135 Ga. 771 | Ga. | 1911
On December 1, 1909, a petition in involuntary bankruptcy was filed by three creditors of E. E. Cook in the district court of the United States in the western division of the northern district of Georgia. On December 2, at fifty-five minutes after nine o’clock a. m., on application of the creditors a temporary receiver was appointed by the referee in bankruptcy. On November 22 preceding, a mortgage on personal property was given by Cook to a bank, and was recorded on the same day. Another mortgage was given to certain attorneys for the sum of $500, bearing date November 23, and recorded December 2. On December 2 each of these mortgages was foreclosed, and the executions issuing upon such foreclosures were levied by the sheriff on the mortgaged property at 11.30 o’clock a. m. of that date, the receiver in bankruptcy not having then taken possession. On January 15, 1910, Cook was adjudicated a bankrupt, and a trustee in bankruptcy was elected
Section 60(b) of the bankruptcy act of 1898, making voidable preferences given within four months before the filing of a petition in bankruptcy, refers to existing debts, and not to a mortgage given bona fide for a present consideration, and not in contemplation of bankruptcy. City National Bank v. Bruce, 109 Fed. 69; Sebring v. Wellington, 63 N. Y. 498; Bankruptcy Act 1898, § 67d. A mortgage of the latter character, duly recorded, would not be a voidable lien under the bankruptcy act. In Merry v. Jones, 119 Ga. 643 (46 S. E. 861), it was held that proceedings in a State court to foreclose a mortgage would not be affected by a subsequent adjudication in' bankruptcy. See also Parks v. Baldwin, 123 Ga. 869 (51 S. E. 722); Nelson v. Spence, 129 Ga. 35 (58 S. E. 697). It was urged that in the present case it appeared that the petition in involuntary bankruptcy was filed before the proceeding to foreclose the mortgages was begun; and that, upon the subsequent appointment of the trustee, his title to the property of the bankrupt related back to the filing of the petition, and therefore antedated
The decision in Mueller v. Nugent, 184 U. S. 1 (22 Sup. Ct. 269, 46 L. ed. 405), was relied on by counsel for plaintiff in error. But that case did not involve the right of the State court to foreclose a lien, or of its officer to take charge of property in the hands of the defendant, under a writ issued thereon. What was said in the Nugent case has been several times construed and explained by the Supreme Court of the United States. Thus in Jaquith v. Rowley, 188 U. S. 620 (23 Sup. Ct. 369, 47 L. ed. 620), Mr. Justice Beckham said (p. 625) : “In other words, Nugent’s case simply holds that where the agent held money belonging to the bankrupt, to which he had no claim, but simply refused to give up the property, which he acknowledged belonged to the bankrupt, the bankruptcy court had power, by summary proceedings, to order him to deliver such property to the trustee in bankruptcy.” See also Hiscock’s case, supra, 206 U. S. 41.
If these mortgages were valid their holders had a right to proceed to enforce them in the State court. They were not compelled to go into a court of bankruptcy, either to enforce their.liens or to prove the debts due to them. The receiver appointed by a court of bankruptcy is the mere temporary custodian to preserve the property. Here he did not obtain possession, but the sheriff did so first
Judgment affirmed.