84 Miss. 467 | Miss. | 1904
delivered the opinion of the court.
The question in this case is whether the secured creditor of this insolvent bank may prove and receive dividends upon the face of his entire claim — his whole debt — without crediting his collaterals or collections made therefrom and without surrendering the said collaterals. It is a question upon which there is a great conflict in the authorities; hut, after the maturest consideration, we prefer the view that such secured creditor is not so entitled, but must credit the value of the collaterals on the debt, and prove only for the balance. In view of the very able and very exhaustive consideration of this subject in the case of Merrill v. Nat. Bank of Jacksonville, 173 U. S., 131 (19 Sup. Ct., 360; 43 L. ed., 640), we deem it unnecessary to attempt any extended observations of our own. It is impossible for us to escape the conclusion that the better view is set forth
This assignment expressly directs the distribution to be ratable; these collaterals pass sub modo by the assignment to the assignee; and, in any proper or just sense, it is impossible to say what the real debt due the secured creditor was until he had sold his collaterals and applied the money in reduction of his debt, and that balance of debt thus remaining constitutes the debt upon which alone he can prove. We add, to approve them, the observations of Chief Justice Parker and of Chief Justice Shaw. The former said in Amory v. Francis, 16 Mass., 308: “If it were not so, the equality intended to be produced by the bankrupt laws would be grossly violated, and the creditor holding the pledge would in fact have a greater security than that pledge was intended to give him. Eor originally it would have been security only for a portion of the debt equal to its .value; whereas, by proving the whole debt and holding
It follows from these views that the decree is affirmed.