Court Opinion

ID: 3390921
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:51:36.380586+00
Date Added: 2024-06-11T13:01:10.619016
License: Public Domain

The appeal here is from an order sustaining demurrers and dismissing Bill of Complaint in a suit in partition filed by the appellants against the appellees. *Page 678 
The Bill of Complaint shows all the necessary jurisdictional facts. It shows that Maude E. Brickell was a bankrupt and that Langford, Bullock and Gerstell were properly appointed and qualified Trustees in Bankruptcy of the estate of the bankrupt. It seeks to subject to partition certain lands described in the Bill of Complaint of which it is alleged that Maude E. Brickell is a co-tenant with the defendants named in the Bill and that Maude E. Brickell was prior to her adjudication in bankruptcy the owner and holder of an undivided 6/15 interest in and to the lands described. The Bill of Complaint alleges the interest possessed by each of the other defendants in the lands described. The Bill alleges that the complainants as Trustees in Bankruptcy of the bankrupt estate of Maude E. Brickell, by virtue of the bankrupt statutes, became and are vested by virtue of their appointment as Trustees in Bankruptcy of the bankrupt estate of Maude E. Brickell with an undivided title and interest in and to the lands described in the Bill and that they, as Trustees, are seized and possessed of an undivided 6/15 interest in the property described as tenants in common with the defendants named. It alleges that the Trustees are charged with the duty and vested with the power of disposing of all the assets of the bankrupt estate for the benefit of and for the protection of creditors of the bankrupt estate and are charged with the duty of selling and disposing of the 6/15 interest in the lands described for the purpose of procuring funds to be used in the payment of the bankrupt estate. It is then alleged:
    "Your complainants, as Trustees in Bankruptcy of the bankrupt estate of Maude F. Brickell, allege that in the center of the above described property there is situated a family cemetery and burial ground of the Brickell family; that by reason of this fact an undivided interest in the above described property is not readily saleable, and the sale of the undivided interest in such property would not be advantageous to the estate of *Page 679 
the bankrupt of the beneficiaries thereof — the creditors — and that the sale of an undivided interest in the above described property would have to be made at a sacrifice and at a great loss to the beneficiaries of the bankrupt estate, and such a sale would work a detriment to the creditors of said estate.
    Your complainants, as Trustees in Bankruptcy of the Bankrupt Estate of Maude E. Brickell, further allege that the other tenants in common of said property, as herein set forth, are the brothers and sisters of the bankrupt, Maude E. Brickell, to whose interest and title your complainants have succeeded, as herein set forth, and that the other tenants in common are very bitter and hostile to the creditors of the estate of Maude E. Brickell, and the beneficiaries thereof, and are very bitter and hostile to your complainants, as Trustees of said Bankrupt estate, and are very bitter and greatly opposed to any sale of the Bankrupt's interest in the above described property to which your complainants have succeeded as Trustees of said Estate, for the reason that the said property is the old homestead property of the Brickell family, though it has long since been relieved of its homestead encumbrance, and for this reason the other co-tenants will discourage and do everything within their power to prevent the sale of said undivided 6/15 interest in said property, and will do all in their power, as tenants in common or otherwise, to discourage the sale of said property, and to prevent its bringing an adequate price, and on account of their hostility to any purchaser thereof, will discourage purchasers from buying said undivided interest, or from paying adequate consideration therefor, and for this reason a partition is necessary to fully protect the rights of those interested in the estate of the bankrupt, and a partition of said property is necessary to fully protect the rights of the creditors of the estate of the bankrupt.
    Your complainants, as Trustees in Bankruptcy of the Bankrupt Estate of Maude E. Brickell, further allege that the hostile attitude of the co-tenants of the above described property is well known, and would be by them made well known, to any purchaser or prospective purchaser of an undivided interest in said property, *Page 680 
and the said co-tenants would litigiously defend the possession to the above described property, and would throw every legal obstacle in the way of recovery of possession, or the partition of said property by any purchaser of an undivided interest therein, and these facts being well known to the investing public and those who might be interested in the purchase of said property, renders an undivided interest therein as held by your complainants as Trustees of said Bankrupt Estate, practically unsaleable, and in recognition of these facts the Bankrupt has scheduled this property as of no value, although the said property is situate upon Biscayne Bay and the Miami River within a few blocks of the center of the City of Miami, and is of the reasonable value of $120,000.00.
    Your complainants, as Trustees in Bankruptcy of the bankrupt estate of Maude E. Brickell, having filed their petition before the Referee of said Court setting forth the facts herein set out, and the Referee having entered his order therein finds that it is necessary in order to protect the rights of the trustees and of the creditors and the interest of the bankrupt in said lands to partition it prior to the sale thereof, and that it would be detrimental to the estate of the bankrupt and to the interest of the creditors thereof for the Trustees to sell the undivided interest of the bankrupt in said land as an undivided interest before partition thereof, and that the partition of said land will be advantageous to the interest of and of benefit to the creditors of said estate, and is necessary and expedient to protect the rights of the trustees in bankruptcy and those whom the trustees represent, and the Referee did in said order direct and require the complainants, by reason of the facts herein and in said order set forth, to bring this bill for a partition of said property, for the benefit of the bankrupt estate and for the protection of the interest of the creditors thereof, a copy of said order is hereto attached, marked Exhibit C, and made a part hereof, the same as if it were set out herein in haec verba."
Other allegations of the Bill are pertinent to bills of this character. *Page 681 
It may be said to be well settled that in the absence of special statutory regulation of the subject where a case is fairly brought within the law authorizing a partition either in a court of law or in a court of equity, the right of a co-tenant to partition is absolute. 47 C. J. 288 and cases there cited.
Section 3202 R. G. S., 4994 C. G. L., provides as follows:
    "Suits for a partition of real estate shall in all cases be by bill in chancery, and all proceedings, except where herein otherwise provided, shall be as in other cases in chancery."
Section 3204 R. G. S., 4996 C. G. L., provides as follows:
    "Such bill may be filed by any one or more of several joint tenants, tenants in common or coparceners, against their co-tenants, coparceners or others interested in the lands to be divided."
The Federal Bankruptcy Act, Section 110 U.S. Code annotated, provides in part as follows:
    "The trustee of the estate of a bankrupt, upon his appointment and qualification, and his successor or successors, if he shall have one or more, upon his or their appointment and qualification, shall in turn be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt, except insofar as it is to property which is exempt, to all (1) documents relating to his property; (2) interests in patents, patent rights, copyrights, and trademarks; (3) powers which he might have exercised for his own benefit, but not those which he might have exercised for some other person; (4) property transferred by him in fraud of his creditors; (5) 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.'
In 7 C. J. 114, Section 187, the author says:
    "In general. In addition to providing for the transfer of title to particular classes of property, the Bankruptcy Act, in general terms, vests the trustee with title to all property which, prior to the filing of the petition, the bankrupt could by any means have transferred, *Page 682 
or which might have been levied upon and sold under judicial process against him. Accordingly, the title of the trustee is not limited to property which belongs absolutely to the bankrupt, but also exends to property which, by reason of state statutes, is considered as belonging to him as far as the rights of his creditors are concerned, or in which he has a transferable interest."
The author cites abundant authorities to sustain the statement.
On page 224 of the same volume, section 345, the author says:
    "The trustee is not the representative of the bankrupt, but of the creditors who are unsecured and who were such creditors at the time of the filing of the petition; and he holds title to the bankrupt's property in trust for the creditors and for the purpose of distribution among them."
(Which statement is also sustained by ample authority.)
It has been observed that the bill of complaint in this case by clear allegations shows not only the expediency but a real necessity for resorting to partition to procure the best results for the creditors of the bankrupt estate and it further shows that this expediency and necessity has been duly presented to the bankrupt court and that the bankrupt court in the exercise of its authority has authorized and directed the trustees to institute and prosecute the suit in partition. The appellee here relies largely upon the opinion and judgment in the case of Hobbs et al. vs. Frazier, 56 Fla. 796, 47 So. 929, 131 Am. St. Rep. 179; and Lindsay vs. Runkel, 82 Ohio St. 325,92 N.E. 489, 28 L.R.A. (N.S.) 659, to sustain the decree of the chancellor. It will be observed that in the case of Hobbs et al. vs. Frazier, the Court said:
    "The possession of one co-tenant is the possession of all co-tenants, when the rights of none are denied. If in this case Porter is in possession and denied the right of the trustees the latter having the legal title could *Page 683 
bring ejectment to establish his right to possession. But as the title of the trustee is not denied by Porter, the possession follows the title and partition is not shown by any allegation in the bill to be necessary to a reduction of the property to money for purposes of paying debts, or that it will be advantageous to the interests of creditors to have partition thereof. There is no showing that partition is necessary or expedient to protect the rights of the trustee in bankruptcy or those whom he represents."
From the above, it will be seen that that case must be differentiated from the one at bar. Here it has been made to appear that partition is both expedient and necessary to protect the rights of the trustees in bankruptcy, or those whom he represents. In that case it is also said:
    "The bankruptcy law does not expressly authorize partition proceedings by the trustee of the bankrupt; and as such a proceeding is not shown here to be essential to the statutory duties of such a trustee, and no such duty appears to have been imposed by the bankruptcy court, the statute of this State relating to partition should not be unreasonably extended to cover trustees in bankruptcy who have the bare legal title but only special statutory duties to perform in connection with such title, who have no beneficial interest in the estate of the bankrupt, and where there is no allegation that partition is necessary to fully protect the rights of those interested in the estate of the bankrupt."
This case may again be differentiated from that case by comparing the allegations before the court in this case and the above quoted statement of Mr. Justice Whitfield, who wrote the opinion in that case.
The case of Lindsay vs. Runkel, supra, may be in like manner differentiated from this case. In that case the court said, in regard to the trustees:
    "He comes to the state court as a stranger to its jurisdiction, although he may resort to it to enforce his rights in certain cases. He says in his petition that he belongs to another jurisdiction, and gives the sign *Page 684 
by which he may be known, viz., he is trustee of a tenant in common who is a bankrupt. He does not disclose in his petition that the court of bankruptcy had ordered or authorized him to come into the state court, for any purpose; nor does he ask the state court to order a sale in either of the ways pointed out by the statute under which he was appointed and qualified."
In this case the Bill of Complaint shows affirmatively that the court of bankruptcy has ordered and authorized the trustees to come into the state court for the purpose of instituting and maintaining partition. There is no question of conflict of jurisdiction in this case because the Bill of Complaint shows that the trustees have been authorized and directed by the bankruptcy court to pursue the remedy of partition in the state court.
In American and English Annotated Cases following the report of the case of Hobbs et al. vs. Frazier, supra, there is an editorial note in which the opinion by Mr. Justice Whitfield is construed and we think the construction there enunciated is the proper one. It was as follows:
    "The reported case appears to be the only decision upon the right of a trustee in bankruptcy, appointed by virtue of the Federal bankruptcy act, to sue for a partition of property belonging to the bankrupt. The rule therein laid down is that as a trustee in bankruptcy is not expressly authorized by the act to sue for a partition of property belonging to the bankrupt he cannot bring such an action where no order of the bankruptcy court has been obtained authorizing and directing the bringing of the action, or where it does not appear that such a proceeding is essential to the statutory duties of the trustee, as for the protection of the rights of those interested in the estate of the bankrupt. The decision of the reported case apparently leaves open the question whether such an action may be maintained where one or more of the above facts exist."
In Harlin vs. American Trust Company, *Page 685 
119 N.E. Rep. 20, the Supreme Court of Indiana held contrary to the Florida decision, in the following language:
    "Under Burns' Ann. St. 1914, #3252, whereby a wife's inchoate interest in her husband's lands, given her by sections 3014 and 3029, becomes absolute on a judicial sale thereof, when her interest is not directed by the judgment to be sold or barred by such sale, her interest becomes absolute and entitles her to partition as soon as his title is transferred by an adjudication to the trustees of his estate in bankruptcy, and before the trustee has made a sale thereof."
There have been two cases decided in other jurisdictions since the case of Hobbs vs. Frazier which appear to be pertinent here and we think enunciate the law as it should be applied to the facts in this case.
In Champion vs. Spurck, 302 Ill. 241, 134 N.E. 717, the Supreme Court of Illinois said:
    "A state court rightly entertains suit for partition by a trustee in bankruptcy on a showing of necessity or expediency, the bankruptcy court, with no jurisdiction to entertain such a suit, having waived its right to sell the interest of the bankrupt in its incumbered condition, and in substance requested the state court to take jurisdiction.
    Title of trustee in bankruptcy under Bankruptcy Act 1898 #70a (U.S. Comp. St. #9654), is that of a purchaser, relative to the persons who under Partition Act #1, can maintain suit for partition; 'purchase' meaning every mode of acquisition of estate other than by descent."
In Jewett vs. Perrette et al, 26 N.E. 685, the Supreme Court of Indiana said:
    "We are not of the opinion that the assignee of an insolvent debtor can under no circumstances maintain an action for partition, but it is our opinion that he cannot do so as a matter of course. It is made the duty of the assignee to sell the property as it comes to him, as soon as possible after filing the appraisement which the statute requires, after giving 30 days notice of the sale in the manner provided for. Section 2671 *Page 686 
Rev. St. 1881. The statute does not seem to contemplate partition proceedings, but it is provided that the court shall have supervisory power over the estate of the assignor, and may make such orders in the premises as will be in the interest of those who are interested in the estate. Id. No doubt, if the assignee by virtue of his trust, is a tenant in common of real estate he may, upon a proper showing, obtain an order from the court to bring and maintain an action for partition; and this it is his duty to do whenever it will be bound to be to the interest of the estate so to do."
It appears to me that the bill of complaint alleges sufficient facts to entitle the appellants to pursue partition in the state courts and to maintain their action if the facts alleged are proven to exist.