George Carroll & Bro. Co. v. Young

Citations

• 119 F. 576
• 56 C.C.A. 380
• 1903 U.S. App. LEXIS 4796

Syllabus

<p>1. Bankruptcy—Rights of Lien Creditors—Sale of Property as an Entirety.</p> <p>The principal asset of a bankrupt corporation was its manufacturing plant, consisting of a building on ground leased for a term of years and the machinery and appliances therein used by the bankrupt in carrying on its business, upon which there were various liens. Certain creditors, having valid mechanics’ liens for the price of materials used in the construction of the building, which under the statute bound the building and the leasehold interest of the bankrupt in the land, objected to the granting of an order authorizing the trustee to sell the property as an entirety free from liens, upon the ground that all lien creditors did not stand upon the same basis, and that, in case of such sale, it would be impossible to tell how much of the .fund each represented, or against what portion it could be enforced. The order was made, but “without prejudice to the right of lien creditors to claim from the fund derived from the sale the amount of their respective liens.” iHeZdi, that the objection made and such proviso in the order fully protected the lien creditors in the right to assert their preferences against the fund, without the necessity of excepting to the return of sale, and that it was the duty of the referee to recognize and enforce such right, taking evidence, if necessary, to determine as nearly as possible what portion of the proceeds of the sale represented the property covered by their liens.</p>