Livingstone v. Heineman

Citations

• 120 F. 786
• 15 Ohio F. Dec. 696
• 1903 U.S. App. LEXIS 4534

Syllabus

<p>1. Bankruptcy — Classification of Creditors — Claim of Surety for Reimbursement.</p> <p>There are two general classes of creditors of a bankrupt, within the meaning of Bankr. Act 1898, § 60a (Act July 1, 1898, c. 541; 30 Stat. 562 [U. S. Comp. St. 1901, p. 3446]), first those who have priority and are to be paid in full, and second unsecured creditors who are entitled to equal dividends after the claims entitled to preference have been paid. The claim of a surety for reimbursement for money paid in discharge of his obligations as surety belongs in the second class.</p> <p>2. Same — Sureties—Eights by Subrogation.</p> <p>A surety for a bankrupt who has discharged the debt, either before or after the bankruptcy by Bankr. Act 1898, § 57i (Act July 1, 1898, c. 541; 30 Stat. 560 [U. S. Comp. St. 1901, p. 3443]), is subrogated “to the rights of the creditor,” and is affected by any preference received by the creditor before payment, which inheres in the claim.</p> <p>8. Same — Surrender of Preferences.</p> <p>A bank held two series of note's against the same principal maker — one signed by a single surety, and the other by the same and other sureties. The principal was adjudged a bankrupt, but had previously, while insolvent, and within four months, made payments to the bank on both series of notes. The notes of the first series were taken up by the surety, some before and some after the bankruptcy. Held, that he could not prove a claim therefor in bankruptcy without surrendering the preferences received by the bank on both series of notes.</p> <p>4. Same — Appeal—Denial of Motion to Expunge Claim.</p> <p>A trustee may appeal from an order denying his motion to expunge a claim allowed, unless further preferences were surrendered, and directing a return of a preference previously surrendered by the creditor.</p> <p>¶ 4. Appeal and review in bankruptcy cases, see note to In re Eggert, 43 C. C. A. 9.</p>