In re Seavey

HOUGH, District Judge. It is not thought necessary to discuss the law of wills or their interpretation in order to arrive at decision herein. It is very seldom that I (so to speak) cut across the argument of counsel, and base decision upon some matter not pressed and perhaps not presented in briefs. But in this case, after carefully reading the record and interesting briefs, I am convinced that much that has been done herein is wholly beside the mark. What the trustee wants to do is to sell something that he says belonged to the bankrupt, and therefore belongs to him. The bankrupt denies that that something either belonged to her at the time of petition filed, or is of such a nature that it can ever become vested in her trustee in bankruptcy. This is the issue between the parties, and, in order to solve it, the trustee might have filed a petition in this court, as was done in Re Hoadley (D. C., N. Y.) 3 Am. Bankr. Rep. 780, 101 Fed. 233. If that proceeding had been chosen, all the questions so learnedly discussed by counsel would have been proper for consideration here. But ihis was not only forum open to the trustee, and he chose to sue in the Supreme Court of the state which had jurisdiction and wherein any adjudication of right is entitled to all the respect owing to the final judgment of any court of competent jurisdiction in a civilized country. In that suit the trustee charged (paragraph 8, amended complaint) that Mrs. Seavey was vested with an interest in a certain trust fund, and that she had assigned it in fraud of creditors; wherefore trustee-plaintiff prayed (second prayer) that such property and assets “be declared to belong” to himself as trastee. Mrs. Seavey came into court, and pleaded that at the time of the alleged fraudulent assignment she had no vested interest in the estate in question, nor any interest which would in any way vest in her trustee in bankruptcy. These issues were tried and decided in favor of the trustee, so it is judicially declared that Mrs. Seavey had an assignable interest, that she did assign it in fraud of creditors, and that the trustee is entitled to it; in short, he is the owner of certain salable property [832] so far as the judgment of a court of competent jurisdiction can make an owner of him. This being the case, the trustee had the legal right, and! the duty cast upon him by law, of selling what he owns as trustee for the benefit of creditors. Therefore the bankrupt seeks to stay the trustee in the exercise of his legal duty on grounds which amount to no more than this, viz., that as matter of law the Supreme Court of New York was wrong in its decision. This doctrine logically extended would permit any party defeated in plenary suit by a trustee in bankruptcy to come into the bankruptcy court, and use that tribunal-as one of appeal, and compel every victorious trustee to prove to the satisfaction of the bankruptcy judge that the courts wherein he had won his victory had not erred in granting him the same. It seems to me that this strikes at the very root of legal proceeding. If there he error in Judge Kellogg’s judgment, the courts of the state of New York are open to correct it, and any endeavor to collaterally impeach such judgment in the manner here shown is wholly disapproved. The petition of review is dismissed and the stay vacated.