Hambrick v. Bragg
Hambrick v. Bragg
Opinion of the Court
delivered the opinion of the Court.
The original bill of Hambrick, et als., v. J. M. Bragg, et als., was filed in the Chancery Court at McMinnville, December 16, 1868. It sought to set aside as fraudulent, and intended to hinder and delay creditors, a certain decree obtained in said Court by the children of Bragg, in which, under the guise of a resulting trust, a tract of land in the pleadings mentioned had been decreed to, and title vested in said children of Joseph M. Bragg. An attachment was issued, but not levied on tbe land until March 15, 1869. In the meantime, on December 31, 1868, the debtor of complainants, Joseph M. Bragg, had filed his petition in the District Court of the United States, praying to be discharged of his debts under the bankrnjit law of 1867.
After this, in, perhaps, September, 1870, the com
His Honor, the Chancellor, held this - conclusive as. against complainants in the present bills, and dismissed them. The question is as to the correctness of the decree on the facts above stated.
We may assume, for the sake of the argument, that the levy of the attachment on March 15, 1869, related back to the filing of the original bill in December,
By §20 of the Bankrupt Act of 1867, where a creditor has a lien on property for securing the payment of his debt, he shall be admitted to prove his debt as a creditor only for the balance of his debt, after deducting the value of such property thus charged with the debt. He thus gets the benefit of his security, and may prove and receive his dividend on the balance not covered by such security.
By §21, “no creditor proving his debt or claim shall be allowed to maintain any suit at law or equity therefor against the bankrupt, but shall be deemed to have waived all right of action and suit against the bankrupt, and all proceedings commenced, or unsatisfied judgments already obtained thereon, shall be deemed to be discharged and surrendered thereby.”
The best considered decisions we have seen, hold, that by proving the debt, without claiming the benefit of any security or lien, or bringing the same before the Bankrupt Court to be allowed or adjusted, the party waives his rights by virtue of such lien, and the discharge after this will be a bar to the enforcement of his lien or security.
Much more must this be the case where the debt is not only proven, but the party comes before the Bankrupt Court, and seeks precisely the same relief as against the property, which he claimed to enforce against
It is proper -to say here, however, that by virtue of §14 of the bankrupt law, all attachments or mesne process, such as the present, are dissolved when the attachment was made within four months next preceding the commencement of the proceedings, by virtue of the conveyance of the bankrupt’s property to the assignee. See cases Bump on Bankruptcy, 7th Edition, 452.
The complainants then had no lien which could have stood against the bankrupt proceedings, or the rights of the assignee. If any priority existed in such case, it could only have been enforced, perhaps, in the Bankrupt Court.
This is conclusive of the question presented in this case. As to the other case of Burks, et als., we need but say, the same reason applies, and in addition, the parties would be effectually defeated by the fact that their bill was ■ filed some time after the commencement of the proceedings in bankruptcy. Such is the' principle of the case of Alsabrook v. Charles Cates, et als., 5 Heisk., 271, the correctness of which we do not doubt.- Let the-case be affirmed, with costs.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.