In re The Copper King
| Decision Date | 05 February 1906 |
| Docket Number | 4,215. |
| Citation | 143 F. 649 |
| Court | U.S. District Court — Northern District of California |
| Parties | In re THE COPPER KING, Limited. |
W. B Kollmyer, for petitioner.
Walter D. Mansfield, for trustee.
This is a petition by an attaching creditor for the review of an order made by the referee. It appears from the finding of the referee that the petitioner, on February 4, 1903, commenced in one of the courts of the state an action to recover from the bankrupt the sum of $10,404.96, for goods, wares, and merchandise sold, labor performed, and money advanced to the bankrupt. A writ of attachment was issued in that action and levied upon property of the bankrupt, February 5, 1903. This attachment was in force May 19, 1903, the date of the commencement of the bankruptcy proceedings herein. The referee also found that the petitioner necessarily, and in good faith, incurred and paid the sum of $1,017.20, as taxable costs, in the action referred to, and of this $133 was for the expense of keeping the property attached subsequent to the filing of the petition in bankruptcy. This last sum was allowed as a debt entitled to priority, and the remainder of the taxable costs, $884.20 was allowed as an ordinary debt not entitled to priority. The contention of the petitioner is that the whole amount of the taxable costs incurred in the action mentioned constitutes a debt entitled to priority, and that the referee erred in not so holding. The argument in support of this proposition is based upon subdivision 5 of section 64b of the Bankruptcy Act of July 1 1898, c. 541, 30 Stat. 563 (U.S.Comp.St. 1901, p. 3447) which provides that, among the debts entitled to priority, are '(5) debts owing to any person who by the laws of the states or the United States is entitled to priority,' and section 69 of the insolvency act of this state, approved March 26, 1895 (St. 1895, p. 153 c. 143), which is as follows:
'When an attachment has been made and is not dissolved before the commencement of proceedings in insolvency, or is dissolved by an undertaking given by the defendant, if claim upon which the attachment suit was commenced is proved against the estate of the debtor, the plaintiff may prove the legal costs and disbursements of the suit, and of the keeping of the property, and the amount thereof shall be a preferred debt.'
The question presented is an important one, and, in view of conflicting decisions, cannot be said to be free from doubt. The cases of In re Lewis (D.C.) 99 F. 935, and In re Daniels (D.C.) 110 F. 745, fully sustain the position of the petitioner, while a different conclusion was reached in Re Beaver Coal Co. (D.C.) 107 F. 98, and by this court in the case of In re Allen (D.C.) 96 F. 512, and to this latter opinion, I still adhere. The section of the insolvency act of the state of California above quoted, makes the costs incurred in an attachment suit a preferred claim, if the claim 'upon which the attachment suit was commenced is proved against the estate of the debtor,' although such action may have been commenced for the purpose of obtaining a preference, and the court is not justified in construing it otherwise for the purpose of bringing it into harmony with the provisions of the bankruptcy act, which will not in such a case even permit the claim for taxable costs to be proved as an ordinary debt. The section must stand or fall as a whole, as it is not separable; and in providing, as it does, that costs incurred in an attachment suit constitute a preferred claim, if the debt sued for 'is proved against the estate of the debtor,' it is in conflict with the bankruptcy act, and is therefore suspended by that act. Its language cannot be given a narrower meaning than it plainly...
To continue reading
Request your trial