Greenberg v. Pennsylvania Trust Co.

• Decision Date: 02 June 1927
• Docket Number: No. 3599.,3599.
• Parties: GREENBERG v. PENNSYLVANIA TRUST CO. OF PITTSBURGH.
• Court: U.S. Court of Appeals — Third Circuit

19 F.2d 824 (1927)

GREENBERG v. PENNSYLVANIA TRUST CO. OF PITTSBURGH.

No. 3599.

Circuit Court of Appeals, Third Circuit.

June 2, 1927.

Lowrie C. Barton and Edward G. Coll, both of Pittsburgh, Pa., for appellant.

Thomas M. Benner, of Pittsburgh, Pa., for appellee.

Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

BUFFINGTON, Circuit Judge.

In the Court below the Pennsylvania Trust Company, trustee in bankruptcy of Jacob and Bennie Marcus, filed a bill in equity against Sarah Marcus Greenberg to cancel, on the grounds of fraud and unlawful preference, a deed for real estate made to her on March 25, 1924, by said bankrupts, who were her brothers. It also called for an accounting. To this bill the defendant answered, and the case went to trial on proofs made by both parties.

On December 31, 1926, the court filed an opinion wherein it made certain findings of facts and conclusions of law, which so far as here pertinent were that Jacob and Bennie Marcus were insolvent on January 1, 1924, and so continued until they were adjudged bankrupt; that there was no good or sufficient consideration for the deed; that the defendant at the time of the deed knew Jacob and Bennie Marcus were insolvent. Its conclusion of law was that the deed was made without consideration, that it was in fraud of creditors, and executed for the purpose of delaying, hindering, and obstructing creditors, and it was therefore null and void, and the plaintiff was entitled to have the property conveyed to it as prayed for in the bill, and that the defendant account for rents, issues and profits and pay the costs.

On January 17th following the defendant moved for a reargument, "in order that the question of the jurisdiction of the court may be raised under section 264 of the Judicial Code Comp. St. § 1241." A rule was granted on said motion, and thereafter the court discharged the same for the reasons stated in its opinion printed in the margin.¹ A decree having been entered against the defendant, she took this appeal.

Turning first to the question of whether the defendant is entitled to have the decree in equity vacated and the case sent to the law side of the court, we are of opinion it is not. The bill prayed for cancellation of a deed on the ground of fraud, for an accounting by defendant of profits received between date of conveyance and filing of the bill, for the appointment of a receiver to receive and hold the rents, etc., pending a decree. These and the consequent removal of the cloud on the title created by the alleged fraudulent deed, were all grounds of equitable jurisdiction. Pending the litigation a stipulation was entered into providing a basis of accounting by the defendant, if decreed, and interim possession by her, in order to restore to livable condition the building on the premises, which had been damaged by fire. By this stipulation the relief sought by a receivership was obviated, and the defendant enabled to remain in possession.

While, as seen by the opinion quoted, a general statement was made in the answer that the bill "did not disclose any valid cause of action in equity, and she therefore prays that the said bill be dismissed," the case went, without objection, to trial on proofs by both parties, and no request or even suggestion was made by the defendant, until after the court decided against her, that the cause should be transferred to the law side of the court. That she could waive this right by going to trial is shown by the cases cited in the opinion of the court, to which we add Hollins v. Brierfield, 150 U. S. 381, 14 S. Ct. 127, 37 L. Ed. 1113; and that she did waive it is shown by the acts of commission and omission here shown. The same principle of good faith and the early assertion of a right which equity imposes on a plaintiff rests on a defendant as well. Moreover, as we have seen, cancellation of the alleged fraudulent deed, removal of a cloud upon the title by this recorded deed, and the accounting prayed for, were all subjects of equitable jurisdiction, for which the plaintiff had no adequate remedy at law, so that, even without waiver, the defendant was not entitled, under the decisions of Pennsylvania affecting real estate (see Fowler's Appeal, 87 Pa. 499, followed in Orr v. Peters, 197 Pa. 614, 47 A. 849), to have the bill dismissed on the ground that plaintiff had an adequate remedy at law.

As to the assignments of error which concern admission of evidence and findings of fact, we may, without discussing them in detail, say that we find no error is shown.

The decree is therefore affirmed.

1 The bill first sought a decree declaring the conveyance fraudulent, and in case of failure on that ground prayed that the deed be held a voidable preference under the Bankruptcy Act (Comp. St. §§ 9585-9656). In the answer filed the defendant averred: "Your ...