In re Mt. Winans Lumber Co.

ROSE, District Judge. Before the filing of the petition in bankruptcy the bankrupt was placed in the hands of a receiver appointed by a Maryland state court. After the appointment of a receiver, and before the filing of the bankruptcy petition, Joseph Thomas & Son filed a petition in the state court alleging that rent was due them from the bankrupt, that there was distrainable property in the leased premises in value greater- than the rent due them, and asking that their •claim be made a preferred lien on such property. The state court, still before the filing of the petition in bankruptcy, made the order asked for. Now Joseph Thomas & Son ask this court to direct that the rent due them at the time of the filing of their petition in the state court be declared preferred upon the funds in the hands of the trustee realized from the sale of the distrainable property of the bankrupt upon the leased premises at the date of the state court order. The referee has so done. The trustee has brought the question here by certificate of review. The referee is right. If distress had been validly levied before the institution of bankruptcy proceedings, the lien thereby acquired by the landlord would not in this state have been disturbed by a subsequent petition and adjudication in bankruptcy, for such a lien is not one acquired by legal proceedings within the meaning of the bank-' rupt law. The state court could have permitted such distress to be levied. It did not see any occasion to do so when its order would accomplish the same result with much less trouble and expense. The passage of such order by it must be regarded by the bankrupt court as the equivalent of the levy of a distress, the property subject to such levy being then within its control. The order of the referee must therefore be affirmed, with costs.