« ForrigeFortsett »
should not protect an estate vested in, or for the benefit of, the wife, equally, whether at the common law, or by statute, or under a deed of trust for her separate use.
The case may be summarized as follows: While the federal courts are required by the statutes creating them to accept, as rules of decision in trials at common law, the laws of the several states, except where the Constitution, treaties, or statutes of the United States otherwise provide, their proceedings in equity suits, involving equitable rights, cannot be impaired by the local rules of the different states in which they sit. The principles of equity as applied by them are the same everywhere in the United States. Of course, there may necessarily exist exceptional circumstances, as, for example, in Louisiana, where there never has been any law of uses and trusts as in England, so there can be no such thing as an estate limited to the separate use of the wife. There the whole topic of the rights and obligations of the wife is a part of the Code or statutory law of the state. So, also, if any state, say Massachusetts, had peculiar legislation relating to estates vested to the separate use of the wife, that legislation might have to be regarded by the federal courts in equity as well as at law. Such exceptional cases ordinarily fall within those chancery rules which relate to giving special remedies for rights existing only at common law or under a statute. The general rule which we state is well laid down in Curtis' Jurisdiction of the United States Courts (1880) 13, 14, and strikingly illustrated in Russell v. Southard, 12 How. 138, 147, 13 L. Ed. 927, Neves v. Scott, 13 How. 268,271,14 L. Ed. 140, Babcock v. Wyman, 19 How. 289, 299, 300, 301, 15 L. Ed. 644, Brick v. Brick, 98 U. S. 514, 516, 25 L. Ed. 256, and Kirby v. Lake Shore Railroad, 120 U. S. 130, 137, 138, 7 Sup. Ct. 430, 30 L. Ed. 569. Even in Massachusetts it appears, as we have already shown, that the topic which we are discussing is recognized as one concerning a right in equity limited or regulated in accordance with rules peculiar to that state. We refer to this as merely illustrating our proposition. It could not control it, because, under the decisions of the Supreme Court, it remains for the federal courts, not only to occupy the field of equitable rights according to their own rules, but also to determine what are the boundaries of that field. The first question to be determined in the case at bar is whether an equitable right is involved. We find that the real issue presented is whether, under the federal bankruptcy statutes, which permit the allowance of equitable claims, a loan by a wife to her husband from property secured to her by the Massachusetts statutes creates an equity in her favor. This is a question of general equity. The Massachusetts courts hold that the general principles of equity jurisprudence are to be applied to the statutory separate estates of married women, the same as to an estate vested in trust for her separate use under the general rules of law. The only difference between the Massachusetts courts and courts elsewhere, with respect to the particular question now under consideration, is that the former hold to a limited rule; so that all courts agree that the general topic relates to an equitable right, and the only distinction is that the local treatment of it is peculiar. In cases where parties seek in equity only a concurrent remedy to enforce a legal right, the right is ordinarily determined by the common law of
the state where the litigation is pending; but, as we have seen, this proceeding asserts an equitable right, so that we are not bound by the local rule.
As the record comes to us, we are justified in holding that it authorizes us to make a final disposition of the case. There is nothing to suggest that the findings of the referee, or the assumptions which we have made, are not in conformity with the substantial facts.
The decree of the District Court is reversed; the case is remanded to that court, with directions to allow the proof offered by the appellant, Clitheroe D. James, as a valid proof of an unsecured claim against the partnership estate, and against the several estates of the individual partners, so far as such several estates are subject to the jurisdiction of the District Court in bankruptcy, subject to the rules for marshaling between partnership and individual estates; and the appellant recovers her costs of appeal.
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 commonlaw 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. For 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 of 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
the 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 what 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
of 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 condi tions, 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
ried 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 remedy, 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 regarding the claim of limitations] is competent to the creditors 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,