Pepperdine v. Bank of Seymour

• Decision Date: 31 March 1903
• Parties: PEPPERDINE v. BANK OF SEYMOUR.
• Court: Missouri Court of Appeals

73 S.W. 890

100 Mo. App. 387

PEPPERDINE v. BANK OF SEYMOUR.

Court of Appeals at St. Louis, Missouri.

March 31, 1903.

JUDGMENT — RES JUDICATA — BANKRUPTCY PROCEEDINGS—RESISTANCE BY CREDITOR— ATTACHMENT—DATE OF LIEN—BANKRUPTCY —AVOIDANCE OF ATTACHMENT.

1. An adjudication in bankruptcy for having, while insolvent, permitted a creditor to obtain judgment against the bankrupt, is not conclusive against the creditor's right in the property acquired by virtue of such judgment.

2. The resistance by a creditor of involuntary bankruptcy proceedings instituted against his debtor under Bankr. Act 1898, c. 4, § 18, Act July 1, 1898, 30 Stat. 551, c. 541 [U. S. Comp. St. 1901, p. 3429], authorizing creditors so to do, does not make such creditor a party to the proceedings, so as to conclude his rights in property acquired from the bankrupt.

3. The lien of an attachment dates from the date of the levy, and, when matured by judgment, execution, and sale thereunder, relates back to the date of the levy, and passes title as of that date, free from subsequent incumbrances.

4. Under chapter 7, § 67f, of the bankrupt act, Act July 1, 1898, 30 Stat. 565, c. 541 [U. S. Comp. St. 1901, p. 3450], providing for the avoidance of all liens, judgments, and attachments acquired within four months prior to the inception of bankruptcy proceedings, the entry of judgment in an attachment suit within four months of the filing of a petition in bankruptcy does not avoid the lien of the attachment acquired more than four months prior to the filing of the petition.

Error to Circuit Court, Greene County; J. T. Neville, Judge.

Action by George Pepperdine against Mildred Hymes and the Bank of Seymour. From a judgment for defendant bank, plaintiff brings error. Affirmed.

This is an action by the trustee of a bankrupt's estate to recover a preferential payment alleged to have been made by the bankrupt to the defendant, and was brought originally in the circuit court of Webster county, but removed on a change of venue to the circuit court of Greene county. On the 15th of August, 1898, defendant commenced an attachment suit against A. B. Good, subsequently adjudged bankrupt, then a lumber and furniture merchant in Seymour, and levied on his stock of goods. Other creditors of Good later brought attachment suits for their respective debts. On October 10, 1898, the stock of goods attached was sold pursuant to an order of the circuit court made in the attachment suit brought by the defendant, and the proceeds of the sale were held by the sheriff to await the result of the attachment proceedings. On March 24, 1899, after a previous mistrial before a jury, Good withdrew his plea in abatement to defendant's attachment, and judgment was rendered sustaining the attachment and on plaintiff's cause of action against the defendant therein for $1,900. Judgment by default was also rendered in favor of the subsequent attaching creditors. The sheriff paid to defendant under its judgment $1,300, the recovery of which amount is the purpose of this suit. On the 12th of June, 1899, a petition in involuntary bankruptcy was filed against Good in the Western District of Missouri, the act of bankruptcy complained of being the permitting and procuring of the above judgment against him in favor of the defendant, and the preferring by him of such bank as a creditor. The defendant herein employed its own attorney to resist the bankruptcy proceeding on behalf of Good, and a trial was had, Good adjudged a bankrupt, and the plaintiff herein appointed trustee of his estate.

Omitting the formal averments of his petition, the plaintiff alleged as the preferential payment complained of that, while Good was indebted and insolvent, and within four months before the filing of the petition in bankruptcy, the defendant obtained a judgment against him through legal proceedings, and obtained an execution thereunder, and levied upon his property, and thereby obtained property and money belonging to him to the amount of $1,300; that all such proceedings were null and void, and the money and property so obtained a part of the bankrupt's estate. As a further ground the plaintiff alleged that, while Good was so indebted and insolvent, and within four months of the filing of the petition in bankruptcy, he procured and suffered a judgment to be entered against himself and in favor of defendant bank, and made a transfer of his property and money to the amount of $1,300 to defendant; that the purpose of such judgment and transfer and their effect was and would be to enable defendant to obtain a greater percentage of its debt than any other of his creditors of the same class; that defendant had reasonable cause to believe Good was insolvent and indebted, and that it was intended thereby to give it a preference.

At the trial before the court the following stipulation was introduced and read: "It is stipulated that the following statement of facts may be read in evidence on the trial of the above-entitled cause, either party to be entitled to urge objections and save exceptions to the admission of said evidence on account of irrelevancy."

Said agreed statement of facts is as follows: "That prior to August, 1898, A. B. Good was a merchant of Seymour, Missouri. That in August, 1898, the defendant Bank of Seymour brought in the circuit court of Webster county a suit by attachment against him. That a writ was issued, and the sheriff of said county seized and levied upon a certain stock of furniture, lumber, etc., under the writ of attachment. That immediately thereafter there were several other attachment suits brought in said circuit court, and levies made thereunder, all, however, being subsequent to the levy of the Bank of Seymour. That a short time after said writ of attachment was levied the Bank of Seymour presented a petition to said circuit court for an order of sale of said property, and the court made an order for the sheriff to sell the same, as provided by statute, and hold the proceeds for the further orders of the court; and that thereafter, under and by virtue of said order of sale, having duly advertised the same, the sheriff sold said attached property, and the proceeds therefrom, amounting to $1,421, was held by him to await the result of said action. That defendant Good filed pleas in abatement to all said actions of attachment. That in the case of the Bank of Seymour there was also filed an interplea by one A. B. Ritchie, one of the creditors represented by the trustee in bankruptcy in this action. (The last statement was objected to by plaintiff as irrelevant and immaterial to the issues herein, and, his objection being overruled, he duly excepted at the time.) That said Ritchie claimed a part of said property by virtue of a chattel mortgage, and at the March term, 1899, of the circuit court of Webster county said interplea was duly tried by a jury in said court, and a judgment rendered in favor of said Bank of Seymour and against said interpleader. (The last statement objected to by plaintiff as irrelevant and immaterial, and foreign to any issues in this case, and, his objections being overruled, he then excepted at the time.) That none of the subsequent attaching creditors requested to be made parties or were made parties, but the attorneys representing said subsequent attaching creditors also represented said A. B. Good in his defense to said suit of the plaintiff bank. That the trial resulted in a hung jury. That thereupon, at the same term of court, and after said jury had been discharged by the court, there was filed in said cause by the attorney of said bank the following stipulation, which had been prepared by said attorney, and which was signed by said Good, to wit: `The Bank of Seymour, plaintiff, v. A. B. Good, defendant. In the Circuit Court of Webster County, March Term, 1899. I request that my plea in abatement in the above case be withdrawn, and consent that the attachment of plaintiff be sustained. Marshfield, Mo., March 24, 1899. A. B. Good.' That said writing was signed by said Good without his having consulted with the attorneys who had defended said action, but that same was filed in open court when said attorneys were present. That no defense was interposed by the said Good in any of the other attachment suits then pending against him, and a judgment was rendered at said term against him in said suits by default. That upon the filing of said stipulation in said case said plea in abatement was withdrawn, and judgment was rendered by the court sustaining said attachment, and on the merits in...