Gibbs v. Gibbs
GIBBS verʃus GIBBS.
T
HE cafe was briefly this:– A certain Aaron Muʃgrove has brought a qui tam action againft the Defendant, Ann Gibbs, in which, alter a trial in the Supreme Court, he obtained a judgment on the ʃecond day oƒ October, 1788 ; but no execution was thereupon iffued. On the fourth day of the fame month, however, the Defendant having then confeffed judgment in this Court to the Plaintiff, Benjamin Gibbs. a Fi. ƒa was iffued in this caufe, and duly executed upon a houfe and lot of ground in Philadelphia; after which Mrs. Gibbs committed an act of bankruptcy, and the Sheriff paid the money levied by virtue of the Fi. ƒa. into the hands of the Prothonotary, to be difpofed of as the Court fhould direct.
In the courfe of the argument, there were fome infinuations of collufion, with refpect to the fecond judgment ; but as no proof was offered, the only queftion before the Court was, whether, under all
1788.
the circumftances of the cafe, Muʃgrove's prior judgment was entitled to fatisfaction out of the money levied of the Fi.ƒa. in preference to the fubfequent judgment on which the writ had iffued? See 3 State Laws 655. ʃect. 30.
Bradƒord and Sergeant, arguing in favor of the prior judgment, admitted, that it was no lien againft the affignees of the bankrupt, or the general creditors under the commiffion; but contended, that, unlefs it was for the general benefits, no conftruction of the act of Affembly fhoud be made to diveft the lien which the priority of Muʃgrove's judgment had obtained ; a lien, they infifted, clearly binding as to a purchafor, and, confequently, as to a perfon levying on real eftate, who is to be confidered, in that refpect, a purchafor. They faid, that they had not been able to find any authority more in point than 1 P.Will. 737 but urged, that the want of a direct precedent was in their favor ; for, if the attempt to deftroy a lien of this kind could have fucceed, it muft frequently have occurred in the uniform ftruggle that had been made to defeat the bankrupt laws of England.
It was further obferved, that there had be no laches on the part of Muʃgrove, for he could not iffue an execution ‘till the expiration of four days after his judgment was obtained ; that it was eftablifhed long before the ftatute of frauds, that the firft judgment fhall be firft paid, although the execution was iffued upon a fubfequent one ; that the ftatute and our act of Affembly made no other alteration in the common law, than that of fubftituting the day of docketing for the relation of the firft day of the term; and that, therefore, independent of the bankrupt law, Muʃgrove's claim was indifputable.
But they alfo contended, that, taking the bankrupt law into view, it did not interfere between lien and lien at common law; but is merely directory in the 30. ʃect. how the debts fhall be paid where no execution has been levied. The words do not include the cafe; and a former ftatute, or rule of common law, cannot be repealed or annulled, by implication. Nor could the intention of the Legiflature embrace it; for, that was to make an equal diftribution among the creditors at large; and not to afcertain a right, as between two individuals. Whether, indeed, is a real or pretended debt for which the fecond judgment is confeffed, there are no means to prove from the want of a Court of Chancery ; and whether the commiffioners might recover the money from Muʃgrove is a queftion, that cannot affect the prefent controverfy, o give Gibbs a right to retain it, which he would not otherwife have.
Ingerʃol and Lewis, for the Plaintiff in the execution, ftated, that by the bankrupt law, executions, mortgages, and pledges, were confidered in the fame light; and that the rule of law in the diftribution of a bankrupt's eftate, placed all other defcriptions of creditors on the fame footing, regarding the quantity, and not the quality of their debts. Green. B.L. 100. 101. 136. 146. 190. 12Mod. 446. Com. Dig. 532. 2 Black. Com. 487. 1. Bac. Abr. 258. They infifted, as the property would indifputably veft in the
comiffioners if not prevented by the execution, that, therefore, the queftion lay property between Gibbs and the Affignees, and not between him and Muʃgrove, who could not, with any fhew of right retain the money againft the general creditors, even if the Court were, at this time, to order it to be paid to him. They faid, that the very points now made, were urged and over-ruled in the cafe cited for Muʃgrove ; 1 P.Wm. 737 and it is declared in feveral cafes, that a judgment did not bind lands any more than the teʃle of a Fi.ƒA. did goods, before the ftatute. Ibid. 92 Veʃ 239. 436.
But the very exiftence of a prior lien in favor of Muʃgrove was controverted; becaufe the act of Affembly (1 State Laws 462.3.) in refpect to the docketing of judgments, only alters the law in the cafe of bona ƒide purchafors for a valuable confideration ; and does not affect the cafe of two judgment creditors, whofe liens ftill relate to the firft day of the term. On this ground, therefore, the judgment confeffed to Gibbs in the Common Pleas, is prior to that obtained by Muʃgrove in the Supreme Court ; for the term in the Common Pleas commenced on the 7th oƒSeptember; but the term in the Supreme Court did not commenced until the 24th day of the fame month; fo that, independent of the bankrupt law, the legal relation to the firft day of the term eftablifhes the right of Gibbs on the prefent controverfy.
But the bankrupt law is in itfelf clearly decifive; and that an adverfe precedent is not to be found, muft prove the univerfal fenfe of the Courts of Juftice in England to be in favor of the Plaintiff's doctrine. As, therefore, the general rule, with regard to an execution executed, includes his cafe, and excludes the cafe of Muʃgrove, it is incumbent upon the latter to fhew, if he can, any exception on which he may reft his prefent claim. The principle, indeed, as well as the practice of the law, is on the fame fide. If, alter the execution executed, the commiffioners had taken the houfe and fold it, they would, undoubtedly, have been liable to Gibbs in an action for money had an received his ufe: but will it be affered that Muʃgrove could maintain fuch an action, having no execution executed? Nor can it be juftly faid, that the commiffioners are not interefted in the queftion now agitated ; for, if the proceeds of the eftate fold under the Fi.ƒa. ae enough to pay both, both, according to the oppofite doctrine, muft be paid, and only the balance go to the commiffioners. But there is no cafe which can make a difference whether the money is, or is not, fufficient to pay the amount of the execution ; and fhould Muʃgrove prevail againft Gibbs, for fimilar reafons he muft prevail againft the commiffioners–to the manifeft violation of the words and fpirit of the law.
SHIPPEN,Preʃident.– The motion in this cafe is made in behalf of one Muʃgrove, who is faid to be a prior judgment: creditor, in order to have the money which has been levied and brought into Court under the Plaintiff's execution, paid to him inftead of the Plaintiff. This is objected to, on the ground that the Defendant became a bankrupt previous to the ſerving or iſſuing any execution againſt the eſtate, except the preſent one, at the ſuit of the Plaintiff, and that, therefore, he alone is entitled to the money.
The queſtion ariſes upon the 30th Section of the bankrupt law, which enacts, “That every creditor having ſecurity for his debt by judgment, ſpeciality, or other ſecurity, whereof there is no execution ſerved and executed upon the lands, goods, and eſtate, of the bankrupt before ſuch time as he ſhall become a bankrupt, ſhall not be relieved upon any ſuch judgment, &c. for any more than a rateable part of their debts, with the other creditors.”
This ſection of the act, is ſimilar to one in the ſtatue of James, and muſt therefore receive the ſame conſtruction; and the rational and legal conſtruction appears to be, that no judgment creditor who has not levied his execution, ſhall receive any benefit from his judgment, as to the eſtate or effects of the bankrupt, veſted in the Commiſſioners of bankruptcy by the act, to the excluſion or prejudice of the creditors at large, but muſt be upon the ſame footing with them; yet, as to any liens which do not affect the general creditors, he will have the benefit of them in the ſame manner as if the act had never been made.
This conſtruction accords with the cafe in ſupport of the motion out of 1. Peere Wms. 737. The principle of that caſe ſo far as reſpects the preſent purpoſe, is this, that where there is a prior judgment, and afterwards a ſale of the land, and then a bankruptcy, the purchaſer holds the land ſubject to the prior lien, which muſt be for this plain reaſon, that in that caſe there was no poſſibility that the creditors of the bankrupt could be prejudiced by it, the land being actually ſold before the bankruptcy, and never veſted in the Commiſſioners; and, conſequently, there was no lien as to them, it could only ſubmit againſt the purchaſer, and was not at all affected by the bankrupt laws, as it was indifferent to the creditors whether it ſubſiſted or not.
In the preſent cafe, there has been no act of the party previous to the bankrupcy to prevent the veſting of the eſtate in the Commiſſioners; and, conſequently, all liens, it they operate at all, muſt operate to their prejudice; which is contrary to the expreſs intent of the act, which directs that they ſhall take the eſtate, ſubject only to the claims of ſuch judgment creditors who had levied their executions upon it. For, if any judgment creditor, who has no execution, under the idea of his having a prior lien, could have the benefit of the execution transferred to him, then not only that creditor, but all the prior judgment creditors muſt be ſatisfied, before the Commiſſioners could take any thing to divide among the general creditors, as they would all have an equal right with him.
It is ſaid, that, although the Court ſhould order the prior judgment creditor to be firſt paid, there would be no injury done to the other creditors, becauſe the Commiſſioners might recover the money from him, if he was not intitled to it. Whether they could,
or could not, recover it from him, will, I think, make no material difference as to the prefent motion. It muft, however, be obferved, that, if he can claim this money at all, it muft be under the execution, and as execution creditors are faved, it would be very queftionable whether the Commiffioners could recover it from him. If they could not, then the creditors at large muft be poftponed to him and the other judgment creditors ;– if they could recover it, then it would not only be a vain thing to order the money into his hands, as he muft, be a circuity of action, be obliged to refund it, but it would, in fact, be ordering it into the hands of a perfon not intitled to receive it: And the confequence would be, that the real execution creditor, whofe claim is faved by the act, would infallibly be cut out of his preference.
Whether this is, or is not, a bona ƒide debt, is not the fubject of our prefent enquiry. If any fraud could be proved, this Court would certainly on motion fet afide both the execution and the judgment, but that could not be for the benefit of the prior judgment creditor, whofe claim is founded upon the execution; but for the benefit of the creditors at large under the Commiffion ; who my ftill have a remedy by action, if they can fhew the execution to have been collufive and unfair.
The only queftion, however, now before us, is whether a prior judgment creditor fhall come in under this execution, which we think he cannot as it would defeat the exprefs intent of the bankrupt law.