Court Opinion

ID: 8755046
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:42:47.846008+00
Date Added: 2024-06-11T17:01:12.024297
License: Public Domain

ALDRICH, District Judge
(dissenting). I cannot agree with the conclusion reached’ in the majority opinion. I do not understand that the rule which contemplates that equity jurisdiction, practice, and procedure in the federal courts, based upon the English chancery system, shall be uniform throughout the United States, goes so far as to create a legal or equitable status in respect to the property rights of married women within a given state different from that which exists under the local laws thereof. I do not understand that federal equity accords to married women within a state power to contract or a property status distinctly different and beyond that which exists in equity as administered by the state courts under its own statutory equity and common-law system.
The federal government never committed itself altogether to the idea of an adoption bodily of English chancery rights, or of the English limitations upon equitable rights, or to the idea of adopting bodily the prospective expansion and growth of the English chancery doctrines, to the end that the same should be imposed upon a state, contrary to its own idea of domestic relations and property rights. No state is bound to adopt the measures of supposed equitable reform inaugurated in another jurisdiction. The legal and equitable status of the property rights of married women in a given state is not regulated by general law or by general principles of equity. It rests upon local statutes and local law. It was the English doctrine as to scope of jurisdiction and the English system of practice and procedure that was adopted, and the adoption related to the situation as it then existed, and any subsequent enlargement or limitation of the English system by statute or otherwise must be excluded when we are considering what was actually adopted at the inauguration of our government. Eor a discussion of this question I will refer to Fontain v. Ravenel, 17 How. 369, 394, 395, 15 L. Ed. 80, and Alger v. Anderson (C. C.) 92 Fed. 696. As said by Chief Justice Taney in Meade v. Beale, Taney, 339, 361, Fed. Cas. No. 9,371:
“So, too, as relates to the jurisdiction oí the Circuit Court sitting as a court of chancery. It is undoubtedly true, as contended for in the argument of the complainant, in regard to equitable rights, that the power of the courts of chancery of the United States is, under the Constitution, to be regulated by *410the law of the English chancery; that is to say, the distinction between law and equity as recognized in the jurisprudence of England is to be observed in the courts of the United States, in administering the remedy for an existing right. The rule applies to the remedy, and not the right; and it does not follow that every right given by the English law, and which, at the time the Constitution was adopted, might have been enforced in the court of chancery, can also be enforced in a court of the United States. The right must be given by the law of the state, or of the United States. It is the form of remedy for which the Constitution provides; and, if a complainant has no right, the Circuit Court, sitting as a court of chancery, has nothing to remedy in any form of proceeding.
“In the case before the court, the question is: Is the bequest which the complainants claim a valid one by the laws of Maryland? It is a question which, in its nature, necessarily depends upon the laws of the respective states. Some of the states sanction devises of this description, some do not, and undoubtedly it depends upon every state to determine for itself to whom, in wliat form, and by what instrument any property within its borders may pass by devise or otherwise.”
The present enlarged rights of married women in England, both at law and in equity, principally resulted from removal by statutory enactment of disabilities which the old common law imposed upon the wife by reason of the marital relations. The same is true in respect to the rights and liabilities of married women in the - various states. The rights of married women, varying largely in the different states, have resulted from legislation extending the rights of the wife upon such grounds of public policy as each state has seen fit to adopt. It has never been understood that the property rights and liabilities of married women in a given state were regulated by the law of England or by the law of any other state.
It is conceded by the majority opinion that the claim of the wife in the case at bar would have no standing either at law or in equity in the state courts of Massachusetts. Indeed, section 1 of the Massachusetts statute, referred to in the majority opinion, expressly declares that the wife shall not be authorized thereby to make contracts with her husband, thus statutorily declaring it to be the policy of the state that contracts between husband and wife shall not be recognized and upheld in that jurisdiction. Moreover, in Woodward v. Spurr, 141 Mass. 283, 287, 6 N. E. 521, which was an equity proceeding involving a local insolvency law, which provided for the proof of equitable liabilities against insolvent estates, and in which the state statute in question was under consideration, it was expressly said:
“When contracts are themselves not authorized, validity cannot be imparted to them by affording a remedy for the breach of them through the medium of a court of equity.”
Thus expressly and emphatically repudiating the idea of an enforceable equitable status founded upon considerations of trust in a case like this in the courts of Massachusetts.
Fleitas v. Richardson, 147 U. S. 550, 555, 13 Sup. Ct. 495, 37 L. Ed. 276, was an equity proceeding involving the claim of a wife against her husband, who had been discharged in bankruptcy, and not only was the law of the state with respect to the right and the local idea of trust relations recognized, but the right and the provability of the claim were made distinctly to rest upon the state law of Louisiana.
While I do not question for the purposes of this case that a claim *411of the character of the one in question is now enforceable in equity in England and in nearly all of the states of the Union, and at law perhaps in some of the states, I cannot concur in the idea that the bankruptcy act was intended to create substantive rights to married women beyond those existing under the law of the state in which the married woman resides.
The proceeding here is to adjust the rights between local creditors in respect to a bankrupt estate in the state of their residence. There is no diverse citizenship, and therefore could be no regulation of the rights in question by the federal courts unless under the bankruptcy law. Therefore, if the view of my Brethren is sound, under the bankruptcy law, with no diverse citizenship, the wife has a property right of the value of $20,000, while, if the bankruptcy law were to be repealed, she would have no right enforceable at law or in equity either in the state or federal courts. Giving a status to the claim of a married woman against the estate of her husband in bankruptcy different from that which exists under the local law impairs the substantive rights of the other creditors as they exist under the laws of the state, and is therefore inequitable as to them. It would be inequitable and unwarrantable in the state courts, because against the policy and contrary to the law of the state, and therefore not founded upon a legal or equitable right or remedy enforceable in that jurisdiction, and inequitable in the federal courts because, in the absence of diverse citizenship, the federal courts, in the exercise of general equity power independent of bankruptcy, would have no jurisdiction, equitable or otherwise, to establish and maintain the right.
It is difficult for me to adopt the view that the bankruptcy law was intended to create a property or contract right as between local creditors, either in a legal or an equitable sense, beyond that which obtains according to the rules of property existing under the laws of the state. If the conclusion of the majority is sound, there exist in Massachusetts two rules of property in respect to married women — one rule, distinctly and deliberately expressed, established by its statutes, construed by the highest court of the state, regulating the rights of married women, and another and a very different rule of property, administered in the same jurisdiction by the federal courts, a condition, in my opinion, never contemplated under our system of federal and state governments, in respect to parties residing in the same state and whose property rights are based upon local law.
English and American decisions in other jurisdictions, as to claims of married women enforceable in equity, have no bearing, as it seems to me, upon a situation involving a Massachusetts statute, Massachusetts decisions, a Massachusetts estate, and Massachusetts creditors only. The property rights of married women in Massachusetts are established upon grounds of public policy, upon which the state is entitled to stand. It has been repeatedly decided by the highest court of the state that a claim of this character, even under insolvency conditions, has no legal standing, either at law or in equity, as against the other creditors. Such decisions are based upon the rules of common law and equity as modified and enlarged by the statutes of Massachusetts. As there expressed by its highest court, the rights of mar*412ried women are based upon “the rule of the common law which has been declared and recognized by the Legislature.” Bank v. Tyndale, 176 Mass. 547, 550, 57 N. E. 1022, 51 L. R. A. 447; Clark v. Patterson, 158 Mass. 388, 33 N. E. 589, 35 Am. St. Rep. 498; Woodward v. Spurr, 141 Mass. 283, 6 N. E. 521; Fowle v. Torrey, 135 Mass. 87.
When our government was established, and the common law of England, so far as not inconsistent with our institutions, was adopted by the governments of the various states, and when the English chancery system was adopted by the federal government, and for a long time thereafter, a claim of a married woman like the one in question had no standing in that country at law, or in equity it is believed, in a suit by the wife against the husband or his estate upon a naked loan relieved from relations and considerations of trust; but, however that may be, it is clear, even if otherwise, now that for many years the claim of a married woman had no standing there either at law, or in equity as administered in bankruptcy proceedings, where the claim of the wife was strictly contractual and where creditor interests were involved, as is the case here. Robson’s Bankruptcy (6th Ed.) 475, and cases cited. In re Beale, 4 Ch. 249. According to Taney, as has been already said, in order to have an equitable remedjq there must be a right based upon federal or state law; and, as said by Lord Eldon, in Dewdney, Ex parte, 15 Ves. 479, 498, in discussing the English doctrine as to equitable claims in bankruptcy:
“Upon the whole, my opinion as to the general point is that in the consideration of this statute a commission of bankruptcy is nothing more than a substitution of the authority of the Lord Chancellor, enabling him to work out the payment of those creditors who could by legal action or equitable suit have compelled payment, and that the objection upon the statute [statute of limitations] is competent to the creditors * * * regarding the claim of each creditor as a suit depending.”
Indeed, section 23a of the bankrupt law (Act July 1, 1898, c. 541, 30 Stat. 552, 553 [U. S. Comp. St. 1901, p. 3431]), conferring law and equity jurisdiction upon the Circuit Courts in bankruptcy matters, adopts the idea expressed by Lord Eldon that the right as between the parties should be regulated according to law and equity in the same manner and to the same extent as though bankruptcy proceedings had not been instituted, thus making the right or the claim depend upon its original status of enforceability or nonenforceability at law or in equity under general equity powers, independent of the bankruptcy law; and under this standard there was no right enforceable under the state law, and no equity jurisdiction or right cognizable in the federal courts, in the absence, as is the case here, of diverse citizenship. The question in this case is therefore a very plain and simple one. Was the claim, independent of the bankrupt law, based upon a right enforceable in the state under its laws, or in the federal courts under their general equity powers? And surely this question must be solved in the negative.
It thus results in the case at hand that we have a situation where the claim of the wife was not recognized by the local statutes of Massachusetts and not enforceable in its courts, and where there is no equity jurisdiction in the federal courts in the absence of diverse citizenship, *413and therefore no equitable right enforceable in such courts under their general equity powers independent of the bankruptcy law. And the consequence is that the majority opinion departs from and goes contrary to the idea expressed by Lord Eldon that creditors have a right to object to an equitable claim, not cognizable and not enforceable either at law or in equity, and accords to a creditor wife a right and a status not recognized by the state law, a right and a status not enforceable in the federal courts of equity under their general equity powers, and one with which thev could have nothing to do, independent of the bankruptcy law and bankruptcy proceedings.
Under our distribution of governmental functions between the federal and state governments, and especially in view of the recognition by the federal government of the power of the state (under certain limited and expressly defined constitutional restrictions not material here) to establish and regulate rules of property within its jurisdiction, it results clearly and necessarily that the legal and equitable status of property rights of married women in a given state is regulated by local law; that is to say, by the old common law modified and enlarged by such judicial innovations and such legal and equitable statutory reforms as it has seen fit to adopt, and by such, if any, of the modern ideas and expanded rules of common law and equity adopted in other jurisdictions as the Legislature and the courts of the state in question have seen fit to recognize and declare.
While a state may not, by statutory enactment or otherwise, place any restrictions upon federal equity practice and procedure, which is uniform throughout the United States, or impede or impair its jurisdiction, which is likewise uniform, it may regulate property rights within its jurisdiction, and the laws of the state regulating such rights are regarded by federal courts as rules of decision in respect to property rights so regulated by the local law. And, as said by Woods, Circuit Judge, in Mitchell v. Lippincott, 17 Fed. Cas. 503, 506 (Fed. Cas. No. 9,665), which was an equity proceeding:
“If the rule is ever to be applied to any case, it seems to me the construction of the married women's law is a proper case for its application.”
The Supreme Court, in affirming the decision of Judge Woods, 94 U. S. 767, 770, 24 L. Ed. 315, in referring to the state law, and the state decisions, said:
“This construction is a rule of property of the state, and we are as much bound by it as if it were a part of the statute. It is our duty to apply the law of the state as if we wore sitting there as a local court, and this case were before us as such a tribunal.”
Again, referring to the local statute:
“Where the intent to exclude the marital rights of the husband is doubtful or equivocal, or rests on speculation, the statute intervenes and fixes the character of the estate.”
Mr. Justice Curtis, in Neves v. Scott, 13 How. 268, 271, 14 L. Ed. 140, while holding that the Supreme Court, upon general questions of equity, would not be bound by the decisions of the Supreme Court of Georgia, in the absence of a statute, a custom, or a local law, in effect recognized the idea of the right of a state to regulate legal and equitable property rights by local statutory law.
*414While the leading aspect of the principle that the federal courts regard as rules of decision the decisions of state courts has reference to the construction of statutes and decisions affecting titles to real property, the rule is by no means limited to such sub j ects; for it includes as well the exposition of the local common law of a state by its highest courts, like preferences between creditors, as in Parker v. Phetteplace, 2 Cliff. 70, Fed. Cas. No. 10,746, like questions of possession of personal property, as in Allen v. Massey, 17 Wall. 351, 21 L. Ed. 542, like questions relating to executions, as in United States v. Morrison, 4 Pet. 124, 7 L. Ed. 804, the construction of wills, as in Smith v. Shriver, 3 Wall. Jr. 219, Fed. Cas. No. 13,108, the equitable rights of married women, as in Mitchell v. Lippincott, 1 Cent. Law J. 265, the validity of a mortgage not truly describing the debt intended to be secured, as in Townsend v. Todd, 91 U. S. 452, 23 L. Ed. 413, the power of a corporation to issue bonds, as in Thomas v. County of Scotland, 3 Dill. 7, Fed. Cas. No. 13,909, as to the time when a corporation was formed, as in Stone v. Wisconsin, 94 U. S. 181, 24 L. Ed. 102, and in respect to manjr other subjects relating to property rights within a state. See, also, 1 Bates on Federal Equity, §§ 6-10; Bump’s Federal Procedure, pp. 416-420.
Nothing could be more disturbing or hurtful to a community than the existence within its domain of two sets of law or two measures of equity respecting property rights; and this would be especially so with respect to a system which undertakes to regulate the social, domestic, and property status between the sexes, and the rights of a married woman as between her husband and creditors, who, in reliance upon the local law regulating the rights of property, deal with him in the ordinary course of business within the bounds of the state which creates and maintains its own local system of law and jurisprudence.
I cannot conceive, aside from diverse citizenship or a federal statute expressly creating a right, that the federal courts are, or ought to be, charged with any responsibility in the adjustment of property rights, equitable or otherwise, within a state between its citizens. The idea that such a right or responsibility exists contravenes a fundamental theory as to the distribution of power between the federal and state governments. It is a strained, startling, and subversive construction that carries a bankrupt law, intended only to distribute the assets of a bankrupt estate between local creditors, according to the right or equity as existing independent of the bankrupt law, to the point of creating a substantive, enforceable, federal right, which shall override the positive law and the public policy of a state with respect to the legal and equitable status of married women in property situations, domestic affairs, and business conditions relating to property rights within a state.
It must be always borne in mind, of course, that the issue here is not one alone between the married woman and her husband, but involves as well the equitable rights of creditors. This element distinguishes this case from equitable proceedings to protect the separate estate of the wife as against the husband.
The Massachusetts statute and the Massachusetts cases have established a local rule of property which the federal courts are bound to *415recognize and enforce. It is said in Walker v. Walker, 9 Wall. 743, 754, 19 L. Ed. 814:
“The Circuit Courts of the United States, with full equity powers, have jurisdiction over executors and administrators, where the parties are citizens of different states, and will enforce the same rules in the adjustment of claims against them that the local courts administer in favor of their own citizens.”
And in Ewing v. City of St. Louis, 5 Wall. 413, 419, 18 L. Ed. 657, which was an equity proceeding, it is said:
“The complainant can ask no greater relief in the courts of the United States than he could obtain were he to resort to the state courts. If in the latter courts equity would afford no relief, neither will it in the former.”
I agree with the reasoning of Judge Eowell in Re Talbot (D. C.) 110 Fed. 924, which he adopted as the ground for disallowing the claim in question.