John Garabedian, Bertha Garabedian and Richard Peters v. Griffin Steel & Supply Co. And Allen C. Wait, Trustee in Bankruptcy

Clyde Inman suffered a fire loss on April 12, 1961. The amount of the loss was $12,000. Inman can get none of this because of his subsequent bankruptcy.

The question here is the priority of creditors who levied or attempted to levy more than four months prior to bankruptcy. The referee, affirmed on review by the district court, has held the money goes first for certain fees and costs, then to the United States for some taxes *and the balance to Griffin Steel & Supply Co. This balance will only partially satisfy the claim of Griffin against Inman. Apparently the Garabedians and Peters will end up as general creditors.

The controversy arises out of the service of attachments in the California collection suits. It is conceded that Griffin’s service, subsequent to that of the Garabedians and Peters, was good. The validity of the service of the writs in the suits obtained by the latter two has not been determined by the California state courts, so we have the question.

At a time when it is agreed the Niagara Fire Insurance Company owed In-man the $12,000 here at issue, the Garabedians and Peters ran their California attachments against “American Fore Loyalty Group” and the sheriff’s…