Court Opinion

ID: 8640186
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:51:56.489435+00
Date Added: 2024-06-11T16:56:04.475835
License: Public Domain

ERSI-CIXE, District Judge.
A prior lien-gives a prior claim, and the district court, may ascertain and liquidate a lien. Bankrupt Law, § 1. By section 11 the debtor must, in his schedule, make a statement of any existing lien, pledge, mortgage, judgment, collateral, or other security, &c., and he must show what incumbrances are on the estate. Bisection 14 the assignee takes “all the estate” of the bánkrupt, with the like right, title, power, and authority to sell, &c., that the bankrupt had, and the assignee may discharge any mortgage or conditional contract, *305or pledge, or deposit, or lien upon any property, at any time. Section 20. The creditor who has a lien on property for the payment of his debt, is admitted as a creditor only for the balance of the debt after deducting the value of such property. Section 27 declares that all creditors, whose debts are duly proved and allowed, shall share in the distribution. Thus we have the system: the court has jurisdiction to ascertain and liquidate the lien, and the debtor must state (disclose) the lien to the court. The assignee takes the estate, coupled with the right and power of the debtor to sell, &c. The debtor could only sell subject to the lien. The quantity of his interest was the right to the property as subject to the lien. The creditor is allowed to prove the balance of his debt to the extent of the balance; it must be “duly” proved, and if allowed, he would share in the distribution.
NOTE BY THE JUDGE. It is proper that I advert to my approval, on the 23d November last, of the opinion of Mr. Register Garnett Andrews in the matter of Felltner, Nowell & Co., bankrupts. The approval was too general in its terms, and apparently affirms all the views expressed by the register. The affirmance ought to have been confined to what I consider the only pertinent question certified for my derision, namely, the protection of the property temporarily under the peculiar circumstances of the case, and should not have extended, even by implication, to the subject of liens, or whether judgments share the estate of the bankrupt, pro rata or otherwise, under the statute. The clerk will transmit a copy of this correction to Mr. Garnett Andrews, register in the Sixth district.
The clerk will certify this opinion to Mr. Register Black.