R. L.) (22 R. I. 213) DOYLE v. HEATH et al. DOYLE v. HEATH. Construed in connection with the other parts of the bankruptcy act of 1838, the word "judgments," in section 67f, providing that all levies. judgments, attachments, or other liens obtained through legal proceedings against a person who is insolvent, within four months prior to the filing of petition in bankruptcy, shall be void, if he is adjudged a bankrupt, means "judgment liens." so that the equitable lien arising from a creditors' bill to set aside a fraudulent conveyance, having its date from the filing of the bill, and not from the date of the decree in the suit, is not avoided by the bankruptcy proceedings, where the bill is filed more than four months prior to the petition in bankruptcy, though the decree is rendered within such four months. Suit by Louis J. Doyle against Mark A. Heath. Arthur P. Johnson, trustee in bankruptcy of said Heath, intervened. Complainant moves to dissolve an injunction against a sale under a decree for him. Injunction dissolved. Irving Champlin, for complainant. Oscar Lapham, for respondents. BLODGETT, J. On December 15, 1899, the complainant, Doyle, a judgment creditor of the respondent, Heath, filed in this court a creditors' bill to set aside a transfer of 1,300 shares of the capital stock of the American Cotton-Bale Company, theretofore executed by Heath to his wife, as a fraud upon the rights of the complainant, and to secure an equitable lien thereon; and the respondent was duly served with process on the following day. On May 15, 1900, after a trial upon the merits, a decree was entered declaring that the transfer was void as to Doyle, appointing a master to take a transfer of the stock, and directing the master to sell the same at public auction for the benefit of the complainant. The shares were duly transferred to the master, who advertised the same to be sold on May 29, 1900. On the latter day Heath filed his voluntary petition in bankruptcy in the United States district court for this district, and on the same day an ex parte injunction was granted by this court, restraining the master from selling the stock in question until further order. On July 21, 1900, one Arthur P. Johnson, having been duly appointed trustee in bankruptcy of Heath, was permitted, by a decree of this court of that date, to intervene in this cause. The case comes now before the court upon the motion of the complainant to dissolve the injunction against the sale by the master, and this motion is opposed on behalf of the trustee, who claims that the stock should be delivered to him as a part of the bankrupt estate, free from any lien in favor of the complainant. In support of his contention the trustee in bankruptcy urges that the adjudication in bankruptcy on May 29, 1900, 213 annulled and discharged the lien theretofore declared in favor of the complainant by the decree entered on May 15, 1900. The complainant contends that the decree of that date determined that a lien in his favor existed at the time of the filing of his bill, on December 15, 1899,-more than four months prior to the date of the filing of the petition in bankruptcy by Heath. So that the first question presented for our consideration is the effect of an adjudication of bankruptcy upon a decree entered within four months of the filing of the petition in bankruptcy, and establishing an equitable lien upon the shares of stock in favor of the complainant. And the decision of this question depends in large measure upon the construction to be given to the following section of the bankrupt act of 1898, viz.: "Sec. 67f. That all levies, judgments, attachments, or other liens, obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt, and the property affected by the levy, judgment, attachment, or other lien shall be deemed wholly discharged and released from the same, and pass to the trustee as a part of the estate of the bankrupt, unless the court shall, on due notice, order that the right under such levy, judgment, attachment, or other lien shall be preserved for the benefit of the estate; and thereupon the same may pass to and shall be preserved by the trustee for the benefit of the estate as aforesaid. And the court may order such conveyance as shall be necessary to carry the purposes of this section into effect: provided, that nothing herein contained shall have the effect to destroy or impair the title obtained by such levy, judgment, attachment, or other lien, of a bona fide purchaser for value who shall have acquired the same without notice or reasonable cause for inquiry." Literally construed, section 67f avoids "all judgments obtained through legal proceedings against a person who is insolvent at any time within four months prior to the filing of a petition in bankruptcy against him," and cases are not wanting which hold that such judgments are avoided only in cases of involuntary bankruptcy. See In re De Lue, 91 Fed. 510; In re Easley, 93 Fed. 419; In re Collins, 2 Am. Bankr. R. 1. But section 1 of the act (clause 1), in defining the terms used in the act, provides that "a person against whom a petition has been filed,' shall include a person who has filed a voluntary petition"; and we think the weight of authority is in favor of the view that this section applies as well to cases of voluntary bankruptcy as to those of involuntary bankruptcy. See In re Richards, 96 Fed. 935; In re Vaughan, 97 Fed. 560; In re Higgins, Id. 775; In re Rhoads, 98 Fed. 399; In re Spacht, 2 Nat. Bankr. N. 238; In re Lesser, 100 Fed. 433; Manufacturing Co. v. Mitchell, 1 Nat. Bankr. N. 262. Literally construed, again, section 67f avoids "all judgments" against a bankrupt rendered within four months of the filing of the petition, irrespective of the time of the institution of the suit in which the judgment was rendered; and all such judgments are avoided although no lien or preference was created thereby, for the language is without limitation or exception. But the difficulty and unreasonableness of adopting a literal construction of the words "all judgments" appear upon considering the effect produced upon other sections of the act, and upon other provisions of the United States statutes concerning judgments. In the first place, the words are found in the act under the subtitle "Liens," and they are conjoined with "levies, attachments or other liens." Again, under section 63a of the act the debts which may be proved against a bankrupt are defined as including "(1) a fixed liability, as evidenced by a judgment or an instrument in writing, absolutely owing at the time of the filing of the petition against him"; and this without restriction as to the date of entry of the judgment. And section 63 (5) also includes debts "founded upon provable debts reduced to judgment after the filing of the petition." Under section 17, among debts not affected by a discharge are "(2) judgments in actions for fraud or obtaining property by false pretenses or false representations, or for wilful and malicious injury to the person or property of another,"-a manifest inconsistency if the words "all judgments" are to be taken literally. Again, section 905, Rev. St. U. S., provides that "the records and judicial proceedings of the courts of any state or territory when duly authenticated as therein specified, shall have such faith and credit given to them in every court in the United States as they have by law or usage in the courts of the state from which they are taken." And it is hardly to be supposed that this general provision of federal legislation, first substantially enacted in 1790, was intended to be repealed by the single addition of the word "judgments" in this clause of the bankrupt act of 1898. And, if the words "all judgments" are to be literally construed, they must include judgments rendered in the courts of foreign countries, irrespective of treaty stipulations, and even the judgments of the very court in which the estate of the bankrupt is being administered. We decline to adopt such a construction of the language of the act, and we construe the words "all judgments" to be qualified and defined by their context, and to be limited to the lien or preference created by such a judgment. Such a construction seems to us to be in exact accord with the spirit and scope of the act in general, as well as of section 67,—that no preference should be created within a specified time of filing the petition in bankruptcy. Indeed, in many states, though not in Rhode Island, a judgment is a lien from the date of its entry; and thus no violence is done to the language of the act when it is said that the words "all judg ments," as used in this section, are equivalent to the stricter and more accurate term of "all judgment liens." And this construction is supported by the further language of the section, which, after providing for the avoidance and nullification, continues by saying: "And the property affected by the levy, judgment, attachment or other lien shall be deemed wholly discharged and released from the same, and shall pass to the trustee as a part of the estate of the bankrupt," etc. In Re Kavanaugh, 99 ed. 928, the court says in speaking of section 67f: "This does, indeed, make certain liens and judgments void if obtained within four months of the adjudication; but it appears to us to be evident that the language, properly construed, was intended only to apply to such judgments as of themselves created liens. Liens thus created were intended to be overthrown and made ineffectual by the adjudication in bankruptcy, unless preserved for the benefit of the estate." Section 70a of the bankrupt act provides that the trustee in bankruptcy shall "be vested by operation of law with the title of the bankrupt as of the date he was adjudged a bankrupt" (in this case the 29th day of May, A. D. 1900) as to "(4) property transferred by him in fraud of creditors." And clause "e" of the same section provides that "the trustee may avoid any transfer by the bankrupt of his property which any creditor might have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the. adjudication." It will be seen that the trustee does not acquire any power to recover the stock through any provision of the bankrupt act which vests him with the property or rights of action of Heath, but through a provision which subrogates him to the rights of the creditors of Heath, and to those rights only, and which confers upon him the right of action which any such creditor may have to avoid the transfer of this stock. Section 67e of the act avoids certain fraudulent conveyances by the bankrupt, made within the fourmonths period, but gives no right of action to a creditor to avoid the same; and, as to a fraudulent conveyance made more than four months prior to the filing of the petition in bankruptcy, it is evident that, as in the case at bar, the right of the creditor to avoid and annul such a transfer must rest elsewhere than upon the bankrupt act, and of necessity upon the statute of this state. Being thus subrogated to such a creditor's right of action, the trustee's right of action to avoid a fraudulent conveyance is by derivation from a creditor, and not by derivation from Heath. In Smith v. Millett, 12 R. I. 59, which was the case of a creditors' bill filed to establish a lien on equitable assets, this court decided that "the better doctrine as to the priority of lien is the one stated by Chancellor Walworth in Edmeston v. Lyde, 1 Paige, 637,-that the lien on the equitable assets dates from the filing of the bill." The same doctrine is sustained by the supreme court of the United States in Miller v. Sherry, 2 Wall. 237, 17 L. Ed. 827. In Taylor v. Taylor (N. J. Ch.) 45 Atl. 440, decided in February of the present year, the court of chancery of New Jersey says in a similar case: "Now, the complainant in this case had at the date of the institution of the proceedings in bankruptcy a lien upon the equitable property of the bankrupt,- -a lien which arose by the commencement of this suit more than four months before the bankrupt proceedings were begun. As a general rule, an equitable lien is acquired, by the filing of a creditors' bill, or a bill in the nature of a creditors' bill, upon the chose in action and equitable assets of the judgment debtor. It is entirely settled that a trustee or assignee in bankruptcy takes the property subject to all equitable liens." We are of the opinion, therefore, that the decree of May 15, 1900, though entered within four months of the filing of the petition in bankruptcy by Heath, was not avoided by the adjudication in bankruptcy, inasmuch as such decree did not then create a lien in favor of the complainant, but determined that Doyle was entitled to an equitable lien on the stock at the time of the filing of his bill, on December 15, 1899, and more than four months prior to the filing of the petition in bankruptcy by Heath. The injunction against the sale by the master must therefore be dissolved. Injunction dissolved. (22 R. I. 211) FLEMING v. ANAWANSCOTT MILLS. (Supreme Court of Rhode Island. Sept. 22, 1900.) NEGLIGENCE-COLLISION OF TEAM WITH BICYCLE-PLEADING AND EVIDENCE. 1. Evidence that defendant's horse had shied at lighted electric cars shortly before reaching the place where, again shying at lighted electric cars, he ran into plaintiff, who was riding a bicycle on the extreme side of the road; that the driver did not have the horse under proper control, but was going 12 to 15 miles an hour, on a country road, after dark; and that the horse was green, and had previously shied at electric cars, to the knowledge of defendant and the driver,-warrants a finding that defendant was responsible for the accident. 2. Where it is sought to hold defendant for negligence in not having his horse under proper control when it shied at lighted electric cars and ran into plaintiff, evidence that the horse was green, and had previously shied at electric cars, is admissible without its being alleged in the declaration. Action by William T. Fleming against the Anawanscott Mills. Verdict for plaintiff. Defendant moves for new trial. Denied. Page & Page and Mr. Cushing, for plaintiff. Vincent & Rice, for defendant. PER CURIAM. The evidence shows that the plaintiff was run into by the defendant's team on a public highway in the town of East Providence on the evening of September 4, 215 In 1899, and seriously injured, and that the plaintiff was free from contributory negligence at the time. He was riding on his bicycle, and was on the extreme right-hand side of the road, which, at the place where the accident happened, was about 60 feet wide. It appears that the defendant's horse had shied at some lighted electric cars shortly before reaching the place of the accident, and was going at an unusual rate of speed when he reached a point opposite the plaintiff, and that he then shied at two other lighted electric cars which were standing on the switch, and ran into the plaintiff. There is evidence that the driver of the team did not have it under proper control at the time, and we think it was competent for the jury to find that he was not in the exercise of due care in this regard. He was going, according to his own testimony, at the rate of from 12 to 15 miles an hour, on a country road, after dark; and there is evidence that the horse was a green one, and had previously shied at electric cars, to the knowledge both of the driver and the defendant. view of these facts we cannot say that it clearly appears that the jury were not warranted in finding that the defendant was responsible for the injury which the plaintiff suffered. The case is rather a close one, but, after carefully considering all of the evidence, we do not feel that we can properly disturb the verdict of the jury. The point taken by defendant that the plaintiff could not be permitted to prove that the horse was a green one, and had previously shied at electric cars, because the declaration contained no allegation to that effect, is untenable. The character of the horse, as ruled by the presiding justice, had a direct bearing upon the question of the defendant's negligence. That is to say, if the horse was an old and gentle one, well accustomed to the electric cars, and never having shown any restiveness when passing them, a less degree of care would be required of the driver than when driving a green or fresh horse, which had previously shied when passing such objects; for what is reasonable or due care depends in every case on the subject-matter to which the care is to be applied, and the circumstances attending that subject-matter at the time when care is required. Sullivan v. Scripture, 3 Allen, 564. Petition for new trial denied, and case remitted to common pleas division for judgment. (2 R. I. 118) NYE et al. v. KOEHNE et al. (Supreme Court of Rhode Island. Aug. 2, 1900.) TRUSTS-EXECUTION-WILLS-SALE OF TRUST 1. One to whom a will leaves money in trust "for her sole use," without a remainder over, takes an absolute estate, nothing appearing to show that a life estate was intended. 2. Where a will directs that real estate be sold and the proceeds held in trust for a cer tain person, the latter having died before sale, her heirs may compel a conveyance by the heirs of testator of the legal title, a sale not being necessary. Suit by Minerva T. Nye and others against Charles H. Koehne and others. Respondents demur to the bill. Demurrer overruled. This was a bill in equity brought by parties entitled to the beneficial use of an estate, against the heirs at law of the testator and the administrator cum testamento annexo, to get in the legal title to the estate. Rowland R. Hazard devised the estate to his widow during her life, and then to Lydia B. Van Zandt during her life; and after the death of these life tenants he directed that the estate be sold, and the proceeds of sale divided,— one-half to Anna H. Montgomery, to be held in trust for her sole use by his executor or trustee, one-quarter to Lydia B. Torrey, and one-quarter to Charlotte Flushing. Both life tenants died. Anna H. Montgomery died, devising her interest to Edward Van Zandt, who died, devising his interest to certain of the complainants. The executor under the will of R. R. Hazard died, and no trustee under his will had been appointed. The respondent Charles H. Koehne had been appointed administrator cum testamento annexo. For previous opinions in this matter, see Van Zandt v. Garretson, 21 R. I. 352, 43 Atl. 633; Id., 21 R. I. 418, 44 Atl. 221. Saml. R. Honey, for complainants. Robert W. Burbank, for respondents. PER CURIAM. The court is of opinion that the gift to Anna H. Montgomery, in the will of Rowland R. Hazard, of a half part of the proceeds of real estate ordered to be sold by his executor, was an absolute gift. The respondents who demur to the bill claim that, as it was left in trust for her, she took only a life estate. The money was to be held in trust "for her sole use," without a gift over. The presumption is that the testator did not mean to leave this portion as intestate property. The respondents argue that, if this is held to be an absolute gift, she could have defeated the trust. That would have depended upon circumstances, such as her coverture, improvidence, mental capacity, etc. Nothing appears in the will or the circumstances of the gift to show that it was to be less than absolute, but the contrary intent is evident. This being so, the respondents, as heirs of Rowland R. Hazard, are nominal parties simply, holding a bare legal title, subject to be defeated by sale, but having no further interest in the estate. The complainants are all the beneficiaries to whom the proceeds of the estate are payable if a sale should be made. They ask for a conveyance of the legal title to them as equitable owners in fee. The respondents contend that a sale must be made according to the terms of the will. To what purpose would this be? The complainants, to whom all the proceeds would go, could buy it at any price, and then receive a deed. The same result is reached in a simpler way by granting the prayer of the bill. It is their property in equity. The respondents hold the legal title practically as trustees for the complainants, and we see no reason why they should not convey it, since they all de sire it to be done. Demurrer overruled. FOTH V. ELLENBERGER et al. (Court of Chancery of New Jersey. Oct. 9, 1900.) VOLUNTARY DEEDS VACATION -RIGHT OF GRANTOR'S HEIRS-EQUITY-JURISDICTION. 1. Where, in a suit in chancery to set aside a will, it is admitted that the will was probated, and an appeal therefrom is pending, the court will not assume jurisdiction to determine the validity of the will. 2. Where a grantor, who is mentally incapable of caring for himself or of determining the proper mode to carry out his intention in disposing of his realty, is permitted by his solic itor to make a voluntary deed absolute in form, when his intention was to convey only a life estate to the grantee, with remainder to a par ticular person, such grantor has a right to sue to set the conveyance aside for mistake, which right, at his death, descends to his heirs. Bill by Herman Foth against Caroline Ellenberger and another to set aside a deed and a will. Decree for complainant. M. T. Rosenberg, for complainant. Lewis A. Allen and George P. Rust, for defendant Ellenberger. PITNEY, V. C. The subject of the controversy in this cause is a house and lot situate in Carlstadt, in the county of Bergen. Prior to December, 1898, the title of it was vested in Louis Foth, now deceased, the father of the complainant, Herman Foth. On December 10th of that year, Louis Foth executed a will, by which he devised it to the defendant Caroline Ellenberger for life, with remainder to the defendant William Foth. On the 12th of December, 1898, he executed a deed of conveyance absolute of the same premises to Caroline Ellenberger. Herman Foth was the only child and heir at law of Louis, and files his bill against Caroline Ellenberger and William Foth, who is his son, to set aside both the will and the deed. It was admitted at the hearing that the will was admitted to probate by the surrogate of Bergen county, and that an appeal was duly taken by the complainant herein from that decree, which was pending at the time of the hearing, undetermined. Of course, under these circumstances, this court will not assume jurisdiction to determine the question of will or no will, and will only deal with the question of the validity of the deed. That was assailed on the general ground that it was made without consideration, by the undue influence of Caroline Ellenberger, exercised at a time when the grantor was laboring under the disease of senile dementia, of which he confessedly died on August 3, 1899, less than eight months after the making of the will; and that his expressed instruction to the scrivener who prepared the deed was that he desired to convey the property to Mrs. Ellenberger for life, and at her death that it should go to his grandson William Foth, and hence that the deed, as prepared and executed, did not carry out the express wishes of the grantor. The facts of the case developed at the hearing are as follows: The deceased grantor, with his son, the complainant, foreign born, came to live in Rutherford nearly half a century ago. His business was that of a merchant tailor. He kept a small dry-goods store, and in connection with that carried on the tailoring business. The complainant was his only child, and for over 40 years was a member of his family. He married in 1880, and his wife bore him three or four children. She died in 1884. Complainant's mother died in 1880, and his father shortly after married his first wife's sister, who died in 1894. Shortly before her death, after she became helpless, the complainant, in 1893, at the instance and request of his father, married a second wife, and brought her to the common home of the parties. She has borne him three children. She had at one time served as a domestic in the family, and was well known by the father. The son during these years assisted his father in the store, mainly in buying and selling goods, and was also engaged in the business of an insurance agent, scrivener of deeds, wills, etc., and clerk of the board of education. Both were highly respectable, industrious, and worthy citizens, and were both reasonably thrifty. The father, on the 1st of November, 1896, was possessed of two houses and lots, adjoining each other, one called the "large house," in which he lived with his son and his family, and the other and smaller one that here in dispute. Both were free of incumbrance, and the father had also $800 in bank. The son was worth three or four thousand dollars, invested in bonds and mortgages. The father, in 1896, had attained the age of 78 years, and desired to retire from business, and on that occasion entered into a verbal contract with his son, the complainant, as follows: The son was to take the stock of goods in the store, the cost price of which was about $2,500, but which was in fact worth about half that sum, and was to be the owner in equity of all the real estate, but was to provide his father with one of the suites of rooms in the house, consisting of parlor, sitting room, and two bedrooms, with competent board, etc., and a cash payment of seven dollars a week for spending money. The son further agreed to put the premises in repair. The contract was entirely oral. The parties lived in perfect amity. The son's wife seemed to be not only entirely satisfactory to the father, but rather a favorite with him. Mrs. Ellenberger, the defendant, kept a little hardware store a 217 few doors from the residence of the Foths, and shortly after this new arrangement the old gentleman developed a desire for her company, and visited her frequently. He took her on trolley excursions and to places of public amusement. This disposition increased, and, I think, was, later on at least, encouraged by Mrs. Ellenberger. The proofs show that on several occasions she gave him invitations to visit and take supper with her. At the time that the arrangement was made between the father and son, the father, besides being entirely free of debt, had, as before stated, about $800 in bank, $400 of which he loaned or gave to his son, the complainant, and the other $400 kept for his personal use. The father very soon used up the $400, and also the whole of the income of $7 a week, which was paid to him regularly by his son, and the son naturally believed that he was spending this money on Mrs. Ellenberger. The evidence satisfies me that he was right in this supposition. Some time in the year 1897, or early in 1898, the complainant's wife found fault, in the presence of the old gentleman, with the three sons by the first wife, who were at that time members of the family, because they did not on a certain occasion come promptly to their midday meal, and put her to trouble because of their tardiness in that respect. They had been detained at Mrs. Ellenberger's house. The grandfather, who was present, expressed dissatisfaction at the stepmother's chiding of these children, and in turn chided her in severe and abusive terms, using vile epithets, and attempting personal violence upon her, and finally called the boys to go with him to Mrs. Ellenberger's. In the course of the quarrel, Mrs. Foth, irritated by the circumstances, stated that she was dealing with the boys, and not with their grandfather, and charged him with caring more for Mrs. Ellenberger than for the members of his own family. This angered the old gentleman, and excited his resentment against Mrs. Foth, which he afterwards seemed to cherish. It appears that he reported to Mrs. Ellenberger what Mrs. Foth had said about their intimacy. Afterwards, in the spring of 1898, he repudiated the verbal contract that he had made with his son to give him the pieces of real estate; whereupon the son declined to pay him the full seven dollars a week, and said he could not afford to pay him more than four dollars a week. This the old gentleman accepted, and seemed satisfied with it until on one occasion, when he asked for a payment then due,. and his son, who had been confined to his bed by illness, stated he did not have so much money on hand, except what belonged to his clients, and that he could not pay it out of that money, and begged off for a few days. This angered the father, and he immediately procured a mortgage loan of $1,200 upon the larger of the two pieces of property. The son heard |