In re McKenzie

• Decision Date: 07 October 1905
• Docket Number: 50.
• Citation: 142 F. 383
• Parties: In re McKENZIE.
• Court: U.S. Court of Appeals — Eighth Circuit

142 F. 383

In re McKENZIE.

No. 50.

United States Court of Appeals, Eighth Circuit.

October 7, 1905

(Syllabus by the Court.)

The grant of jurisdiction to the Circuit Courts of Appeals (Bankr. Act July 1, 1898, c. 541, Sec. 24a, 30 Stat. 553 U.S. Comp. St. 1901, p. 3431), to review by appeal the final decision of a controversy arising in bankruptcy proceedings of which that court would have had appellate jurisdiction if it had arisen in any other case in a federal court, and the grant of jurisdiction to revise and superintend in matter of law the proceedings of the inferior courts of bankruptcy (section 24b (U.S. Comp. St. 1901, p. 3431)) are not exclusive of each other, but cumulative or concurrent grants the former of jurisdiction to review questions of law and of fact, the latter of jurisdiction to review questions of law only.

An aggrieved party often has a choice of these methods.

A decision of a controversy in bankruptcy proceedings which involves a widow's right of dower in the estate of the bankrupt presents a case of this character, and where no disputed question of fact is in issue this court has jurisdiction to review it by a petition for revision.

It was the intention of Congress and the public policy embodied in the bankruptcy law to divide the estate of a bankrupt between him, his wife and children on the one hand, and his creditors on the other hand, as the laws of the state of his domicile authorized its division under like circumstances.

Bankr Act July 1, 1898, c. 541, Sec. 8a, 30 Stat. 549 (U.S. Comp. St. 1901, p. 3425), expressly enacts, and its true interpretation is, that the widow and children of a bankrupt who dies during the pendency of bankruptcy proceedings by or against him shall have the same rights of dower and the same allowances as are granted to them by the laws of the state of his domicile under similar circumstances.

The intent of a legislative body in enacting a statute which declares and preserves existing laws and rights is to dispel doubt and to prevent the modification or disregard of such laws and rights. Such statutes are not nugatory because they do not modify existing laws, because their true purpose and effect are to prevent such modification.

Under the laws of Arkansas (Kirby's Dig. Sec. 2687), which give the widow dower rights superior to the rights of creditors of her deceased husband in all the real estate of which he was seized of an estate of inheritance at any time during the marriage, unless she has relinquished them in legal form, a trustee in bankruptcy may not sell his real estate free from these rights, nor divest his widow of her dower rights in the proceeds of sales of it made without her consent, where the bankrupt dies after adjudication of bankruptcy and before distribution of the proceeds of the sales.

A widow of a bankrupt who dies after adjudication of bankruptcy and delivery of possession to a qualified trustee has no rights of dower in his unexempt personal property or its proceeds under the laws of Arkansas, which provide that a widow 'shall be entitled, as part of her dower in her own right, to one-third of the personal estate * * * whereof her husband died seised or possessed' (Kirby's Dig. Sec. 2708), because he was not seised or possessed of such personal property at the time of his death.

N. T. White and Ben J. Altheimer, for petitioner.

Morris M. Cohn, for respondent.

Before SANBORN, HOOK, and ADAMS, Circuit Judges.

SANBORN Circuit Judge.

This is a petition to revise the judgment of the District Court of the Eastern District of Arkansas to the effect that the widow of a bankrupt, who died after his adjudication, is not entitled to any rights of dower in the proceeds of his personal estate which passed to his trustee in bankruptcy. In re McKenzie (D.C.) 132 F. 986. The petitioner was the wife of Ben F. McKenzie. On February 16, 1904, he was adjudged a bankrupt on his own petition and his property was thereupon placed in the possession and control of a trustee in bankruptcy. On June 19, 1904, after the trustee had converted this personal property into more than $2,000 in money, the bankrupt died. His widow petitioned the district court for one-third of the proceeds of this property and her petition was denied.

Counsel for the respondent insists that this court is without jurisdiction to determine the question of law presented by the petition for the reason that the amount involved exceeds $500 and section 25a of the bankruptcy law of 1898 permits an appeal 'from a judgment allowing or rejecting a debt or claim of five hundred dollars or over. ' Bankr. Act July 1, 1898, c. 541, 30 Stat. 553, U.S. Comp. St. 1901, p. 3432. But the claim of the petitioner is probably not of the character referred to in this section of the statute, and if it were the grant of the jurisdiction ' to revise in matter of law the proceedings of the several inferior courts of bankruptcy' by section 24b (U.S. Comp. St. 1901, p. 3431), and the grant of jurisdiction to review final decisions therein by appeal, are not exclusive of each other, but concurrent and cumulative. Decisions of questions of law may in many cases be revised by petition in the Circuit Courts of Appeals under section 24b during the pendency of the proceedings, which are also reviewable by appeal after final decisions have been rendered. The petition for revision in effect invokes a decision upon a demurrer, an appeal, one upon the merits of the case. The former permits the appellate court to determine legal questions without an examination of the evidence upon disputed issues of fact, the latter allows it to review the entire case. In many cases parties aggrieved have the option to present questions of law by petition for revision, or questions of law and fact by an appeal.

This case is of that nature. It involves the title to a portion of the estate of the bankrupt, not a claim of a creditor based upon his debt, obligation, or wrongful act. If the controversy had arisen in a federal court when it was not sitting in bankruptcy, the final decision of it would have been reviewable in this court by writ of error or appeal. Jurisdiction to review the final judgment in this case upon both the law and the facts by an appeal was granted by section 24a, and jurisdiction to revise the action of the bankruptcy court herein by section 24b. As the petitioner sought to review a question of law only, the proceeding by petition for revision was the more appropriate and convenient method and this court has jurisdiction to entertain it. Act March 3, 1891, c. 517, Sec. 6, 26 Stat. 828, 1 U.S. Comp. St. 1901, p. 549; Bankr. Act July 1, 1898, c. 541, Secs. 2 (7), 24a, 24b, 30 Stat. 546, 553 (U.S. Comp. St. 1901, pp. 3421, 3431, 3432); Dodge v. Norlin, 66 C.C.A. 425, 429, 133 F. 363, 367.

The intention of Congress portrayed and the public policy embodied in the bankruptcy law was to divide the estate of the bankrupt between him, his wife and children on the one hand, and his creditors on the other, in the same way that the laws of the state permitted its division under similar circumstances. This purpose is evidenced by the preservation of exemptions allowed to the bankrupt by the state laws (Bankr. Act July 1, 1898, c. 541, Sec. 6, 30 Stat. 548 (U.S. Comp. St. 1901, p. 3424)), by the exception of his exemptions from the property which passes to the trustee by the transfer to the latter of the title to all the property not exempt which the bankrupt could have transferred before the petition was filed and all that could have been sold under judicial process against him (Sec. 70a, 30 Stat. 565 (U.S. Comp. St. 1901, p. 3451)), and by the provision that in case of his death the widow and children shall have the same rights in his property that they would have had under similar circumstances under the laws of the bankrupt's residence (Sec. 8a, 30 Stat. 549 (U.S. Comp. St. 1901, p. 3425)). No words occur to us which would indicate this intention more clearly than those of the section last cited. It reads:

'Sec. 8. Death or Insanity of Bankrupts.-- a. The death or insanity of a bankrupt shall not abate the proceedings, but the same shall be conducted and concluded in the same manner, so far as possible, as though he had not died or become insane: Provided, that in case of death the widow and children shall be entitled to all rights of dower and allowance fixed by the laws of the state of the bankrupt's residence.'

The rights of the bankrupt and of his wife or widow and children in his estates are therefore fixed by the laws of the state of his domicile, and the right of the petitioner in this case to one-third of the proceeds of the personal estate of this bankrupt is conditioned by the laws of the state of Arkansas.

Those laws provide that a widow shall be endowed of one-third of all the lands of which her husband was seised of an estate of inheritance at any time during the marriage unless the same have been relinquished in legal form, Kirby's Dig. 1904, Sec. 2687, that no deed or conveyance made by her husband, no judgment or decree against him, and no laches, covin, or crime of her husband shall prejudice this right of dower (section 2702), and that as against creditors the widow shall be endowed of one-third of the real estate in fee simple if a new acquisition, and not ancestral, of which the husband died seised (section 2709).

Clause 5 of section 70a of the bankruptcy law (Act July 1, 1898, c 541, 30 Stat. 565 (U.S. Comp. St. 1901, p. 3451)), defines the property to which the trustee in bankruptcy took title in this case and hence it is the only one that it is necessary for us to consider. That section declares that upon the appointment and qualification of the trustee he shall 'be vested by operation...