The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1872-06-08

TO occur to their prejudice. The purpose and
design or the bankrupt law IL to bring the D. opeity
OF the bankrupt into the bankrupt Court for admin
istraton and that Court IL furnished with all need
full power TO llquidate and settle all liens thereon;
and where there adverse claims, which 10 il not
appropriate or proper To htigate by summary In
quirv and order, provision IL made by giving jurls-
d,ction TO the District Court, permanently with the
Circuit Court for that purpose II Ia true that
State Courts have jurisdiction entertain bills for
the foreclosure OF mortgages upon the real estate
OF a bankrupt, and may no doubt properly ex-
ercise that jurisdiction, IL no objection Is made
Special circumstances may sometimes exist in
which there liz no reason for objection by the
assignee, M, for example, when the mortgaged
premises are confessedy of less value than the
mortgage debt-lIn re. Iron Mountains Company,
Northern District OF New York, January, Is72l-and
where foreclosure Is pending and the proceedings
are nearly completed at the time proceedings In
bankruptcy are commenced, it may sometimes be
convenient and economical to suffer the validity Of
the mortgage and the amount due 10 be settled In
NIT sale by the decree OF the State Court or not
will be in the discretion OF the Court in Bankruptcy
pursue the estate OF the bankrupt in the
State Court, but should come to the trfhu-
nal which under federal laws is charged with
from this. If there be doubt whether the
moitgaged premises adequate security for the
payment OF the debt and interests when finally
adudged due upon valid mortgage) the Court
will recognize the prior lien OF the mortgage upon
the land and the equitable right OF the mortgage
OF the bankrupt, by receivership or otherwise,
and not permit them to be applied TO the payment
signee or his fees, and on the obvious ground that
he Is only entitled to the interest which the bank
permitted without just reference to the interest
OF all VINO are concerned. the mortgagcrs as well
as other. creditors. Nor do think 1t
toning the validity OF the mortgage exists the
Court In Bankruptcy would entertain the summary
petition OF mortgagee for the sale OF the mortgaged
premises and direct the assignee to make the sale,
either free OF ali liens subject TO the tgages,
as might be deemed ludcious Nor II the assignee
~
that under the jurisdiction declared in the second
section OF the Bankrupt law the mortgage may
proceed by bill in either the District or CHI cult
Court. 1t Is therefore error to insist that the
mortgagee II not permitted to proceed in the state
Court, IA remedess, or that he must await the
pleasure OF the assignee and suffer him to collect
the rents and interest OF the mortgaged premises,
| leaving the interest unpaid. ! can see, think,
that 1t Is either misrepresentation on this sub
Ject or disregard Of these views that led the mort
gagees in this case into the State Count alter the
| bankruptcy and after tile appointment OF an as
signee, and that the resistance TO any withdrawal
| OF the administration from the Bankruptcy Court,
the proper tribunal has resulted in bitter personal
| feeling, III great and unnecess ary delay and in
| large expenses and possible loss, which might have
! been easily avoided. 10 further appears that pend
ing the controversy the petitioner for the review
| has become the sole creditor OF the bankrupt
lother than two paid mortgages OF the premises In
rupt has come to the assignee, except the mort
| gagged premises. The bankrupt united in the Pc
h n,a the sy tns o. asssnss
sole creditor. The assignee, by his coun-
sci, In the argument Of this review de-
clared his entire assent TO such change.
There is, therefore, reason why the prayer OF the
petitioner to that extent should not be granted,
| the present assignee having allowed the use OF any
moneys collected his first and reasonable disbursc-
| ments and his commission Tor the moneys received
ana paid, or to he paid. But Ii would not be just
or reasonable to allow him, as was suggested on
| the argument, commissions based upon the spccr-
latve idea that, possibly II continued in olce and
permitted Tor the mere purpose OF earning commits
| sions to litgate the validity of the mortgages
against the viii OF all who are Interested in that
question, he might establish their invalidity. The
| Bankrupt law was not enacted Tor the purpose
necessary litigation, when no interest OF
the pai ties to be affected thereby requires
IT, and where. on the contrary. every
It, therefore, appeared that upon the conceded fact
that there are no general creditors but the petition
and therefore no interest is to be served by further
| contest respecting the mortgages 1.-THE bankrupt
himself uniting in the petiton), the District Court
| had refused TO substitute such other assignee
there might have been reason for asking this Court
TO review the decision. But it appears by the de-
cison OF the District Judge that the petitioner de-
cllned to take such substitution unless it proceeded
upon other grounds, and this also was conceded on
| the argument In this Court. This, however, does
| not appear by the order which was mad G, and
which Is under review; It ought, ! think, TO have
on the record on adjudication that the petitioner wal
not entitled upon conceded facts to have any par
| OF the relief sought. The mere fact that the petit
| toner, under the advice OF his counsel, though
| himself entitled to renewal OF assignee or
the other ground probably ought not to deprive
| him OF the opportunity to bring the matter to q
| close without Iulther litigation Let an order be
made that the assignee carry the estate OF the
| bankrupt TO such assignee as the petitioner and
the bankrupt may name, or ii they o not agree to
| refer il to Register Winsiow, to receive the nomi
nation OF the petitioner, and IL he approve of such
| nomination, then to the assignee approved but
| reserving to the present assignee all moneys col
| lected by him until his just allowance for his ex
peuses and for his commissions thereon shall be
settled in such manner as the District Court may
| direct.