In re Federal Biscuit Co.
| Decision Date | 07 April 1914 |
| Docket Number | 239. |
| Citation | 214 F. 221 |
| Parties | In re FEDERAL BISCUIT CO. |
| Court | U.S. Court of Appeals — Second Circuit |
[Copyrighted Material Omitted]
R. P Levis, of New York City, for petitioner.
Jno. M Gardner, of New York City, for respondent Vick.
J. Deyo and Phelan Beale, both of New York City, for other respondents.
Before LACOMBE, COXE and ROGERS, Circuit Judges.
ROGERS Circuit Judge (after stating the facts as above).
This court was called upon to pass upon this same motion in February, 1913. The court below had then entered an order in which it granted the relief asked, and we reversed its action in part. We then said:
' In re Federal Biscuit Co., supra.
The motion was a year later renewed, and this time the learned District Judge, to whom the application was made, denied the motion and said:
The appeal taken from the order denying the motion raises the question whether the facts are the same now as they were when this matter was last before us, and, if they are not the same, whether the difference is such as to make it proper for us to modify in any respect our former action. But we have failed to discover that anything has occurred since the case was last before us which should change the conclusion we reached at that time.
It is said that the attachment obtained by Vick in his suit against the bankrupt in the state court should be vacated, and it is conceded that the attachment was levied within four months of the filing of the petition in bankruptcy. The District Judge in his opinion says:
It is possible that the District Judge did not have the matter clearly presented to him, and we are free to say that we do not think it was clearly presented in the argument in this court. It is important to distinguish between the discharge of the lien of the attachment by the bond given to take its place and the vacation of the writ. The two things are quite distinct, and the District Judge apparently did not have his attention called to the distinction, and it was not clearly pointed out in the argument before us. The bond given by the Massachusetts Bonding Company bonding the attachment in the suit in the New York Court was authorized under the New York statutes, and the purpose of the statute as explained in Christal v. Kelly, 88 N.Y. 285, 292 (1882), by Chief Judge Andrews was the following:
'It was intended for the benefit of defendants whose property had been, or might be, attached under process, to enable them to substitute, for the property which had been or might be attached, security for the payment of any judgment which might be recovered in the action, and thereby relieve their property from the actual or apprehended lien of the process.'
And the effect of the dissolution of an attachment is to release the attached property, though no order of dissolution may be entered in the court where the action is pending.
A lien acquired by an attachment of an insolvent debtor is a lien 'obtained through legal proceedings' and is, by the express terms of the Bankruptcy Act, Sec. 67f, dissolved by the filing of a petition in bankruptcy by or against the debtor, if that occurs within four months after its date. And the effect of the statute in dissolving attachments is not confined to those issuing from courts of the United States, but applies as well to the process of the state courts. See Black on Bankruptcy, Sec. 376, and Bank of Columbia v. Overstreet, 10 Bush (Ky.) 148.
The discharge of the lien of attachment is one thing, the vacation of the writ is another. The discharge of the lien does not necessarily vacate the writ. See King v. Block Amusement Co., 126 A.D. 48, 111 N.Y.Supp. 102 (1908), affirmed 193 N.Y. 608, 86 N.E. 1126. The question whether the writ shall be vacated is important as affecting the liability of the surety.
The question whether the writ of attachment should be vacated was considered in the New York case above cited. It was decided in the Appellate Division of the Supreme Court, and affirmed by the Court of Appeals, that a warrant of attachment issued within four months of the filing of a petition in bankruptcy against defendant and discharged by an undertaking for which the surety takes no security would not be vacated after the adjudication in bankruptcy so as to discharge the surety. We think the same ruling should be applied under the facts of the case at bar, although in this case there has been no discharge of the bankrupt, and property of the bankrupt is held in trust for the indemnity of the surety.
The statutes of the United States prevent the courts of the United States from issuing injunctions to stay proceedings in any court of a state except in cases 'where such injunction may be authorized by any law relating to proceedings in bankruptcy. ' Revised Statutes U.S. Sec. 720 (U.S. Comp. St. 1901, p. 581). And it is provided in the Bankruptcy Act, Sec. 11, that:
'A suit which is founded upon a claim from which a discharge would be a release, and which is pending against a person at the time of the filing of a petition against him shall be stayed until after an adjudication or the dismissal of the petition; if such person is adjudged a bankrupt, such action may be further stayed until twelve months after the date of such adjudication, or, if within that time such person applies for a discharge, then until the question of such discharge is determined.'
In pursuance of this provision of the Bankruptcy Act the United States District Judge for the Southern District of New York on September 25, 1912, issued an order...
To continue reading
Request your trial
-
MANUFACTURERS'FINANCE CORPORATION v. Vye-Neill Co., 2744
...Company of New York, 259 Mass. 419, 156 N. E. 674; Woogmaster v. National Surety Company, 260 Mass. 184, 157 N. E. 44; In re Federal Biscuit Co. (C. C. A.) 214 F. 221, 223; Brown v. Four-In-One-Coal Co. (C. C. A.) 286 F. 512; In re Rosenstein (C. C. A.) 276 F. 704; In re Maaget (C. C. A.) 1......
-
Fischer v. Pauline Oil Gas Co
...First State Bank v. Bradshaw, 174 Okl. 268, 51 P.2d 514. 4 In re Tune, D.C., 115 F. 906; In re Beals, D.C., 116 F. 530; In re Federal Biscuit Co., 2 Cir., 214 F. 221, 224. 5 Clarke v. Larremore, 188 U.S. 486, 488, 23 S.Ct. 363, 364, 47 L.Ed. 555; Chicago, B. & Q.R. Co. v. Hall, 229 U.S. 511......
-
In re General Steel Tank Company, Inc.
...dissolved by the debtor's bankruptcy, the lienholder may nevertheless proceed on the bond and recover from the surety. In re Federal Biscuit Co., (2 Cir., 214 F. 221). The creditor thus is effectually preferred, while the surety, who has given an adequate present consideration for the trans......
-
In re New York, NH & HR Co.
...on the authorization of stays in attachment actions instituted within four months of the bankruptcy proceeding. See the same case at 2 Cir., 214 F. 221. Since the plaintiffs in the Massachusetts action are the Old Colony trustees appointed by the bankruptcy court, and the liquidation of thi......