118 F. 360 | S.D. Ga. | 1901
(orally). This is an attempt on the part of creditors of William Miller to administer his estate in bankruptcy. It appears that an important part of the estate is about to be sold by the Thomasville Doan & Improvement Company by virtue of a deed made by the debtor, in which under the law of Georgia he conveyed title to that company. This nevertheless, in equitable contemplation, is security only for debt. It is said that the holder of that lien, who is proceeding to sell a portion of the real estate, has the right to sell it, and that this court, exercising the functions of the bankruptcy court, has no authority to enjoin that sale. This the plaintiffs now insist should be done because the deed is usurious in character. It is objected by the holder of the deed that that point cannot be raised in this court for several reasons. One is that usury is a personal plea, and another is that a creditor coming and making an equitable defense against usury, or what is claimed to be an equitable defense against an usurious deed, must himself do equity and pay off the principal and interest due on the debt secured by the deed before the court will hear him. It is further insisted that this court has no right to consider the question at all, but that it must be determined by the courts of the state.
With regard to the first contention, it is sufficient to say that the statute of Georgia is a definite and conclusive answer. The bankrupt is an insolvent as far as we are now advised. The Code of Georgia (section 2878) provides: “The plea of usury is personal, and a credit- or has no right to collect usurious interest from an insolvent debtor to the prejudice of other creditors.” It is here made to appear to the court from the pleading that a creditor is seeking to collect usurious interest; and he is doing more,—he is using what is alleged to be the usurious deed of an insolvent, not only to collect the usurious interest, but to defeat a sovereign and uniform remedy of other creditors
That being true, in the opinion of the court the objections to the amendment must be overruled, and the amendment must be allowed.