In re Le Claire

124 F. 654, 1903 U.S. Dist. LEXIS 157
CourtDistrict Court, N.D. Iowa
DecidedSeptember 2, 1903
StatusPublished
Cited by4 cases

This text of 124 F. 654 (In re Le Claire) is published on Counsel Stack Legal Research, covering District Court, N.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Le Claire, 124 F. 654, 1903 U.S. Dist. LEXIS 157 (N.D. Iowa 1903).

Opinion

SHIRAS, District Judge.

From the record in this case it appears that the petition in bankruptcy was filed on the 8th day of April, 1903, and the adjudication thereon was entered on the day following, to wit, April 9th. It further appears that on the 23d day of March, 1903, the bankrupt had brought an action in the district court of Clay county, Iowa, for a divorce from her husband, Joseph De Claire, and had in her petition asked that alimony should be granted to her out of the estate of her husband. On the 13th day of April, 1903, the court entered a decree of divorce, granting to the bankrupt a judgment for $100 against her husband, and setting aside to the bankrupt, as alimony, certain realty in Spencer, Clay county, Iowa, of the estimated value of $3,500, but subject to a mortgage of $2,000, and also granting to the bankrupt the care and custody of a minor child. On the 4th of May, 1903', the bankrupt was examined at length by the creditors, and she testified that her former husband, Joseph De Claire, in 1899, bought a portion of lots 16, 17, and 18 in the town of Spencer, and built a house thereon, which he, with his wife and family, occupied as a home in September, 1899; that she, the bankrupt, now lives therein, it being the realty set apart to her as alimony; that she claims the same as her home, and refused to deed the same to the trustee in bankruptcy. It further appears from the record that the debts to the contesting creditors were created against her before she married Joseph De Claire.

Upon the filing of the petition for discharge, a specification in opposition thereto was filed on behalf of two of her creditors, averring that within four months next preceding the filing of her petition in bankruptcy the bankrupt, with intent to hinder, defraud, and delay her creditors, had concealed her property, in that she had not listed as part of her assets her claim for alimony, and that she refused to list the same after it had been granted by the state district court.

Under these circumstances, would the court be justified in finding that the bankrupt had concealed the property from her creditors, within the meaning of the bankrupt act ? When the petition in bankruptcy was filed, this property had not been assigned to her, and [656]*656there was no certainty that a divorce would be granted, or that any specific property would be set apart to her as alimony. She was not required to set forth in the schedules attached to her petition the fact that after the adjudication in bankruptcy she might become vested with the title to some property by way of alimony. According to the provisions of section 70 of the act of July 1, 1898, c. 541, 30 Stat. 565 [U. S. Comp. St. 1901, p. 3451], the trustee is vested with the title of the bankrupt as of the date of the adjudication in all “property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him.” Certainly, at the date of the adjudication in this case, the mere claim or possible right to alimony asserted by the bankrupt in the divorce proceedings could not have been levied on and sold under judicial process, nor was it a property right which could be made the subject of barter and sale with third parties by the bankrupt herself. Prior to the entering of the decree of divorce in the district court of Clay county, which was not done until some days after the date of adjudication, it could not be known whether a divorce would be granted to the bankrupt, or whether any alimony would be allowed her; and, if allowed, it could not be known whether it would be in the form of stated amounts of money to be paid by the husband, or by setting apart specific property to her, both of which methods are permissible under the statute of Iowa. In view of these considerations, and of the further fact that the Code of Iowa of 1897, § 3x80, enacts, that: “When a divorce is decreed, the court may make such order in relation to the children, property, parties and the maintenance of the parties as shall be right. Subsequent changes may be made by it in these respects, when circumstances render them expedient”— it seems clear that a claim for alimony asserted in a suit for divorce is not a property right that can be sold and transferred by the claimant, or that-can be levied on by judicial process. If this be true, then the failure to list the claim in the schedules attached to the petition in bankruptcy cannot be held to be a concealment of property of such a nature as to defeat the right to a discharge.

But it is claimed that, after the decree of the court had been entered awarding the alimony, the fact that the bankrupt refused to list the property or to convey it to the trustee would support the charge of concealment, and so defeat the discharge. There certainly was not actual effort on part of the bankrupt to conceal the facts of the situation from the creditors or the trustee. The whole proceedings in the divorce case are on record in the state court, and are open to all interested. Upon the examination of the bankrupt she stated the facts fully. It is true she refused to convey the property to the trustee, claiming that the same was her homestead; but this was not a concealment of the property, but only the assertion of her claim thereto. If the property is assets of the estate, it is vested, by operation of the act, in the trustee, and it cannot be fairly claimed, therefore, that the bankrupt is concealing the same from the trustee or the creditors. The assertion of her claim that the property is not part of the assets of her estate is only the assertion of a claim which she has the right to make; and, even if it should be finally ruled that the property [657]*657passes to the trustee as part of the assets of the estate, that would not sustain the charge that the bankrupt had concealed the property with intent to defraud.

But is it true that this property is part of the assets of the estate, which can be rightfully claimed by the trustee as part of the estate to be administered by him for the benefit of the creditors? The property in question belonged originally to the husband. He built a house on the- lots, and with his wife and family occupied the same as a homestead. When the decree of divorce was granted, the court awarded the custody of the minor child to the mother, and set apart the homestead as alimony, the title thereto being conveyed to the bankrupt. Treating it as property then acquired by the bankrupt, it would not pass to the trustee, as the creditors have no interest in or claim to property acquired after the date of the adjudication, unless it represents property rights held by the bankrupt before the adjudication. Traer v. Clews, 115 U. S. 528, 6 Sup. Ct. 155, 29 L. Ed. 467. But the claim for alimony was not a property right held by the bankrupt. Thus, in Martin v. Martin, 65 Iowa, 255, 21 N. W. 595, it is said:

“But we are of the opinion that her right to alimony does not create in her an interest in his property. Alimony is an allowance out of the estate of the husband for the maintenance of the wife after the dissolution of the marriage relation.”

In Audubon v. Shufeldt, 181 U. S. 575, 21 Sup. Ct. 735, 48 L. Ed. 1009, it was ruled that alimony awarded to the wife was not a debt provable in bankruptcy, nor was it affected by a discharge granted the husband; it being said in the opinion:

“Alimony does not arise from any business transaction, but from the relation of marriage.

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Bluebook (online)
124 F. 654, 1903 U.S. Dist. LEXIS 157, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-le-claire-iand-1903.