Page:Federal Reporter, 1st Series, Volume 9.djvu/508

 m fis JACKSON. e93 �In re Jackson, Bankrupt. [Bittrief Court, 8. D. New York. November 16, 1881.) �1. Ikjukction DrsBOLVED — Section 5057 — Limitations— Fkacdulent Judgment. �An injunction should be dissolved when it can no longer subserve any useful purpose. �Where, prior to proceedings in bankruptcy, several executions had been le vied on the bankrupt's property, and the sherlfE had advertised it for sale there- under, when he was stayed by injunction issued in the bankruptcy proceedings, but was afterwards allowed to sell and hold the proceeds, subject to the order of the court; and after paying certain prior executions, about which there was no controversy, there remained in the sherifl's hands $611, applicable next in order upon a judgment and execution bf M.; butit was claimed by the assignee in bankruptcy, and also by certain subsequent execution creditera, that M. 's judgment was fraudulent and flctitious, and M. 's proceedings under it had been stayed since 1874, and the assignee, though knowing the facts since 1875, had taken no steps to assail M. 's judgment, — hdd, that the assignee's right to at- taek M. 's judgment had, under section 5057, long since expired, and that .the injunction should now be dissolved. �In Bankruptcy. �Jas. Armstrong, for the motion. �Jas. G. Grakam, for the assignee. �Darwin W. Eamond, for creditors. �Bbown, D. J. Markowitz, the moving crediter, by virtue of a judg- ment, execution, and levy prior to the commeneement of proceedings in bankruptcy, obtained a legal lien upon the goods and chattels of the bankrupt. The goods were under advertisement for sale under this execution, and others, at the time of the filing of the petition in bankruptcy, on December 8, 1874. On that day an injunction was issued out of this court in those proceedings, restraining further pro- ceedings by the sherifE. Afterwards it was so modified as to permit the sheriff to sell all the goods and chattels of the bankrupt le vied on, and to retain the proceeds to abide the further order of the court. He was also permitted to pay two judgments prior to that of Markowitz, there being no controversy about them. After paying those judgments and the expanses of sale, a net balance of $611.39 remained in his hands, which was then, and has ever since been, claimed by Markowitz under his judgment of $2,040, which was next in order of lien. Payment to him has been prevented by the original injunction, which, as respects this judgment, has never been vacated, it being claimed, not only on behalf of the assignee in bankruptcy, but also in behalf of two subsequent judgment creditors, that that judgment was fraudu- lent and collusive, and designed to give an unlawful preference to Markowitz, who is a brother-in-law of the bankrupt. ��� �