57 So. 624 | Miss. | 1911
delivered the opinion of the court.
If the deed of trust in question was valid under the laws of this state afid under the bankrupt law, its lien survived the discharge of the bankrupt, and the purchaser at the foreclosure sale acquired a valid title to the property therein described. Its validity under the state law is not, and could not be, seriously questioned.
The decree of the court below is reversed, and the bill dismissed.
Dismissed.
OPINION ON SUGGESTION OE ERROR.
This case was disposed of at a former sitting of the court, but is again called to onr attention through the medium of a suggestion of error. The case comes to the court on appeal allowed by the chancellor to settle the principles of the case, the chancellor having overruled a demurrer to the bill of complaint filed by F. O. Horne, appellee.
On the first hearing of this case, this court was of the opinion that the lower court should have sustained the demurrer and dismissed the bill, and we accordingly so ordered. In the former opinion of the court we took the view that the note and trust deed to secure same was valid as between the parties and all others except “creditors and subsequent purchasers for a valuable consideration without notice,” though not lodged with the chancery clerk of the proper county for record. Sec. 2787, Code 1906. There was no claim by any person that the
But what merit is there in this case so far as appellee • is concerned? Let us examine his allegation of fact in the bill of complaint. It is unnecessary to pursue the statement of fact set forth in the bill in detail. We shall content ourselves with merely summarizing the main facts alleged in the bill. It appears from the complaint filed by appellee that he states that on December 4, 1907,
Appellee further alleges in the bill that the object of thé fertilizer company in taking the security in December, 1907, was to obtain a preference and protect and secure itself in this preference over other creditors. Appellee then charges that at the time he gave the trust deed to appellant he was insolvent and had been for many weeks, and that this fact was known to the fertilizer company at and prior to the time it took the note and trust deed. The appellee seeks by this bill to have the trustee’s deed to Hall canceled as a cloud upon his title. It is our judgment that the bill of complaint entirely fails to state any cause of action, and the demurrer should have beén sustained and the bill dismissed. There are many reasons,why appellee cannot succeed, and we will proceed to state them.
In the first place, we have seen that it was not necessary for this trust deed to be recorded in order to make it valid as between the parties and’ as against the general creditors of appellee. See Sec. 2787 of the Code of 1906, and Loughridge v. Bowland, 52 Miss. 546. In this case all the creditors were general creditors, and therefore, under the laws of This state, the transfer or mortgage was a valid one. If it-could have been avoided- at
In Loveland on Bankruptcy it is stated that “a secured creditor may rely upon his lien and neither prove his debt in bankruptcy nor release his security. In such case the security is preserved, notwithstanding the bankruptcy of the debtor.” This statement of the law is again repeated in the same book on page 1098. If this is true, it follows that the discharge in bankruptcy had no bearing on this security. See section 469, et seg. If it be argued that this was no lien because it could have been avoided by the trustee, we answer that it was good until avoided, and it was never avoided, and therefore this mortgage is to all intents and purposes a valid mortgage and as such it is to be treated in this case as between the parties litigant.
We have shown from the above authorities that this mortgage was a valid mortgage under the state law as between the parties and all general creditors. We have also shown that, being valid under the state law as to
Reversed and the bill dismissed.