496
THE GREEN BAG
NOTES OF
THE
MOST
IMPORTANT
RECENT
CASES
COMPILED BY THE EDITORS OF THE NATIONAL REPORTER
SYSTEM
AND
ANNOTATED
BY
SPECIALISTS IN THE SEVERAL SUBJECTS (Copies of the pamphlet Reporters containing full reports of any of these decisions may be secured from the West Publishing Company, St. Paul, Minnesota, at 35 centa each. In ordering, the title of the desired case should be given as well as the citation of volume and page of the Reporter in which it is printed.) BANKRUPTCY. (Liens.) Texas. — A novel question as to the rights of a secured creditor against a bankrupt, is decided in Jungbecker v. Huber, 101 S. W. Rep., 552. In this case it appeared that a note was secured by a vendor's lien as well as by a mortgage on real property. After the execution of the mortgage, the property became a part of the mortgagor's homestead, and after he was adjudged a bankrupt, was by the Court of Bankruptcy set aside to him out of a larger tract of land, which, exclusive of the improvements at the time of its designation as a homestead, exceeded in value S5000. The holder of the note brought a suit in a state 'court by authority of the bankruptcy court against the trustee of the bankrupt to foreclose her liens on the property before the note, as shown on its face, was due. The principal question in the case was, could she do this? In answering this in the affirmative, the court says that a secured creditor of a bankrupt can resort to one of three remedies: First, he may rely upon his security; second, he may abandon it and prove the whole debt as not secured, or, third, he may be admitted onlv as a creditor to the balance after deduction of the value of the security. Plaintiff in the case at bar pursued the latter remedy. Had she chosen the first, she would have had no recourse on the general fund in the hands of the trustee, and would have taken the risk of the property bringing the amount of her debt at a foreclosure after the note matured. Had she pursued thr> second the abandonment of her liens would simply release the property from sale by the trustee, and nothing could be realized from it for the payment of any of the bankrupt's debts, and she would have been told that as a creditor having a lien on the bankrupt's homestead, she was required to exhaust her remedy by foreclosure before she could resort to the general fund. In order for plaintiff to be admitted as a creditor for the balance of her debt, after deducting the value of the property on which she had liens, it was essen
tial for her to foreclose her liens and have the property sold under the decree of foreclosure. If she was required to wait until her debt matured before she could do this, lapse of time would prevent her from being admitted as a creditor for the balance of her debt. A contention that the course pursued by plaintiff cut off defendant's equity of redemption, the court holds defendant escopped from asserting, on the ground that he had by his own acts in having the property covered by the lien set aside as his homestead, compelled plaintiff to pursue this course. CONSTITUTIONAL LAW. (Insurance — Sui cide as Defense.) U. S. Sup. Ct. — The validity of the Missouri Statute (Rev. St. 1870. Sec. 5982) which excludes suicide as a defense in a suit on a life insurance policy unless such suicide was con templated at the time application was made tor the policy is upheld in Whitfield v. Hadley, 27 Sup. Ct. Rep.' 578. It was suggested that the statute " merely encourages suicide, and offers a bounty therefor, payable, not out of the public funds of the state, but out of the funds of the insurance company." The court says that there is some foundation for this suggestion in Ritter v. Mut. Life Ins. Co., 169 U. S. 130. 42 L. Ed. 693, 18 Sup. Ct. Rep. 300. wherein it was held that public policy, even in the absence of a prohibitory statute, forbade a recovery on a life policy silent as to suicide, where the insured when in sound mind wilfully and deliberately took his own life; but the court observes that the determination of the case at bar depends on other considerations than those involved in the Ritter Case. An insurance company is not bound to make a contract which is attended by the results indicated by the statute. If it does business at all in the state it must do so subject to such valid regulations as the state may choose to adopt. Even if the statute could be fairly regarded by the court as inconsistent with public policy or sound morality, it cannot for that reasonal one be disregarded,
