163 Ga. 276 | Ga. | 1926
Lead Opinion
(After stating the foregoing facts.)
We concede that the Chatham Chemical Company does not stand upon the footing of an innocent purchaser for value, without notice of the right of the trustee in bankruptcy, and of any right which a purchaser at the trustee’s sale might acquire to these lands and the crops growing thereon at the trustee’s sale, after the trustee had succeeded in cancelling the fraudulent conveyance by the husband to his wife of these lands and the sale thereof by the trustee and the purchase thereof by the Yidalia Chemical Company. The Chatham Chemical Company took its mortgage on these crops pending the proceeding by the trustee in bankruptcy in the bankrupt court. This was general notice of any equity or claim of the trustee in and to these lands from the time this proceeding was filed and docketed. As the same seems to have been duly prosecuted and not to have been collusive, the Chatham Chemical Company, which took its mortgage pending this suit, is affected by the decree rendered therein. Civil Code (1910), § 4533. So this company could set up no lien upon the crops growing upon the lands upon the theory that it took its mortgage upon these lands when the legal title thereto was in the wife. It was charged with lis pendens notice of the claim of title to these lands by the trustee, and took its mortgage upon these crops subject to any rights which the trustee had, or a purchaser from him might acquire, to these lands or the crops growing thereon.
The trustee in bankruptcy, in his proceeding to have set aside and cancelled the deed from the husband to the wife, did not set up, so far as the record discloses, any claim to mesne profits from these lands while possessed and enjoyed by the wife, and did not seek to recover such mesne profits. The Vidalia Chemical Company did not acquire any title to or interest in the mesne profits from these lands while so possessed and used by the wife, and for this reason can not set up and enforce any claim thereto in the present proceeding. All that company can claim would be rent for these lands after it acquired title, and during the period when the receiver was in possession of these lands, harvesting and removing the crops therefrom. Want of valid title in the mortgagor to the premises on which these crops were grown, and title in the trustee in bankruptcy, who was not a party to this suit, would not bar an action foreclosing and enforcing the mortgage of the Chat-ham Chemical Company on these crops. James G. Wilson Manu
Applying the above principles, the trial judge erred in awarding the whole of the proceeds of these crops, less the expenses of the receivership, to the' Vidalia Chemical Company. He should have awarded only so much of these proceeds to that company as would yield to it a fair rent for these lands during the period beginning September 2, 1924, when that company became the purchaser of these lands at the trustee’s sale, and ending when the receiver had finished harvesting and removing the crops of the year 1924 from these lands.
Judgment reversed.
Dissenting Opinion
dissenting. The judgment rendered was not erroneous, under the law and the facts. Mrs. Eerrell had no title to the property upon which the crops were grown that are involved in this controversy. The property had been fraudulently transferred to her, and the trustee in bankruptcy became vested with the title to this property at the date of his appointment. It is established that a trustee in bankruptcy takes title to the property which the bankrupt has fraudulently transferred and in which, therefore, the creditors have an equity. “The trustee’s interest in the property is stronger than was that of the creditors in whose stead he stands, for he has a title. The trustee is vested not only with the title of the property but also with the creditors’ rights of .action with respect to property of the bankrupt fraudulently transferred or incumbered by him, and he may assail in their behalf all of .such transfers and incumbrances,” etc. 2 Collier on Bankruptcy (12th ed.), 1124. “A trustee in bankruptcy may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and recover the property or its value from the person to whom he transferred it, unless he was a bona fide purchaser for value prior to the date of the adjudication; and this right of the trustee extends to all transfers made by the bankrupt prior to the adjudication, in fraud of the rights of his creditors, without reference to whether such trans