In re Gimbel

• Decision Date: 22 November 1923
• Docket Number: 4152.
• Citation: 294 F. 883
• Parties: In re GIMBEL. v. SMITH. HOFFECKER
• Court: U.S. Court of Appeals — Fifth Circuit

294 F. 883

In re GIMBEL.

HOFFECKER v. SMITH.

No. 4152.

United States Court of Appeals, Fifth Circuit.

November 22, 1923

J. G McGrady, of El Paso, Tex. (Lea, McGrady, Thomason & Edwards of El Paso, Tex., on the brief), for petitioner.

Volney M. Brown, of El Paso, Tex. (J. M. Goggin, F. E. Hunter, and Volney M. Brown, all of El Paso, Tex., on the brief), for respondent.

Before WALKER and BRYAN, Circuit Judges, and GRUBB, District Judge.

WALKER Circuit Judge.

Upon the adjudication of bankruptcy in September, 1921, the trustee took possession of described lots of land in El Paso which were owned by the bankrupt, subject to a deed of trust executed by him in January, 1921, to secure his five promissory notes, aggregating $5,500, with interest thereon none of the principal or interest being due at the date of the bankruptcy adjudication. Each of the notes contained the following provisions:

'Together with 10 per cent. thereon and upon the coupon notes thereto attached as attorney fees should this note or said coupons be placed in the hands of an attorney for collection, or suit be brought thereon. If default be made in the payment of any part of said money, either principal or interest, when the same becomes due and payable, then all of said principal and interest shall, at the option of the legal holder or holders thereof, become at once due and payable without notice.'

The deed of trust gave the trustee named therein the power to sell, after prescribed notice by advertisement, the conveyed land, upon default in payment of the secured debt. After part of the land embraced in the deed of trust had been set aside to the bankrupt as exempt, the trustee applied to the referee for an order to sell the nonexempt part of the land, his petition alleging 'that said nonexempt property is of value far in excess of the amount of the indebtedness against the same, and that it would be for the best interests of the estate of the bankrupt for said property to be sold at either public or private sale, free of lien. ' A daughter of the bankrupt, who then held one of the secured notes, and the petitioner, who then held the other four notes, were made parties to that proceeding. The petitioner, who, upon one of the notes held by him becoming due in January, 1923, and upon demand on the bankrupt for payment being refused, declared all of said notes due and placed them in the hands of an attorney for collection, contended that he was not subject to be brought into the bankruptcy proceeding, that said nonexempt property was not subject to be sold free of liens by order of the bankruptcy court, that he was entitled to have that property sold in the manner prescribed in the deed of trust, and that, if it was sold under the order of the bankruptcy court, 10 per cent. attorney's fees should be...