The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1869-03-11
cases of mutual account the account shall be stated

OF mutual account tue uCcOuut eudii oe ceeN,
and one debt set of against the other. and the 6al-
ance only allowed or ,ald. The second clause pro
vdes that whel creditor has mor'gaG" or pledge
of real or personal property of the bankrupt or Il
lien thereon ior securiu ray men OF uso, NE 81
10 him he shall Le adm; ed as creditor only lor
the balance of the debt after delucdng inc Siue OF
such property to be asc"rtained by agreement Dc
tween him and The assignee. or by a sale.
The third clause authorizes tue crcoitor III su ~ Il
case to release or convey to the assgn-e MS eiaim
up such property and then to prove tor the "noie
debt -. ,,,o
The fourth clause provides that if the value OF the
property exceed the debt, the assignee may re.e ss
to the creditor the GankruprS right o. feaety'.S" .
therein on receiving such excess. or hc may so'i ~.
property subject to the claim OF the crei'.or. ~
comment is ;sary. 1t Is c'cir 'nat tnc y -; az
th. h1nlrupt in property, bound by lcD II III tue
eycess of the value of the property aiter
o. the lien and that this is al tue act CONVEYS " o
assirpee That this 47h section. IN provuhs Io1 o1
the payment Of tue tees o:t Oh .uG a.. 81 tLo nv
bankrupt" in it. terms iorbids the iota VI the pay
mont of the fees out of that portion OF Ine properly
bound BY liens wlich is not i'll excess OF, hen.
In,smnrh as the lien creditor eeess aDo enjoys tue
aid OF this court in enforcing AMI reazing h,s hen
hn "a bourd TO nav the costs incurred in obtaining
tis aiJ But tn regard to the CO Sts OF general ad-
ministration in which he has no concern. and 10
which he can have no interest until his lien IS either
s,tisfed or realized it would be lnequitaole TO re-
uuire him to bea' tho burden OF them.
Upon examining the 25th section of the act, on
which the regisrIr also relics it will be seen that it
max prOvlSlOn Tor Inc paN QeDC Ol ctS'au PrtlcE-
red debts when dividend is declared.
It will be observed that dividend is paid only 10
general creditors and that no creditor hodng lien
shall share in it, except for the overplus whcn may
remaiu after credlne the debt with tue ful Vaue OF
the property bound by the lien, or BY the surrender
and release Of his lien altogether. Section 2))
twill also be observed that the 18th section gives
preference not only to the fees, costs aud expenses
OF suit but also to four other classes OF creulIoe
such as-debs to the United states debts to the
State wages of operatives and debts due to tue per-
sons Who by the laws OF the United States are enh-
tied 10 priority OF preference. lbe debts due 10 the
Untef states are to be paid next aer tae aho LUZ
ci.ions that ccbt due to the United states Ia not
in the nature Of lien nor has debt due the gov
ernment preference over the claim OF len credi'
for. fU :. vs.. Hove. Cr. IS lst Peters q. s..
Condensed Rep. g; Beastou vs. Farmers Bank OF
Delaware 10 Peters 1U2; Phillips VS. Scaterpo d,
Giloin, 1; u :. vs. sheriff of Char.eston Bee's Ad-
miralty, 1861 that. as this section puts in the
same category Of preferred debts, the COSTS &C.. and
debts due to the United states, 1t must b. und.r-
stood to can such preference rs 1s not inconsis-
tent with the vested right OF len. Indeed. 1t can
ha, dis be mant lined that creditor boiling lien
which is recognized by this court should be post
poned to all of these five classes OF creditors, or VIII
be compelled to meet these debts of the bankrupt
out of property pledged to him.
The registrar seems to apprehend that II the iien
creditor can insist upon his lien to the exclusion OF
the general he can also insist upon 1t as against
the personally set off to the bankrupt But there Is
no rround for such apprehension. ne BanRrupt
act takes hold Of and administers all the property
and rights of property of the bankrupt. When 1t
has assumed jurisdiction 1t exercises control over
all persons and property connected with the bank
rupt It invites and compels the discovery and sur
render not only of visible property bound by liens,
but bs all rights interests and equities. In return
for this frank and full discovery it secures the bank
rupt certain parts of his estate which are set oil to
him free of ali claim Of these he, in fact becomes
the purchaser, the consideration for the purchase
being the surrender of all his estate, and the sane
ton for ha title being in the supreme law OF the
land.
Again, the act of Congress directs the Court OF
Bankruptcy to set apart certain portion of the pro-
perty ia the schedule of tue bankrupt for his use,
free from the claims of creditors. Tho lien OF
creditor upon the property 80 ST. apart could not
therefore be enforced in this court Nor could he
use the State courts tor such purpose before the
adjudication OF blnkr Ipscy. Tnis court asSu mes
over all the property under the cont rol
of the bankrupt and in this court 1t must be admin
istered.
The creditor haying come into this jur isdiction,
has submitted hi,iself to it, and he Is bound by Its
orders.
An effort to enforce the law through the State
Court would put hun in contempt, and would be
punishable accordingly.
am of the opinion that the registrar has erred In
his ruling, and that thu assignee, after paying tue
costs of the proceedings necessary tor proving the
en should pay the remainder of the proceeds oil the
sale OF the real estate to the creditors holding the
same. GEORGE y BRYAN,
Q. S. Judge, District OF south Carolina
February q, 1869.