Stocker v. Church
| Decision Date | 12 June 1925 |
| Docket Number | No. 24546.,24546. |
| Citation | 204 N.W. 398,113 Neb. 639 |
| Parties | STOCKER v. CHURCH. |
| Court | Nebraska Supreme Court |
A mortgage executed and delivered for a then present consideration, more than four months before the mortgagor therein files his petition in bankruptcy, and recorded within such four months, is not vulnerable to attack as being void, by the trustee in bankruptcy representing creditors not equipped with deed, mortgage, or other instrument duly recorded prior to the recording of such mortgage, under section 5612, Comp. St. 1922. Neither can such trustee avoid it under section 60a of the federal Bankruptcy Act (U. S. Comp. St. § 9644), as a preference, it not being “required” to be recorded under our statute that it may be valid.
Mortgages executed and delivered for a valuable consideration more than four months before the mortgagor therein files his petition in bankruptcy, and recorded within such four months, take precedence over a judgment lien, with execution returned unsatisfied, created by the federal Bankruptcy Act in the trustee in bankruptcy, which judgment lien takes effect on the date of the filing of such petition.
Evidence examined, and held insufficient to support the judgment, but to preponderate in favor of appellant.
Appeal from District Court, Otoe County; Begley, Judge.
Suit by Albert E. Stocker, trustee in bankruptcy of Gilbert E. Hanks, bankrupt, against Iola H. Church and others, with which were consolidated on appeal suit by the Nebraska City National Bank against Gilbert E. Hanks, in which Iola H. Church and husband, as cross-petitioners, sought to foreclose a mortgage, and suit by the United States Trust Company against Gilbert E. Hanks, in which Mrs. Iola H. Church and husband, as cross-petitioners, sought to foreclose a mortgage, and to foreclose a deed having the effect of a mortgage. From a decree for plaintiff, canceling and setting aside the mortgages and denying foreclosure thereof, Mrs. Iola H. Church appeals. Judgment reversed and set aside, and suit remanded, with instructions.Burkett, Wilson, Brown & Wilson, of Lincoln, for appellant.
Pitzer & Tyler, of Nebraska City, for appellee.
Albert E. Stocker, legally appointed and acting trustee in bankruptcy of the estate of Gilbert E. Hanks, brought this suit in the district court for Otoe county against Iola H. Church, sister of Hanks, hereinafter called Mrs. Church, Gilbert E. Hanks, the bankrupt, and his wife, Grace W. Hanks, to cancel and set aside a mortgage executed and delivered to Mrs. Church by the Hanks in the amount of $35,480, covering 560 acres of land in Otoe county. The mortgage is dated June 21, 1921, and was recorded August 3, 1923.
At the hearing in this court the following suits were consolidated with this one: Nebraska City National Bank v. Hanks, No. 24422, 204 N. W. 400, in which Mrs. Church and her husband, Luther J. Church, as cross-petitioners, seek to foreclose a mortgage for $15,000 given to Mrs. Church by the Hanks, covering lands other than the 560 acres referred to above, dated May 6, 1921, and recorded August 3, 1923; and United States Trust Co. v. Hanks, No. 24415, 204 N. W. 400, wherein Mrs. Church and her husband, Luther J. Church, again as cross-petitioners, seek to foreclose a mortgage in the amount of $15,000 given to Mrs. Church by the Hanks, covering lands other than the two tracts hereinbefore referred to, dated June 15, 1921, and recorded August 3, 1923, and also to foreclose a deed given by them to her, which was intended to be, and is, a mortgage, and will be so treated, in the amount of $18,966.28, covering the same land as that covered by the last-mentioned mortgage, dated November 1, 1921, and recorded August 3, 1923. Each instrument above mentioned was delivered to Mrs. Church on or about the date of its execution. The issues and evidence in each suit are the same as far as the matters involved herein are concerned, and will be considered and determined in this opinion.
The pleadings filed are somewhat voluminous and will not be set out at length. However, the trustee contends that, at the time these respective mortgages were given, Hanks was insolvent, which was known to Mrs. Church; that such insolvency continued until August 4, 1923, when Hanks was adjudicated a bankrupt; that, notwithstanding her knowledge of the insolvency, she intentionally and collusively withheld her mortgages from record until she learned that Hanks was contemplating bankruptcy, in pursuance of an agreement with Hanks whereby his credit might be preserved; that these mortgages are instruments required by law to be recorded, and that their recordation within four months prior to the filing of the petition in bankruptcy constitutes a preference under section 60a of the federal Bankruptcy Act, regardless of the date of their execution and delivery.
These contentions of the trustee are denied by Mrs. Church and she further alleges that these mortgages were given more than four months before the filing of the petition in bankruptcy, and for a then present and valid consideration, and that the same were recorded before the filing of the petition in bankruptcy. In each instance she prays a decree establishing her respective liens, and a foreclosure and sale as by law provided.
Upon the issues thus raised, trial had to ...
To continue reading
Request your trial