Robertson v. Howard

The' opinion of the court was delivered by Smith, J;: While the evidence afforded by the records and written instruments in the case shows that the trustee’s sale of the school-land certificate was very irregular, if not void, we shall consider this case on the questions of law involved, and not review the findings of fact made by the court. One question involved is whether the sale of the certificate by the trustee in bankruptcy conveyed any interest in the land, or whether it was necessary, in order to devest the certificate holder of his title in the land, to appraise and advertise the land itself for sale and sell it in the method provided by the laws of the United States. No attempt was made to sell the land as such; hence, of course, no steps prescribed by law for the sale of the land were taken. The certificate is evidence of a contract between the state and the purchaser of the school land, and when such contract is executed and the purchaser makes a payment thereon in execution thereof he becomes the equitable owner of the land, subject to defeasance or forfeiture by noncompliance on his part with the conditions of the contract. The property acquired in the transaction by the purchaser is “land,” or “real property,” and is not “personal property.” (Gen. Stat. 1868, ch. 104, § 1, subdiv. 8; Gen. Stat. 1909, § 9037, subdiv. 8.) The school-land certificate in question is in every legal aspect like the state normal school-land certificate involved in Poole v. French, 71 Kan. 391. In that case this court held in substance that the right acquired by the purchaser was an equitable title to the real estate, [595] the sale of which is evidenced by the certificate, and that such title is subject to sale on execution. Such interest is also subject to attachment. (Travis v. Supply Co., 42 Kan. 625.) It seems apparent, if the equitable title may be sold on execution or be subject to attachment in one judicial proceeding, that it can not in another forum be sold by a judicial transfer of the certificate; else one court may cause a valid sale of the certificate and another of the land at the same time. It is contended by the appellees that the sale of the certificate by the trustee is a sale of the land, while they concede that the sale was irregular, and that the law of this state determines the character of the property as real estate, or land. While the adjudication of bankruptcy conveyed this land and all the property of Hagener to the trustee appointed by the court, the court had no jurisdiction over the land. Its jurisdiction was in personam. (Short v. Hepburn, 21 C. C. A. 252.) The attempted sale of the land by the trustee is not simply irregular and erroneous; it is void. (Watson v. Holden, 58 Kan. 657; McNutt v. Nellans, ante, p. 424; Short v. Hepburn, supra; Williams v. Nichol, 47 Ark. 254; Casseday v. Norris, 49 Tex. 613.) The case last cited involved the validity of a sale of land in one county at the courthouse of another county in Texas, under an execution issued upon a judgment rendered by the United States circuit court at Austin, Tex. It was therein said: “Sales of land made by the United States marshal, under execution, must be made in the county where the land is situated. “A marshal’s sale of land, part of which was in Mc-Lennan county, made at the courthouse of Bell county, held void as to that part lying out of Bell county.” (Headnote.) The United States district court for the southern district of Illinois has no jurisdiction in Kansas in bankruptcy, and a trustee appointed by it can only sell real [596] estate in this state under orders procured from some court having jurisdiction therein. (1 U. S. Comp. Stat. 1901, § 568, subdiv. 18.) So far as'conveying any interest in the land in question, the sale of the certificate by the trustee is void. Upon the adjudication that Hagener was a bankrupt, and upon the qualification of the trustee appointed by the court, the title to all the property of Hagener, including the land in question, vested in a sense in the trustee; and when a bankrupt is fully discharged the title to any of his property which has not been disposed of by the trustee reverts to him. But at all times Hagener had an actual interest in the property, which became a perfect title when it was not needed to pay his indebtedness or when for any reason the trustee was discharged without having used it for that purpose. This interest in the land in question, with the rents thereof, Hagener and wife conveyed to the appellees before he was discharged in the bankruptcy proceeding, and upon his discharge all his rights in and to the property held by the trustee reverted to his grantees. As was said in Bird v. Philpott, 69 L. J., n. s., Ch. Div., 487: “The trustee takes all the bankrupt’s property for an absolute estate in law, but for a limited purpose— namely, for the payment of creditors. . . . Subject to that, he is a trustee for the bankrupt of the surplus. . . . The bankrupt has not got the ordinary right of a cestui que trust to intervene, until the surplus has been ascertained to exist and all the creditors and interests and costs have been paid. He can not . . . interfere with the administration of the estate in any way, but subject to that, and subject to his noninterference with the administration and with the arrangements of the trustee during the bankruptcy in the due course of the execution of his duty, the bankrupt . . . has a right to the surplus — a right which he can dispose of by . . . deed or otherwise during the pendency of the . . . bankruptcy, even before the surplus is ascertained; although, of course, such dis [597] position will be ineffectual unless there turns out to be a surplus eventually.” (Page 491.) (See, also, In re Evelyn, 63 L. J., n. s., Q. B. Div., 658.) If while the bankruptcy proceedings were pending the bankrupt had died intestate there can be no doubt that upon the discharge of the trustee the title to the land would have vested in his heirs. If he had died testate it would have vested in his devisee. No reáson is apparent why, where he has conveyed away his interest in his lifetime, the title should not vest in his grantee. It is not contended that the appellants had a valid tax deed, or its equivalent, to the land. As we have determined that the appellees acquired all of Hagener’s interest in the land, it follows that they were entitled to discharge the tax lien of the appellants thereon. The judgment is affirmed.