127 F. 538 | 7th Cir. | 1904
(alter stating the facts as above). A voluntary bankrupt is required by Act July i, 1898, c. 541, § 7a (8) 30 Stat. 548 [U. S. Comp. St. 1901, p. 3425], to prepare, make oath to, and file with his petition “a schedule of his property, showing the amount and kind of property, the location thereof, its money value in detail, and a list of his creditors, showing their residences, if known, if unknown, that fact to be stated, the amounts due each of them, the consideration thereof, the security held by them, if any.” The plain purpose of the law is that one seeking the benefit of a discharge under the act shall turn over to his creditors all his property of every kind and nature, except such as is exempt by law. This is the condition of a discharge from debt. The bankrupt must also give a sworn list of creditors, with the nature and amount of the debt due to each, and the particulars ’of any
The bankrupt here had received and acted upon the deed from her mother, claiming that it conveyed to her an interest in the land, and mortgaged that interest to secure a certain large debt, warranting to the mortgagee the title to the land. She knowingly failed to schedule any interest in that land, or to schedule the mortgage as securing her note, or to schedule the deed; and this she seeks to justify upon the theory that, as matter of law, the deed to her in fact conveyed no interest. We cannot commend such a course of conduct. Where a bankrupt has received a deed purporting to convey an interest in land; has acted upon it, obtained a large sum of money upbn the faith of a mortgage given upon that interest, it is not proper to omit all mention of it when application is made for a discharge from indebtedness, upon the theory that, after all, no interest in lands was conveyed. It is not for the bankrupt to constitute himself the judge, and to foreclose creditors from asserting the efficacy of the deed. The plain duty of the bankrupt is fully to disclose the transaction, both with respect to the deed and to the mortgage by which a creditor was sought to be secured, that the question of law as between creditor and bankrupt and creditor and creditor may be determined by proper proceedings before the court. It is not clear from this record that the court below denied discharge solely upon the ground that the deed conveyed title. It is so asserted by the petition, but denied by the answer. The order or decree refusing the discharge does not clearly declare that such was the sole point of adjudication. We would be justified, we think, in affirming the decree upon this ground alone. But, passing that, and coming to the question principally argued at the bar, we are of opinion that the court below correctly ruled that by the deed in question an interest in the land was conveyed to the bankrupt. The will directed that the estate should descend and be distributed in the manner directed by law, with the single
“When the present will was executed and went into effect the law gave to the husband, in right of his wife, a freehold estate in her lands during the marriage, by virtue of which he was entitled to their exclusive possession and the entire rents and profits thereof. He could sell or otherwise dispose of them as he pleased, without her consent, and they were liable to be taken in execution for his individual debts. This being the state of the law at the time of the execution of the will, it was doubtless the intention of the testator to so dispose of the land as to place it not only beyond the legal control of the husband, but also beyond his power and influence, so far as that could be accomplished. Hence the conveyance was made to the trustee in the'manner we have seen.”
The object of the trust was thus to place the property beyond the control of Mrs. Browning’s husband, and to secure to her the income. It may be true that the legal title to the realty was thus vested in the trustee, and under the technical rule prevailing in Illinois would descend to his heirs; but surely the equitable title would not so descend. The trust was to continue during coverture, or the lifetime of Mrs. Browning, and would end with her death. The equitable title, as we think, vested in her; and while, by the terms of the will, she was restricted from any disposition of the property, except subject to the trust created, the equitable title upon her death would descend to her heirs, and we perceive no reason wh)*-, in her lifetime, she could not convey that equitable title, subject to the trust imposed by the will. We are therefore of Opinion that the deed from Mrs. Browning to the bankrupt conveyed to the latter an interest in this land subj ect to that trust, and that the ruling of the court below was correct.
The order or decree refusing discharge is affirmed.