Adams v. Riley/Opinion of the Court

by by John Marshall Harlan

United States Supreme Court

122 U.S. 382

Adams  v.  Riley

The lands conveyed by Barnes to his children having come to the possession of, and being claimed by, his assignee, and the title thereto being in dispute, the petition filed by the latter in the district court was authorized by section 5063 of the Revised Statutes. Under the pleadings in that suit,-all the parties therein having appeared, asserted their respective claims to the lands, and sought a determination of the dispute between them,-it was competent for the district court, sitting in bankruptcy, to have determined, at least, the question of title. Had that court adjudged that the lands belonged to the grantor in the deed of 1863 at the time he was adjudged a bankrupt, that judgment, until reversed or modified, would have been a bar to any new action by the defendants for the recovery of the property.

But we have seen that the assignee, after the expiration of several years, and without notice to the defendants, withdrew his cause from the district court, and instituted this suit in the circuit court, substantially for the same relief as that asked in his petition in the district court; using, upon the hearing of this suit, the evidence taken in his original suit. Evidently he supposed that, in a new suit in the circuit court, the limitation of two years prescribed by section 5057 of the Revised Statutes would defeat any claim to the lands which the defendants might assert. But that section, if applicable at all to such a case as this, is applicable to the plaintiff as well as to the defendants. If the assignee claims that the question of title could only be determined in a suit in equity in the circuit court, it might well be said that, not having himself instituted suit in the proper court against the holders of the legal title, within two years from the time the cause of action accrued to him, he could not maintain the present suit. But we are of opinion that the suit in the district court and the present suit, having substantially the same object, are to be rea rded, for the purposes of the limitation prescribed by section 5057, as the same suit; the latter being, in effect, a continuation of the former. It results that the question between the assignee and the grantees in the deed of 1863, as to the title to the lands in dispute, was raised in apt time. During the whole period, from the commencement of the suit in the district court until the institution of the present suit, the defendants have asserted their ownership of these lands, denying that they constituted a part of the bankrupt's estate. They met the issue tendered by the assignee in the forum selected by himself. To permit him to abandon that forum without their knowledge or consent, and-in computing the time fixed for bringing actions, by or against assignees, touching property claimed adversely to him-to exclude the period between the institution of the suit in the district court and the commencement of this suit, would make the statute an instrument of fraud. It cannot receive that construction.

Upon the merits of the case we have no serious difficulty. The evidence satisfies us that the conveyance of 1863 was not made with any intent to hinder or defraud the creditors of the grantor. The latter was, at that time, in such condition as to property that he could, without injustice to creditors, make a gift of these lands to his children. The transaction was in good faith, and was not a mere device to hinder and defraud creditors. The deed was promptly delivered by the grantor to one for all of the grantees. The possession of the lands by the father, at times subsequent to the execution and delivery of the deed, and his control of them apparently for his own benefit, is satisfactorily explained by witnesses. His possession, after the deed of 1863, was not intended to be, and was not in fact, adverse to his grantees. According to the weight of evidence, he held possession under and for his children. The only fact in the case which creates doubt on this point is that he improperly included these lands in his schedule of the real estate of which he was in possession when he filed his petition in bankruptcy. But that circumstance, even if not satisfactorily explained, cannot legally affect the rights of his grantees, and is only important as bearing somewhat on his credibility as a witness, testifying that he delivered the deed immediately upon its execution, and that his possession at a later period was for his children. Code Ga. 1867, (in force January 1, 1863,) §§ 1942, 2620; Clayton v. Brown, 17 Ga. 217, 222; Clayton v. Brown, 30 Ga. 491, 495; Weed v. Davis, 25 Ga. 684; Wallace v. Penfield, 106 U.S. 262, 1 Sup. Ct. Rep. 216; Jay v. Welchel, supreme court Georgia, April 4, 1887.

There is still another view of the case. If the grantor was insolvent when he made the conveyance of 1863, or if the lands so conveyed constituted more, in value, of his estate than he could rightfully withdraw from the reach of creditors and give to his children, in either case the assignee in bankruptcy, there being no fraud on the part of the grantor, has no standing to impeach the conveyance. The deed was good as between the grantor and his children; and, in the absence of fraud, could not be questioned by the assignee, who took only such rights as the bankrupt had. Yeatman v. Savings Inst., 95 U.S. 764, 766;Stewart v. Platt, 101 U.S. 731, 738; Hauselt v. Harrison, 105 U.S. 401, 406; Rev. St. § 5046. It could only be avoided by creditors who were such at the date of the conveyance. Warren v. Moody, ante,

Upon the whole case, we are of opinion that the assignee in bankruptcy of Barnes has no valid claim to said lands, or any of them; and that the deed of 1863 was not void as between him and the grantees therein. The circuit court erred in declaring it to be void, and in ordering the sale of the lands, under the direction of the district court, as part of the bankrupt's estate. The e cree is reversed, and the cause remanded, with directions to set aside the entire decree of November 25, 1882, and for such further proceedings as are consistent with this opinion.

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