ROSE H. HARKINS
v.
GEORGE E. HOLT, AS TRUSTEE OF THE BANKRUPT ESTATE OF I. E. HARKINS, DECEASED

Fla. | 1936-07-08
Ellis, P. J., and Terrell, J., concur., Whitfield, C. J., and Brown and Davis, J. J., concur in the opinion and judgment.
124 Fla. 774 Florida Supreme Court (1936) Positive Treatment
Also reported at: 169 So. 481
Cited by 30 cases

AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.

Synopsis

This case concerns whether a bankruptcy trustee can set aside fraudulent conveyances made by a bankrupt husband to his wife after the husband's discharge in bankruptcy. The court held that the discharge is personal to the bankrupt and does not prevent the trustee from recovering fraudulently transferred property.


Holding

Yes, a bankruptcy discharge is personal to the bankrupt and does not release fraudulent grantees from liability for fraud. The trustee can recover fraudulently transferred property, and a state court has concurrent jurisdiction to entertain such a suit when properly authorized.


Key Quotes

“A discharge is personal to the bankrupt, and does not release his fraudulent grantees from liability for fraud committed by them.”

Establishes that the bankrupt's discharge does not protect the wife from the trustee's action.

Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.

Join FLexlaw to unlock all legal intelligence

Facts & Procedural History

A bankruptcy trustee filed a bill of complaint to set aside conveyances of property from a bankrupt husband to his wife, alleging the transfers were f…

The full statement of facts, procedural history, and disposition for this case are member content.

Join FLexlaw to unlock all legal intelligence

© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.


Opinion of the Court
Buford, J.

Buford, J.

This cause now comes before this court on appeal from the final decree rendered in the Circuit Court of Dade County, Florida, overruling all exceptions to the Master’s report and ordering the cancellation of certain deeds of record in which the appellant was the grantee, and ordering certain property sold to satisfy a judgment rendered against one I. E. Harkins, appellant’s husband, during his life and before his bankruptcy.

On September 16, 1933, the said I. E. Harkins was discharged in bankruptcy; on June 13, 1934, the trustee in *776. bankruptcy, by authority of the referee in bankruptcy, filed a bill of complaint against Harkins, alleging:

“That the complainant, George E. Holt, is a resident and citizen of Miami, Dade County, Florida, and is over the age of twenty-one years; that he is Trustee in Bankruptcy in that certain cause now pending in the United States District Court, Southern District of Florida, in Bankruptcy, No. 1350, in the matter of I. E. Harkins, Bankrupt; that he was appointed such Trustee by order of said Federal Court on the 30th day of August, A. D. 1933; that by virtue of an order made by said Court on the 18th day of November, A. D. 1933, he was authorized to bring this suit on behalf of the creditors of said Bankrupt, a copy of said order being hereto attached * * *

The Bill further alleged that the purchase of certain property by I. E. Harkins in appellant’s name and his name prior to the discharge was fraudulent and that certain conveyances from the- said Harkins to his wife, appellant, were without consideration and were for the purpose and intent to deceive and defraud his' creditors; that without these assets the defendant was insolvent, and asking the court to set aside these conveyances, declare an equitable lien in favor of complainant against said properties, and that said properties be sold to satisfy said judgment. A motion to dismiss the bill of complaint was overruled, and thereafter the defendant filed her answer, joining issue on the allegations of fraud.

The appellant contends that the cause would have been dismissed on the grounds amongst others “that the said Bill shows affirmatively that the complainant is not entitled to the relief prayed for”; that a state court cannot, subsequent to a final discharge in bankruptcy and ignoring said final discharge, cancel and avoid said conveyance made by the *777discharged bankrupt prior to the period of his insolvency, and further, that the trustee could not bring this action because the duties of the referee, as well as his powers, were terminated with the entry of the final discharge, the court itself having the sole power to re-open the cause.

A discharge is personal to the bankrupt, and does not release his fraudulent grantees from liability for fraud committed by them. Robinson, et al., v. Tischler, et al., 69 Fla. 77, 67 So. 565; Moyer v. Dewey, 103 U. S. 301, 26 L. Ed. 394. The discharge of a debtor in bankruptcy in no way precludes the trustee from recovering property of the bankrupt’s estate which has been fraudulently transferred. In re Pierce (D. C.) 103 F. 64. The property here in question was omitted from the schedule of the bankrupt’s assets and was never adjudicated and the final order of discharge would in no way make the claim res judicata. See Stephenson v. Bird, 168 Ala. 363, 53 So. 92, Ann. Cas. 1912-B 249 and note.

It has even been held that the reference to whom the cause was originally referred has jurisdiction of a petition to reopen the cause and may make the necessary order. Bilafshy v. Abraham, 183 Mass. 401, 67 N. E. 318. However, it does not appear from the record that the trustee was ever discharged, nor the estate finally administered. The only thing that appears in the record beside the discharge of the bankrupt, which is personal, is that the trustee was given authority to bring this suit by the referee. It follows that when proper authority has been granted to the trustee to enter suit the State Court has still its concurrent jurisdiction and may entertain the suit.

It is further contended that the evidence does not sustain the allegations of the bill of complaint and that the Chancellor erred in entering the final decree thereon.

*778In a suit bycreditors to set aside a conveyance made by a husband to his wife as fraudulent, the burden of proving consideration proportionate to the value of the land conveyed is upon the wife, and clearer and fuller proof is required than if the transactions had been between strangers. Claflin v. Ambrose, 37 Fla. 78, 19 So. 628; Southern L. & S. Co. v. Verdier, 51 Fla. 570, 40 Sou. 678. The burden of proving bona fides in such cases is consequently on the wife. In cases of insolvency or of failing circumstances, the presumption of fraud follows the showing of insolvency, regardless of whether the conveyance was voluntary or otherwise, Southern L. & S. Co. v. Verdier, supra; Weatherbee, et ux., v. Deckle, 145 So. 199. However, this presumption or inference of fraud is not conclusive but is rebuttable, and when so rebutted and put in equipoise, it is then the duty of the party having the affirmative, upon whose allegations the issues are founded, to go forward with the evidence.

Both the Master and the Chancellor found against the contentions of appellant and, while the evidence as disclosed by the record, is not conclusive, we find substantial support for the findings necessary to support the decree, and, therefore, should not disturb the decree.

Under cross assignments of error appellee contends that the court erred in holding that real property held by a husband and wife as an estate by the entireties could acquire the status of homestead property. That such property so held may become the homestead has been definitely determined by this Court in Oates v. New York Life Insurance Co., 113 Fla. 678, 152 So. 671.

The decree appealed from should be affirmed and it is so ordered.

Affirmed.

Ellis, P. J., and Terrell, J., concur.

*779Whitfield, C. J., and Brown and Davis, J. J., concur in the opinion and judgment.


Cases With Similar Vibessemantic neighbors from the corpus


Citator

Cited By

  • J. C. Frell and Jeanne v. Frell, 154 So. 2d 706 (Fla. 3d DCA 1963)
    …evidence on the part of the defendant, and such transactions are regarded with suspicion. Southern Lumber & Supply Co. v. Verdier, 1906, 51 Fla. 570, 40 So. 676; Reel v. Livingston, 1894, 34 Fla. 377, 16 So. 284; Harkins v. Holt, 1936, 124 Fla. 774, 169 So. 481. “The appellant questions the proof in this case of fraudulent intent on the part of the transferee. It has been said that fraudulent intent, from its very nature, must usually be shown by substantial evidence. Such circumstances, although inconclu…
  • Money v. Coy C. Powell and Kathleen Powell, 139 So. 2d 702 (Fla. 2d DCA 1962)
    …the transferor, such tends to establish a prima facie case [*704] which mast be met by evidence on the part ■of the defendant. Tornwall v. Carter, supra; Southern Lumber & Supply Co. v. Verdier, 1906, 51 Fla. 570, 40 So. 676; Harkins v. Holt, 1936, 124 Fla. 774, 169 So. 481. By alleging a transfer while litigation was pending or threatened against the transferor, which transfer was made to the transferor’s wife without consideration, the transferor retaining dominion and control over the property transfer…
  • Passmore v. Morrison, 63 So. 2d 297 (Fla. 1953)
    …e’s death, it never lost its homestead character, and being so, it was not subject to. devise by Mrs. Passmore but descended by operation of law to appellant. Oates v. New York Life Ins. Co., 113 Fla. 678, 152 So. 671; Harkins v. Holt, 124 Fla. 774, 169 So. 481; Clark v. Cox, 80 Fla. 63, 85 So. 173; Nelson v. [*299] Hamlin, 89 Fla. 356, 104 So. 589; Osceola Fertilizer Company v. Sauls, 98 Fla. 339, 123 So. 780; O’Neal v. Miller, 143 Fla. 171, 196 So. 478, 129 A.L.R. 295; Larsen v. Austin, Fla., 54 So. 2d 6…

Previewing 3 of 8 citing cases — full citator treatment, depth of discussion, and citing context are member features.

Join FLexlaw to unlock all legal intelligence

Authorities Cited

Full citator, related cases, and AI research tools

Open in FLexlaw