In re Fougner Concrete Shipbuilding Co.

MAYER, Circuit Judge (after stating the facts as above),, The trustee seeks revision of the order below on the ground that the liens lapsed at the end of one year after filing because of failure of the lienor to-commence foreclosure proceedings as provided by the New York Lien Law. We confess our inability to follow this contention. The bankruptcy court had taken possession of the property and had restrained this creditor, among others, from prosecuting its liens or otherwise interfering with the bankrupt’s property. The trustee was appointed on August 29, 1919, and title immediately vested in him as of the date of filing the petition, i. e. February 26, 1919. Prosecution of the liens, as provided by the state statute, had not only been restrained, but would1 have been futile. [381] Title to the proceeds of sale of the barges was in the trustee, subject, according to court order, to any lien which could be established. There was but one way to establish the lien, and that was to file proof of claim within the year provided, on the one hand, by the New York Lien Law, and, on the other, by the Bankruptcy Law (Comp. St. §§ 9585-9656). The procedure here followed is practiced almost daily in the bankruptcy court in respect of chattel mortgages. It simply amounts to this: That a lienor comes into the court which has seized the res and has issued its injunction against interference therewith, and there establishes his lien in accordance with the procedural machinery of that court. Courtney, Trustee, v. Fidelity Trust Co., 219 Fed. 57, 134 C. C. A. 595. Some other criticisms of the order below do not merit discussion. Order affirmed, with costs.