The Fairfield herald. [volume] (Winnsboro, S.C.) 1849-1876, 1867-04-10
The Bankrupt Law and Mortgages.

Tho comm crcial editor OF the New
Orleans Times refers to u point OF
paramount Importance to holders Of
mortgages Oh real estate. The qucs-
ton is this Whcthor, nudcr the
bankrupt Act, in cases Of parties
availirg themselves u he Aot, sur
rendering property y'u,l' '"1l ." nn-
dor mort"o 70, the .'r- q thc u'!'>a
States court can oriur ~ NCr"2"Ns
standing against the "alGJP or %r.y
one pctitioning for the benefit ,'"'a'&.
can order the crasure Of oIt.,agvs on
the records of the mortgage oi!icc.
The editor says:
cit will be remembered that under
the Act of 1912, or tho last national
bankrupt Act, the presiding judge
could direct the crasurc of all mort.
cages that the morgagccs mere
ly could have privilege on the
assets or proceeds of the pro-
pcrty released. 1t will be rcmcmhnr-
cd that the proceeds Of much r"a' cs-
tate, sold under the order OF Eank-
ruptcy, under that law, cid not COM
mand one-fourth or half tho sum for
whIch It WAS valued or cost
The editor then quotes tho case Of a
Mr.. Thomas Banks, q wealthy citizen,
who went into court-being forced
into hanlSruptcy--with q property of
rcal estate valued at $l,S00,000,
which property only realized $i50,-
00O. Tie same property is valued,
to-day, at $7,000,00o or SS,o0o,U00.
The Now York Times comments on
the article of its New Orleans cotcm-
porary, from which We extract:
eff the owner Of incumbcrcd pro-
rcrty becomes bankrupt, and the
whole Of his assets pass into the hands
Of It receiver for the hcnctit of the
creditors, should The existence Of Il
mortgage upon the real part of the
estate relieve it from the liability to
forced sale The creditors arc cnti-
tied to the entire body Of assets, and,
to secure the benefit of all tho power
to anticipate the conditions Of Il mort
gage, and even to direct its crasure,
must rest somewhere. Of this authori-
ty, the judge is The proper custodian.
Con the other hand, the exercise
of the authority may. in sonsons ut
tux,l. ,.,n"Y.t'sslon or disaster, opcr.
ate prcludicially to tho rights of the
. mortgagco. True, his privilege as a
! creditor of the mortgagor mi.:ht re.
main 4 ii+St charge upon the proceeds
of his estate, into which the available
price of the zeal property would enter.
But forced sales of lands or houses, in
TIC midst Of panic, are not likely to
realize more than II small proportion
! OF ;hcn real value. Al such Il time.
hundreds of dollars buy What is in
trinS'cally worth-and what may be
actually morgaged or-thousanis. s.
The case cited in the statement VIC
have copied, where less than half Il
million resulted from the sale of pro-
pcrty valued at millions, is fair il
, lustration Of the sacrifices that would
follow IN unyiclling exercise of the
right Of judge in bankruptcy to or
der sale. OF course, as compared
with ordinary creditors, the mortga
gee retains lis advantage. But in
the instance supposed sale in pursu-.
unce OF the mortgagor's bankruptcy,
might easily be equivalent to the for.
fciture of a large part of the amount
covered by the mortgage"
AS this matter will doubtless be Of
interest, at least to some Of our read
crs, we publish tho remarks above for
thcir information.