Horton v. Moore

• Decision Date: 15 March 1940
• Docket Number: No. 8403.,8403.
• Parties: HORTON v. MOORE.
• Court: U.S. Court of Appeals — Sixth Circuit

110 F.2d 189 (1940)

HORTON v. MOORE.

No. 8403.

Circuit Court of Appeals, Sixth Circuit.

March 15, 1940.

Sempliner, Dewey, Stanton & Honigman, Jason L. Honigman, and Albert E. Smith, all of Detroit, Mich., for appellant.

Harold R. Martin, of Detroit, Mich., for appellee.

Before HICKS, SIMONS, and HAMILTON, Circuit Judges.

HAMILTON, Circuit Judge.

This is an appeal from an order of the District Court holding that certain property did not constitute an asset of the bankrupt at the date of adjudication.

The material undisputed facts are as follows: Allison A. Moore died testate in 1928, the owner of real estate and personal property in the county of Wayne, Michigan. He left surviving his widow, Margaret Moore, the appellee, his son, Harold H. Moore, and his daughter, Helen Margaret Moore. The will of the deceased was executed February 27, 1928, and was duly probated and recorded by the Probate Court for the county of Wayne, Michigan, December 28, 1928. The only items of the will which are material to the controversy are the third, fourth, and fifth, which in summary are as follows:

(3) The residue of the estate is placed with three trustees in trust (a) to first pay, during the lifetime of testator's wife, the sum of $100 monthly to each of his two children, Harold H. Moore and Helen Margaret Moore, from the income of the trust estate, (b) to then pay to testator's wife, during her lifetime, the balance of the net income from the trust estate, (c) to use a portion of the principal of the trust estate if the net income is insufficient for the wife's comfortable care and support.

(4) On the death of the wife, the trustees shall divide the trust estate into two equal parts: (1) one of such shares is given, devised and bequeathed absolutely to his son, Harold H. Moore; (2) the other share is given to the daughter.

(5) Should the son die before receiving such share of the estate leaving lawful issue surviving him, then such share go to such issue; (b) should the son die before receiving such share of the estate leaving no lawful issue surviving him, then his share is to go to other named persons.

On March 12, 1936, appellee, Harold H. Moore, filed his voluntary petition and on that date was adjudged a bankrupt. In his schedule of assets, he referred to his interest in his father's estate, stating that it was a contingent remainder and did not vest in his trustee under U.S.C.A. Title 11, Sec. 110, sub. a(5), Bankruptcy Act of July 1, 1898, Ch. 541, 30 Stat. 565, as amended.

On November 19, 1938, the widow, Margaret Moore, died leaving the appellee surviving. On September 12, 1939, the Probate Court of Wayne County, Michigan, approved a division of the trust estate and assigned to the bankrupt certain real estate and personal property as his share. The bankrupt owed approximately $23,000, and valued his interest in his father's estate at the date of the death of his mother at approximately $63,000. He was forty-seven years of age at the date of adjudication, and his mother approximately seventy-five, and she had been confined to her bed on account of illness for about eight years. Appellant trustee filed his petition for directions as to the disposition of the bankrupt's interest in his father's estate. The Referee after a hearing held that title to the estate vested in the Trustee under Title 11 U.S.C.A. § 110, subd. a(5), and directed its sale from which order appellee filed a petition for review and on hearing the lower court reversed the referee holding that the bankrupt was vested with a contingent remainder in the estate of his father and the trustee had no interest therein, hence this appeal. The sole issue involved is whether the estate devised to the bankrupt by the will of his father is an asset in the hands of the Trustee in Bankruptcy.

"The trustee of the estate of a bankrupt * * * shall * * * be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt * * * to all * * * (3) powers which he might have exercised for his own benefit * * * (5) property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him." 11 U.S.C.A. § 110, sub. a(5).

By the statutes of Michigan (Michigan Compiled Laws, 1929, Sections 12927 to and including 12931, and 12933) contingent estates are made to depend upon two conditions, (1) when the person to whom the estate is given remains uncertain, (2) when the...