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Wicker v. Messinger.
intended to return, and that it is consistent with the answers to the special interrogatories.
Finding no error in the record, the judgment of the court of common pleas will be affirmed.
[Franklin (2nd) Circuit Court, January Term, 1901.]
REINHARD v. REINHARD.
JURISDICTION IN SUIT TO QUIET TITLE AGAINST TRUSTEE IN BANKRUPTCY. The jurisdiction of a state court to declare a trust in and to quiet title to real estate, at the suit of a person in possession against a bankrupt and his trustee in bankruptcy, is not divested by the bankrupt act of 1898.
HEARD ON ERROR.
John J. Stoddard and Lyman H. Innis, for plaintiff, cited:
Bardes v. Bank, 178 U. S. 524, as establishing the following propositions :
First-That the powers conferred upon the courts by the bankruptcy act are: (a) Supervisory. (b) The determination of controversies at law and in equity.
Second-That all jurisdiction of the first class of matters is placed with the district courts.
Third-That all jurisdiction to try controversies as to property or ownership, the title to which is in dispute, between the trustee and third parties which is vested in the federal courts is vested in the circuit courts of the United States but subject to the provisions that (a) the parties must have diverse citizenship or (b) jurisdiction may be obtained by consent.
Fourth-That all other jurisdiction and authority over disputes between the trustee and third parties remains where it belongs by the fundamental law of the land, namely, in the state courts.
Pugh & Pugh and T. E. Steele, for defendant in error, Rector, Trustee.
The plaintiff seeks by this suit to have a trust declared in certain real estate in the city of Columbus, the title to which is in the name of her husband, the defendant, Henry A. Reinhard, and of which she avers she is in possession. She also asks to have the title transferred to her and to quiet her title against the trustee in bankruptcy of her husband.
The court of common pleas sustained a demurrer to the petition on the ground that it did not have jurisdiction of the subject matter and dismissed the plaintiff's petition.
We think the court erred and the judgment is reversed, the demurrer is overruled and the case is remanded for further proceedings.
In Eyster v. Gaff, 91 U. S. 521, 525, Mr. Justice Miller says: "The debtor of a bankrupt, or the man who contests the right to real or personal property with him, loses none of those rights by the bankruptcy of his adversary.
Franklin Circuit Court.
"The same courts remain open to him in such contests, and the statute has not divested those courts of jurisdiction in such actions."
See also the cases cited in the opinion, and Bardes v. Bank, 178 U. S. 524 [20 S. Ct. Rep. 1000]; Bryan v. Bernheimer, 181 U. S. 188 [21 S. Ct. Rep. 557]; Wall v. Cox, 181 U. S. 244 [21 S. Ct. Rep. 642.
Black on Bankruptcy, page 124, commenting upon section 23 of the bankrupt law', says: The bankruptcy act of 1867 contained no provisions conferring or recognizing jurisdiction in the state courts to entertain controversies between the assignee in bankruptcy and adverse claimants," and points out that section 23 was purposely so drawn to give no occasion of doubt, and he says the true rule is stated in Eyster v. Gaff, supra.
[Ashland (5th) Circuit Court, May Term, 1901.]
Douglass, Vorhees and Donahue, JJ.
HANNAH FAST V. DAVID UMBAUGH ET AL.
1. DOWER-CONVEYANCE BY HUSBAND IN FRAUD of MARITAL RIGHTS. Where a husband, voluntarily and without consideration, disposes of his iuterest in real estate, though it be only an equity therein, during coverture, without the knowledge or consent of his wife, it is a fraud on her marital rights, and she, at his death, is entitled to dower in such property.
2. BONA FIDE PURCHASER WITHOUT NOTICE-RIGHT of.
A bona fide purchaser of such property at judicial sale, without any knowledge or notice of this equitable claim of dower by the widow, would hold it free from such claim of dower.
3. NOTICE SUFFICIENT TO PUT ON INQUIRY AS TO Claim of Dower. But where the purchaser of real estate at judicial sale had actual knowledge or notice that the widow claimed that she was entitled to the rights of a widow in said property, though the children of her deceased husband claimed she was not so entitled, and the purchaser, with such knowledge of such claim, decides that said widow has no claim, he decides at his peril; and it sufficient information comes to him to put him on inquiry, he cannot rely upon his rights as a bona fide purchaser for value.
4. DOWER INTEREST Entitled to ShaRE IN RENTS AND PROFITS.
A widow, being entitled to dower in real estate, is only entitled to share in the rents and profits arising therefrom, from the date of the filing of her petition for assignment of dower; and the commissioners in assigning dower shall ascertain the rental value of the property from that time.
J. W. Albaugh, and Nichols & Boffenmyer, for plaintiff, cited:
Dower: Sec. 4188 Rev Stat.; McDonald v. Aten, 1 O. S. 293; Christmas v. Spink, 15 Ohio, 600, 601; Miller v. Wilson, Ib. 108; Abbott v. Bosworth, 36 O. S. 605, 608; Ward v. Ward, 63 O. S. 125 [57 N. E. Rep. 1095]; Woodworth v. Paige, 5 O. S. 70.
C. P. Winbigler, for defendants, cited:
Dower: Settlement of decedents' estates, 694; Milter v. Wilson, 15 Ohio, 108, 113 and 117; Rands v. Kendle, 15 Ohio, 671; Abbott v. Bosworth, 36 O. S. 605 [39 Am. Dec. 218].
Fraud: 10 Am. & Eng. Enc. Law (1 ed) 203; 1 Woerner on Adm. Sec. 113; 35 Am. Rep. 699; 4 Cush. (58 Mass.) 138.
Fast v. Umbaugh.
As to personalty: Thayer v. Thayer, 39 Am. Dec. 219n; Firestone v. Firestone, 2 Ohio, 415; Butler v. Butler, 30 Am. Rep. 441, 445. By appointment: 1 Scribner on Dower, 295; 1 Waerner Am. Law of Adm. 245.
As to origin of dower: Dunseth v. Bank, 6 Ohio, 77, 78.
The case of Hannah Fast against David Umbaugh and others comes into this court by appeal, and the action is for the assignment of dower in the premises described in plaintiff's petition and for rents and profits in the same. Her claim is based on the facts which are substantially as follows:
On April 6, 1876, one George Fast, who was afterwards plaintiff's husband, was the owner in fee of the real estate described in plaintiff's petition, and on said date said George Fast entered into a contract with his son, Jonathan Fast, by which he conveyed said premises to his said son, in consideration of six thousand dollars and the promise on the part of the son to support his father, the said George Fast, and his wife, the mother of said Jonathan Fast, during their lives, and to support the survivor in the event of one's death prior to the other. Said consideration for said contract was secured by a mortgage on the premises. Said contract of sale was, in September, 1879, rescinded and said mortgage released by arrangement between the said Jonathan Fast and his father, George Fast. Prior to this the mother of said Jonathan Fast had deceased, and the said George Fast, on December 5, 1877, had intermarried with the plaintiff. Said Jonathan Fast on September 30, 1879, without consideration, conveyed the said premises, by direction of his father, said George Fast, and without the knowledge or consent of the plaintiff, to the children of said George Fast, who are named in the deed of that date. Said George Fast, on July 4, 1888, died intestate, leaving the plaintiff his surviving widow. The plaintiff, on August 14, 1897, (and this date will become material as we proceed further), filed her petition in this action. The defendants, the children, deny the allegations of the petition as to the alleged fraud and denied the agreement to reconvey the property by Jonathan to George; that the defendant, David Umbaugh, bought at public sale a portion of the premises in a partition proceeding, and he files a separate answer and avers, that he now owns and is in possession of all the lands described in plaintiff's petition, and has paid full value therefor. He further claims that he did not know that plaintiff had made any claim whatever to said land before he became the purchaser. He denies all charges of fraud and conspiracy alleged in the petition.
On December 15, 1888, one Ida Swope, one of the children of said George Fast, filed her petition for partition in the common pleas court of this county, praying for partition in the premises in the petition described, making the children and heirs of said George Fast, deceased, parties thereto, but the plaintiff herein was not made a party. Such proceedings were had in said action, that on July 6, 1889, said premises were sold by the sheriff of this county, at public auction, to the defendant, David Umbaugh, for $4,175; which sale was upon terms of one-third cash, one-third in one year and one-third in two years. The sale was confirmed and the premises conveyed by the sheriff to said purchaser, who is still the owner thereof.
Ashland Circuit Court.
The plaintiff's contention is, that she is entitled to dower in said. premises by reason of her marriage with the said George Fast, which occurred on December 5, 1877; that on July 4, 1888, said George Fast died leaving the plaintiff his widow, and on December 15, 1888, the same year, said partition suit was commenced.
It is contended by defendants, that the plaintiff is not entitled to dower, because, during the coverture existing between the plaintiff and George Fast, said George Fast was not seized of the legal title to said lands, or any part thereof, nor at the time of his death did he have any equity in said property.
These two statements of facts raise the material questions that are to be considered, so far as questions of law are concerned: First, whether it was necessary under the circumstances and facts claimed here, that at the time of his death, George Fast should have an equity in these premises, in order that the plaintiff would have her rights as to dower.
In examining the evidence in the case we find, as a question of fact, that the sale of this property by George Fast to his son Jonathan was a valid sale, and was for a valuable consideration, and was made in good faith; and it passed the legal title of this property to Jonathan Fast. That sale was, by the consent of the parties, rescinded. The effect of the rescission, without a reconveyance, would be, that George Fast would be the equitable owner of this property, which he had so conveyed to his son. There is no controversy as to the fact that this sale was rescinded. The parties had a right to rescind. Jonathan had a right, if he found he could not carry out the contract, with the consent of the father, to throw up the contract and rescind the transaction and release himself from the obligation that he had entered into with his father with reference to this property. But it must not be lost sight of, that when George Fast released this contract, when he gave up this mortgage that he had, when he released and discharged Jonathan from that contract, he was then attempting, he was, in fact, giving up an equity that he had in this property. He did not have the legal title at that time, but he had the real value of the property, that he had transferred to his son; it was an equity then in him. The naked legal title, which, when the contract was rescinded, remained in Jonathan, was a mere paper title and practically of no value, because the real value, the equity, was in the father, which had been secured to him by the contract secured by the mortgage, that he had with his son to keep him during his lifetime. So, as a question of fact, we find, under the circumstances and the situation, that the legal title to this property was not in said George Fast during the coverture of the plaintiff with him.
That leads us to the consideration of the next question: Was said George Fast seized of an equitable title? And if he was seized of an equitable title, could he then dispose of that equity, during his lifetime, without the consent or knowledge of his wife and thereby deprive her of her rights as his widow, in case she survives him? This is the vital question in the case.
The legal title was not reconveyed to George Fast by Jonathan, but by direction of said George it was conveyed to his, George's, children. The mortgage was also released; the contract rescinded; and by direction of his father, said George Fast, Jonathan, who had nothing but the legal title, conveyed the property to the children of said George Fast.
Fast v. Umbaugh
Can a husband, without the knowledge or consent of his wife, voluntarily and without consideration dispose of his property, even if it be an equity, during coveture, whereby she is defrauded of her rights as a married woman, in case she survived her husband as his widow? We believe the Supreme Court of Ohio in a recent case has settled this question.
In Ward v. Ward, 63 Ohio St. 125 [57 N. E. Rep. 1095], the court held, that where a man has entered into a contract of marriage, with a woman, but immediately before the consummation of the contract of marriage, he conveys to his children his property, without consideration, and without the knowledge or consent of the party with whom he has entered into such contract to marry, and then afterwards consummates the marriage, such an act on the part of the husband is a fraud upon her, and a fraud upon her rights as his wife. In that case it is plainly and easily seen, that if he passed the title to his property before the consummation of the contract of marriage, and never again became the owner of the title up to the time of his death, he would not be strictly regarded as the owner of the equity of the property. But that is not material, it is not necessary according to the holding of the Supreme Court.
The fact that he entered into the marriage relation immediately after making a disposition of his property, without the knowledge of the party with whom he has entered into the contract, is a fraud upon her rights, and she is entitled to dower in his real estate, if she survives him.
We think that case is stronger than this. We believe the doctrine there goes farther, because at the time of the conveyance in that case the relation existing between the parties was that of debtor and creditor, in the event that the contract of marriage had not been cosummated. It is true that where a man enters into a contract of marriage with a woman, the moment he enters into the contract to be performed in the future, in case of a violation of the contract, the relation of debtor and creditor on a breach of the contract arises between them; she is a creditor in contemplation of law from the date of the contract. But in the case at bar, where there was an agreement between Jonathan and his father, that the contract was to be rescinded, and in compliance with that agreement the contract was rescinded, and the valuable part that had been secured to the father by mortgage had been released, but the legal title to this property was not reconveyed by Jonathan to his father, and the father, who was then seized of the equitable title to said property, directs the son Jonathan, who was then paying nothing for said property, to convey the same to the children of said George, the father, without consideration, and without the knowledge or consent of the plaintiff in this action, we hold that such a conveyance is a constructive frand upon the plaintiff, and if she survives her said husband, she would be entitled to her dower interest therein, unless Mr. Umbaugh, who was the purchaser of this property at judicial sale, can hold it as an innocent purchaser, as against her claim of dower.
If Mr. Umbaugh had purchased this property at judicial sale, although he bought it on time, yet, if he received his deed and confirmation of sale and the whole transaction, as far as he was concerned, had taken place without any knowledge or notice of this equitable claim of dower in the premises by plaintiff, he would hold it as against her.