Gantt v. Jones

272 F. 117 | 4th Cir. | 1921

WOODS, Circuit Judge.

In October, 1919, C. A. Baker and W. A. Gantt were adjudged bankrupts, as copartners and individuals. Gantt owned a tract of 371 acres of land, known as “Scyamore Farm,” on which were several outstanding mortgages executed by him. On each of these mortgages his wife, Alice Gantt, had renounced her dower.

Under a petition filed by the trustee, with due notice to the mortgagees, the court ordered the land sold free of the liens of the mortgages. The petitioner, Alice Gantt, wife of the mortgagor, gave notice at the sale of her claim of dower. Under a petition filed by the purchaser, to which Alice Gantt was made a party, the questions were made, first, whether the purchaser took a good title at the sale free from the claim of dower; and, second, whether Mrs. Gantt was entitled to an allotment of dower in the surplus proceeds of the sale.

[1] The power to sell a bankrupt’s property free from liens is not expressly conferred by the statute. But such a sale is often necessary to the due execution of the power and duty to reduce the assets to money and distribute it to creditors. This necessarily implied power of the court of bankruptcy as a court of equity has been asserted in numerous cases. 7 C. J. 231, § 359, note.

[2-4] At such sale the purchaser takes the same title as if the sale were made in any other court of equity to foreclose the mortgages or to marshal the assets of an insolvent, with all lienholders and other parties in interest before the court. This title is good against the mortgagor, the mortgagees, and all their privies, including the wife of the mortgagor, who has renounced her dower. So, also, the proceeds of sale come into the hands of the bankrupt court for distribution among creditors precisely as if the mortgage had been formally foreclosed. The same incidents attach to the surplus over the lien debts. It is a rale of property in South Carolina that, when a wife renounces her dower on a mortgage executed by her husband and the land is sold to satisfy the mortgage, she has no right of dower, either in the land or in the surplus proceeds of sale. Grube v. Lilienthal, 51 S. C. 442, 451, 29 S. E. 230.

Affirmed.