Newberry Shoe Co v. Collier
Decision Date | 15 September 1910 |
Citation | 68 S.E. 974,111 Va. 288 |
Court | Virginia Supreme Court |
Parties | NEWBERRY SHOE CO. v. COLLIER et al. |
1. Bankruptcy (§ 400*) — Allowance or Homestead Exemption—Conclusiveness.
An allowance of lots in bankruptcy as part of the bankrupt's homestead did not affect a lis pendens lien previously acquired by a creditor in a suit in a state court.
[Ed. Note.—For other cases, see Bankruptcy, Dec. Dig. § 400.*]
2. Bankruptcy (§ 433*)—Discharge—Effect on Liens.
A discharge in bankruptcy does not necessarily affect a specific lien, but only releases the bankrupt from personal liability.
[Ed. Note.—For other cases, see Bankruptcy, Cent. Dig. §§ 808-823; Dec. Dig. § 433.*]
3. Bankruptcy (§ 199*)—Validity of Liens.
A lien on property of a bankrupt acquired within four months before he was adjudged a bankrupt was void if he was insolvent when the lien was obtained.
[Ed. Note.—For other cases, see Bankruptcy. Dec. Dig. § 199.*]
4. Bankruptcy (§ 433*)—Discharge—Effect on Liens.
A discharge in bankruptcy does not affect a lis pendens lien previously acquired by a creditor in a suit in a state court.
[Ed. Note.—For other cases, see Bankruptcy, Dec. Dig. § 433.*]
5. Bankruptcy (§ 2122-*)—Homestead—Power
of Bankrupt Court.
A bankruptcy court's jurisdiction of a bankrupt's homestead is limited to setting it aside, where he dedicates property as such, and the court is without power to adjudicate the rights of creditors therein; a creditor desiring to subject such property to the payment of a. debt paramount to the homestead being required to pursue his remedy in the state courts.
[Ed. Note.—For other cases, see Bankruptcy, Dec. Dig. § 212.*]
Appeal from Circuit Court, Wise County.
Bill by the Newberry Shoe Company against M. D. Collier and others. From a decree dismissing the bill, complainant appeals. Reversed.
Bond & Bruce, for plaintiff in error.
Burnett & Bremner, for defendants in error.
May 7, 1908, the bill in this cause was filed by the appellant in the circuit court of Wise county to have set aside a deed, dated January 14, 1908, from M. D. Collier to Martha Collier, the wife of the appellee J. A. Collier, conveying to her two lots or parcels of land, upon the ground that J. A. Collier had paid for the lots with his own means and had them conveyed to his wife for the purpose of hindering, delaying, and defrauding his creditors. On On the same day that the bill was filed the complainant had recorded in the clerk's office a lis pendens under section 2400 of the Code.
The defendants not appearing, and the suit being duly matured, the court on July 20, 1908, entered a decree in favor of the complainant for the amount of its debt, set aside the deed, and declared the debt to be a lien upon the property thereby conveyed as of May 7, 1908, the date of the recordation of the lis pendens, and referred the cause to a commissioner to ascertain the liens.
On the 27th of April, 1909, the appellees, J. A. Collier and wife, appeared and by leave of court filed their joint and several answer to the bill, admitting the debt asserted in the bill, but alleging that, after the institution of the suit, J. A. Collier had filed his petition in bankruptcy, and had filed therein a schedule of his debts, including that of the complainant, and that he was adjudged a bankrupt and discharged from all debts and claims provable under the law in bankrupt proceedings. The answer further alleged that Martha Collier had on June 20, 1908, conveyed the lots in question to her husband, J. A. Collier, and that the referee in bankruptcy had allowed them to J. A. Collier as a part of the homestead exemption claimed by him under the laws of the state. It is further alleged that the appellant and other creditors had objected to the lots being allowed to J. A. Collier as part of his homestead, but that the objection was overruled by the referee, and that the appellant had appealed from that action to the United States District Court for the Western District of Virginia, where the action of the referee had been affirmed. Portions of the record in bankruptcy showing these facts are filed with the answer in support of the contention there made, that the right of the appellee J. A. Collier to hold these lots as a part of his homestead exemption as against the lien thereon acquired by the appellant in this cause had been decided by the United States District Court between the same parties, and was therefore res adjudicata.
Upon the filing of this answer the circuit court of Wise county rendered the decree complained of, setting aside all of the decrees theretofore entered in the cause, and dismissing the complainant's bill, with costs.
We are of opinion that this was error. The rights of the complainant in this cause were not affected by the proceedings in bankruptcy, but remained as they were before any petition in bankruptcy had been filed by the defendant J. A. Collier. A discharge in bankruptcy does not necessarily affect a specific lien, but only releases the bankrupt from personal liability. A lien on property of the bankrupt acquired within four months of the time he was adjudged a...
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