In re Prince & Walter

Citations

• 131 F. 546
• 14 Pa. D. 172
• 1904 U.S. Dist. LEXIS 218

Syllabus

<p>1. Bankruptcy — Mortgages—Lien—Extinguishment.</p> <p>Under Bankr. Act July 1, 1898, c. 541, § 67d, 30 Stat 564 [U. S. Comp. St. 1901, p. 3451], providing that liens given or accepted in good faith, etc., which have been recorded according to law, shall not be affected by the act, where real estate of a bankrupt was ordered to be sold subject to a first mortgage, and the trustee, who was the holder of a second mortgage thereon, obtained special leave to bid as a lien creditor, and the referee’s original order of sale expressly provided that the land should be sold subject only to the first mortgage, the lien of the second mortgage was divested by the sale.</p> <p>2. Same — Taxes—State Statutes — Construction.</p> <p>Act Pa. June 4, 1901, § 2 (P. L. 364), providing that all taxes that may thereafter be lawfully imposed or assessed on any property shall be a first lien thereon, etc., and that such lien shall have priority to, and be fully paid and satisfied out of the proceeds of, any judicial sales of the property, etc., is prospective only, and does not give priority to taxes over a mortgage which was a lien before its passage.</p> <p>3. Same — Order of Sale — Liens—Vacation.</p> <p>Where real estate of a bankrupt was sold subject only to a first mortgage thereon, such sale operated to divest a tax lien on the property, as against a purchaser on the faith of the record, notwithstanding Act Pa. June 4, 1901, § 32 (P. L. 375). by which all taxes are made a continuing lien on property, notwithstanding a judicial sale, unless the proceeds of the sale are sufficient to pay them.</p> <p>4. Same — Assets—Payment of Claims — Priority—Taxes.</p> <p>Under Bankr. Act July 1, 1898, c. 541, § 64, 30 Stat. 563 [U. S. Comp. St. 1901, p. 3448], providing the order of priority in which debts or charges against the estate of a bankrupt are to be paid, and declaring that the court shall order the trustee to pay all taxes legally due and owing by the bankrupt in advance of the payme