Staunton vindicator. [volume] (Staunton, Va.) 1860-1896, 1873-11-07
Bankrupt Decisions.

Important EbRMASaaEbt DSGESlDMSs
In the United States Circuit court at Rich
mond, Friday, in the cases of Geo. w. Dill
lard and other bankrupts, Judge II. L. Bond
rendered most important decision. The
creditors having neglected Judgment, OBJ
tanned DEGREES in the State Court direct
ing the sale of billiards. property. After
wards billiard filled petition in bank
ruptcy, and claimed the homestead exemp-
ton of $4,000, which exemption was allow
ed in the United States District Court by
Judge Underwood. The creditors then
carried the case before Judge Bond by pc
tition, and he decided the following points,
which entirely reverse the ruling of Judge
Underwood:
First, where suits are pending in State
courts before the commencement of bank
ruptcy proceedings, if there be no sugges-
ton of fraud, and no interests of the gen.
eral creditor will be prejudged the bankrupt
court ought not to interfere with the ju-
risdiction of the State court second when
the bankrupt has made a deed of trust to
secure creditors he is not entitled to any
exemption out of the property conveyed
until the deed is satisfied OF adjudged fraud
ulent as to creditors by the State court ;
third, where the proceedings in bankrupt
cy were commenced before the passage of
the amendatory act of March 80, 1878, the
bankrupt is entitled to such exemption on
ly as allowed by the laws existing at the
time the proceedings commenced (; fourth
the amendatory act, so far as it is declara.
tory Of the intentions of the act of 1867, is
void fifth, the rights of the bankrupt and
l. s4or, two 4f h1
laws in force when the bankruptcy proceed
lation can affect them.
The Richmond Dispatch in reviewing
Judge Bonds decision says:
In the Circuit Court of the United States
in this city yesterday Judge Bond render
ed a decision which is likely to excite a
great deal of interest in this State, at least,
and perhaps in others. He cut up Mr..
Hughes amendatory bankrupt act by the
roots and laid down the law in an opinion
| which we trust will teach Underwood a
much-needed lesson. We say Judge Bond
| cut up Mr.. Hughes bankrupt law by the
| roots because the whole and sole object OF
| that law was to deprive creditors holding
| liens under judgments OF DEGREES OF the
State courts of their rights under those
| liens, and to enable bankrupts to hold on
| to their property in spite of those lens.-
! We have not Judge Bonds opinion before
| us-We hope soon to get it-but we can
| give, we think, an accurate statement OF
| the points decided.
| Judge Bond says that the rights of par
| ties are fixed and vested at the date of the
| adjudication Of bankruptcy-tha is, when
| they are adjudged to be bankrupts. In
cases of voluntary bankruptcy this adjudi-
cation takes place very early-in chambers
| so to speak. In cases ofinvoluntary bank
ruptcy, that is, where the parties deny be.
ing bankrupt, and contest the cases, the
! adjudication is made at a later stage Of the
suit. These fixed and vested rights are
not changeable.
| Judge Bond went on to say that so far as
| the amelidatory bankrupt law was declara
| tory it was absolutely null and void. II
was beyond the power of Congress to con
strue the laws OF to supervise and control
| the courts of the country. The constitu
tional part of the law is like any other law
prospective only, and not retrospective
To make it retrospective would, he said
| be violative Of right and justice, and sub
versive OF the principles of the social COM
pact. Consequently when persons went
into bankruptcy # their property was sub
ject to ae1,s by virtue of Judgments or DEGREES
Of court ecisting previously, they eoere entitled
to no homestead. Judge Bond thinks the
act will extend to all cases arising after its
passage-that is, will exempt the home
stead in spite Of all liens which have &C.
crued since the amendatory bankrupt ACT
cannot destroy the liens existing prior to
| the passage of the act. In other words
the new law cannot divest the creditors Of
vested rights.
This decision will relieve the law as ad
miniStered in VIRGINIA of it's most odiOus
features.
Some other interesting points were
decided by Judge Bond. The question
| had been raised whether the bankrupt
court could arrest or control proceedings
in the State courts even after Judgment OF
decree entered. Judge Bond said there
was no doubt in his mind upon this point
The bankrupt court had the right to as
! sumo jurisdiction, arrest jurisdiction, at
rest proceedings in the State courts
| control all the assets, and do whatever was
necessary to be done in order to admins
ter the bankrupt law according to the re-
quirements. But it was matter within
the discretion of the bankrupt court il
each case whether it was it's duty to inter
pose.
Where the Judge is satisfied that no sur.
plus will be left after the liens have been
satisfied, he should abstain from interior
ence. 1t would benefit neither the bank
rupt nor the creditors in bankruptcy thus
to double the costs and the jurisdiction
And because the district court in one case
at least these are OUT words] had improp-
erly interfered where there was OF would
be no surplus, Judge Bond reversed the de-
cision Of the district court in bankruptcy
and left the State jurisdiction free.