Allen v. Hauss

• Decision Date: 31 May 1923
• Docket Number: 513.
• Citation: 290 F. 253
• Parties: ALLEN v. HAUSS.
• Court: U.S. District Court — Eastern District of Michigan

290 F. 253

ALLEN v. HAUSS.

No. 513.

United States District Court, E.D. Michigan, Southern Division.

May 31, 1923

Lucking Helfman, Lucking & Hanlon, of Detroit, Mich., for plaintiff.

Angell Turner & Dyer, of Detroit, Mich., for defendant.

SIMONS District Judge.

The plaintiff, a resident of the state of Michigan, brought suit in the circuit court for the county of Wayne and state of Michigan, by a bill in chancery against the defendant, Ethel A. Hauss, a resident of the state of Florida-- the bill charging in substance that the plaintiff is the widow of David D. Allen, deceased; that before his death he had secretly made alleged gifts of nearly all of his stock to his daughter, the defendant Hauss, for the purpose of depriving the plaintiff of her widow's rights in the estate; that the deceased and the defendant had conspired together to this end, and that the gifts were in the nature of a testamentary disposition and were not fully delivered, the donor having kept the income of the same during his life; that the donations were in fraud of the plaintiff's rights; that the deceased's executor, having taken part in the transfer and prepared the instruments of conveyance, was disqualified to sue to set them aside; and asking that the alleged gifts be set aside and the property represented by them, or its equivalent, be restored to the estate of the deceased, and the plaintiff be declared to be entitled to her share in such gifts, and for other relief. A few days after the original bill was filed, an amended bill was filed joining the Security Trust Company, a Michigan corporation the executor named in the will of David D. Allen, and special administrator of his estate, as party defendant, alleging that the Security Trust Company had in its possession 50 shares of capital stock of the Ford Motor Company of Canada, Limited; that such shares belonged to the estate of the deceased; that the plaintiff feared they might be claimed by the defendant Hauss; and praying that the said shares be declared part of the estate of the deceased.

The appearance of the defendant Hauss was entered on November 15, 1922, and on the 27th day of November, 1922, the cause was removed to the United States District Court for the Eastern District of Michigan. On the 29th of November, 1922, defendant Hauss filed an answer denying fraud and undue influence, and claiming ownership of the fifty shares of stock in possession of the Security Trust Company, and on January 2, 1923, filed an amended answer. The Security Trust Company answered the amended bill of complaint on December 1, 1922, admitting having prepared the instruments of transfer from the deceased to the defendant Hauss, and denying that the plaintiff is entitled to any relief against it.

This is a motion to remand the cause to the Wayne county circuit court, because one of the defendants, who is a necessary and indispensable party, is a resident of the same state as is the plaintiff, and this court has no jurisdiction.

The principal questions involved are:

(1) Is the grantor, or, in case of his death, the personal representative, a necessary and indispensable party to a suit to set aside a fraudulent conveyance?

(2) Can complete relief be obtained as to the 50 shares in possession of the executor without joining the executor, or is there a separable controversy as to such shares?

Where it is charged that the grantor, as well as the grantee, has been guilty of fraud, it has been held that the grantor is a necessary party to a suit to set aside the conveyance. Swan Land Co. v. Frank, 148 U.S. 603, 13 Sup.Ct 691, 37 L.Ed. 577; Graves v. Corbin...