Page:Federal Reporter, 1st Series, Volume 9.djvu/917

 902 FEDERAL REPOfiTER. �particulars, except that the sheriff's return shows he sold as well on fi. fa., No. 31, June term, 1878, as on^. /as. No. 213 and No. 214, Mareh term. �On February 11, 1878, John T. Shirley filed his petition in bank- ruptcy, and on the same day this court issued restraining orders against the Eaton, Cole & Burnham Company and certain other exe- cution creditors, enjoining sales by the sheriff until a motion for an injunction could be heard. Upon such hearing the court refused the injunction and dissolved the restraining orders; whereupon the sheriff proceeded to sell the property so levied on, and sold the same between the ninth and thirtieth days of- March, 1878, inclusive. J. T. Chalfant was chosen assignee of the bankrupt, March 28, 1878, and the assignment to him seems to have been made on the 30th. �A portion of the proceeds of the sheriff's sale reached the Eaton, Cole & Burnham Company's judgment, but a large part thereof re- mained unsatisfied. For this unpaid balance the company sought to make proof in bankruptcy, but the register would not allow the proof. The case is now before the court to review this action of the register, whose refusai to admit the proof rests upon the assumption that section 5075 of the Revised Statutes is conclusive against the company's right to prove. That section is as follows : �" Sec. 5075. When a crediter has a mortgago or pledge of real or personal property of the bankrupt, or a lien tliereupon for securing the payment of a debt owing to him from the bankrupt, he shall be admitted as a crediter only for the balance of the debt after deducting the value of such property, to be ascertained by agreement between him and the assignee, or by a sale thereof, to be made in such manner as the collrt shall direct ; or the creditor may re- lease or convey hIs claim to the assignee upon such property. and be admitted to prove his whole debt. If the value of the property exceeds the sum for which it is so held as security the assignee may release to the creditor the bankrupt's right of redemption therein on receiving such excess; or he may sell the property subject to the claim of the creditor tliereon; and in either case the assignee and creditor, respectively, shall execute all deeds and writings necessary or proper to consummate the transaction. If the property is not so sold or released, and delivered up, the crediter shall not be allowed to prove any part of his debt." �Is the case of the Eaton, Cole & Biirnham Company within this pro- hibition? It is certain the company had neither a mortgage nor a pledge. Was, then, its levy, which anticipated the bankruptcy, a lien within the meaningof this section, and the goods in the hands of the sheriff property which the execution creditor was bound either to ��� �