Shreck v. Hanlon
| Decision Date | 22 June 1905 |
| Docket Number | 13,871 |
| Citation | 104 N.W. 193,74 Neb. 264 |
| Parties | JESSE R. SHRECK, TRUSTEE, APPELLEE, v. ELIZA E. HANLON, APPELLANT |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Clay county: ED L. ADAMS, JUDGE. Affirmed.
AFFIRMED.
John C Stevens, for appellant.
Thomas H. Matters and Ambrose C. Epperson, contra.
OLDHAM C. AMES and LETTON, CC., concur.
This was an action in the nature of a creditors' bill instituted by the trustee in bankruptcy of the estate of David Hanlon, a bankrupt, for the purpose of setting aside the conveyance of 480 acres of land situated in Clay county Nebraska, to Eliza E. Hanlon, wife of the bankrupt, as having been made in fraud of his creditors. The cause was instituted in the district court for Clay county, and is here a second time for review. At the first hearing of the cause in the district court a judgment was rendered in favor of the defendants. This judgment was reviewed on error and reversed by this court. Shreck v. Hanlon, 66 Neb. 451, 92 N.W. 625. The issues in the case are set forth in this opinion, and the questions determined, which are now governed by the rule of "the law of the case," are that the plaintiff has legal capacity to maintain the action; that the action was not barred by the statute of limitations when the cause was instituted; that it is not a sufficient defense to the action to show that the bankrupt had other property in his possession at the time the transfers were made which was sufficient to satisfy the creditors, if the conveyance was, in fact, fraudulent and made for the purpose of defeating claims of creditors, and at the time of commencing the action the grantor in the conveyance had no property subject to execution, out of which the claims could be made. When the cause was reversed and remanded, in pursuance to the directions of our first opinion, a new trial was had to the court, and plaintiff's bill was dismissed as to the quarter section of land occupied by defendants as a homestead, and the conveyance from the husband to the wife of the other two quarter sections was set aside as fraudulent. To reverse this judgment, defendant Eliza E. Hanlon appeals to this court.
The petition was instituted by the trustee in bankruptcy to subject the lands in dispute to the payment of the following claims, which are admitted to have been properly filed, approved, and allowed by the referee against the estate of the bankrupt: Claim of the First National Bank of Harvard for $ 445.45 and interest; claim of the First National Bank of Harvard for $ 33.85 and interest; claim of Jesse R. Shreck for $ 20.20 and interest; claim of S. J. Rice & Co., for $ 74.50 and interest; claim of the Commercial State Bank of Clay Center for $ 170.88 and interest; claim of the Phoenix Insurance Company of Brooklyn, New York, for $ 170.88 and interest. But one of these claims, that of the Commercial State Bank of Clay Center, has ever been reduced to judgment and had execution returned unsatisfied thereon prior to its being filed with the referee, and it is now contended by appellant that this is the only claim on which a creditors' action will lie at the suit of the trustee to set aside the alleged fraudulent conveyance of the real estate in controversy. This question, however, has been determined against the contention of the appellant in Sheldon v. Parker, 66 Neb. 610, 92 N.W. 923, wherein this court held:
"The bankrupt act vests the assignee with title to all property conveyed by the bankrupt in fraud of creditors, and he may proceed to recover the interest of the bankrupt in the property, whether any creditor was in position to attack the transfer or not."
And again in Hood v. Blair State Bank, 3 Neb. (Unof.) 432, it was specifically held that a trustee in bankruptcy, acting for the creditors of the bankrupt, may maintain an action in the nature of a creditors' bill to set aside a fraudulent conveyance, without reducing the claims of the creditors to judgment. While we are aware that we are not bound by the language and reasoning of this opinion, yet the conclusion reached on this question is in harmony with the doctrine announced in Sheldon v. Parker, supra, and is supported by the holding in Southard v. Benner, 72 N.Y. 424.
The next point urged is that the question involved in this controversy was adjudged adversely to the claim of the appellee, and more particularly the claim of the Commercial State Bank, by the United States district court because it is admitted in the record that this creditor objected to Hanlon's discharge in...
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