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Furnival Machinery Co. v. King

Decided: June 9, 1976.

FURNIVAL MACHINERY COMPANY, PLAINTIFF-APPELLANT,
v.
WILLIAM H. KING AND STANLEY LAPINSKI, INDIVIDUALLY, T/A LAKING CONSTRUCTION CO., AND LAKING CONSTRUCTION CO., INC., DEFENDANTS-RESPONDENTS



Kolovsky, Bischoff and Botter. The opinion of the court was delivered by Kolovsky, P.J.A.D.

Kolovsky

On October 21, 1968 a judgment for $5,915.92 was entered herein in favor of plaintiff against all three defendants. Defendant Stanley Lapinski (Stanley) and Teresa, his wife, then owned, as tenants by the entirety, two tracts of land in Hunterdon County, one in Lebanon, the other in Raritan.

It is conceded that plaintiff's judgment, from the time of its entry, became a lien on Stanley's interest in those properties, N.J.S.A. 2A:16-1, and that his interest as tenant by the entirety could be levied upon and sold under execution. King v. Greene , 30 N.J. 395, 412-413 (1959); Newman v. Chase , 70 N.J. 254 (1976).

Plaintiff appeals from an order entered June 21, 1974, under the purported authority of N.J.S.A. 2A:16-49.1, cancelling and discharging, as against Stanley, both the judgment and the lien thereof*fn1 because Stanley had been adjudicated bankrupt on October 22, 1970 and had received his discharge in bankruptcy on March 12, 1971.*fn2

We reverse so much of the trial court's determination as cancelled and discharged the lien of plaintiff's judgment on Stanley's interest in the two properties because Stanley's discharge in bankruptcy did not affect the continued viability

of the lien and the destruction thereof is not authorized by N.J.S.A. 2A:16-49.1.

Stanley's suggestion that the lien became ineffective by reason of the bankruptcy proceedings, even without resort to the cited statute, lacks substance. Neither the judgment nor the lien thereof was subject to attack under 11 U.S.C.A. § 107(a) (1) since the judgment was entered more than four months prior to the adjudication in bankruptcy. In those circumstances Stanley's trustee in bankruptcy became vested with only such title as Stanley had at the date of the filing of the petition in bankruptcy, 11 U.S.C.A. § 110 (a), a title which was subject to the lien of plaintiff's judgment.

Further, while the discharge in bankruptcy relieved Stanley of any personal liability to pay plaintiff's judgment, it had no effect on the lien thereof on his interest in the two properties. Kobrin v. Drazin , 97 N.J. Eq. 400, 402 (Ch. 1925); Bassett v. Thackara , 72 N.J.L. 81 (Sup. Ct. 1905); 1A Collier on Bankruptcy , (14 ed. 1943), § 17.29. Apposite are the court's comments in Kobrin v. Drazin, supra:

None of the liens of the judgments was, of course, affected by the discharge in bankruptcy of the judgment debtors. The discharge relieved them of personal liability only; the liens on the land remained.

The rule is stated in Collier on Bankruptcy, supra , as follows:

A discharge, being personal in character, releases the bankrupt's personal liability only. It follows, therefore, that a valid lien on property of the bankrupt existing at the time of the adjudication in bankruptcy, which is not avoided by the Bankruptcy Act, may be enforced notwithstanding the discharge of the bankrupt. So also a judgment evidencing a lien is not affected by a discharge except as to the personal liability it imposes upon the bankrupt. [at 1742.7 (3)]

The lien of the judgment was not affected by the fact that Stanley's interest in the two ...


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