Epp v. Bicknell, 12588.

• Decision Date: 31 January 1944
• Docket Number: No. 12588.,12588.
• Citation: 138 F.2d 735
• Parties: EPP v. BICKNELL.
• Court: U.S. Court of Appeals — Eighth Circuit

138 F.2d 735 (1943)

EPP v. BICKNELL.

No. 12588.

Circuit Court of Appeals, Eighth Circuit.

November 12, 1943.

Writ of Certiorari Denied January 31, 1944.

C. A. Sorensen, of Lincoln, Neb. (C.C. Cartney, of Lincoln, Neb., on the brief), for appellant.

Herman Ginsburg, of Lincoln, Neb., for appellee.

Before SANBORN and RIDDICK, Circuit Judges, and LEMLEY, District Judge.

Writ of Certiorari Denied January 31, 1944. See 64 S.Ct. 522.

LEMLEY, District Judge.

This is an appeal from an order of the District Court, made in a proceeding under Section 75 of the Bankruptcy Act, as amended, 11 U.S.C.A. § 203, overruling a motion of a secured creditor to strike certain lands from the debtor's schedules, or in the alternative to require that the schedules be amended to show that the debtor is the owner of an undivided one-half interest only in said lands. The facts are undisputed and are substantially as follows:

On July 12, 1937, the debtor, Robert F. Bicknell, and one Charles W. Peek, his brother-in-law, being indebted to one Annie Bell in the sum of $9,000 for the purchase price of said lands, made and delivered to her their certain promissory note in that amount, and, in order to secure the payment of said indebtedness, executed and delivered to her their certain mortgage deed wherein they conveyed to her the property in question, namely, 160 acres of Nebraska farm lands, which lands were owned and held by them as tenants-in-common, each having an undivided one-half interest therein.

The debtor, Bicknell, was at the time and is now a farmer in actual occupancy, farming the entire tract. His co-tenant Peek, was at the time and is now a merchant and not a farmer.

In due course, said note and mortgage were assigned to the appellant herein, Mrs. Edith Harrison Epp. Thereafter, the indebtedness being in default, Mrs. Epp filed suit in the state court to foreclose her mortgage. On June 24, 1940, a decree of foreclosure was entered, the court finding that there was due Mrs. Epp the sum of $10,008.29, with interest at 8 per cent. from said date. On the same day Peek and Bicknell obtained a nine months' stay of execution. On May 5, 1941, the lands were sold at sheriff's sale to Mrs. Epp for $9,600. On May 21, 1941, and prior to but upon the eve of confirmation of the sale, Peek, the merchant, for the consideration of one dollar, which was actually paid, conveyed to Bicknell, the farmer, his undivided one-half interest in the premises. The evidence reflects that Peek did not believe that there was any equity in the property, and did not desire to attempt to redeem the same, whereas Bicknell did, and that the transfer of Peek's interest to Bicknell was made in the office of Bicknell's attorney and upon the latter's advice and in contemplation of Bicknell's filing a petition in bankruptcy. The petition was filed two days later, asking for relief under subsections a to r, inclusive, of Section 75 of the Bankruptcy Act. On November 10, 1941, Bicknell amended his petition, asking for relief under subsection s. The lands involved here were listed in the schedules attached to said petitions as property of the debtor. The appellant's motion under consideration is directed to these lands.

The ground for appellant's motion is that Peek, not being a farmer, could not maintain a farmer-debtor bankruptcy proceeding, and that his conveyance to his brother-in-law, Bicknell, for a nominal consideration, was made for the purpose of putting the whole title in Bicknell so that he might hinder, delay, and defraud his creditors by the institution of this proceeding.

In the argument before this court, the appellant in effect conceded that the District Court was correct in refusing to strike the entire one hundred and sixty acres from the appellee's schedules, but insisted that it had erred in refusing to grant the alternative prayer of the motion, namely, to require that the schedules be amended to show that the debtor is the owner of an undivided one-half interest only in the lands.

Appellant contends that the conveyance from Peek to Bicknell is void under Section 36-101, Comp.St.Neb.1929, providing in part as follows: "Every conveyance of, or charge upon, any estate or interest in lands, or the rents and profits thereof, made or created with intent to defraud prior or subsequent purchasers for a valuable consideration, shall, as against such purchasers, be void"; and, Section 36-401 of said Statutes, which is, in part, as follows: "Every conveyance or assignment, in writing or otherwise, of any estate or interest in lands * * * made with the intent to hinder, delay or defraud creditors or persons, of their lawful rights, damages, forfeitures, debts or demands * * * shall be void"; and in this connection calls particular attention to certain Nebraska decisions, not necessary to cite here, holding that a conveyance between relatives which has the effect of hindering or delaying a creditor in the collection of his debt is presumptively fraudulent as to an existing creditor, and that a brother-in-law comes within the well-settled meaning of the word "relatives"; she also cites and principally relies upon In re Collins, 8 Cir., 75 F.2d 62.

We cannot agree with appellant's contention. Here, Bicknell prior to the execution and delivery to him of Peek's deed was a tenant-in-common with Peek, having an undivided one-half interest in the lands. Under Nebraska law, which governs, the lands involved being situated in Nebraska (Buss v. Prudential Ins. Co. of America, 8 Cir., 126 F.2d 960; McLean v. Federal Land Bank of Omaha, 8 Cir., 130 F.2d 123), he had an equity of redemption in the property, the sheriff's sale not having been confirmed. United States Nat. Bank of Omaha, Neb., et al., v. Pamp, 8 Cir., 83 F.2d 493, and Nebraska statutes and decisions therein cited. He was liable for the full amount of the mortgage note. In order to redeem, he was required to pay into court the amount of the foreclosure decree, "together with all interests and costs." Section 20-1530, Comp. St.Neb.1929. He could not compel the lien-holder to accept a part of the debt and relieve his interest in the property of its burden. Dougherty et al. v. Kubat et al., 67 Neb. 269, 93 N.W. 317. See, also, Note 7 to the opinion in Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 579, 580, 55 S.Ct. 854, 79 L.Ed. 1593, 97 A.L.R. 1106. Upon his redemption from the lien he would, for the purpose...