Davis v. Lumpkin ( 1879 )

Campbell, J.,

delivered the opinion of the court.

The right of Mrs. Lumpkin must be determined with reference to the deed of April 17, 1866, by which the land was conveyed to her. The paper of June 12, 1862, had no effect, for want of delivery; and this “memorandum,” as it was called and treated by the parties, and the taking possession of the land, and every thing which preceded the execution of the deed of April 17, 1866, must go for nothing. The deed of April 17, 1866, was void as to the creditors of the grantor. It was voluntary, and the grantor was not in a pecuniary condition to make gifts. His liabilities far exceeded his assets. This deed being void, the land conveyed by it was subject to the lien of judgments against the grantor, as if it had not been made. As to them, it is to be considered as not existing. Pulliam v. Taylor, 50 Miss. 551; Thomason v. Neeley, 50 Miss. 810; Shaw v. Millsaps, 50 Miss. 380.

The subsequent bankruptcy of the judgment debtor did not affect the lien of judgments agaiust him. These liens exist by the law of the State, and are preserved unimpaired by the bankrupt law. The discharge of the bankrupt discharges him personally from judgments, but the lien of a judgment against him which had attached to property before the adjudication in bankruptcy is still a lien. The appointment of an assignee, and the assignment to him in pursuance of the law, vest in him the property of the bankrupt, but in the precise condition it was in at the time of the adjudication. He stands in the shoes of the bankrupt, and takes property subject to all liens- and equities which could have been enforced against it if bankruptcy had not occurred. Yeatman v. Savings Institution, 95 U. S. 764; Russell v. Cheatham, 8 S. & M. 708; Talbert v. Melton, 9 S. & M. 9; Winters v. Claitor, 54 Miss. 341; Reed v. Bullington, 49 Miss. 223. The bankruptcy of Maxwell did not hinder the enforcement of the lien of a judgment against him by execution. The sale of property bound by the lien of a judgment does not affect the right of the judgment creditor to seize and sell it. Being subject to the lien, it may be seized and sold as the means of making the lien available. Crowe v. Reid, 57 Ala. 281; McHenry v. La Sooiété Francaise, 95 U. S. 58.

The assignee in bankruptcy may draw the matter of adjusting all liens into the District Court of the United States, and himself sell the property, and apply the proceeds under the direction of said court; but if be finds that the property is so incumbered as to consume its full value in discharging liens to which it is subject, and, therefore, that there is nothing in it for general creditors, he may decline to have any thing to do with it; and in that case the enforcement of the liens by judgment creditors, by the process of the State courts, is not an invasion of the jurisdiction of the courts of the United States, or in contravention of the provisions or the policy of the bankrupt law. Pressly v. Ellis, 48 Miss. 574. Nor do we think that § 711 of Revised Statutes of United States makes any difference in this respect, both because of the fact that this suit was pending (Rev. Stats. § 5597), and because this contest is not a matter in bankruptcy.

In this case, the bankruptcy occurred in 1868, and the appointment of an assignee and the assignment to him near the close of the year 1869. This bill was filed in 1869, soon after the levy of the execution on the land. The assignee was made a party to the suit in 1875. He has never appeared, nor has he sought by proceeding in the court of the United States to interfere with the land or the litigation about it, as we must assume from the continuance of this litigation. All claim by the assignee to attack the deed of April 17, 1866, has been baryed bj*- the two years’ limitation of the Bankrupt Act. It is manifest that the assignee has no interest in this controversy, and no concern about it, and that he has acquiesced in this effort of the judgment creditor to obtain satisfaction of his judgment by a sale of the land. And Mrs. Lumpkin cannot make the non-action of the assignee, and lapse of time, as against him, a shield from the attack of Davis, whose right as against her is independent of the assignee. The abstinence from the contest of the assignee leaves Davis’s way clear of all obstructions; and the fact that the assignee has lost all right to contest the claim of Mrs. Lumpkin, frees the contest between herself and Davis from any other question than that of its merits, and that we have resolved in favor of Davis.

No case is presented for marshalling assets, as it does not appear that the execution levied on the land in controversy in this suit can be satisfied, in whole or part, ou.t of other lands conveyed by Maxwell, after April 17, 1866. We recognize the rule that a prior grantee has the right to insist on the devotion of different parcels of property to the satisfaction of a lien to which all are subject in the inverse order of their alienation, so that the property conveyed by the debtor last in point of time shall be first applied to discharge the lien; but he who seeks to divert a lien creditor from himself to another source of satisfaction to which he should resort, must show clearly an unobstructed source of obtaining such satisfaction. Protecting himself by presenting another for the sacrifice, he must present one equal to the burden he would shift from himself to him. The other lands to which the complainant would direct the execution creditor have been levied on by other executions, and are the subject of an adverse claim by Mrs. Maxwell, and of serious litigation between her and the judgment creditor.

We do not regard the answer of Davis, as to the judgments alleged to have been paid, as authorizing the conclusion on the hearing that the allegation of the bill to that effect is to be taken as true. The answer was sufficient, under the circumstances it discloses, to prevent the operation of Code 1871, § 1024. It states that the judgments, other than that the execution on which was levied on the land claimed by the complainant, were the subject of another suit, in the same court, between the respondent and another, and that all the facts in reference to those other judgments were set forth in the answer of the respondent in that suit; which answer he refers to and adopts in this, as to such judgments. There was no exception to the answer for insufficiency or irrelevancy. The record shows that the judgments were not in fact paid ; and a rule of practice, created for convenience, should not be perverted to injustice, as would be done by maintaining the view contended for by counsel for the appellees on this matter. Davis is entitled to the relief sought by his cross-bill.

Decree, reversed, and cause remanded for decree.