Rock Island Plow Co. v. Reardon

Citations

• 222 U.S. 354
• 32 S. Ct. 164
• 56 L. Ed. 231
• 1912 U.S. LEXIS 2186

Syllabus

<p>A bankrupt, in Illinois, within a few days of filing a petition in voluntary bankruptcy, confessed judgments upon which executions were issued and returned unsatisfied but no actual levy was .made; ■ thereafter and before filing the petition he transferred goods in his possession to the vendor thereof, who claimed they had been delivered on conditional sales; the trustee began subrogation proceedings to preserve the liens of the judgments for the benefit of the estate, to which the judgment creditors assented, and also commenced proceedings to compel redelivery of the goods transferred on ground that lien of judgments inured to estate; the trustee had also claimed a right to recover, the goods on the ground of unlawful preference; held, that</p> <p>Under the law of Illinois, delivery to the sheriff of the executions on the judgments operated without levy to create liens upon the property of the judgment debtor within .the county.</p> <p>Such lieps were paramount to rights in the property possessed by the vendor under contracts of conditional sale.</p> <p>The effect of the subrogation order whs to render inoperative as a preference in favor of the judgment creditors the lions obtained through the executions and to preserve such liens as of the date of filing the petition for the benefit of the estate. First National Bank v. Staake, 202 U. S. 141.</p> <p>Liens of execution-creditors, as they exist when a petition of involuntary bankruptcy is filed, cannot be subsequently destroyed by acts of the creditors to the prejudice of the estate.</p> <p>As the holder of the goods had not been prejudiced by the proceedings to recover for unlawful preference, the trustee was not barred from asserting the lien of the judgments on the same goods for the benefit of the estate,</p> <p>168 Fed. Rep. 654, affirmed.</p>