| R.I. | Apr 14, 1927
Arthur J. Levy became trustee in bankruptcy of David Miller in 1923, and pursuant to the Federal Bankruptcy Act, became vested with title to property transferred by Miller in fraud of his creditors. He brought in the Superior Court of this State a bill in equity against David Miller and his wife, Sarah Miller, to recover certain real estate on which was a dwelling occupied by David and Sarah and title to which stood on the records at the time of adjudication in the name of Sarah Miller. The court determined that the conveyance to Sarah was in fraud of creditors and title was adjudged to be in Levy as trustee. *251 Subsequently Levy was authorized by the bankruptcy court to sell this real estate. David and Sarah declined to vacate the premises. The present action was trespass and ejectment against both, brought in September, 1926. The plea was the general issue. At the trial before a jury no sworn evidence was offered on behalf of defendants but defendant David addressed the jury after which the court directed a verdict for plaintiff.
Exceptions come to this court on alleged errors in rejecting evidence and in directing a verdict for plaintiff.
During the trial David Miller, acting without legal aid, took many exceptions to disallowance of his questions. None of these exceptions merit discussion. All rulings were proper and the trial court displayed great patience.
In this court for the first time counsel appear and suggest that the State court is without jurisdiction to pass upon a case of trespass and ejectment brought by a trustee in bankruptcy against the bankrupt and his wife seeking to oust them from possession of real estate title to which is vested in the trustee but of which real estate he has never had actual possession. They present what they term a "suggestion" that the real estate in question is part of the assets of the bankrupt; that Miller is the bankrupt and can have no adverse claim thereto; that his wife, Sarah, claims no right of possession and that plaintiff was and is entitled to a summary order from the Federal court directing the Millers to deliver up possession; that such summary order can be given by the Federal court alone, which has charge of the administration of the bankrupt estate, and that the State court was without jurisdiction to entertain the trustee's suit for trespass and ejectment. "Wherefore it is suggested that for want of jurisdiction . . . said cause be dismissed."
Although no question of jurisdiction was raised in the court below, we shall consider defendant's objection to jurisdiction.McAdam v. People,
We have found no case exactly like the present one. Jurisdiction in plenary suits for the recovery of assets of bankrupt's estate is concurrent in the State and Federal courts. Bankruptcy Act, § 23a, § 60b, § 67e, § 70e. The question of when resort may be had to summary proceedings and when the trustee's action should be by plenary suit has been the source of much litigation. Usually those in possession and resisting the trustee contest his right to a summary order and insist that he proceed, as he did here, by plenary suit. The proposition now presented by the wrongful claimants is that the trustee's only permissible procedure was in the Federal court by summary order against them.
Where a third party in possession of property either makes no claim to right of possession or holds possession merely on behalf of the bankrupt, such third person summarily may be ordered to deliver possession to the trustee. Babbitt v. Dulcher,
When the Millers suggest that summary proceedings against themselves in the Federal court are the only means by which Levy may oust them from possession they ask us either at the outset to discredit their making of an honest adverse claim in the Superior Court or to make that court's jurisdiction dependent on the facts found at the trial that *254 the claim was not honestly adverse. Their claim may have been absurd but the record leads us to believe that they made it in good faith. Under such circumstances it is idle to say that because the trustee gave the defendants the benefit of a presumption of an adverse claim made in good faith and proceeded by plenary suit in the State court that such court was without jurisdiction.
The action was in no way an interference with the administration of the assets by the bankruptcy court. The trustee never having had possession there was no more interference with the bankruptcy court's administration of the estate than when a trustee brings action in a State court to recover personal property never in his possession. Cominger v. Louisville TrustCo.,
Our conclusion is that the Superior Court had jurisdiction; that its verdict was correct.
Defendants' exceptions are overruled, and their suggestion is without merit.
The case is remitted to the Superior Court for entry of judgment on the verdict.