Source: http://supreme.nolo.com/us/245/513/case.html
Timestamp: 2019-07-21 23:05:16
Document Index: 495773586

Matched Legal Cases: ['§ 2727', '§ 3260', '§ 47', '§ 60', '§ 60', '§ 60']

MARTIN V. COMMERCIAL NATIONAL BANK, 245 U. S. 513 - Volume 245 - 1918 - Full Text - US Supreme Court Center - USSC Cases - Nolo
US Supreme Court Center > Volume 245 > MARTIN V. COMMERCIAL NATIONAL BANK, 245 U. S. 513 (1918) > Full Text
Construing this section in Hawes v. Glover, 126 Ga. 305, 317, the supreme court held:
"A mortgage is perfectly valid as between the parties thereto, though never recorded. Hardaway v. Semmes, 24 Ga. 305; Gardiner v. Moore, 51 Ga. 268; Myers v. Picquet, 61 Ga. 260; Civil Code, § 2727 (Park's Ann.Code, § 3260). If it is not recorded, or, as in this case, is illegally recorded, the only effect is to postpone it to purchases made, or liens procured by contract, without notice of its existence or to liens obtained by operation of law."
Section 60b, Bankruptcy Act, has been specially considered by us in two recent cases -- Bailey v. Baker Ice Machine Co., 239 U. S. 268, and Carey v. Donohue, 240 U. S. 430. In the first, the company installed an ice machine for Grant Brothers at Horton, Kansas, during February, under a conditional sale contract of earlier date and recorded May 15th following, when the purchasers were known to be insolvent; July 11th they became bankrupt. Such a contract is valid under the laws of Kansas as between the parties, whether recorded or not, but void as against a creditor of the vendee who fastens a lien upon the property by execution, attachment or like process prior to recording. The vendors demanded the machine. The trustee maintained § 47a, Bankruptcy Act, gave him the status of a lienholder prior to recordation, and that the contract, having been put to record within four months, operated as a preference voidable under § 60b. We held the trustee occupied the status of a creditor with a lien fixed as of the date when the bankruptcy proceedings commenced, and that he could not assail the contract under the state law; further, that § 60b refers to an act whereby the bankrupt surrenders
In Carey v. Donohue, the trustee sought to set aside a real estate transfer executed more than four months before bankruptcy, but recorded within that time. Under the Ohio statute, conveyances of land, until filed for record, are deemed fraudulent as to subsequent bona fide purchasers without knowledge, but recording is not essential to their validity as against any creditor, whether general creditor, lien creditor, or judgment creditor with execution returned unsatisfied -- that is, as against any class of persons represented by a trustee in bankruptcy or with whose rights, remedies, and powers he is deemed to be vested. We denied the trustee's contention and, among other things, declared: "Required" has regard to persons in whose favor the requirement is imposed.
The word "required" in § 60b refers directly to statutes in many states relating to recording which, through various forms of expression, seek to protect creditors by providing that their rights shall be superior to transfers while off the record. Recognizing the beneficial results of these enactments and intending that rights based thereon might be utilized for the advantage of bankrupt estates, Congress inserted (amendment of 1910) the clause "or of the recording or registering of the transfer if by law recording or registering thereof is required." In Carey v. Donohue, we pointed out that purchasers are not of those in whose favor registration is "required," but that the reference is to persons concerned in the distribution of the estate -- i.e., "creditors, including those whose position the trustee was entitled to take." And we think it properly follows that, before a trustee may avoid a transfer because of the provision in question, he must in fact represent or be entitled to take the place of some creditor whose claim actually stood in a superior position to the challenged transfer while unrecorded and within the specified period.