In re WILKES

In re WILKES. (District Court, E. D. Arkansas, E. D. February 4, 1902.) Personal Property—Purchase Money—Statutory Remedy—Bankruptcy— Evidence of Lien—Effect. Sand. & H. Dig. Ark. § 4727, provides that property shall not be exempt from claims for the purchase money thereof. Section 4728 provides that in an action for such purchase money the plaintiff may have an order directing the sheriff to take the property, and hold it subject to the court’s order. Section 4729 provides that defendant may give a bond for the retention, of the property. Held,, that these sections did not vest in the seller of personalty a lien arising at the time of the sale, and protected under'Bankr; Ácf, §'<⅝ subd.“d,” providing that liens given'or accepted •in good faitb-, etcl, shall not be affected ;by the. act, but that-they merely confer the right to gain a lien by attachment, which lien was within Bankr. Act, § 67, feubd.- “f,” providing that all attachments or other liens obtained through legal proceedings within four months of the filing of a bankruptcy petition shall- be void. In Bankruptcy.. On December 10, 1901, the Southern Pants Manufacturing Company, hereinafter referred tó as the “Manufacturing Company,” a creditor of the above-named bankrupt, instituted an action against the bankrupt before a justice of the peace for the recovery of money due for the purchase money of certain, merchandise sold to the ,bankrupt, and at the same time also filed, under the statutes of Arkansas, an affidavit fpr the seizure of the goods in the possession of the vendee. A summons and order for'the seizure of the goods were issued by the' justice of the peace, and placéd in the hands of the; constable, who duly executed the' same by seizing the goods. On the .same .day, after the seizure, the bankrupt filed a voluntary petition in bankruptcy in this court, and. was duly adjudicated a bankrupt. The referee issued an crder restraining the manufacturing company from in any way interfering with these' goods until a hearing was had, which order was duly-'-obeyed. On January 25, 1902, the manufacturing company filed with .the referee, its petition, setting up the foregoing -facts, and praying for an-order. setting aside: the restraining order theretofore made, and that it be permitted to have .the goods seized sold by the constable to -satisfy its claim. The. referee denied the petition, whereup' n, upon motion of the manufacturing company, the matter was certified to the court for review. The -statutes of Arkansas under which the manufacturing company claims are! as. follows:- ‘-‘Sec..4727. In;any action brought in the-courts of this state for the recovery.-,of mopey contracted for property in p.ssession of -the vendee, it shall'not be lawful to.iiiplude said property in any schedule intended to protect said property;, .or .exempt it from seizure on attachment or salé on execiition or 'other' piveess issued from any court for the collection of any debt upon, the-claim of ¡the plaintiff. ’ - “See. 4728. In any such action the court or , clerk shall issue, on petition of, the. plaintiff,...duly .verified, describing the property and stating its value, at or after the. commencement of said action, an order, which may be embodied in the'original,‘summons, stating the name of the court and the style of the action, and 'directing the sheriff or other officer to take the property described in the petition,,-and hold the-same subject to the orders of the court.. .... ‘‘'“Sec.' 472Ó. The'defendant hhay give bond for the retention of the property, as in cases of orders of delivery of personal property.” R. W. Nichols, for Manufacturing Co. [MAJORITY — TRIEBER, District Judge] TRIEBER, District Judge (after stating the facts as above). In Re Durham (D. C.) 104 Fed. 231, 4 Am. Bankr. R. 760, this court had occasion to pass upon one phase of this statute, but the question there involved was whether "the property thus seized could be claimed exempt under, the bankrupt law as' 'against the vendor. In the case at bar the contest is between the trustee in bankruptcy, representing all-ffhe creditors, and the vendor. The only ground upon vVliich the rnaiiúfáctúrihg company bases its claim is that it has a vendor’s lien .off]'the gopds, which was inchoate until the seizure, was made .by. the|officer, .whereupon it became a perfected lien, pro-tectee!'by- section 67, subd. “d,” of the-bankrtfptcy act. The construction-given this statute by the supreme court of the state will not síís'taÍh''this''cb'fitóitiori. In Bridgeford v. Adams, 45 Ark. 136, the court expressly held that this act, does not give the vendor a lien on the property lor the purchase price, but only provides that the property ;shall not b;e exempt from the vendor’s 'execution for the debt, and enables the plaintiff in a suit for the purchase money to seize it at once pendente lite to prevent a disposition thereof,_ if under the control .or possession of the vendee. Mr. Justice Rakim speaking for the court, says: •‘It is a statutory process for impounding tlie chattel pendente lite, and does not imply that the lien exists independently of the process. It is analogous to a specific attachment, which is sometimes given in cases where a previous lien did exist, hut the previous lien is in no view essential to support it.” 45 Ark. 142. The court further held that an assignee, in insolvency, though not an innocent purchaser for value so as to hold against an equity of a third party, which is in the nature of a lien upon the property itself, takes the property absolutely ,as against the vendor under this Statute. .<¡5 Ark. 143. In Fox v. Industrial Co., 52 Ark. 450, 12 S. W. 875, the question before the court was whether the vendor’s privilege under this statute takes precedence of the rights of a prior attaching creditor, and the court held that, although an attaching creditor is not a purchaser for value, it did not, and that “it is, the settled construction of this Statute that it was not intended to give the vendor of personal property a lien upon the property sold, but only a remedy for impounding it to prevent the vendee from putting it beyond his reach, pendente lite.” 52 Ark. 452, 12 S. W. 875. To the same effect is Shoe Co. v. Block, 52 Ark. 458-467, 12 S. W. 1073. In Blass v. Hood, 57 Ark. 13, 20 S. W. 544, it was held that the privilege granted by this statote cannot be exercised after the vendee dies, although the assets of the deceased are a trust fund in the hands of the administrator, subject tp any liens or charges thereon. The ground upon which the court based its opinion was “that the vendor has no lien under the statute on the property.” 57 Ark. 15, 20 S. W. 544. The statute being analogous to an attachment,’ it is, like an attachment, “but a preliminary execution.” Grubbs v. Ellyson, 23 Ark. 287; Beard v. Wilson, 52 Ark. 290, 12 S. W. 567. As the bankrupt act specifically declares that “all levies, judgments, attachments, or other liens obtained through legal proceedings' against a person Who is insolvent at any time within four momiA prior To a filing of a petition in bankruptcy against him should be, deemed mill and void” (section 67, subd. “f”), and the manufacturing, company in this case exercised the privilege granted it by the sta* ute on the day of the adjudication of the bankrupt, it necessarily follows that the seizure in this case is null and void, and the con ■ elusion of the referee in bankruptcy is, correct, and should be affirmed. Were this a contest between the bankrupt, who claimed the! property as exempt, and the manufacturing company, the rule would be different, and should be governed by that laid down by this court; in Re Durham,' supra, but such is not the case. It is therefore ordered by the court that the judgment of the referee- is- affirmed iff all things.