Bagley v. Bagley

• Citation: 89 So. 739,206 Ala. 232
• Decision Date: 19 May 1921
• Docket Number: 6 Div. 281
• Parties: BAGLEY v. BAGLEY et al.
• Court: Supreme Court of Alabama

89 So. 739

206 Ala. 232

BAGLEY v. BAGLEY et al.

6 Div. 281

Supreme Court of Alabama

May 19, 1921

Rehearing Denied June 23, 1921

Appeal from Circuit Court, Jefferson County; Horace C. Wilkinson Judge.

Bill by Wm. A. Bagley against John W. Bagley and others to redeem certain land, with cross-bill by respondents for reformation etc. From a decree granting the relief prayed under the cross-bill, and denying relief under the original bill complainant appeals. Affirmed.

Harsh, Harsh & Harsh, of Birmingham, for appellant.

Arthur L. Brown, of Birmingham, for appellees.

THOMAS J.

The purpose and prayer of the bill by W.A. Bagley were for redemption against respondent John W. Bagley.

Respondent's answer was made a cross-bill, disclosed his joint interest in the lands with N.E. Bagley, prayed that Isham D. Hobbs, as trustee of the bankrupt estate of W.A. Bagley, Jonas Schwab, as vendee, and N.E. Bagley, as vendee of Schwab, be made parties respondent, sought correction of said conveyances, and for accounting for occupation and for waste. There was no error in making as parties respondent to the cross-bill all parties at interest in the land, in making the correction of mutual mistake of the conveyances thereof, and in its redemption, that a binding decree may be rendered. Cornelius v. Bishop, 88 So. 592, 205 Ala. 503; Wootten v. Vaughn, 202 Ala. 684, 81 So. 660.

Complainant W.A. Bagley, a bankrupt, having failed to schedule the lands in question or his interest therein, had theretofore conveyed the same to his relatives, who were thereafter made respondents to a bill in equity by the trustee in bankruptcy of this complainant. Such conveyances were set aside as fraudulent under the statutes provided for such cases. Thereafter said trustee in the due administration of his trust sold and conveyed the lands to one Schwab, who conveyed to John W. Bagley and N.E. Bagley for the valuable consideration indicated.

If complainant W.A. Bagley sustain his bill, it is upon an alleged agreement to redeem or sell within the time indicated, which writing was executed by John W. Bagley alone. Said respondent in the original bill and complainant in cross-bill filed pleas A and B, averring that W.A. Bagley had no right of "redemption," and that the written agreement on which complainant predicated his right of redemption was without consideration. With the pleas were averments of fact showing that complainant could not recover under his bill for redemption, and setting up a mutual mistake in the description in the several conveyances of the land, from the trustee in bankruptcy to Schwab, and that to John W. and N.E. Bagley, which gave the right of reformation to the end that the conveyances speak the true intention of the parties thereto. On final submission the decree was pursuant to the averments and prayer of the cross-bill, and was supported by the evidence.

When W.A. Bagley was adjudicated a bankrupt, no part of his property or interest in these lands was set apart to him as exempt. His title thereto and interest therein vested in the trustee in bankruptcy, who sold them to Schwab, and from which sale there was no right of redemption. Duncan v. Watson, 198 Ala. 180, 188, 73 So. 448. Nor had he any right of action growing out of his bankruptcy or lands administered therein that may be assigned or enforced in a court of equity. Neuberger v. Felis, 203 Ala. 142, 82 So. 172. That is to say, after his bankruptcy, W.A. Bagley had no property right or interest or right of action in the lands; was without interest in its sale or disposition by his creditors or the trustee holding the legal title for his creditors. The administration of the bankrupt estate had been closed, the lands sold and the proceeds administered, and thereafter W.A. Bagley had no property right or right of action on which to found a right of redemption of the land from the purchasers at trustee's sale or his vendee. In the disposition of the bankrupt's real properties, or interest therein, and in making conveyances thereof, a mutual mistake crept into said conveyances. This misdescription is shown by the pleading and evidence, and the conveyances are sought to be reformed. Such power rests in the inherent jurisdiction of a court of equity.

By operation of law, the title to all of the property or interest in the lands of original complainant had vested in his trustee immediately upon his adjudication as a bankrupt, subject to the right of exemption provided by statute. After its sale by the trustee the creditors were not interested in the lands at the time of the filing of the original and the cross bill, since the trustee had made a complete settlement of his trust, including distribution of the purchase price of the land. The trustee, however, was a proper party, for the prayer of the cross-bill was for a correction in the description of his conveyance to Schwab. The interest of W.A. Bagley's vendees (the several Bagleys by reason of the deeds executed by the bankrupt before his adjudication) was concluded by the proceedings under the statute in the name of the trustee in bankruptcy against them, and the decree set aside their respective conveyances as fraudulent and void, and divested the interest or title of W.A. Bagley and his vendees in and to all of said lands, and declared the same to be vested in said trustee in bankruptcy. Hence, said vendees were not necessary parties to the cross-bill.

If W.A. Bagley had properly listed said lands in his schedules upon or after filing his petition in bankruptcy, and had the trustee omitted or overlooked the sale of certain of them so scheduled, the title to the property unadministered may have reverted to him, upon the closing of the bankrupt proceedings without its disposition by the trustee. Duncan v. Watson, supra; Watson v. Motley, 201 Ala. 25, 75 So. 147. However, such was or is not the case. The bankrupt Bagley did not list said real property or interest therein, having theretofore made fraudulent disposition of it (under the statute) to third parties. He could not thereafter have any interest in this real property founded on antecedent title or interest, nor could subsequent equities in his favor be rested on such title or interest.

The property of the complainant being vested in the trustee immediately upon his adjudication as a bankrupt and the appointment of a trustee, irrespective of the deed made to such trustee by the register in chancery (Duncan v. Watson supra) the decree of the chancery court but cleared the title of the fraudulent conveyances, and confirmed such superior right and title in the trustee. The fact that a mutual mistake in the description of the property was contained in the several conveyances exhibited could not affect the real title of...