228 F. 551 | S.D. Ga. | 1915
The question here made is quite an important one to the business world. It appears that on the 18th day of January, 1912, the bankrupt, B. E. Harrell, made a mortgage on his real estate in Dodge county to the Citizens’ Banking Company, of Eastman, Ga., in order to secure an indebtedness of something like $3,900, principal; that the mortgage was duly recorded, as provided by the laws of Georgia, and was regularly foreclosed by final judgment in the superior court of Dodge county, Ga., in November, 1914, and that a mortgage fi. fa. was issued a few days thereafter on said judgment for principal, interest, and attorney’s fees; that B. L. Harrell filed his voluntary petition in bankruptcy in this court on October 30, 1915, and an order of adjudication was promptly entered, but that about one month before the filing of said petition in bankruptcy the sheriff of Dodge county had levied upon said real estate in order to satisfy said mortgage fi. fa., and is now advertising the property for sale. The trustee brings this bill to enjoin the sheriff from selling the real estate of the bankrupt so levied on as aforesaid.
“Where the lien is obtained more than four months prior to the filing of the petition, it is not only not to be deemed'to be null and void on adjudication, but its validity is recognized.”
The Circuit Court of Appeals of the Fifth Circuit, to which this court owes obedience, has decided the very point here involved in the case, of Sample v. Beasley, 20 Am. Bankr. Rep. 164, 158 Fed. 607, 85 C. C. A. 429. In that case a similar effort was made to stay the sale of real estate of a bankrupt which had been levied upon on a judgment rendered in an action to foreclose certain mortgages made four months before the filing of the petition in bankruptcy — the levy having been made before the petition was filed. It was contended by the complainant in that case, as it is contended here, that the property would
“A bankruptcy court has not jurisdiction to stay the sale of real estate duly seized under a judgment rendered in an action to foreclose a mortgage, rendered long prior to the four months preceding the petition and adjudication of the mortgagor.”
It is probable that this headnote was not formulated by the Court of Appeals, and the court is of the opinion that the statement therein to the effect that the District Court of the United States had no jurisdiction is rather too' broad, and that a better statement of the principle involved should have been that the District Court, under the facts in the case, should.not enjoin the sheriff from selling the property under the state court process. In other words, I think that this court would have jurisdiction to stop the sale -where absolutely necessary under the facts of the particular case in order to protect the rights of the creditors or the trustee, which would otherwise be lost or impaired. It is not a question of jurisdiction, but of discretion and policy in each case under its peculiar facts. See also the case of In re Rohrer, 177 Fed. 381, 100 C. C. A. 613, decided by the Circuit Court of Appeals of the Sixth Circuit, where the subject is fully discussed and many authorities cited; also Neill, Trustee, v. Barbaree, Sheriff, 135 Ga. 771, 70 S. E. 638, Carter v. People’s National Bank, 109 Ga. 573, 35 S. E. 61, and Parks, Trustee, v. Baldwin et al., 123 Ga. 869, 51 S. E. 722.
Under the foregoing decisions, inasmuch as the mortgage and the judgment foreclosing same were more thañ four months old before the bankrupt filed his petition in bankruptcy, and inasmuch as the sheriff of the state court had already seized the property before the petition was filed, this court does not think it should enjoin the sale.
*554 “The plea of usury Is personal; but a creditor has no right to collect usurious interest from an insolvent debtor to the prejudice of other creditors.”
The case of Parker v. Barnesville Savings Bank et al., reported in 107 Ga. 651, 34 S. E. 365, is also in point. The second headnote in that case is as follows:
“If, however, such mortgage debt be infected with usury, and the mortgagor is insolvent, it is the equitable right of the wife, as a creditor of her husband, to compel the mortgagee to purge his claim of the usury charged against their common debtor. To this end the wife may, even after a foreclosure of the mortgage, avail herself of the statutory remedy provided for by section 2769 (now section 3304) of the Civil Code, whereby a creditor is permitted, upon specified terms, ‘to contest the validity or fairness of a mortgage lien or debt’ prejudicially affecting his interests as such.”
An order will be entered accordingly.