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U.S. Supreme Court

Taubel-Scott-Kitzmiller Co., Inc. v. Fox, 264 U.S. 426 (1924)

Taubel-Scott-Kitzmiller Co., Inc. v. Fox

No. 188

Argued January 22, 23, 1924

Decided April 7, 1924

264 U.S. 426


1. Section 67f of the Bankruptcy Act does not invalidate a lien obtained by levy of an execution within the four months preceding the filing of the petition in bankruptcy on which the judgment debtor is adjudged a bankrupt if the debtor was in fact solvent when the levy was made. P. 264 U. S. 429.

2. Congress has power to confer upon the bankruptcy court jurisdiction to adjudicate the rights of trustees in bankruptcy to property adversely claimed, even when not in the possession of the bankruptcy court, and may determine to what extent jurisdiction shall

Page 264 U. S. 427

be exercised by summary proceedings and to what extent by plenary suit. Pp. 264 U. S. 430, 264 U. S. 438.

3. But the bankruptcy court has not been given jurisdiction by summary proceedings or otherwise to avoid, under § 67f, a lien created by levy of an execution under a judgment of a state court within four months preceding the filing of the petition in bankruptcy, where the property is in the actual possession of the sheriff and neither he nor the judgment creditor has appeared in or consented to adjudication by the bankruptcy court, and where the claim of the creditor that the bankrupt was not insolvent at the time of judgment and levy is not colorable, but substantially supported. Id.

4. Section 67f, in providing that the bankruptcy court may order that a lien void as against the trustee shall be preserved for the benefit of the estate, does not confer by implication jurisdiction to determine whether the lien is void, but grants substantive rights effected by means of subrogation. P. 264 U. S. 435.

286 F.3d 1 reversed.

Certiorari to a judgment of the circuit court of appeals reversing, on petition to revise, an order of the district court in bankruptcy which stayed a summary proceeding before the referee brought by trustees in bankruptcy for the purpose of having an execution declared void and to obtain possession of property upon which it had been levied.

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