Page:United States Statutes at Large Volume 52.djvu/917

 PUBLIC LAWS-CH. 575-JUNE 22, 1938 such lien was obtained such person was insolvent or (b) if such lien was sought and permitted in fraud of the provisions of this Act: Pfs t pro Provided, however, That if such person is not finally adjudged a visions, bankrupt in any proceeding under this Act and if no arrangement or plan is proposed and confirmed, such lien shall be deemed reinstated with the same effect as if it had not been nullified and voided. fLiens dinoied by "(2) If any lien deemed null and void under the provisions of paragraph (1) of this subdivision a, has been dissolved by the fur- nishing of a bond or other obligation, the surety on which has been indemnified directly or indirectly by the transfer of or the creation of a lien upon any of the nonexempt property of a person before the filing of a petition in bankruptcy or of an original petition 9,o. ' 83 9)05under chapter X, XI, XII, or XIII of this Act by or against him such indemnifying transfer or lien shall also be deemed null and rpistn. void: Provided, however, That if such person is not finally adjudged a bankrupt in any proceeding under this Act, and if no arrangement or plan is proposed and confirmed, such transfer or lien shall be deemed reinstated with the same effect as if it had not been nullified and voided. Discharge of prop "(3) The property affected by any lien deemed null and void under the provisions of paragraphs (1) and (2) of this subdivision a shall Parsage of property be discharged from such lien, and such property and any of the indemnifying property transferred to or for the benefit of a surety Conveyansc by shall pass to the trustee or debtor, as the case may be, except that the court may on due notice order any such lien to be preserved for the benefit of the estate, and the court may direct such conveyance as may be proper or adequate to evidence the title thereto of the trustee Vai of title of or debtor, as the case may be: Provided, however, That the title of bona-flde purchser. a bona-fide purchaser of such property shall be valid, but if such title is acquired otherwise than at a judicial sale held to enforce such lien, it shall be valid only to the extent of the present considera- tion paid for such property. tnuaryurisdic- "(4) The court shall have summary jurisdiction of any proceed- tion to hear and deter- mine rights of parties. ing by the trustee or debtor, as the case may be. to hear and deter- mine the rights of any parties under this subdivision a. Due notice of any hearing in such proceeding shall be given to all parties in interest, including the obligee of a releasing bond or other like obli- gation. Where an order is entered for the recovery of indemnify- ing property in kind or for the avoidance of an indemnifying lien, the court, upon application of any party in interest, shall in the same proceeding ascertain the value of such property or lien, and if such value is less than the amount for which such property is indemnity or than the amount of such lien, the transferee or lien- holder may elect to retain such property or lien upon payment of its value, as ascertained by the court, to the trustee or debtor, as the case may be, within such reasonable times as the court shall fix. Discharyge of abil- "(5) The liability of a surety under a releasing bond or other like obligation shall be discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien nulli- fied and voided by the trustee or debtor, or, where the property is retained pursuant to the provisions of paragraph (4) of this subdi- vision a, to the extent of the amount paid to the trustee or debtor. nataliditoy d "b. The provisions of section 60 of this Act to the contrary not- withstanding, statutory liens in favor of employees, contractors, mechanics, landlords, or other classes of persons, and statutory liens for taxes and debts owing to the United States or any State or sub- division thereof, created or recognized by the laws of the United States or of any State, may be valid against the trustee, even though arising or perfected while the debtor is insolvent and within four [52 STAT.

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