Creamery Package Manufacturing Co. v. Horton

Sewell, J.: There is no doubt that, as between the plaintiff and the defendant George H. Horton, the failure to filé the contract did not affect the validity of the plaintiff’s title to the silo. It is equally clear that the title to it remained in the plaintiff as against the defendant Sarah J. Horton, as it appears that the silo could be detached and removed without causing any serious damage to the realty and she failed to meet the burden imposed upon her of showing that she was a purchaser in good faith, that she had no knowledge of the condition of the contract and had parted with value or lost some right on account of the annexation of the silo to her premises. (Hopkins v. Davis, 23 App. Div. 235; Crocker-Wheeler Co. v. Genesee Recreation Co., 160 id. 373; Davis v. Bliss, 187 N. Y. 77; Central Union Gas Co. v. Browning, 210 id. 10.) [470] Upon the facts in the record we also think that the trustee in bankruptcy acquired no lien on the property, and, therefore, could not impeach the validity of the contract for not filing. He acquired no more, or any other or further right than any creditor of the bankrupt could have acquired by a legal or equitable proceeding under the statutes of this State. (Dooley v. Pease, 180 U. S. 126; Thompson v. Fairbanks, 196 id. 516; Humphrey v. Tatman, 198 id. 91; Mattley v. Wolfe, 175 Fed. Rep. 619.) It does not appear that any creditor could have secured a levy by execution upon the property. There is nowhere in the record any suggestion that there was a creditor of the vendee for more than two years after the silo was attached and after it had become, on account of its nature and the manner of its annexation to the realty, a part of it as to all persons except the parties to this action. According to our view of the conceded facts of this case the trustee in bankruptcy is in the same position he would have been if the defendant Sarah J. Horton had purchased the silo of her codefendant and obtained a delivery of it before any debt had been contracted by him. It is plain that he would then be in the situation of every creditor who comes with an execution after his debtor has in some way parted with or become divested of his property. There is no force in the contention of the respondent that the plaintiff’s claim for conversion was provable in the bankruptcy proceeding and was released by the discharge. The defendant came lawfully into possession of the silo. The attachment of it to the realty, in the manner it was attached, was not, under the circumstances, a conversion per se. There is nothing to show that the possession of the defendants was in hostility to the plaintiff’s rights, or that it was not in protection of the plaintiff’s interest until the demand and refusal three months after the adjudication in bankruptcy., The filing of the petition in bankruptcy did not bring into existence a claim in favor of the plaintiff against the defendants for a conversion. That liability did not arise or become fixed until three months after the petition was filed, when the wrong was done. Until then, the bankrupt or his trustee, if he had one, could have paid the amount due and become [471] the owner. Neither did so and, therefore, the title remained in the plaintiff. By the provisions of the Bankruptcy Act there must be a fixed liability at the time of filing the petition. (Phenix Nat. Bank v. Waterbury, 197 N. Y. 161.) The case at bar is clearly distinguishable from Crawford v. Burke (195 U. S. 176) and Wood v. Fisk (215 N. Y. 233). In each of these cases a cause of action for conversion was complete at the time of the bankruptcy. We think the defendants failed to make out a defense to this action and, therefore, the judgment should be reversed and a new trial granted, with costs to the appellant to abide the event. All concurred, except Lyon and Cochrane, JJ., who dissented on opinion of McCann, J., at Trial Term. Judgment reversed and new trial granted with costs to appellant to abide event.