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In re STORM et al.

(District Court, E. D. New York.

July 27, 1900.)

1. Manufacturing- Corporation — Act of Bankruptcy — Preference—Dissor I.UTION of Corporation.

A manufacturing corporation, which has permitted three judgments to be taken against it, and executions to be issued thereon, and its property to be advertised for sale thereunder, and which thereafter institutes proceedings for the dissolution of the corporation, is chargeable with having committed an act of bankruptcy, within Bankr. Act, § 3a, subd. 3, providing that an act of bankruptcy may be committed by suffering or permitting, while insolvent, any creditor to obtain á preference through legal proceedings, and not having vacated or discharged the same at least five days before sale.

2. Same — Dissolution of Corporation.

The commencement of voluntary proceedings for the dissolution of a manufacturing corporation does not have the effect to extinguish the liens of all levies on executions against the corporate property, so as to relieve the corporation from the operation of Bankr. Act, § 3, subd. 3, providing that an act of bankruptcy is committed by permitting a creditor to obtain a preference through legal proceedings, and not having discharged the same at least five days before sale.

Charles De Hart Brower, for petitioner.

Paul Grout, for alleged bankrupt.

THOMAS, District Judge.

The question is whether the alleged bankrupt has committed an act of bankruptcy. If so, the act falls under section 8, subd. 3, whereby it must have “suffered or permitted, while insolvent, any creditor to obtain a preference through legal proceedings, and not having at least five days before a sale or final disposition of any property affected by such preference vacated or discharged such preference.” Between the months of May and November, 1899, several judgments were recovered against the alleged bankrupt, and executions thereon placed in the hands of the sheriff of the county of Kings. In November such officer advertised certain personal property for salé on December-1st. Two notices of sale were duly posted six days before the sale, but there is a conflict of evidence respecting the third notice, as the person who posted it was not produced by either party. However, the third notice was posted six days previous to December 1st, the day appointed for sale, because the deputy sheriff states that he saw it after it was posted, and that he saw it a day or so after its date. Its date was November 23d; hence he saw it November 24th or 25th. It was delivered to the officer’s assistant, for posting, Nqvember 23d, and the fact that the deputy. sheriff saw it posted on the 24th or 25th is sufficient evidence of due posting. It is contended on the part of the alleged bankrupt that the voluntary proceedings for the dissolution of the Corporation vacated the preference, while it is urged on the part of the petitioner that the proceedings confirmed the preference, inasmuch as the lien created by the levy upon personal property would be confirmed. The levy of the execution created a lien, and the attention of the court is called to no statute providing that the voluntary proceedings should discharge the lien. The alleged bankrupt con*619tends that voluntary proceedings taken by a corporation for dissolution extinguish the liens of all levies on executions. But it is not thought: that a corporation may in such manner escape the effect of a levy upon its property. Hence it is concluded that the alleged bankrupt suffered numerous judgments to be entered against it, executions to be issued thereon, levy to he made, and property to he advertised for sale, and before the sale took proceedings calculated to continue the benefit of the levy. The act of bankruptcy was committed, and this court has jurisdiction to proceed with the administration of the estate.

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