Jackson v. Valley Tie & Lumber Co

Decision Date19 November 1908
Citation108 Va. 714,62 S.E. 964
CourtVirginia Supreme Court
PartiesJACKSON. v. VALLEY TIE & LUMBER CO.

1. Equity (§ 415*)—Decree—Form and Sufficiency.

It is no objection to a decree that the reasons for the decisions are recited therein.

[Ed. Note.—For other cases, see Equity, Cent. Dig. § 936; Dec. Dig. § 415.*]

2. Bankruptcy (§ 199*) — Distribution of Estate—Attachment—Lien.

Under Bankruptcy Act July 1, 1898, c. 541, § 67f, 30 Stat. 565 (U. S. Comp. St. 1901, p. 3450), providing that all attachments or other liens against a person who is insolvent at any time within four months prior to the filing of a petition in bankruptcy against him are void in case he is adjudged a bankrupt, the debtor must not only be insolvent, but the insolvency must have existed at the time the lien attached.

[Ed. Note.—For other cases, see Bankruptcy, Dec. Dig. § 199.*]

3. Bankruptcy (§ 216*) — Distribution of Estate—Actions—Evidence.

Under Bankruptcy Act July 1, 1898, c. 541, § 67f, 30 Stat. 505 (U. S. Comp. St. 1901, p. 3450), making void liens created against a bankrupt within four months prior to the filing of the petition, the burden of proving insolvency at the time the lien was created is on the one asserting it.

[Ed. Note.—For other cases, see Bankruptcy, Dec. Dig. § 216.*]

4. Bankruptcy (§ 200*) — Distribution of Estate—Attachments and Other Liens— —Incipiency.

Under Bankruptcy Act July 1, 1898. c. 541, § 67f, 30 Stat. 565 (U. S. Comp. St. 1901, p. 3450), providing that attachments or other liens against a person who is insolvent at any time within four months prior to the filing of the petition in bankruptcy are void, the lien of an attachment is created when the levy is made, and does not depend on the judgment.

[Ed. Note.—For other cases, see Bankruptcy, Cent. Dig. §§ 297-300; Dec. Dig. § 200.*]

5. Bankruptcy (§ 216*) — Distribution of Estate—Liens—Dissolution—Pleading.

After an attachment was levied the debtor was adjudged a bankrupt, and the trustee in bankruptcy filed a petition in the attachment proceedings and moved to abate the attachment, stating verbally that his grounds were that the attachment was void under Bankruptcy Act July 1, 1898, c. 541, § 67f, 30 Stat. 565 (U. S. Comp. St. 1901, p. 3450), relating to liens created within four months before the petition in bankruptcy, and was informed that the motion would be resisted because the trustee had not shown that the bankrupt was insolvent at the time the lien was created. The trustee announced that he was willing that the court should take the case for decision on the record. Held that, after decision against him, the trustee was not entitled to file an amended and supplemental petition, setting forth the same grounds contained in the motion to abate in order to secure an opportunity to produce the evidence he might have produced under the former petition.

[Ed. Note.—For other cases, see Bankruptcy, Dec. Dig. § 216.*]

Appeal from Corporation Court of City of Staunton.

Proceedings in attachment by the Valley Tie & Lumber Company against H. N. Girard, in which E. H. Jackson, trustee, files his petition to abate attachment. From a judgment for the Valley Tie & Lumber Company, said Jackson appeals. Affirmed.

Landes & East and Richard S. Ker, for appellant.

J. M. Perry, for appellee.

CARDWELL, J. On the 13th of September, 1906, E. K. Mercereau sued out of the corporation court of the city of Staunton a chancery attachment against H. N. Girard, the ground of the attachment being that Girard was a nonresident, and on that day the process In the suit was served on the Valley Tie & Lumber Company, a partnership, as garnishee defendants.

On November 5, 1900, in the city of Washington, D. C, the defendant Girard was adjudicated bankrupt on his own petition. February 19, 1907, E. H. Jackson filed his petition in this attachment suit, setting forth the adjudication of Girard a bankrupt, the appointment of petitioner as his trustee; that the plaintiff in this suit had attached a fund of about $567.37 owing to the estate of Girard by the defendant, the Valley Tie & Lumber Company; and that "inasmuch as the said Girard is now a bankrupt, and as your petitioner has been appointed by the creditors of said bankrupt as trustee to take charge of all the assets of said estate, he has a right to require the said Valley Tie & Lumber Company to pay over to him the said sum of $567.37, " etc., and praying to be made a party defendant in the chancery suit. On the same day the petitioner was made a party defendant in the cause, and thereupon filed a motion in writing to abate the attachment.

At the same term of the court counsel for the complainant, Mercereau, requested the grounds of the trustee's motion to abate, and in response the verbal statement was made that the grounds relied upon were that "Girard had been adjudicated a bankrupt within four months after the attachment In this cause was executed, and that accordingly the said attachment and the levy thereof were null and void, under and by reason of the provisions of the bankruptcy act, and especially section 67f thereof (Act July 1, 1898, c. 541, 30 Stat. 565 [U. S. Comp. St. 1901, p. 3450])"; and the cause was then continued to the March term of the court.

On the first day of the March term amotion of the complainant to require Jackson, as the bankrupt's trustee, to file a written statement of the grounds of his motion to abate the attachment, was overruled, the court being of opinion that the matter required had already been stated by the trustee with sufficient particularity, thereupon the hearing of the motion to abate was set for Tuesday, March 12th.

On the day named counsel for the trustee was by counsel for the complainant informed of the grounds on which the motion to abate would be resisted, viz.: "That no evidence had been adduced by the trustee or any person showing or tending to show that said Girard was insolvent at the date of the levy and obtaining of the said attachment, " whereupon the hearing was continued to the next day, March 13th, and on the last-named day was by consent continued to the 16th.

On March 16th, the day fixed for the hearing, the trustee announced to the court "that he was willing that the court should take the case for decision upon the record as it then stood, and upon the authorities cited by both parties, " and then the case was heard, the court reserving it until the 18th for decision.

On the 18th of March the court announced its judgment overruling the motion to abate the attachment on the ground that "there is no evidence or proof in this cause that said Girard, at the date of the obtaining of the attachment and the levy thereunder, as shown by the record, was insolvent."

Owing to the physical indisposition of the judge of the court, the decree prepared in accordance with his ruling was not entered on the 19th, and on the 20th of March, but before the entry of the decree in the order book of the court, the trustee, by counsel, appeared in court, and asked leave to file what was styled "an amended and supplemental petition, " wherein he prayed the abatement of the attachment on certain grounds stated, to wit, the provisions of section 67f of the bankruptcy act; but this petition was not allowed to be filed, the court being of opinion that the ground stated therein for abatement of the attachment was merely a written statement of the ground upon which had been based the former motion to abate, which written statement the trustee before the hearing declined to furnish, and, the court being further of opinion that no sufficient grounds for a rehearing of the cause were alleged, proceeded to enter the decree prepared in accordance with its decision of the 18th of March, dismissing the original petition of the trustee filed in the cause, from which decree the cause is brought to this court on appeal.

Complaint is made that the foregoing facts as to what took place in the lower court are all set out in its decree adversely to appellant, but we are unable to appreciate the force of the contention that this method of stating the reasons for the court's decision is in violation of established rules of equity practice. The court might have with the utmost propriety set out its reasons for the decision rendered in a written opinion filed in the record and made a part of the decree carrying out the decision, and there is no conceivable reason why the grounds for the court's ruling should not be recited in its decree.

The two assignments of error relied on are: First, the refusal of the court to abate the attachment under appellant's original petition filed in the cause; and, second, its refusal to allow the filing of the "amended and supplemental petition" of appellant tendered on the 20th day of March, 1907, the day previous to the entry of the decree appealed from.

Section 67f of the bankruptcy act, so far as material here, is 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 mouths 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 essential to the invalidity of any lien falling within the purview and control of the statute is that (a) the lienee must be insolvent; (b) the insolvency must have existed at the time the lien attached, or, as applied to this case, Girard must have been insolvent on September 13, 1906, the date of the levy of the attachment.

Loveland on Bankruptcy (3d Ed.) § 192c, discussing paragraph 67f of the bankruptcy act, says: "It is essential, to bring a case within the prohibition, that it appear that the lien was obtained against a person who was insolvent at the time. If it does not so appear, the lien is valid. It is not sufficient that...

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    ...Co. v. Barker, 187 U.S. 165, 23 S.Ct. 67, 47 L.Ed. 122 (1902); Charron & Co. v. Boswell, 59 Va. (18 Gratt) 216; Jackson v. Valley Tie & Lumber Co. 108 Va. 714, 62 S.E. 964 (1908). Under the Virginia Code 8.01-501, "the only person who can defeat the fieri facias lien is a bona fide purchase......
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    ...Simpson v. Van Etten (C.C.), 108 F. 199, 201; Keystone Brewing Co. v. Schermer, 241 Pa. 361, 365, 88 A. 657; Jackson v. Valley Tie & Lumber Co., 108 Va. 714, 718, 62 S.E. 964; Newberry Shoe Co. v. Collier, 111 Va. 288, 290, 68 S.E. 974; Severin v. Robinson, 27 Ind. App. 55, 61, 60 N.E. 966.......
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