In re Swift

Citations

• 111 F. 503
• 1901 U.S. Dist. LEXIS 88

Syllabus

<p>Bankruptcy—Relinquishment of Lien through Mistake of Law—Right to Reinstatement.</p> <p>A creditor of a bankrupt sued him and garnished persons owing him within four months before the bankruptcy, and thereafter obtained, judgment and collected the same from the garnishees, believing that 'be garnishment was valid.. At that time both he and the garnishees knew of the bankruptcy, and that the trustee claimed the money owing from the garnishees, and they required a bond of indemnity from the creditor. Thereafter' a fund was received by the estate on which such creditor was entitled to a lien for the amount of his debt, but, in the belief that his debt had been discharged, he waived any claim to such fund. The trustee afterwards brought suit against the garnishees, who made demand on the creditor under his bond of indemnity, and he settled the suit by paying over to the trustee the amount he had received under the .garnishment. Beld, that such payment should be treated in equity as a restitution of money belonging to the bankrupt’s estate, and the creditor reinstated in his lien on the fund in the hands of the trustee, as having been relinquished through a mistake of law; his good faith in the transaction being conceded.</p>