1788.
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
