When a judgment creditor brings either sort of state law action, says du Pont, the filing of the complaint instantaneously creates a lien against the relevant property. See Rioux v. Cronin, 222 Mass. 131, 137-38, 109 N.E. 898, 901-02 (1915) (judgment creditor's mere filing of creditor's bill creates lien); J. Nolan, supra, § 382, at 460-62 n. 9 (judgment creditor's mere filing of statutory action to reach and apply also creates lien, but cf. Rioux, 222 Mass. at 139, 109 N.E. at 902); see also L. Reed, 6 Massachusetts Practice: Equity Pleading and Practice § 473, at 556 n. 10 (1952); id. at 166 (Supp. 1973).
See, also, Gilleran, Massachusetts Prejudgment Security Devices, 69 Mass.L.R. 156, 178 (1984) ("the mere appointment of a receiver gives the plaintiff no lien on the property of the defendant and therefore no security or priority in the sense of a right to payment from specific assets"); Aldrich Shoe Co. v. Kagan, 173 F.2d 457, 459 (1949) ("Liens do not arise out of thin air, but result from positive assertion of right by parties in action.") The creditor contends that the mere filing of a bill to reach and apply is sufficient to create a lien regardless of injunctions or the appointment of receivers, based on an early case, Rioux v. Cronin, 222 Mass. 131, 109 N.E. 898 (1915). The mere statement of the proposition exposes its weakness.
Snyder v. Smith, 185 Mass. 58. Gay v. Ray, 195 Mass. 8, 15. Rioux v. Cronin, 222 Mass. 131, 137. Earlier decisions possibly tending toward a contrary conclusion were examined and distinguished in Snyder v. Smith, 185 Mass. 58. G.L. (Ter.
Only upon both the filing of an action to reach and apply and the issuance of an injunction restraining the transfer of the property sought to be reached and applied does the plaintiff acquire an equitable lien or equitable attachment upon the property. Foxborough Savings Bank v. Ballarino (In re Ballarino), 180 B.R. 343, 348 (D. Mass. 1995); Gray v. Federal Deposit Ins. Corp. (In re Ryan), 28 B.C.D. 790, 792, 1996 WL 442737 (Bankr. D. Mass. 1996); In re Borofsky, 138 B.R. 345, 347 (Bankr. D. Mass. 1992); McCarthy v. Rogers, 295 Mass. 245, 246-47, 3 N.E.2d 787 (1936); Rioux v. Cronin, 222 Mass. 131, 137, 109 N.E. 898 (1915); Snyder v. Smith, 185 Mass. 58, 62, 69 N.E. 1089 (1904); Nolan, Equitable Remedies, § 382 ("as to the non-judgment creditor, the mere filing of the complaint establishes no rights and creates no lien as to the property sought to be reached and applied in satisfaction of the debt. A lien as to such property may be established only upon the issuance of an injunction").
1996); In re Borofsky, 138 B.R. 345, 347 (Bankr.D.Mass. 1992); McCarthy v. Rogers, 295 Mass. 245, 246-47, 3 N.E.2d 787 (1936); Rioux v. Cronin, 222 Mass. 131, 137, 109 N.E. 898 (1915); Snyder v. Smith, 185 Mass. 58, 62, 69 N.E. 1089 (1904); Nolan, Equitable Remedies, § 382 ("as to the non-judgment creditor, the mere filing of the complaint establishes no rights and creates no lien as to the property sought to be reached and applied in satisfaction of the debt. A lien as to such property may be established only upon the issuance of an injunction").
Doubtless "receiver" would have been the correct designation of the officer so appointed by the court, especially in view of powers subsequently conferred upon him, but the term used does not affect the substance of his authority. Rioux v. Cronin, 222 Mass. 131, 139. In December, 1929, the special master filed his first report. It is there set out among other matters that in the suit of Cochrane against the Trustees final decree was entered on August 2, 1929, establishing the debt of the Trustees to Cochrane in a sum over $300,000. It is stated further: "Said decree ordered the defendant trustees to pay out of the cash of the trust, to the extent thereof, the said sums established as aforesaid to the special master in this case to be held and applied by him according to the further orders of the court, and directed that execution for the amount of the debt, interest and costs so established should issue to and in the name of the special master against the assets of the trust now or that may hereafter come into the possession of the trustees.
Where findings and inferences rest upon the observation of witnesses who have testified orally, the appellate court does not reverse unless plainly wrong; but where the facts all are documentary or are in a master's report, then this court on appeal has the same functions as a single justice and draws the proper inferences for itself. Rioux v. Cronin, 222 Mass. 131, 134. Harvey-Watts Co. v. Worcester Umbrella Co. 193 Mass. 138. Dominion Trust Co. v. New York Life Ins. Co. A. C. 254, 257. Bacon v. Abbott, 137 Mass. 397, 399. American Circular Loom Co. v. Wilson, 198 Mass. 182, 200. The evidence is not reported. Therefore the facts found by the master must stand unless upon the face of his report they are mutually inconsistent or contradictory and plainly wrong.
We treat the bill as a creditor's bill under the general principles of equity. Rioux v. Cronin, 222 Mass. 131. The master found that Clancy from 1899 until he was indicted in 1903 was engaged with Murphy in the fraudulent buying and selling of grocery stores.
Furthermore, the state court, having rightfully taken jurisdiction of Raphael's bill against Dempsey and his sureties on the bond, had by means of attachments of tangible property of the defendants Drake and Buff and orders restraining them from transferring or encumbering their other property, the judicial custody of such property, and valid legal and equitable liens thereon were created in favor of the plaintiff. Snyder v. Smith, 185 Mass. 58, 69 N.E. 1089; Rioux v. Cronin, 222 Mass. 131, 109 N.E. 898; Metcalf v. Barker, 187 U.S. 165, 23 S. Ct. 67, 47 L. Ed. 122; Pickens v. Roy, 187 U.S. 177, 23 S. Ct. 78, 47 L. Ed. 128. And assuming that the ancillary bill brought by the receiver in the receivership proceedings was in the nature of a creditor's bill brought for his benefit and all others similarly situated, the injunction issued by the District Court on the filing thereof could not avail to give that court jurisdiction over property already rightfully in the custody of the state court. Covell v. Heyman, 111 U.S. 176, 4 S. Ct. 355, 28 L. Ed. 390; Pickens v. Roy, 187 U.S. 177, 23 S. Ct. 78, 47 L. Ed. 128; Kline v. Burke Construction Co., 260 U.S. 226, 43 S. Ct. 79, 67 L. Ed. 226, 24 A.L.R. 1077.
In re Fraden, 317 B.R. 24, 37 n. 30 (Bankr.D.Mass.2004); Rioux v. Cronin, 222 Mass. 131, 109 N.E. 898 (1915). Cellceutix has asserted no claim that it holds or is seeking an equitable lien in the stock.