Dioguardi v. Curran

• Decision Date: 15 October 1929
• Docket Number: No. 2832.,2832.
• Citation: 35 F.2d 431
• Parties: DIOGUARDI v. CURRAN. In re DIOGUARDI.
• Court: U.S. Court of Appeals — Fourth Circuit

35 F.2d 431 (1929)

DIOGUARDI v. CURRAN.

In re DIOGUARDI.

No. 2832.

Circuit Court of Appeals, Fourth Circuit.

October 15, 1929.

Lawrence S. Kaufman and Robert Barron, both of Baltimore, Md., for appellant.

Samuel H. Hoffberger, of Baltimore, Md. (Leon I. Kappelman, of Baltimore, Md., on the brief), for appellee.

Before PARKER and NORTHCOTT, Circuit Judges, and HAYES, District Judge.

PARKER, Circuit Judge.

This is an appeal from an order in a controversy arising in bankruptcy, wherein the trustee was held to be entitled to certain leasehold property in the city of Baltimore. There is no dispute as to the facts. The petition in bankruptcy was filed December 29, 1927, and the order of adjudication was entered on the same day. At that time the property in question was owned by the bankrupt and his wife as tenants by the entireties. Two days later the wife died, and the bankrupt thereupon became vested with the sole and exclusive ownership of the property. His discharge was not granted until March 10th following. The only question in the case is whether, under the law of Maryland, a bankrupt, or his creditors, have such rights in an estate by entireties held by the bankrupt and his wife at the time of the filing of the petition that, upon the death of the wife before the bankrupt's discharge, the property vests in the trustee in bankruptcy.

We can dispose, at the outset, of the seeming complication resulting from the death of the wife. That this occurred prior to the bankrupt's discharge is, we think, entirely immaterial. The rights of the trustee in the property of the bankrupt relate, not to the date of the latter's discharge, but to the date of the filing of the petition in bankruptcy. Bankruptcy Act, 70a, 11 USCA § 110(a); Everett v. Judson, 228 U. S. 474, 33 S. Ct. 568, 57 L. Ed. 927, 46 L. R. A. (N. S.) 154; Firestone Tire & Rubber Co. v. Cross (C. C. A. 4th) 17 F.(2d) 417, 423. And there is nothing in the Act of June 25, 1910 (11 US CA § 75(a) (2), which in any wise helps the position of the trustee. That act merely vests the trustee, as of the date of the filing of the petition, with the rights, remedies, and powers of a creditor holding a lien by legal or equitable proceedings as to property of the bankrupt in the custody of the court, and of a judgment creditor holding an execution returned unsatisfied as to property not in the custody of the court. As the estate by entireties was not in the custody of the court, and as a judgment creditor holding an execution duly returned unsatisfied would have had no rights against it, unless the bankrupt had an interest therein reachable by his creditors, the question comes back to the interest of the bankrupt in the estate by entireties at the time of the filing of the petition. Did the bankrupt have, at that time, any interest in the estate which, in the language of section 70a of the Bankruptcy Act, 11 USCA § 110(a), "he could by any means have transferred or which might have been levied upon and sold under judicial process against him." If he did, that interest passed to his trustee. If he did not, the fact that the bankrupt subsequently became vested with such an estate upon the death of his wife is immaterial, so far as the rights of the trustee are concerned. Hull v. Farmers' Loan & Trust Co., 245 U. S. 312, 38 S. Ct. 103, 62 L. Ed. 312; Everett v. Judson, supra; In re Benson, Fed. Cas. No. 1,328; In re Hogan (C. C. A. 7th) 194 F. 846.

We agree with counsel for the trustee that, whether the bankrupt at the time of the filing of the petition had such interest in the estate by entireties as he could have transferred, or as could have been levied upon or sold under judicial process against him, is to be determined by the law of Maryland. Cullom v. Kearns (C. C. A. 4th) 8 F.(2d) 437, 47 A. L. R. 432; Healey Ice Machine Co. v. Green (C. C.) 181 F. 890. But, after a careful examination of the decisions of that state, we are satisfied that he did not have such interest. The estate by entireties in Maryland has all of its common law incidents. It is based upon the fiction of the unity of husband and wife, who take the estate, not as joint tenants, or as tenants in common, but by the entirety, per tout, et non per my. Marburg v. Cole, 49 Md. 402, 33 Am. Rep. 266; Ades v. Caplin, 132 Md. 66, 103 A. 94, L. R. A. 1918D, 276; U. S. v. Tyler (C. C. A. 4th) 33 F.(2d) 724, decided July 1, 1929. Neither spouse can dispose of any part of the estate without the consent of the other. Marburg v. Cole, supra; McCubbin v. Stanford, 85 Md. 390, 37 A. 214, 60 Am. St. Rep. 329; Ades v. Caplin, 132 Md. 66, 103 A. 94, L. R. A. 1918D, 276. And neither has such interest in the property as can be subjected to the lien of a judgment for his debts or seized and sold under an execution on the judgment. Jordan v. Reynolds, 105 Md. 288, 66 A. 37, 9 L. R. A. (N. S.) 1026, 121 Am. St. Rep. 578, 12 Ann. Cas. 51; Frey v. McGaw, 127 Md. 25, 95 A. 960, L. R. A. 1916D, 113; Ades v. Caplin, supra.

Such being the characteristics of the estate by entireties in Maryland, we think that it is settled by the decision of this court that the trustee in bankruptcy of the husband acquired no interest therein. Cullom v. Kearns, supra. That decision, it is true, dealt with an estate by entireties under the law of North Carolina; but it is...