Opinion
October 16, 1929.
October 30, 1929.
Debtor and creditor — Judgment — Levy — Postponement of sale — Subsequent levy — Effect.
In an issue to determine which of two execution creditors were entitled to the proceeds of a sheriff's sale it appeared that the plaintiff levied upon the goods of a third person, and that about six months later the defendant also levied upon them. The plaintiff had postponed the sale of the goods for the period of six months because of the straitened circumstances of the third person's family. The goods were sold on the writs and the proceeds paid into Court. Under such circumstances, where there was no genuine intention on the part of the plaintiff to collect the debt, an award of the proceeds of the sheriff sale to the defendant will be affirmed.
Debtor and creditor — Execution — Postponement of sale — Intention — Effect.
An execution which is not placed in the sheriff's hands with a bona fide intention of collecting a debt, but merely to hold a security or to prevent other creditors from coming in upon the debtor's goods, is fraudulent as to them.
A reasonable delay is not of itself fraudulent, where a creditor postpones a sale in good faith and in furtherance of a genuine intention to collect his debt. But where he forbears out of consideration for the straitened circumstances of the debtor, his action cannot prejudice the rights of another creditor.
Appeal No. 194, October T., 1929, by plaintiff from order and decree of C.P., No. 4, Philadelphia County, December T., 1927, No. 9155, in the case of Abraham Raskin v. Aaron Nasow and Rachel Nasow, Onward Building and Loan Association.
Before PORTER, P.J., TREXLER, KELLER, LINN, GAWTHROP, CUNNINGHAM and BALDRIGE, JJ. Affirmed.
Issue to determine priority between execution creditors. Before FINLETTER, J.
The facts are stated in the following opinion of the court below:
By agreement of the parties, the disposition of the within matter was left to the determination of the court upon the testimony taken before the court in banc on February 2, 1929.
The facts are as follows:
Abraham Raskin obtained a judgment against the above-named defendants. A judgment was also obtained against the same defendants by one Danenberg. On January 17, 1928, Raskin caused a fi. fa. to issue and on January 25, 1928, Danenberg also caused a fi. fa. to issue, returnable the first Monday of February, 1928, under which levies were made against property of the above-named defendants and the return made by the sheriff "levy and goods remain unsold."
On June 7, 1928, the Onward Building and Loan Association, which had previously secured a judgment against the same defendants, cause a fi. fa. to issue and a levy to be made. Raskin and Danenberg, who had taken no action since February, thereupon caused writs of vend. ex. to issue on June 12, 1928. The goods of the defendants were sold by the sheriff upon all three writs on June 30, 1928, and by proper proceedings, to which all the persons above named were party, the proceeds of the sheriff's sale have been paid into court. This fund is before us for distribution.
The general rule is that an execution which is not put in the sheriff's hands with bona fide intention of collecting a debt, but merely to be held as security or to prevent other creditors from coming in upon the debtor's goods, is fraudulent as to them. A reasonable delay may be permitted. If the creditor, in good faith and in furtherance of a genuine intention to collect his debt, postpones a sale, an indulgence for such a purpose is not in itself fraudulent, but may be good policy for the creditor as well as mercy for the debtor.
The explanation given by the plaintiffs, Raskin and Danenberg, for the delay in pursuing their execution, shows that their purpose was an entirely different one from a genuine intention to collect their debt. It was simply their pity for the straitened circumstances of the defendant family, and, while creditable to them from one point of view, it is not a sufficient justification as against another creditor who has a right to come upon the defendants' goods for payment of his judgment.
There is no objection to the consideration shown by Raskin and Danenberg for the defendants, but they have no right to do this at the expense of another creditor. We cannot, therefore, regard their fi. fas. as taken out with a bona fide intention of collecting the debts. They must, therefore, yield to the subsequent creditor, the Onward Building and Loan Association.
For these reasons, the fund is awarded to the Onward Building and Loan Association.
Award of the proceeds of the sheriff's sale to the defendant. Plaintiff appealed.
Error assigned was the order of the court.
Benjamin H. Levintow, for appellant.
James F. Masterson, for appellee.
Argued October 16, 1929.
The judgment is affirmed on the opinion filed by Judge FINLETTER of the court below.