

No. 740.

United States Court of Appeals, Ninth Circuit.

March 3, 1902

W. W Cotton, J. N. Teal, Wirt Minor, and Joseph Kirk, for petitioner.

Thomas G. Greene, Cecil H. Bauer, and William D. Fenton, for claimant.

See 110 F. 630.

On December 18, 1899, Alexander H. Kerr, the appellee herein brought an action in the circuit court of the state of Oregon for Coos county against the Beaver Coal Company to recover $4,093.41, with interest and costs, and on the same day caused a writ of attachment to be issued in said action, and under said writ the sheriff seized certain personal property of the defendant in the action. On May 19, 1900, judgment was duly rendered in favor of the plaintiff for $4,233.66 and costs and disbursements, and the judgment entry contained an order directing the sale of the attached property to satisfy said judgment. On June 21, 1900, a petition in involuntary bankruptcy was filed against the Beaver Coal Company, and on August 3 1900, it was adjudged a bankrupt. The appellee filed his claim against the estate of the bankrupt, asserting priority against the proceeds of the attached property. It was adjudged to have such priority, and from the decision of the district court so ruling the present appeal is taken.

Before GILBERT and MORROW, Circuit Judges, and HAWLEY, District Judge.

GILBERT Circuit Judge, after stating the case as above, .

The attachment was issued and levied more than four months prior to the institution of the proceedings in bankruptcy, but the judgment was made and entered within less than four months prior to such proceedings. The question presented on the appeal is whether the appellee's lien was dissolved by the proceedings in bankruptcy, by virtue of section 671 of the bankruptcy act, which provides as follows:

'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.'

The appellee undoubtedly obtained a lien by virtue of his attachment. Under the statute of Oregon, the attached property is held as security for the judgment, and the law goes so far as to provide that, as against third persons, the attaching creditor 'shall be deemed a purchaser in good faith and for a valuable consideration of the property, real or personal, attached. ' Hill's Ann. Laws Or. Sec 150. Was the lien so obtained by the attachment lost or merged in the judgment, so that it can be said that the lien under which the appellee made his claim against the bankrupt estate was 'obtained' by the judgment? If so, under the plain provision of the bankruptcy act it must be declared null and void. It is not disputed that, if no judgment had been taken, the attachment lien would have been at the time of the institution of the proceedings in bankruptcy a valid and subsisting lien, for it had been obtained more than four months prior to such proceedings. We do not think the lien thus obtained was lost by reducing the claim to judgment. By the law of Oregon, the lien of an attachment upon personal property is enforced by a provision in the judgment entry directing the sale of the...