In re Strauch
| Decision Date | 17 March 1913 |
| Docket Number | 3,868. |
| Citation | 208 F. 842 |
| Parties | In re STRAUCH. |
| Court | U.S. District Court — Northern District of Ohio |
Edward Vollrath, of Bucyrus, Ohio, for petitioners.
R. V Sears and A. S. Leuthold, both of Bucyrus, Ohio, for trustee.
This matter is before the court on four petitions for review brought by the bankrupt's wife and daughter. In entering the orders complained of the referee has manifestly gone afar wrong.
Touching the applications of Mrs. Strauch for allowance of dower and homestead, it appears that the real property of the bankrupt being his home, was sold free of the contingent right of dower of Mrs. Strauch. Unless, therefore, something appears in the record to prevent, Mrs. Strauch was clearly entitled to receive from the trustee out of the proceeds of sale remaining after mortgage liens were satisfied, the value of her contingent right of dower, computed according to well-known methods. We are unable to find anything in this record to defeat her right of dower.
It is well established in this state that one enjoying a contingent right of dower, who joins in a mortgage of property involved to secure the debt of her spouse, releases dower only to the mortgagee and his assigns and is entitled to the value of the contingent right of dower computed upon the full value of the property, to be paid out of the surplus, if any, after the mortgage lien is satisfied.
The referee gives three reasons why in his judgment the claimant is not entitled to dower: (1) That she was barred by the compromise made with Albert G. Stoltz. (2) She was estopped by her conduct in assenting to the compromise. (3) That she cannot claim dower in said funds as against either the Second National Bank of Bucyrus or Stoltz.
The third position is undoubtedly valid. As against these parties who were mortgagees she has no right of dower for the reason that she signed the several mortgages, but that fact affords no reason why she should not have dower in the surplus remaining after these mortgage claims are satisfied. To understand the first two alleged reasons it must be explained that Stoltz was the mortgagee under an instrument which this court set aside as a preference. Pending appeal to the Circuit Court of Appeals, the trustee compromised with Stoltz and allowed him $300 on his mortgage claim of $1,500. How out of this circumstance the referee finds a bar or an estoppel against Mrs. Strauch passes the court's comprehension. The compromise was between the trustee and Stoltz. Under no circumstances could Mrs. Strauch's approval or assent, disapproval or dissent affect it. She was in no wise a party to it and in no wise could control it. The utmost interest she had in it was that to the extent Stoltz was allowed anything on his claim to that extent it might be that the surplus out of which her contingent dower should be paid might be reduced.
It appears that in making up the sum of $1,500, which Stoltz claimed was the consideration for the mortgage set aside, $376 were paid by him in cash to Mrs. Strauch. The facts indicate that Mrs. Strauch was her husband's agent in receiving this money, as they also suggest that the money was disbursed in the payment of household expenses and debts of Mr. Strauch. At the time Strauch was an invalid, and during his progress to health Mrs. Strauch was doing business for him. The referee affects to find in these circumstances a valid consideration moving from Stoltz to Mrs. Strauch for her dower interest. Assuming that to be the fact, it would in no wise affect the situation. Stoltz may have paid her actual cash to release her dower, and yet the release would be good only as to him and only affect the interest he had in the compromise and could not, even if upon the consideration passing from Stoltz, be permitted to operate to enlarge the rights of unsecured creditors. She would nevertheless be entitled to dower against all other creditors, to be paid out of the surplus.
If authority for the court's position is necessary, it may be found in the decision of the Circuit Court of Appeals of this circuit in the case of In re Lingafelter, 181 F. 24, 104 C.C.A. 38, 32 L.R.A. (N.S.) 103, 24 Am.Bankr.Rep. 656.
In his opinion the referee has also discovered an alleged estoppel in the fact that there was at some time some dispute over the description of the property conveyed by the Stoltz mortgage and contained in other conveyances. This homestead had been conveyed by the bankrupt to his wife. The trustee undertaking to recover it, Mrs. Strauch voluntarily conveyed it to the trustee with an express reservation in the deed that neither her dower nor homestead rights should be affected by the several transactions. For a while it was thought that in these conveyances part of the property was not covered by the description, and some confusion arose because of this misconception. It was afterwards cleared up, all the property passed out of Mrs. Strauch, and to...
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