Year: 1870

L
lor any debt or debts in good faith and for
present. consideration, and otherwise vivid
ard duiy recorded pursuant to any statute
OF the United States, or of any State, shall
DC III mihValldated Or affected hereby"


Inc argument is that all mortgages not
| expressly saved from the operation of the
act by this clause must be held invalid;
anu, therefore, that all deeds of trust and
oIHer conveyances intended as security for
debts, and not within the description of
invalid '''''' ~


But we cannot adopt this reasoning. It
would be going too far, we think, to hold
all mortgages not included by the terms of
the description to be invalidated by the
act. The clause expressly saves certain
mortgages, but it says nothing as to others.
Much less does it say anything as to deeds
Oh trust or conyeyances of analogous char
acter. 1t leaves all deeds and instruments Of
writing not expressly saved to the general
principles of jurisprudence. TO, hold other
wise would, We think, he TO give to the act
an eg post fdcto operation contrary to the
intent of Congress.


And it would he quite gratuitous so to
mold for the rights of creditors as against
all instruments not described In this clause
are 1ully protected by that which stands
next lnthe section andvests in the assignee
l , pSiiCuV oll property conveyed
by the bankrupt in fraud of his creditors.


The next question in this case, therefore,
Is, whether the deed of trust by which the
several liabilities of Endcrs, Paine, and
! Williams, for Wynne were secured was
made In fraud of the creditors of Wynne,


1t has been argued that the deed of trust
took effect as against creditors only on the
I'd day Of March, 1867, and that the re-
cordng of the deed on that day was itself an
act of bankruptcy. TO maintain this pro-
position it is necessary to show that the re-
But clearly 1t was no act of his. The
deed as against him was operative from
its date. 1t was then that all his interest in
the property described in it came vested by
way of security in the trustee. 1t was then
that he delivered the deed and parted with
all control Of it. If the bcneticiarcs were
satisfied with the security afforded by the
deed llnrecorded there was neither neccS-
sity nor obligation to record it.. To record
it was only necessary to make it valid Sc
curity against other creditors; and it was
not for Wynnc, but for the creditors Sc
cured by the deed, to determine whether 1t
should be recorded or not. The delivery of
| it for record was in no sense his act, but
theirs. In no sense, therefore, can it be re-
garded as an act Of bankruptcy.
| But it has been argued that rs against
creditors it must he regarded as deed
executed ut the date Of the record, and
| therefore rs II deed creating preference
on that day, which was within four months
of the filing Of the petition. There is in2c-
nuty and apparent force in this argument.
But we think there are decisive answers to
it. In the first place, the preference which
the law condemns is Il preference made
within the limited time by the bankrupt,
| ,runpI nv f.ra1ifOrS
and we have Just shown that the preference
gained by the record WAS not Il preference
made by the bankrupt. And. in the second
place, the law which makes deeds OF trust
void "until and except from" the time OF
record clearly makes them valid ut and
from that time. And 1t is rs much the
policy Of the bankrupt act to uphold liens
and trusts when valid us it is to set them
aside when invalid.


II is hardly necessary TO add that tins
must be especially true of trust deed ere
ated and recorded before the approval OF
the bankrupt act.


| Was there any actual fraud in giving OF
taking the security created by tho deed OF
trust! There has bcenno attempt to mlll-
tain this.


1t has been said that Ender>, Paine, and
Williams, on the .Sth of December, 1866,
knew that Wynnc was insolvcnt, but it is
not denied that they had Il right to obtain If
they could preference III payment under The
laws of Virginia: They could obtain it by
direct transfer of property by deed OF trust,
by Judgment and execution. Until after the
passage Of the bankrupt act nothing but
fraud In obtaining the preference could
inyalidatc il in whatever mode obtained.


1t is not necessary to insist on this in the
case before us, for we do not think that the
evidence establishes us matter OF fact that
at the date of the decd or at the date of the
record Endcrs, Paine, and Williams, were
aware of the actual insolvency of Wynnc.
They knew, indeed, that he was embar-
raised in carrying OH his printing and pub
fishing business, but they seem to have
fully Believed that his property was more
than sufficient to pay all his debts:


On the whole, we are of the opinion that
the deed of trust must be supported as
valid deed, and that the creditors named
in IL are entitled TO be paid out Of the pro-
cecds of the property embraced i'll it.


The remaining question to be considered
is. whether at the time of the filing OF the
petition in bankruptcy Hayall e. Co. had
any lien for rent upon the property OF the
bankrupt.


This is the same property which was con-
veyed by the deed of trust, and the solution
of the question Just stated may be affected
in some measure by the conclusion to which
we have come i'll respect to the validity of
the lien created by that deed. -.... e.


And in considering the question now to
he disposed OF we may lay out of view the
proceeding by distress warrant and also
the proceeding by attachment. AS we un-
dcrstand the bankrupt act, all the rights
and all the duties of the bankrupt in re-
spcct to whatever property, not expressly
excluded from the operation of the act, he
may hold under whatever title, whether
legal or equitable, and however incum-
| bered, pass to and devolve upon the as
signee at the date of the filing of the petit
tiOn in bankruptcy. And all rights thus ac-
qlired are to be enforced by process.
and all duties thus imposed are to be per-
formed under the superintendence of the
national courts. No lien can be acquired
| or enforced by any proceeding in Il State
court commenced after petition is filed,
though in cases where jurisdiction has
been previously acquired by State courts Of
suit brought i'll good faith to enforce 4
valid lien upon property such jurisdiction
will not be diycsted (D.


| Whether, therefore, the distress warrant
| or the attachment hc regarded as 4 proceed
ing for obtaining or enforcing lien each
was equally unWarranted (S). II lien for
rent existed, it was Il lien TO be discharged
by the assignee, and enforced in the United
States court Of bankruptcy. If it did not
exist. it could not he brought into existence
by any proceeding whatever.


The real question is, Were the goods on
the premises demised to the bankrupt SUBJ
ject to lien for rent under the State law
when the petition was filed, independently
of any proceeding by distress or attach
ment2


Liens are of various descriptions, and