".
_. .. _
'c"',',...·.·,
RREGELO·
-ADAMS,
Assignee, etc. - - , 1880.)
(Circuit Oottrt,
n. Indiana.
Appeal from the District Court. Claypool, Newcomb 11; Ketcham, for appellant. John R. Wilson, for appellee. DRUlHMOND, C. J. This IS a controversy between two execution creditors of the bankrupt's estate, and it presents a very singular state of facts and questions, by no means free from difficulty, and I regret, as it is a. question' which . arises, exclusively under the law of Indiana, that there iS'no decision of its Supreme court which throws any light upon the qaes: tion. ,; . ··:1 ' The assignee of the bankrupt came intb possession of son9.lproperty to the estate, which was soJd 'by handk ' , '.,. him, andt-he proceeds' bfwhich are noW At the tihle of the bankruptcy there were executions agahist the bankrupt, issued out the courts of the state, which {tis liens upon thepropetty, andtbe assignee holds the:proceeils subject to the of bile of the .I Jwili state briefly the facts which give rise to this contro. versy: On the eighteenth of October, 1877, English 'issued an e:reeution on a judgment which 'he had obtaineq against the bankrupt, and placed the execution in the of the sheriff of Marion county. This execution, under the law of the state, 'had 180 days to run. On the sixteenth of April, 1878, when the time had expired, the execution was returned by the sheriff for renewal, without any direction from the plaintiff. On the same day-the sixteenth of April-an alias execution was issued, and was placed in tbe hands of the sheriff on the morning of the seventeenth of April, at half-past 9 o'clock. Kregelo, another creditor, who had obtained a judgment against the bankrupt on the twenty-first of February,
EREGELO,'t1. ADAMS.
029
1878, then issued an execution that j udgmetif19,nd 'placed it in the hands of the sheriff of Marion county., '; It is claimed by English that the second execution, which was issued on his judgment on the same day that, the first was returned, continued the lien which the law gaiV8 upon,the first, so as to cut off Kregelo's execution, which, at the. time the second of English's executions was issued and placed in the hands of the sheriff, was also in the sheriff·'s hands. In other words, it is olaimed that .if the seoond executioniB "timely" issued, as it is stated by some of the text writers, it operates to continue the lien which the first execution has . obtained, so as to cut off an execution held by We sheriff·' at the time the second execution comes to his hands. The, question in this case is whether that is the law under the statutes of Indiana. 2 Davis' Rev. St. § 416;p;200; declares that "when an exacutionagainst the property of any pe;rson is delivered to an officer to he executed, the goodlil'and chattels of such! person within the jurisdiction of shall be bound from the tin1e of the 'delivery." , The 4.15th section requires tha,V'the execution llhwll indorse'thereorithe year,month j day, :and hour when he received it." ' ': ' any property hHi&d on Section 453 declares that, remains unsold, it shall be the duty of the sheriff;*hen ;he returns the execution, to return the appraisement therewith, stating in his return the failure to sell, andihe' cause' of .thij failure." ,. , ;, The 454thsection declares that "the lien of the levyi'tipon the property shall continue, and the c1erk,unlesaotherwille directed by the plaintiff, shall forthwith issue another tion, reciting the return of a former execution, the levy; and failure to sell, and directing the sheriff to satisfy the' judgment out of the property unsold, if the same is sufficient. If not, then out of any other property of the debtor subject to execution. " In this case there was no levy made on the first execution, and I have come to the conclusion, taking all these provisions of the laws of this state into consideration,that the second
on
680
FEDERAL REPORTER.
execution of English in this case did not continue the lien which the first had acquired, and thd the execution which was issued by Kregelo between the date of the English first execution and the second has the priority of lien. It seems to me that that is the simplest and most satisfactory view to take of the question-the one freest from difficulties and complications of various kinds. In that way only can we carry out the spirit of the law of this state in reference to executions. When an execution. is delivered to an officer, the personal property of the defendant is bound, if within the jurisdiction of the officer, but it is bOUI\d how long? Does it continue after the return of the execution,if no levy is made upon the property? Ithink not. It seerus to me that when an exeoution is returned that it ceases to operate .by way of a lien upon personal property, and the langUage of the statute gives' emphasis to this view of the question. It declares that when, under an execution, there shall be a levy upon the property, and it is returned, the lien shall not be lost, but that it shall continue. It makes no such declaration where there is no levy made. It does :not continue any lien to the second, which the firs.t execution created, upon the personal property. It expresses in the one case that the lien continues, and it says nothing about it in the other. This argument is not without force. Again, it seems to me that, if we hold an execution continues a lien under the law. we involve ourselves in inextricable difficulties and embarassments. It is stated in some of tpeauthorities, and by sQme of the text writers, that if a second execution issues "timely" it continues the lien. How much tjme is to elapse before a second execution shall issue in order to continue the lien? What is meant by the word "timely?" Does it mean a week or a month? How much of that which we call time must there be,in ordedhat a second execution may be said to be "timely?" In this case there was only an interval of a day. The execution was returned on the sixteenth of April, and an alias carne into the hands of the sheriff on the morning of the seventeenth. Now, it is to be observed that: the execution issued on the si:s.teenth had, per
tmEGELO 'D. ADAMS.
631
$e, no effect upon the property of the defendant until it was delivered to the hands of the sheriff, because it is only from that time it becomes a lien upon personal property. And, if it is not so, how long may an execution, when issued, lie in the clerk's office, or in the hands of the plaintiff or his sel, before it is 'delivered to the sheriff, in order that the lien shall be continued? If it may remain there a day, why not 80 week, or a month, or an indefinite time? Is it a mere matter of discretion how long it shall be before the execution shall be delivered to the officer in order to continue a lien by virtue -of a first execution? Is it not much simpler and clearer, and more in accordance with the intent of the law-makers, to say that an execution, if there has been no levy made, which is issued secondly, only operates, as the first did, from the time it comes to the hands of the officer? The law makes no distinction between an alias and an original execution. It does not say that the first shall be placed in the handsaf an officer in order to make a lien, and the second; shall not be. It says, in effect, all executions, in order to be binding upon personal property, shall be placed in the hands of the officer. And it requires, as to the second eiecution, the same as the nrst, that the officer shall indorse upon it the year, the month, the day, and the hour when he received it. But it is said that it would have made no difference if the execution had been delivered to the officer on the sixteenth of April, instead of on the seventeenth. That may be true. It only follows as a necessary consequence, from what has been said, that, where there is no levy as to personal property, the lien which the first execution created ceases when it is returned; and in order that there shall be a lien through another execution, it must be delivered to the officer. As I have said, this is a nice question. The authorities do not agree upon all of the questions which have a bearing upon this one before the court. I decide it upon what I consider the true construction of the law of Indiana, whioh, I think, is binding upon the court in this case. And, in this respect, 1 differ from the district court, and the order which was made giving priority to the English execution be reversed.
will
632
FEDERALBEPORTEB.
FLEMING and others
v.
ANDREWS, Assignee, etc.
(Circuit Court, D. Indiana. - - , 1880.) L BANJl:RUPTCy-CONSpiRACy-ILLEGAL PREFEUENcE.-The creditor of 8 bankrupt cannot obtain a preference of his debt by purchasing the property. of the bankrupt through the intervention of an agent, and tendering the notes of the bankrupt in payment for the same.
Z. SAME-AcTION BY ASSIGNEBl-SET.OFF.-In an action by the assignee to recover the value of such property, the creditor cannot set off the notes of the bankrupt.
In Bankruptcy. Appeal from the district court. Baker, Hard et Hendricks and Ayres «Brown, for plaintiffs. Chapman et Hammond, for defendant. DRUMMOND, C. J. The declaration was originally filed upon the theory that the bankrupt, Williamson, and the defendants, to whom Williamson was indebted, had made an arrangment, in violation of the bankrupt law, in consequence of which the defendants had obtained an illegal preference of the debt which they had against him. Demurrers were interposed in the district court to the various paragraphs in the com· plaint, and, as the result of the action of the court, amend. ments were made by the complainant, upon all of which, finally, the defendants went to trial on the issues formed. The cause was submitted to the district court without the intervention of lj. jury, and the court found against the defend· ants. The facts of the case, as they appear upon the record and in the bill of seem to be substantially these: Williamson, the bankrupt. bad become insolvent, but bad in his possession and control forty-four car loads of coal. The defendants, knowing his condition, or having reason to believe that he was insolvent, and with a view of causing a portion of the debt which Williamson owed them to be paid, made an arrangement with C. G. Stewart & Co., by which the latter were to purchase of Williamson this coal, or pre. tend to purchase it, and payment to be made in cash in 30 days; but that C. G. Stewart & Co. were to have transferred