US SUPREME COURT DECISIONS

The provisions of the Bankruptcy Act of 1898 preventing preferences, apply not only to mortgages and voluntary transfers, but also to preferences obtained through legal proceedings, but the act was not intended to lessen rights already existing, nor to defeat inchoate liens given by statute of which all creditors were bound to take notice. The general lien given by the laws of Georgia to the landlord on the property of the tenant is the equivalent, as to goods levied on by distress warrant, to the common law distress; while it does not ripen into a specific lien until the distress warrant is issued, it exists from chanrobles.com-red

Page 225 U. S. 632

the time of the lease, and the lien of the distress warrant is not one obtained through legal proceeding within the meaning of the the preference provisions of the Bankruptcy Act.

Under the Bankruptcy Act of 1867 a statutory attachment for rent in the nature of a landlord's distress warrant levied within the preference period was not nullified or discharged by the bankruptcy proceedings, and there is nothing in the Act of 1898 opposed to this conclusion.

The general provision of the Bankruptcy Act of 1898 indicate a purpose and intent, as against general creditors, to preserve rights such as those given by the Georgia statute to landlords, even though not enforced until within four months of the bankruptcy.

175 F.6d 3 affirmed.

Samuel Mayer owned a plantation in Dooley County, Georgia, which he rented to Joseph Burns for one year. The rent not having been paid at maturity, Mayer, on November 13, 1908, made an affidavit in conformity with the statute, and a justice of the peace thereupon issued a distress warrant, which, on the same day, was levied upon the cotton, corn, and other products of the place. The crops found on the premises being apparently insufficient to pay what was due, the sheriff at the same time levied upon other property by virtue of § 2795 of the Code of Georgia, which declares that

"landlords shall have a special lien for rent on crops made on land rented from them, superior to all other liens except liens for taxes, . . . and shall also have a general lien on the property of the debtor liable to levy and sale, and such general lien shall date from the time of the levy of a distress warrant to enforce the same."

Three days after the levy, a petition in bankruptcy was filed against Burns, the tenant, who was subsequently adjudged a bankrupt. The trustee, when elected, obtained possession of all the property seized by the sheriff, and subsequently sold it in the due administration of the estate. The proceeds of the cotton and corn were paid over to Mayer, it being conceded that the landlord's chanrobles.com-red

Page 225 U. S. 633

special lien on the crops had not been affected by the bankruptcy proceedings.

Mayer also claimed that, by virtue of his general lien, he was entitled to have the balance of the rent paid out of the proceeds arising from the sale of the other property levied on, and filed his intervention to secure such an order. The trustee's objection was sustained by the referee on the ground that the landlord's general lien was discharged because it had been "obtained by legal proceedings" or levy made three days before the filing of the petition in bankruptcy. His ruling was reversed by the district court (175 F.6d 3). That judgment was affirmed by the circuit court of appeals without opinion. The case was then brought here by writ of certiorari, granted at the instance of the trustee, who claims that, under the Georgia Code, the landlord had no lien on the property prior to the levy of the distress warrant, and that whatever right had been acquired by that seizure was discharged by § 67f, which declares that

"all levies, judgments, attachments, or other liens obtained through legal proceedings against a person who is insolvent at any time within four months prior to the filing of a petition in bankruptcy against him shall be deemed null and void in case he is adjudged a bankrupt. "

Page 225 U. S. 636