Rochester Lumber Co. v. Locke

• Decision Date: 03 February 1903
• Citation: 72 N.H. 22,54 A. 705
• Parties: ROCHESTER LUMBER CO. v. LOCKE. SMITH v. SAME.
• Court: New Hampshire Supreme Court

54 A. 705

72 N.H. 22

ROCHESTER LUMBER CO.

v. LOCKE.

SMITH

v. SAME.

Supreme Court of New Hampshire. Strafford.

Feb. 3, 1903.

Exceptions from Superior Court.

Separate actions by the Rochester Lumber Company against J. Wesley Locke and by Frank J. Smith against the same defendant. Judgment for plaintiff in each action, and defendant excepts. Exceptions overruled.

The first action is assumpsit. The second is trover by the sheriff to recover the value of goods attached in the first action, and taken from him by the defendant. The judgment in the first action was in rem. The following were found to be the facts: January 25, 1901, Locke mortgaged certain personal property to one Cavanaugh, who did not make or subscribe the affidavit required by the statute. January 11, 1902, the lumber company caused Smith to attach the same property in a suit against Locke. Neither Smith nor the lumber company had actual knowledge of the mortgage, and are not chargeable with knowledge of it unless its record is sufficient for that purpose. January 16, 1902, Locke filed a voluntary petition in bankruptcy, and subsequently obtained his discharge. January 22, 1902, Locke forcibly took the property from the sheriff's keeper, and has since retained possession of it. Locke included the attached property in his bankruptcy schedules, but the trustee did not take possession of it, because of the mortgage.

Felker & Gunnison, for plaintiffs.

Elmer J. Smart, for defendant.

PARSONS, J. As against the defendant Locke, the plaintiff company acquired by the attachment a lien upon the property attached for the satisfaction of any execution which they might obtain in the suit. Kittredge v. Warren, 14 N.H. 509; Kittredge v. Emerson, 15 N.H. 227. The order of the court making such application was therefore authorized, unless the facts stated in the case arising after the attachment have annulled this lien as against Locke. The actual possession by Smith of the property taken by the defendant Locke is sufficient evidence of title to sustain an action of trover against a mere wrongdoer. Harrington v. Tremblay, 61 N.H. 413. His possession under the attachment gave him a special property in the goods, and a right to the possession against any one claiming them under a title to which the lien of the attachment was superior. Johnson v. Railway, 44 N.H. 626; Lathrop v. Blake, 23 N.H. 46, 56. Prior to the adjudication in bankruptcy, Locke had no right of possession, and he is liable for the value of the goods taken by him, unless, as matter of law, such adjudication revested in the bankrupt both the title and right of possession as against the officer.

One general purpose of the United States bankruptcy act of 1898 (Act July 1, 1898, c. 541, 30 Stat. 544 [U. S. Comp. St. 1901, p. 3418]) was to distribute the bankrupt's property proportionally among all his creditors. In furtherance of that purpose, the act contains provisions designed to prevent one creditor from acquiring a preference over other creditors through legal proceedings commenced within four months prior to the bankruptcy. In re Kenney, 45 C. C. A. 113, 105 Fed. 897. Whether the sections inserted for this purpose (67c and 67f, Act July 1, 1898, c. 541, 30 Stat. 564 [U. S. Comp. St. 1901, pp. 3449, 3450]) can, or not, be reconciled with each other, or, if not, which section is to be taken as the expression of the legislative purpose, is not here material. The purpose of each is the same— to secure to the trustee the bankrupt's property discharged of liens so created. Section 67f, under which the defendant claims, provides that lions so obtained "shall be deemed null and void," and that the property so affected "shall be wholly discharged and released therefrom, and shall pass to the trustee as a part of the estate of the bankrupt." This language is an elaboration of the provision of the bankruptcy act of 1867 (Act March 3, 1867, 14 Stat. 522, c. 176) that the conveyance to the assignee "shall dissolve any such attachment made within four months next preceding the commencement of proceedings." Rev. St. § 5044. It was held under this clause that an attachment was not dissolved as against the bankrupt. Sims v. Jacobson, 51 Ala. 186. The present language has no tendency to establish a purpose different from the construction put upon the former. It seems intended to make clear what before might have been open to argument. The peculiar language used raises the question, by whom and when are such liens to be "deemed null and void," and the property affected deemed "wholly discharged and released therefrom"? The inquiry is answered by the general purpose of the act and the language of the section. The property, by the section, is to pass to the trustee as a part of the estate of the bankrupt. From this it follows that in any controversy between the trustee and the lienors, and in any proceeding in relation thereto for the purposes of the act, the lien is to be deemed null and void. Further than this the act does not go. The language makes clear what has been stated was the construction put upon the act of 1867—that as against the bankrupt himself the lien was not affected. The same view has been expressed in a recent case in...