In re Hagin

21 F.2d 433 | E.D. La. | 1927

BURNS, District Judge.

Petitioner for review, the Southern Development Company, loaned $750 to the bankrupt, stipulating for a second mortgage on certain real estate. By oversight on its part, tho act of mortgage was not made, signed, or delivered. In due eourse, after adjudication, tho trustee proceeded with the sale of the property, when the petitioner discovered that it did not hold the security intended. The referee refused to recognize petitioner’s claim to recognition as the holder of an equitable lien, or otherwise than as an ordinary creditor. Hence the petition for review.

The referee must he sustained. Such liens are not recognized in Louisiana, where liens, privileges, and mortgages are precisely defined by the Civil Code, and no proof can be admitted of a verbal mortgage. Article 3305. The state Constitution (article 19, § 19), prescribes : unless recorded or registered in- the parish where the property is situated, in the manner and within the time prescribed by law.”

“No mortgage or privilege on immovable property, or debt for which preference may he granted by law, shall affect third persons

Section 47a (2) of the Bankruptcy Act, as amended (11 USCA § 75), has no bearing on the ease, because the petitioner has no lien, privilege, or mortgage that may come in conflict with the lien of the trustee, as such. The petitioner can be recognized as an ordinary creditor only.

The contention of petitioner for consideration upon equitable grounds, to the detriment of other ordinary creditors and third persons generally, cannot prevail in Louisiana. As a court of equity, this court, sitting in Louisiana, is as much bound by the positive law of the state, where the statute is direct and applicable, as the courts of this state or any court of law. Eaton on Equity, pp. 47, 49.

The activity of eourts of equity cannot be invoked, except by those who act, not only in good conscience and good faith, but-also with reasonable diligence. Pomeroy, Eq. Juris. 197, 198.

Petition denied. A decree affirming the referee’s order may be entered accordingly.