Corner v. Mallory

Alvey, J., delivered the opinion of the Coui’t. This was an attachment on warrant, against a non-resi [472] dent debtor, issued on the 11th day of April, 1867, and laid in the hands of several garnishees on the day after. The garnishees appeared, on the return of the attachment, and pleaded “ nulla bona ” for themselves, and for the defendant, that he was never indebted, as alleged. At the January Term thereafter, the appellee filed in the cause a claim to the property attached, and a motion to dissolve the attachment, upon the ground that on the 2d of July, 1867, and within four months after the attachment was issued, and within four months after the institution of the proceedings on which it was founded, proceedings in bankruptcy were duly instituted against the defendant in the attachment, in pursuance of the Bankrupt Law passed and approved on the 2d of March, 1867; and that within the four months, the defendant had been duly declared a bankrupt, and that the appellee had been duly appointed and qualified as his assignee, and that all the defendant’s property had been conveyed to him, the appellee, as assignee, and that therefore the attachment ought to be dissolved. To this claim and motion of the appellee, the appellant demurred, by which the facts alleged were admitted; whereupon the Court below overruled the demurrer,, and quashed the attachment. By the Act of Congress of 1867, entitled “ An Act to establish a uniform system of bankruptcy throughout the United States,” approved March 2d, 1867, in the fourteenth section, it is provided that there shall be assigned and conveyed to the assignee, “ all the estate, real and personal, of the bankrupt, with all his deeds, books and papers relating thereto, and such assignment shall relate back to the, commencement of said proceedings in bankruptcy, and thereupon, by operation of law, the title to all such property and estate, both real and personal, shall vest in said assignee, although the same is then attached on mesne process, as the property of the debtor, and shall [473] dissolve any such attachment made within four months next preceding the commencement of said proceedings.” It is clear, we think, that the attachment in this case is mesne process, and of the character embraced by the terms of the Act; and the only question is, shall the time be so computed back, from the commencement of the proceedings in bankruptcy, as to overreach and render dissolvable the attachment. It is insisted for the appellant that the Act did not take effect in reference to such a proceeding as this, until the 1st day of June, 1867, and that the four months are not to be computed back of that day, so as to embrace this attachment, which issued on the 11th of April preceding. And in support of this position, the fiftieth section of the Act is relied on, which provides that the Act shall commence and take effect as to the appointment of officers, and the promulgation of rules, from and after the date of its approval; “ provided, that no petition, or other proceeding under this Act, shall be filed, received, or commenced before the first day of June, Anno Domini eighteen hundred and sixty-seven.” That the Act was operative for many purposes from the time of its approval is manifest, and for several most important purposes other than those mentioned in the fiftieth section, as will appear from the thirty-ninth section, in regard to what acts shall constitute bankruptcy. But, in our view of the ease, it is immaterial, so far as the question now before us is concerned, whether we suppose the Act to have been operative from its approval in reference to all other matters than those mentioned in the proviso to the fiftieth section; or whether, by the proviso, the general provisions of the Act, except as to the appointment of officers and the promulgation of rules, were suspended until the 1st day of June, 1867. For, though it be conceded that the latter supposition is the true construction, we think it clear that the attachment in this case was, notwithstanding, [474] within the purview of the fourteenth section of the Act, and therefore liable to be dissolved upon motion of the assignee of the bankrupt defendant. The language of this last-mentioned section is broad and comprehensive. It is that, upon the assignment the property shall vest in the assignee by operation of law, “ although the same is then attached on mesne process as the property of the debtor, and shall dissolve any such air tachment made within four months next preceding the commencement of said proceedings.” It will be observed that it is not restricted and made to have reference to the time at which the Act was to become operative. Proceedings under the Act were suspended until the 1st of June, but it does not follow that Congress intended that attachments issued and levied previous to that time, but since the passage of the Act, should not be embraced by it, any more than acts constituting bankruptcy, in the contemplation of the thirty-ninth section, occurring after the passage of the Act, but before the 1st of June, should be excluded from its operation. We cannot suppose that it was the. purpose of the law to leave unaffected all attachments that issued previous to the numerous cases in bankruptcy that occurred after the 1st of June and before the 1st of October, 1867; as, by the construction contended for, none but such attachments as issued after the 1st of June, and within four months of the commencement of proceedings in bankruptcy would be embraced: "We discover nothing in the law to warrant such a construction. This period of four months was not intended to have reference to the 1st day of June, when the Act was to go into effect as to all its provisions, but was fixed as a period within which no preference should be gained by one creditor, by attachment, over the claims of other creditors of the bankrupt. And the law effects no hardship in dissolving such attachment, as the creditor’s claim is not impaired, and he is only deprived of a lien and priority that he might other [475] wise obtain to the prejudice of other creditors, and in violation of the policy of the law, which is to effect a fair and equal distribution of the property of the bankrupt among all his creditors. (Decided 10th December, 1869.) In support of the construction that we have placed upon the fourteenth section of the Statute, we refer to the analogous cases of Hutchins vs. Taylor, 5 Law Rep., 289; Swan vs. Littlefield, 4 Cush., 574, and Curtis vs. Barnum, 25 Conn., 370; the two former arising under the Bankrupt Act of 1841, and the latter under an Act of the State of Connecticut in relation to insolvent debtors. And in the last-mentioned case of Curtis vs. Barnum, the analogy is exceedingly strong, for there the statute provided that all attachments of the property of a debtor, made within sixty days preceding an assignment by him, under the provisions of the Act, should be dissolved, and the property attached vest, free from the attachment, in the trustee; and it was held that the Act applied to an attachment made within the sixty days preceding the day upon which the Statute had provided it should go into operation and effect. The Court below, having dissolved the attachment in this case as being within the operation of the Bankrupt Law, it follows, from what we have said, that its judgment must be affirmed. Judgment affirmed.