In re Payne

20 F.2d 665, 1927 U.S. Dist. LEXIS 1269
CourtDistrict Court, S.D. Iowa
DecidedJune 9, 1927
DocketNo. 5475
StatusPublished
Cited by1 cases

This text of 20 F.2d 665 (In re Payne) is published on Counsel Stack Legal Research, covering District Court, S.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 Payne, 20 F.2d 665, 1927 U.S. Dist. LEXIS 1269 (S.D. Iowa 1927).

Opinion

SCOTT, District Judge.

'This matter came before the court upon the petition of Mary A. Payne, widow of Cheals W. Payne, bankrupt, to review an order of the referee in bankruptcy denying the application of petitioner for allowance and admeasurement of a widow’s distributive share in the real estate of the late bankrupt, and for the allowance of her year’s support under the statutes of Iowa.

From the certificate of the referee it appears that, Cheals W. Payne having been adjudged a bankrupt on May 11, 1923, upon an involuntary petition filed April 20, 1923, a trustee was duly appointed and qualified on May 26, 1923; that the bankrupt died on June 23, 1923; that Mary A. Payne is the. surviving spouse of the bankrupt, and on. July 21, 1923, filed her petition setting forth that the bankrupt at the time of his adjudication jvas the owner of some 950 acres of land in Iowa, subject to incumbrance, and praying for the • allowance and admeasurement of her distributive share and for her year’s support under the statutes of Iowa. The matter was heard before the' referee and by the referee ordered that the petition of the widow be denied.

The record presents the questions:

First, whether a surviving spouse, in ease of the death -of the bankrupt after adjudication and the election and qualification of a trustee, and before the conclusion of the proceedings in bankruptcy, is entitled to the distributive share in the real property possessed by the bankrupt at I the time of the filing of the petition in bankruptcy under section 3366, Code Iowa 1897 (now section 11990, Code 1924).

Second, whether in like circumstances, and if necessary to her need, the surviving spouse is entitled to sufficient of the property of the bankrupt of such kind as is appropriate to support her for twelve months from the time of the bankrupt’s death under section 3314, Code Iowa 1897 (now section 11923, Code 1924).

Section 3366, Code 1897, provides that “one-third in value of all the legal or equitable estates in real property possessed by the husband at any time during the marriage, which have not been sold on execution or other judicial sale, and to which the wife had made no relinquishment of her right, shall be set apart as her property in fee simple, if she survive him. The same share of the real estate of a deceased wife shall be set apart to the surviving husband. All provisions made in this chapter in regard to the widow of a deceased husband shall be applicable to the surviving husband of a deceased wife.”

The trustee, respondent herein, contends —and such contention seems to have been adopted by the referee — that the words “or other judicial sale,” in the section above quoted, embraces an adjudication in bankruptcy; that is, that an adjudication in bankruptcy followed by the election and qualification of a trustee, is equivalent to a judicial sale within the meaning of the section referred to. The reasoning is that, the adjudication and qualification of the trustee having taken place before death, the real property was thereafter sold on judicial sale, and thereby ceased to be subject to ad-measurement under the section referred to. Counsel on both sides concede, and they are correct so far as I know, that the Supreme Court of Iowa has not decided the particular question here to be considered.

Counsel for the trustee relies jjarticularly upon the holding* of the Supreme Court in Taylor v. Voss, 271 U. S. 176, 46 S. Ct. 461, 70 L. Ed. 889, wherein certain statutes of Indiana were under consideration, together with the decisions of the Supreme Court of that state construing the same. Counsel for petitioner contends that section 8 of the Bankruptcy Act (Comp. St. § 9592) controls the situation, and that the adjudication and subsequent qualification of the trustee is not equivalent to a judicial sale within the meaning of the Iowa statute.

Section 8 of the Bankruptcy Act of 1898 provides: “The death or insanity of a bankrupt shall not abate the proceedings, but the same shall be conducted and concluded in the same manner, so far as possible, as though he had not died or become insane: Provided, that in case of death the widow and children shall be entitled to all rights of dower and allowance fixed by the laws of the state of the bankrupt’s residence.”

[667]*667The particular provision of the statute of Indiana considered in Taylor v. Voss, supra, pertinent to be considered here, did not deal with the rights of a survivor on the death of a spouse. The Indiana statute provided: “If a husband die * * * leaving a widow, one-third of his real estate shall descend to her in fee simple, free from all demands of creditors: Provided, however, that where the real estate exceeds in value ten thousand dollars, the widow shall have one-fourth only, and where the real estate exceeds twenty thousand dollars, one-fifth only, as against creditors.” Rev. Stat. Ind. 1881, § 2483. And then again: “In all cases of judicial sales of real property in which any married woman has an inchoate interest by virtue of her marriage, * * * such interest shall become absolute and vest in the wife in the same manner and to the same extent as such inchoate interest of a married woman now becomes absolute upon the death of the husband, whenever, by virtue of said sale, the legal title of the husband * * * shall become absolute and vested in the purchaser thereof.” Rev. Stat. Ind. 1881, §§ 2508, 2509.

In Taylor v. Voss, supra, the latter section of the statute was invoked, it being contended that the adjudication in bankruptcy, followed by the appointment of the trustee, operated as a judicial sale, and entitled the wife of the bankrupt to her distributive share as upon the death of the bankrupt and notwithstanding he was still'in health. The Supreme Court of the United States in that connection followed the long-settled rule of the Supreme Court of Indiana, saying: “In the absence of any conflicting provision in the Bankruptcy Aet, the question of a wife’s interest in the bankrupt’s property is governed by the local law. See Stellwagen v. Clum, 245 U. S. 605, 38 S. Ct. 215, 62 L. Ed. 507. And, following the construction placed upon the Indiana statute by the courts of that state, we conclude that the adjudication of Erskine as a bankrupt, when followed by the appointment of the trustee in bankruptcy, operated as a ‘judicial sale’ of his real estate within the meaning of the statute, and made absolute his wife’s interest therein.”

Section 8 of the Bankruptcy Act was not considered in Taylor v. Voss, for the obvious reason that the court was not dealing with a case involving the death of a bankrupt. The provisions of section 8 of the aet could in no way conflict with the conclusion in that case.

Counsel for petitioner, among a large number of other cases, cites, but does not stress, Hull v. Dicks, 235 U. S. 584, 35 S. Ct. 152, 59 L. Ed. 372. It seems to me that that case is particularly pertinent in the present instance. In that ease Dicks, a resident of Georgia, was adjudicated a bankrupt; Hull was elected trustee and took possession of the bankrupt’s property; three weeks later Dieks died leaving a surviving spouse; the spouse applied to the referee for an order directing the trustee to pay over an amount allowed by a state court of ordinary; her application was denied and that ruling reversed by the District Court.

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20 F.2d 665, 1927 U.S. Dist. LEXIS 1269, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-payne-iasd-1927.