Del Rio Bank & Trust Co. v. Cornell

57 F.2d 142, 1932 U.S. App. LEXIS 3945

Opinion

WALKER, Circuit Judge.

The court disallowed a claim of the appellant that it was entitled to an equitable lien on laud of the bankrupt which was intended to be included in a deed of trust or mortgage made by the bankrupt to the appellant more than a year prior to the bankruptcy, but by mutual mistake of the parties to that instrument was omitted therefrom. Under the recording laws of Texas the equitable title of the appellant to the omitted land was not required to he recorded in order to protect it against creditors of the bankrupt in whose favor an attachment or an execution on a judgment against the bankrupt was issued. Johnson v. Darr, 114 Tex. 516, 272, S. W. 1098. Under amended section 47a of the Bankruptcy Act (11 USCA § 75), the trastee in bankruptcy has tho status of such a creditor, not tho status of a bona fide purchaser for value and without notice. Bailey v. Baker Ice Machine Co., 280 U. S. 268, 36 S. Ct. 50, 60 L. Ed. 275; Zartman v. First National Bank, 216 U. S. 134, 30 S. Ct. 368, 54 L. Ed. 418. The rights of the trustee in bankruptcy being subordinate to those of the appellant, based on the asserted equitable claim, which was supported by the evidence, tho disallowance of that claim was erroneous.

Tho decree is reversed.