, 1873-10-16

hltnuuEH suo9 hlIoHoA - IiB''' "A't'+"'S"'oH' NV
tho oloso.
The Now York banks reported their condition
materially improved, with currency beginning
to como in from tho country, anl tlsat thoy had
not boen 50 strong Binco tho panio commenced.
Brown, Wadsworlh & Co., private banking
firm, which suspended curly III tho panic, IL tho
fist Of tue privnto firms to 1osu,no. Tho NOR
improving. saos Of lour, wheat, and corn on
tho Produce Exohango amounted to aS25,000.
-
JUDGE DLATcHF0RD AND THE WANDER
B1LT SECURITIES.
Tho o1citomont accustomed In Wall street by |
Judge Blntchford's decision, enjoining cortain
number Of brokers from Holllng about 912,0O0,-
600 Of Vanderbilt atock, pledged with thom by
e. 3. Grinnell l. Go. (who woro known as Yum
dorbits brokera) ,inlicalos that thore WAS gen.
oral conviction in New York that plodgos. or col
1atorala on call-loanB, can be sold by the holdor
In default OF payment Of tuo noto to Rocuro
| which they havo boen hypothccatcd. Thorc Is
| no doubt that thoro hus boon worry general inn
| prosslon throughout tho country that bnnhrupt-
oy proceedings could not effect this class of &C.
curltios In any way. Judge Blatohfora's decision
shows that this impression is to certain dogroo.
orronoouBe If the pledge be bona dde, aud the
property hns boon hypothocated bofora the
debtor l,as become inBo1vent ts character as &C.
ourity for tho debt cannot bo changed; but,
nevertheless, as Judge Dlatchfora has hold, it
may be called in among tho othor aasots Of tho
| hail 5nr11@{n IN I'm ~ In
Court, at the latter's discretion. Judge Dlatch-
ford's decision is not new construction Of tho
law. Tic snme ground haa been taken in many
previous bankruptcy casoB. Tho ronson 1t has
attracted particular attention is because 30 un-
usually large MI amount Of these pledges Inns
beon tied up in this case, and because tho lock-
up Of those seauritios has exortod an important
influence on the whole Of tho stock mar
ket. Tho modification made by the Court in
tho case Of Bldko Bros. j. Co., who
hold largo portion Of tho Grinne1l oo'laterals.
WAS entirely discretionary with the Court, aud it
will DO noticed that, oven thon, tho supervisory
power Of the Court, or Of the Assignee, il one
} shall he appointed, Is in no wiao reloased. Dnke
, Bros. ura required to mako n aworn statement in
respect to tho disposition and application Of the
, proceeds Of oil tho aalos thoy mako.
] The rightR OF lion-creditors are defined in
I Boo. "a Of the Bankruptcy act. A creditor hold
0 ing mortgage on real estate, or plodgo on
personal property. may como In with tho other
croditors for tho balanco Of bis debt after reduc-
ing the value Of the property, aud tho Assignee
may release tho dobtor's right Of redemption.
t On tho other hand, tho law provides that
the Assignee s may sell tho property. subject to
the claim of tho creditor thereon" It has beor
:. held in various decisions, under this clause
that crcditor holding such mortgage or pledge
= must prove his dobt us ono holding accurlty
o mud obtain permission Of tho Court to have
+ tho property sold, and that q ealo rnado withou
such permission may be SGT aside by tho Court
Having such power veatod in it by law, it fol
,. lows as q matter Of course, that a Baukrup
II Court has a1so tho powor to restrain tho salc o
y property under mortgage Or plodge. In fact
- tho law provides expressly, In Sec 83, TIM
I'd tho Court nay also, by it's injunotions restra
tho debtor aud any othor person, IN tho mean
time, from making any tranBfer or dispoatio
: of any part Of tho debtors property nc
." excepted by this act from tho operation
= thereof and from any interference there
~ WITH" As nc have seen. pledges and mortgage
r. arc not excepted from the administration of til
10 10 Court. In fact, Jndgo DlntohfordB decision, {
~ wen aa othors that have gono bofore, declart
~ that it Is the design Of tho Bankrupt law
~ bring all tho property into tho Bankrupt Cou
te for administration. Tho manifest purpose
IL this design ia to protect creditors from fraud
pn lent preference against them, which could
's- more easily worked out through mortgages NJ
10 pledges than in any other way.
'ot It docs not necessarily follow that every pr
'' ceeding in bankruptcy must tieup the collatera
pledged by tho debtor before he became ban
:" rupt, as it has dono in tue caho Of Grinncn
W. In that case there were s12,o0o,o0o Of pledge
.'' and dobts Of 51,500,000 more entirely unt
curod. It WAS charged, and admitted
'N' somo Of tho creditors holding plodgss th
~ they had demanded aud received additional o.
APn latorala utter tho debtors had become iusolve
" Such pledges, received after insolvency, WOE
be sot aede and sold by the Assignee for t
benefit Of tho creditors generally, ana it wor
nck bo impossible for tho Court to separate the 30
ma. .fde Pledges from tho unlawful onos unless
nai- whole list woro brought into Court. To do Il
ricd it became necessary to enjoiu tho sale Of a
ter. portion OF the collaterals. Tho Modification
II a favor Of Blake Bros. seems to moan that
nv. Court will release tho restraint on the sale
,ne tho oo"a )Hao eeeaf't'es as rapidly "6 1hoS
will separated from thoao "hleh WILL hos holo
,eon law. While, thon, this power Of Danhr'
mad Court to enioin tho salo Of collater
and bring them Into Court, along "
vear the other assets, appears to DO =
oots established, lilo security Of tho genuine
,hio lawful pledgea Is In no wise affected, and a