Opinion · District Court, E.D. Louisiana.

In re Hagin

21 F.2d 433

Type
Opinion
Court
District Court, E.D. Louisiana.
Jurisdiction
Louisiana
Date
1927-07-25
Topic
general

BURNS, District Judge. Petitioner for review, the Southern Development Company, loaned $750 to the bankrupt, stipulating for a second mortgage on certain real estate. By oversight on its part, tho act of mortgage was not made, signed, or delivered. In due eourse, after adjudication, tho trustee proceeded with the sale of the property, when the petitioner discovered that it did not hold the security intended. The referee refused to recognize petitioner’s claim to recognition as the holder of an equitable lien, or otherwise than as an ordinary creditor.

Citator

UpLaw has not yet analyzed In re Hagin. The absence of a flag is not a finding that it is good law.

Cited by
1 opinion
IN RE HAGIN, (E.D.La. 1927)
21 F.2d 433
In re HAGIN.
No. 3158.
United States District Court, E.D. Louisiana,
New Orleans Division.
July 25, 1927.
In Bankruptcy. In the matter of James E. Hagin, bankrupt. On petition by the Southern Development Company for review of referee's order refusing to recognize petitioner as the holder of an equitable lien against bankrupt's realty, or otherwise than as an ordinary creditor. Petition denied, and referee's order affirmed.

See, also,21 F.2d 434.
Louis L. Rosen, of New Orleans, La., for petitioner.

A.P. Frymire, of New Orleans, La., for trustee.
BURNS, District Judge.
Petitioner for review, the Southern Development Company, loaned $750 to the bankrupt, stipulating for a second mortgage on certain real estate. By oversight on its part, the act of mortgage was not made, signed, or delivered. In due course, after adjudication, the trustee proceeded with the sale of the property, when the petitioner discovered that it did not hold the security intended. The referee refused to recognize petitioner's claim to recognition as the holder of an equitable lien, or otherwise than as an ordinary creditor. Hence the petition for review.

The referee must be sustained. Such liens are not recognized in Louisiana, where liens, privileges, and mortgages are precisely defined by the Civil Code, and no proof can be admitted of a verbal mortgage. Article 3305. The state Constitution (article 19, § 19), prescribes:

"No mortgage or privilege on immovable property, or debt for which preference may be granted by law, shall affect third personsPage 434unless recorded or registered in the parish where the property is situated, in the manner and within the time prescribed by law."

Section 47a (2) of the Bankruptcy Act, as amended (11 USCA § 75), has no bearing on the case, because the petitioner has no lien, privilege, or mortgage that may come in conflict with the lien of the trustee, as such. The petitioner can be recognized as an ordinary creditor only.

The contention of petitioner for consideration upon equitable grounds, to the detriment of other ordinary creditors and third persons generally, cannot prevail in Louisiana. As a court of equity, this court, sitting in Louisiana, is as much bound by the positive law of the state, where the statute is direct and applicable, as the courts of this state or any court of law. Eaton on Equity, pp. 47, 49.

The activity of courts of equity cannot be invoked, except by those who act, not only in good conscience and good faith, but also with reasonable diligence. Pomeroy, Eq. Juris. 197, 198.

Petition denied. A decree affirming the referee's order may be entered accordingly.Page 434