Rosenberg v. Mencke

Opinion by Mr. Justice Thompson, The present action of ejectment was brought by the appellant against the appellee, trustee in bankruptcy of Emanuel Rosenberg, husband of appellant. On December 16, 1895, Samuel P. Hannum held a judgment for $300 against Emanuel Rosenberg, the bankrupt, and on December 16, 1898, he assigned his judgment to the appellant, the wife of the bankrupt. Subsequently tbe real estate involved in this action was levied upon in proceedings under this judgment, sold by the sheriff and bought by the appellant. After her purchase her husband became a voluntary bankrupt and appellee was appointed a trustee for his creditors in the bankruptcy proceedings. As such trustee he recovered this real estate in an ejectment upon the ground that the sale and purchase by appellant was in fraud of the creditors of her husband, the bankrupt. The appellant then brought this second ejectment to recover the real estate in question, and the court below quashed the writ and this is assigned for error. In the first action of ejectment the jury found that the appellant had bought the judgment, that her husband had furnished the money, that he was at the time insolvent, and that she then had knowledge of his insolvency. After tbe recovery by the appellee in the action of ejectment this second one for the same real estate was brought by the appellant, and it is manifest that if the recovery in the first action was based upon an equitable title it was conclusive. As an ejectment is a substitute for a bill in equity, and as a decree there would operate to estop a denial of the title de [334] creed, the logical conclusion would follow that a judgment in equitable ejectment would be also conclusive. In Nicolls v. McDonald, 101 Pa. 514, it is said by Mr. Justice Mebctjb : “ Although the action may be ejectment in form, yet in substance it is a bill in equity to compel a reconveyance of the land from the mortgagee in possession. Each form of action is subject to the same equitable principles. If the parol evidence is insufficient to move a chancellor to decree a reconveyance it is insufficient to justify a recovery in ejectment. In each case the judge administers equitable powers. It is in the discretion of a chancellor whether he will send an issue to the jury. When sent their province is to aid him in ascertaining the facts ; but their verdict is advisory only. It is not conclusive on him. He is still judge both of the equity and the facts. So on the trial of an action of ejectment, founded on an equitable title, it is the duty of the judge to consider and to weigh the facts for himself. They must be proved to his satisfaction as well as to the satisfaction of the jury. If he be of opinion that the evidence does not make out a case which would induce a chancellor to decree a conveyance it is his duty to give the jury binding instructions to that effect.” An equitable title is such by operation of equity or cognizable in equity, and when a legal title is the result of fraud the party guilty of the fraud is not entitled to hold the beneficial interest and becomes a trustee for the party who has been injured and such party may recover in ejectment. In Church v. Ruland, 64 Pa. 441, Mr. Justice Shabswood says: “ It fastens upon the conscience of a party having thus procured a will and then fraudulently refusing or neglecting to fulfill the promise on the faith" of which it was executed, a trust or confidence, which a. court of equity will enforce -by compelling a conveyance when the proper time for it has arrived; and with us in Pennsylvania such a conveyance will be considered as having actually been made whenever it ought to have been made. The cestui que trust will be entitled to recover in ejectment against the trustee and all in privity with him.” A trust arising ex maleficio turns the holder of the legal title into a trustee, to recover which an ejectment will lie. The recovery in the first ejectment rested upon the ground that [335] the title of the appellant was based upon a fraud upon creditors, and that she held the real estate in question for the benefit of creditors, and the' equitable title was thus clearly at issue in that ejectment." Under the National Bankruptcy Act of 1898, the beneficial interest in this estate became vested in the appellee as a trustee for the creditors of the bankrupt, and the first ejectment was to recover possession based upon such equitable title. It was a distinctive assertion of an equitable title, and if so the recovery in that action is conclusive: German-American Title and Trust Co. v. Shallcross, 147 Pa. 485. The assignment of error that the court below erred in quashing the second writ is not sustained and the decree is affirmed.