Howe v. Union Insurance

By the Court, Crockett, J.: The plaintiff having commenced an action against one Mc-Cann, sued out an attachment therein, under which the defendant in this action was duly summoned as a garnishee. When thus summoned the defendant was indebted to McCann in the sum of one thousand dollars. Whilst the attachment and garnishment remained in force the plaintiff obtained a judgment against McCann for about the sum of one thousand four hundred dollars, on which judgment an execution was immediately issued and placed in the hands of the Sheriff, who, by virtue thereof, applied to the defendant in this action for the payment of the one thousand dollars previously attached; but this request was not complied with, and the money was not paid; nor did the Sheriff levy the-execution upon the fund in the hands of the defendant, supposing, from what transpired at the time, that the money would be paid in a day or two without an actual levy of the execution. Before any further step had been taken, and within less than four months from the time when the attachment was issued and served, proceedings were commenced in due form in the District Court of the United States against McCann, to have him declared a bankrupt; and, subsequently, in due time, the intervenor, Hyde, was duly appointed assignee of the bankrupt’s estate, and received an assignment thereof. By section fourteen of the Bankrupt Law of the United States it [533] is provided that all attachments upon mesne process within four months before the commencement of the proceedings in bankruptcy shall be thereby dissolved, in case the defendant in the attachment be declared a bankrupt. Under this section it is clear that if the proceedings in bankruptcy bad been commenced before the plaintiff obtained his judgment against McCann, the attachment would have been dissolved and the plaintiff would have lost his lien upon the fund in the hands of the insurance company. It is equally clear that if the plaintiff had obtained his judgment, issued his execution thereon, and caused the same to be actually levied upon the fund before the proceedings in bankruptcy were commenced, he would have acquired a lien upon the fund which would not have been divested by.the proceedings in bankruptcy. In that case his lien would have accrued under final and not under mesne process, and would have been protected under section twenty of the Bankrupt Law. But inasmuch as the execution was not, in fact, levied, neither the judgment nor execution created any lien upon the fund other than that under which it had been previously held. If the insurance company had. paid the money to the Sheriff at the time when it was summoned as garnishee under the attachment, as it had the right to do, and if the plaintiff had thereafter obtained his judgment against McCann, and issued his execution and placed it in the Sheriff’s hands before the proceedings in bankruptcy were commenced, it would have been the duty of the Sheriff immediately to apply the money received under the attachment toward the satisfaction of the execution; and under section one hundred and thirty-two of the code the plaintiff would have acquired a lien under final process, within the meaning of section twenty of the Bank'rupt Law. But when there is no money or property in the hands of the Sheriff under the attachment prior to the judgment, I do not perceive how the mere fact that a judgment was rendered and an execution issued, but not levied, can [534] haye the effect to convert the attachment lien upon a fund in the hands of a garnishee into a lien upon final process. It appears to me to be plain that in such a case the attachment lien remains, after the judgment and before the levy of the execution, precisely what it was before, to wit: an attachment under mesne process, and is therefore dissolved under section fourteen of the Bankrupt Law, by proceedings in bankruptcy commenced within four months after the attachment. Judgment affirmed.