Milens v. Bostian

• Decision Date: 28 December 1943
• Docket Number: 12678.,No. 12677,12677
• Citation: 139 F.2d 282
• Parties: MILENS v. BOSTIAN (two cases).
• Court: U.S. Court of Appeals — Eighth Circuit

139 F.2d 282 (1943)

MILENS v. BOSTIAN (two cases).

Nos. 12677, 12678.

Circuit Court of Appeals, Eighth Circuit.

December 28, 1943.

A. J. Granoff, of Kansas City, Mo. (Julius C. Shapiro and Myer M. Rich, both of Kansas City, Mo., on the brief), for appellants.

Nelson E. Johnson, of Kansas City, Mo. (C. E. Thomson, of Kansas City, Mo., on the brief), for appellee.

Before SANBORN, WOODROUGH, and RIDDICK, Circuit Judges.

SANBORN, Circuit Judge.

The referee in bankruptcy on February 4, 1943, in a summary proceeding in the Matter of Bessie Eichenberg, Bankrupt, entered an order and judgment determining that the bankrupt had an undivided one-fourth interest in the estate of her deceased brother, Harry C. Milens, that her trustee in bankruptcy was entitled to her interest, and that a purported renunciation of it, made by her, was void. The order and judgment voided the renunciation and required the administrator of the estate of Harry C. Milens to turn over to the trustee in bankruptcy "an undivided one-fourth (¼) interest in the estate of the said Harry C. Milens, deceased, subject to the payment of the valid debts of said estate, and the costs of administration therein, at such time as an order of distribution may be entered in said estate by the Probate Court of Jackson County, Missouri." The order and judgment permanently enjoined the administrator from transferring this undivided interest to any person other than the trustee in bankruptcy. On petition to review, the order and judgment was affirmed by the District Court.

These appeals, one by the administrator of the estate of Harry C. Milens, deceased, and the other by an heir of the deceased, challenge the jurisdiction of the court of bankruptcy to enter the summary order and judgment.

The facts out of which the controversy arises are not in dispute. In 1935, in a State court of Missouri, L. E. Fenton obtained a judgment for $29,392.28 against Bessie Eichenberg, upon which nothing has been paid. On February 1, 1942, Harry C. Milens, her brother, died intestate, leaving her and her sister, Rebecca Westerman, and two brothers, M. G. Milens and Charles E. Milens, as his sole heirs. On February 5, 1942, the Probate Court of Jackson County, Missouri, appointed M. G. Milens administrator of the estate of Harry C. Milens, deceased. The estate was valued at more than $90,000. On May 25, 1942, Bessie Eichenberg executed a renunciation and disclaimer of any interest in the estate. This instrument was dated March 9, 1942, and was directed to and served upon M. G. Milens, administrator. No consideration was paid for the renunciation, and Bessie Eichenberg was insolvent when she executed it. On July 20, 1942, an involuntary petition in bankruptcy was filed against her. On August 5, 1942, she was adjudged a bankrupt, and William B. Bostian was appointed trustee in bankruptcy of her estate.

On September 19, 1942, the trustee filed with the referee a petition for the entry of the order and judgment which the appellants now challenge. The petition asserted, in substance, that the bankrupt's renunciation of her interest in the estate of her deceased brother was a transfer of her property within one year of the filing of the petition in bankruptcy and while she was insolvent, and was void; that the trustee was entitled to her interest in the estate; and that M. G. Milens, administrator, unless restrained, would distribute the interest of the bankrupt to the other heirs of Harry C. Milens. An order was issued by the referee and served upon M. G. Milens, individually and as administrator, Charles E. Milens, Rebecca Westerman, and the bankrupt, directing them to show cause why the prayer of the petition should not be granted.

At the hearing upon the petition, M. G. Milens, as administrator, appeared specially and objected to the jurisdiction of the referee. Charles E. Milens also entered a special appearance and objected to the jurisdiction on the ground that he was an adverse claimant "to a right, title and interest in said estate of Harry C. Milens, Deceased, of the asserted one-fourth interest therein, of said bankrupt, when and as the same may be distributed, and become due and payable." Rebecca Westerman did not appear, although she testified as a witness. The bankrupt filed a motion to dismiss the petition upon the ground that it stated no claim upon which relief could be granted, and because the court of bankruptcy was without jurisdiction of the subject matter.

The referee overruled the objections to his jurisdiction, denied the motion of the bankrupt to dismiss, and entered the order appealed from. He determined that the bankrupt had a vested equitable interest in her deceased brother's estate which she could not transfer in fraud of her creditors; that she had, prior to her purported renunciation, signed a document evidencing her intention to accept her interest in the estate; that she was guilty of fraud and collusion in attempting to renounce her interest; and that the administrator of the estate of her deceased brother holds her undivided one-fourth interest in that estate in trust for the trustee in bankruptcy.

It is conceded that, at the time the order and judgment appealed from was entered, the estate of Harry C. Milens was being administered by the Probate Court of Jackson County, Missouri, that the assets of the estate were in the custody and possession of M. G. Milens as administrator, and that no decree of distribution had been entered. It is also conceded that the courts of Missouri have not as yet determined what effect ...