Fallows v. Continental & Commercial Bank,
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235 U.S. 300 (1914)
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U.S. Supreme Court
Fallows v. Continental & Commercial Bank, 235 U.S. 300 (1914)
Fallows v. Continental & Commercial
Bank Trust & Savings Bank
Argued November 9, 1914
Decided November 30, 1914
235 U.S. 300
First National Bank v. Staake, 202 U. S. 141, and Rock Island Plow Co. v. Reardon, 222 U. S. 354, followed as to the purposes of § 67-f of the Bankruptcy Act of 1898 in subrogating the trustee to liens acquired by creditors on assets of the bankrupt within four months of the petitions.
Where the referee and both courts below have sustained the propriety of subrogating the trustees to liens and no abuse of the discretion vested in them is shown, this Court accepts their action as correct.
The validity and priority of mortgage liens depend on the law of the state.
The statutes of Illinois relating to the continuation of a lien of a mortgage on personal property have not been definitely construed by the courts of that state, but this Court sustains the construction of the district court and the circuit court of appeals holding that the lien of such a mortgage expires as against judgment creditors three years after record subject to one extension for twelve months on proceedings taken in strict conformity with the statute, and that attempts to further extend the lien are ineffective.
As between judgment creditors and the holder of a mortgage on personal property, held that as the lien of the mortgage had expired as to judgment creditors under the state law prior to the entry of the judgments, and under the state law could not be further extended, the lien of the judgments attached if not fraudulently obtained.
Executions delivered to the sheriff for service without any instructions to refrain from carrying out the mandate held, under the circumstances of this case, to include levy.
In the absence of directions not to levy, it is the duty of the officers to obey the directions and commands of the writ.
201 F. affirmed.
The facts, which involve the validity and priority of liens on property of the bankrupt of judgment creditors
and holders of notes secured by mortgage on personal property, and the construction of the laws of Illinois relating to such mortgages, are stated in the opinion.