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Statement of the Case.
On the 3d of September, 1878, Peabody, as trustee, prepared a notice of sale, dated that day, setting forth the facts of the date and record of the trust deed of April 2, 1877; the contents of the note secured by it; the fact that its legal holder, as thereby authorized, had elected to make the principal sum therein mentioned, and the same had thereby become, at once due and payable, by reason of the default, continued for more than 30 days, in the payment of the instalments of interest due thereon October 2, 1877, and April 2, 1878, respectively; that there was due on the note the principal sum of $35,000, with interest thereon at the rate of 74 per cent per annum, from April 2, 1878, and the two defaulted instalments of interest, of $1312.50 each, with interest on each at the rate of 10 per cent per annum, from the dates when they respectively became due; that default had been made in the payment thereof; that, on the demand of the legal holder of the note, the trustee, on October 7, 1878, at 11 o'clock in the forenoon, at the southwest corner of Dearborn and Monroe streets, in Chicago, at the door of No. 174 Dearborn Street, would sell at public auction to the higbest bidder for cash, for the uses and purposes specified in the trust deed, the premises described therein, (repeating the description contained in the trust deed,) together with all the right, title, benefit and equity of redemption of Robertson, his heirs and assigns, therein ; and that the records of the recorder's office showed that Templeton had acquired some title or interest in the premises, as assignee of Robertson, subject to the trust deed. This notice was published in the “Chicago Journal," a newspaper of general circulation, printed and published in Chicago, four times, being one time a week for four successive weeks, the date of the first paper containing the same being September 4, 1878, having been published and issued on that day, and the date of the last paper containing the same being September 23, 1878, having been published and issued on that day.
Robertson, on the 7th of September, 1878, left Chicago for Scotland; and on the same day he was adjudicated a bankrupt. He has never since been in Chicago.
On the 5th of October, 1878, Taylor and Bruce, as creditors
Statement of the Case.
of Robertson, filed a petition in the District Court, in bankruptcy, sworn to by Charles B. McCoy, their agent at Chicago, setting forth their judgment, and stating that no assignee of the estate of Robertson had yet been chosen ; that Robertson, in his inventory of assets, had scheduled a large amount of property, which required the immediate personal attention of some person properly authorized to care therefor and preserve the same for the benefit of the estate, and prevent waste, injury and loss thereof; that among the assets so scheduled, with other real estate, was “the property known as the Jefferson-Park Hotel, on West Madison Street, Chicago." The petition prayed that a provisional assignee be appointed for the estate of Robertson, with the usual powers in such cases, to act in the premises until the regular assignee should be chosen. On the same day, Bradford Hancock was appointed by the District Court provisional assignee of the estate of Robertson, “ with full power and authority to take possession of, manage, and control the same, and to collect the rents due said estate."
The sale under the trust deed took place on the 7th of October, 1878, at the hour and place named in the published notice. Greene became the purchaser, and Peabody, as trustee, on the same day executed and acknowledged a deed to him, which was recorded October 10, 1878. That deed recited the making of the note and its contents, including the provision for election by the legal holder of the note as to the becoming due of the entire principal; the making and recording of the trust deed; the power of sale given by it to the trustee; and the provisions in it for notice and for giving a deed to the purchaser. It also recited the default in the payment of the two instalments of interest; the election by the legal holder of the note that the principal sum should at once become due and payable; the amount that was due for principal and interest ; that the legal holder had applied to the trustee to advertise and sell the premises ; that he had advertised them, and all right, title, benefit and equity of redemption of Robertson, his heirs and assigns, therein, for sale at public auction to the highest bidder for cash, on the day and at the place before mentioned ;
Statement of the Case.
the notice he had given; that the contents of the notice were in conformity with the provisions of the trust deed and of the statute; that, in pursuance of said notice, and at the time and place of sale therein mentioned, he had offered the premises described in the trust deed, and all right, title and equity of redemption of Robertson, his heirs and assigns, therein, for sale at public auction to the highest bidder for cash; that Greene was such highest bidder, and bid therefor $30,000, which was the highest bid; and that the same were accordingly struck off and sold to Greene at that price. The deed then conveyed to Greene, his heirs and assigns forever, the premises described in the trust deed, by the description therein contained, together with all the right, title, benefit and equity of redemption of Robertson, his heirs and assigns, therein, to have and to hold the same, with the appurtenances, to Greene, his heirs and assigns forever. It further stated that Peabody covenanted to the extent, and no more, that he had fulfilled all the powers and trusts in said deed contained, in respect to the sale, in accordance with the terms of the trust deed.
The $30,000 for which Greene purchased the property was applied to pay the first and second interest coupons, with interest thereon to October 17, 1878, and interest on the note to that date from April 2, 1878, the expense of advertising, the fees of the trustee, and sundry back taxes, and the balance of the amount, $24,107.43, was endorsed by the trustee as paid on the principal of the note for $35,000, on the 17th of October, 1878.
On the 23d of October, 1878, the release by Peabody, as successor in trust, of the trust deed from Grow to Gallup, was recorded.
Greene died at New Bedford on the 19th of May, 1879.
On the 7th of July, 1879, a warrant in bankruptcy was issued against the estate of Robertson.
Bradford Hancock was, on the 24th of July, 1879, appointed assignee in bankruptcy of Robertson, and on the same day the register assigned to him all the estate real and personal, of Robertson, including all the property, of whatever kind, of
Statement of the Case.
which he was possessed, or in which he was interested, or entitled to have, on the 31st of August, 1878, except property exempt by $ 5045 of the Revised Statutes.
Taylor & Bruce, on the 23d of March, 1880, filed in the bankruptcy court a proof of debt against Robertson, founded on their judgment and on the levy made February 15, 1878, under the execution issued January 29, 1878. They claimed therein a lien, by virtue of the judgment, on all the real estate of Robertson, and, by virtue of such levy, on the portion thereof on which it was levied, and a first preference on all the proceeds of the property covered by the lien of the judgment and the levy.
On the 25th of March, 1880, Taylor and Bruce filed a petition in the bankruptcy court, setting forth the recovery of their judgment; the issuing and return unsatisfied of their execution of October 15, 1877; the filing of their creditors' bill in the Circuit Court on the 24th of January, 1878; the fact that they had proved their debt in the bankruptcy court ; that on the 30th of July, 1877, the date of the recovery of their judgment, Robertson owned real estate, all of which was encumbered with sales for taxes, and the greater part with mortgages or deeds of trust to about or near the full value thereof, so that of the latter class he was, at the time of the filing of the petition in bankruptcy, at best only invested with an equity of redemption; that at the time their judgment was rendered, and at the time of the filing of the petition in bankruptcy, he owned sundry real estate which was unencumbered except by tax sales and judgments (describing it); that, at those times, he owned or had interest in real estate encumbered by mortgages and trust deeds, and also by tax liens, describing it, and as part of it describing the property 73 feet by 116 feet, on the corner of West Madison Street and Sheldon Street, "incumbrance, $35,000, besides interest and taxes;” that on the 29th of January, 1878, they issued a second execution on their judgment; that on the 15th of February, 1878, it was levied on all the real estate described in the petition, except a small portion in Cook County, Illinois, which was heavily encumbered; that before any sale was made by the marshal,
Statement of the Case.
Robertson went into bankruptcy, and no sale had ever been made under the execution, but the levy was in force as a first lien of any judgment; that they were entitled to have the amount of their judgment paid out of the proceeds of the sale of the property, to the exclusion of all the other creditors of Robertson, except those who held mortgages or liens prior to their judgment; and that they were willing and desirous to have the administration and enforcement of the lien of their judgment transferred to the bankruptcy court, and established by that court, and enforced against the property of the bankrupt estate. They prayed that their lien might be established against the described real estate; that Hancock, the assignee, might be ordered to selt said real estate and apply the proceeds to pay their judgment; and that they might be permitted to purchase at the sale and credit their bids on the judgment.
Hancock, the assignee, on the 2d of April, 1880, presented a petition to the bankruptcy court, in answer to a rule for him to show cause, issued on the filing of the petition of Taylor and Bruce of March 25, 1880, setting forth that he believed the allegations of that petition to be substantially correct, and that he believed it was for the best interest of the bankrupt's estate that said real estate should be sold without further delay. He prayed for an order directing him to sell it; that it be sold subject to all taxes, liens and incumbrances thereon, except the judgment of Taylor and Bruce and judgments rendered subsequently thereto; and that he be ordered to bring the proceeds of sale into court or make such other disposition of them as the court should direct. On this petition, and on the same day, an order was made by the bankruptcy court, on the consent of the assignee, of Taylor and Bruce, of the bankrupt, and of two creditors by a judgment subsequent to that of Taylor and Bruce, directing the assignee to sell all the real estate of the bankrupt, free and clear of the lien of the judgments mentioned, “ but subject to all other liens and incumbrances thereon, and all taxes and assessments thereon," and to bring the proceeds of the sale into court, to be paid to such judgment creditors according to the priority of their liens on the property sold, to the amount of their respective judgments.