Globe Bank & Trust Co. v. Martin - 236 U.S. 288 (1915)
U.S. Supreme Court
Globe Bank & Trust Co. v. Martin, 236 U.S. 288 (1915)
Globe Bank & Trust Co. v. Martin
Argued December 4, 17, 1914
Decided February 23, 1915
236 U.S. 288
A controversy over the distribution of a fund in the hands of the trustee arising from proceeds of property attached under attachment by a creditor, within four months of the petition, the lien of which has been preserved for the estate, is a controversy arising in bankruptcy proceedings and appealable, as in other cases in equity, under the Circuit Court of Appeals Act, and is not controlled by § 25 of the Bankruptcy Act.
This case being appealable to this Court under the Circuit Court of Appeals Act, the petition for writ of certiorari is denied.
The title with which the trustee is vested under § 70a includes all property transferred by the bankrupt in fraud of creditors and which, prior to the bankruptcy, might have been levied upon and sold under judicial process against him.
Under § 70e, the trustee may avoid any transfer by the bankrupt of his property which any creditor of the bankrupt might have avoided, and the trustee has authority to recover the property in the hands of anyone not a bona fide holder for value.
The provisions of the Bankruptcy Act in regard to attachments and liens acquired under state laws are superior to all state laws in virtue of the constitutional authority of Congress to enact a uniform system of bankruptcy.
Even though a fund representing property conveyed in fraud of creditors may be recovered through the state court under an attachment obtained by creditors who, under state law, would alone share in the fund and the lien of which has been preserved under § 67b, disposition of the fund is determined by the rule of distribution prevailing in the federal jurisdiction, and not by that in the state court in the absence of bankruptcy, and so held that a fund so obtained should be distributed between all the creditors as a general asset of the estate, and not between those creditors who would alone have shared in the fund had their attachment been obtained more than four months prior to the petition.
The liens on property passing to the trustee to which a preference is given under § 64b in accordance with state laws are statutory liens such as those for furnishing labor and materials, and that section does not prevent the application of § 67f in the circumstances here shown.
193 F. 841, 201 F. 31, affirmed.
The facts, which involve the construction of § 67f of the Bankruptcy Act of 1898 and the application of proceeds resulting from a lien preserved for the estate thereunder, are stated in the opinion.