Lewis v. Higgins

Alvey, J., delivered the opinion of the Court. This was an attachment under the Act of 1864, ch. 306. The defendant appeared to the short note case, and [616] pleaded in abatement, that at tbe time of the institution of this action “there was on file on the Docket of the District Court of the United States of the District of Maryland, pending for trial, proceedings instituted by the plaintiffs against the defendant, upon the same debt as set forth in this case, for the purpose of having him adjudged a bankrupt.” The defendant pleaded a similar plea, making the same averments, to the writ of attachment ; and to both of which pleas the plaintiffs demurred, and the Court below sustained the demurrers. Upon trial of other issues made by the pleadings, judgment was rendered against the defendant in the short note case, and judgment of condemnation was rendered against the garnishees in the attachment case; and from both of which judgments the defendant has appealed. These appeals, however, are only intended to present to this Court the questions arising under the demurrers to the pleas in abatement. As to the plea in abatement in the short note case, that is defective in several respects. In the first place, it does not aver that the proceedings in bankruptcy were pending at the time of the plea pleaded, which is an essential fact to the sufficiency of the plea. Those proceedings, though they may have been pending at the time of the institution of tbe present action, may have been withdrawn or dismissed before this plea was filed by the defendant. But, besides this fatal omission in the averments, the plea is otherwise defective. This is an action in personam, and the simple pendency of the proceedings in bankruptcy constituted no cause of abatement of the action. It is not alleged or pretended that the cause of action here sued on has been proved as a claim in the bankruptcy proceedings, and thus made subject to the provision of sec. 5105 of the Revised Statutes of the United States j and though the debt be provable in bankruptcy, the most that could be insisted on, under sec. 5106, of the Revised [617] Statutes, would be that, upon the application of the bankrupt, the action should he stayed to await the determination of the Court in bankruptcy on the question of his discharge. If, for any cause, the proceedings in bankruptcy should terminate or he closed without a discharge, the plaintiffs would he entitled to a judgment in personam against the defendant, and the latter would he liable whether he he adjudged a bankrupt or not, to pay that judgment out of any property that he might thereafter acquire. Norton vs. Switzer, 93 U. S., 355, 360; The Brandon Manf. Co. vs. Frazer, 47 Vt., 88; Ray vs. Wight, 119 Mass., 426. But the plea to the attachment depends upon somewhat different principles. The attachment is a proceeding in rem, by which the plaintiffs sought to seize the property of the defendant and apply it exclusively to the discharge of their claims. This would be in plain contravention of the policy of the bankrupt law, if the defendant at the time was subject to the provisions of that law ; and therefore, to avoid any such undue preference, if the attachment he sued out at any time within four months next preceding the commencement of the bankruptcy proceedings, and a fortiori if after the commencement of those proceedings, the law, U. S. Rev. Stats., sec. 5044, declares such attachment to he dissolved by the assignment in bankruptcy. Such attachment, as said by the Supreme Court, “ is avoided and made of no effect, and the proceedings under it are held for naught. The money obtained by color of it is money held for the assignee, and is recoverable by him.” West Phila. Bank vs. Dickson, 95 U. S., 180, 182; Yeatman vs. Sav. Inst., Id., 764. The plea, however, is defective in not making the essential averment that the Court in bankruptcy had taken cognizance of the petition filed by the plaintiffs. The proceeding was to have the defendant declared an involuntary bankrupt; and by sec. 5024, U. S. Rev. Stats., it is provided that [618] upon filing the petition authorized to he filed for the purpose of having the party adjudicated a bankrupt, “ if it appears that sufficient ground existed therefor, the Court shall direct the entry of an order requiring the debtor to appearand show cause, .at a Court. of bankruptcy to be holden at a time to be specified in the order, not less than five days from the service thereof, why the prayer of the petition should not be granted.” Whether the Court ever determined that sufficient ground existed for proceeding on the petition, or whether any order was ever passed thereon against the defendant, according to the direction of the statute, as a preliminary proceeding to requiring the defendant to answer, the plea omits to aver. It may be, for aught that appears, that the proceedings had been dismissed or otherwise terminated, before plea filed, without any such preliminary proceeding, and, consequently, without any adjudication of bankruptcy against the defendant, or the appointment of an assignee to take charge of the property. In the absence of the necessary averments to show that the Court in bankruptcy had actually taken cognizance of the case, and assumed jurisdiction in the premises, and further, that the proceedings were still pending at the time of filing the plea, there is nothing shown to preclude the plaintiffs from proceeding against the property of the defendant by way of attachment. The Court below, therefore, was clearly right in sustaining the demurrers and adjudging the pleas bad in both cases. (Decided 12th December, 1879.) The motion to quash the attachment because an attorney of the Court was one of the sureties in the attachment bond given by the plaintiffs, was rightly overruled. The rule of Court prohibiting attorneys from becoming securities for costs, or securities on appeal bonds, has no application to a case like the present. Judgments affirmed.