in fee of the real estate in controversy in this case, and that sometime prior to the rendition of the judgment in favor of Hartly he conveyed the same to his wife, Georgia Oliphant, with the limitation in substance that the land was to revert to him if his wife should die without children. The bill alleged this conveyance to his wife was voluntary, and made to hinder, delay and defraud his creditors, both existing and subsequent, and prayed that the property might be decreed to be sold to satisfy the plaintiff's judgment. Oliphant and his wife were made defendants to the bill. Oliphant was served with process the day the bill was filed, and afterwards appeared to the action. In June, 1876, Oliphant was, on his own petition, adjudged a bankrupt by the district court of the United States for the eastern district of Arkansas. He did not schedule the property in question as part of his assets. Georgia Oliphant, the wife, died in July, 1876, and the action abated as to her, and the plaintiff and defendants in this action concede that, under the limitation in the deed, the legal title to the land reverted to Oliphant at her death. Oliphant's aSRignee in bankruptcy never asserted any claim to the property nor sought to become a party to the suit, and was not made a party, and was discharged by the bankrupt court before final decree in the case. Hartly never proved his judgment as a debt against the estate of the bankrupt. Oliphant never answered the bill, but before final decree filed his certificate of discharge in bankruptcy in the case, and moved to dismiss the cause for want of jurisdiction, and because his as· signee in bankruptcy was not made a defendant. On the twenty-seventh of January, 1877, a final decree was rendered in the cause, in accordance with the prayer of the bill. From this decree Oliphant appealed to the supreme court of the state, where the decree below was affirmed. Olio phant v. Hartly, 32 Ark. 465. sold under the decree, and purchased The property by Hartly, the plaintiff in that action, and one of the defendants in the present suit. Afterwards Oliphant, the bankrupt, conveyed the property to the present plaintiff, who
KIMBERLING V. HARTLY.
brought this action of ejectment to recover the property from the purchaser at the sale made under the decree of the state court. To the answer, which by agreement is to be taken as setting up with the requisite fullness and particularity the . above facts in bar, the plaintiff filed So demurrer. . T. J. Oliphant, for plaintiff. B. D. Turner, for defendant. CALDWELL, J. The plaintiff contends that when Oliphant was adjudged a bankrupt the state court was without jurisdiction to proceed further in the pending cause, unless the assignee was made a party, and that, as that was not done, the decree of that court, and sale and conveyance thereunder, are nullities, and that, as the land reverted to Oliphant under the limitation in the deed to his wife, after he was adjudged a bankrupt, it was a new acquisition, and his deed invested plaintiff with the legal title. Judgment, execution, and a return of nulla bona thereon, placed the judgment creditor in a position to assail any conveyances made by the judgment debtor to defraud his creditors, and a bill was filed for that purpose, making the judgment debtor and the alleged fraudulent grantee defendants. Proper process issued and was duly served on the judgment debtor, to whom, under the limitation contained in the deed to his wife, it is conceded the legal title to the property reverted upon her death, which occurred soon after the institution of the suit, and after that event Oliphant was the sole proper defendant in the action. By these proceedings the state court acquired complete jurisdiction over the parties to the suit, and the subject-matter of the action; and the plaintiff acquired So lien in equity on the lands mentioned in his bill, and the right, if he established the fraud, to subject them to the payment of his judgment. The law is well settled that the filing of such a creditor's bill, and the service of process in the action, create a lien in equity upon the lands described in the bill, and enti. tIe the plaintiff to priority over other creditors. Storm v. Waddell, 2 Sandi. Ch. 494; Tilford v. Burnham, 7 Dand. 110; Maffitt v. Ingham, ld. 495; Hartshorn v. Eames. 31 Me. 93; Newdigate v. Jacobs, 9 Dana, 18; McDurmott v. Strong, 4
John. Ch. 687; Spader v. Davis, 5 John. Ch. 280; Carr v. Farrington, 63 N. C. 560; Fetter v. Ci'r'ode, 4 B. Mon. 482; Day v. Washbwrne, 24 How. 352; Clark v. Rist, 3. McLean, . 494. "It has been aptly termed an equitable levy." Miller v. Sherry, 2 Wall. 249. And this lien is not displaced by the subsequent bankruptcy of the judgment debtor, but is protected by the bankrupt act. Section 5075, Rev. St.; Clark v. Rist, 3 McLean, 494; Sedgwick v. Mench, 6 Blatch, 156; Parker v. Merggridge, 2 Story, 334; Storm v. Waddell, supra; Carr v. Farrington, supra; Fetter v. Cirode, 8upm; Newdigate v. Jacobs, 8upra; McDurmott v. Strong, supra; Goddard v. Weaver, 1 Wood, 260; Yeatman v. Savings Institution, 1:15 U. S. 764; Stewart v. Platt, U. S. Sup. Ct., October term, 1879, 12 C. L. N. 20l. Conceding that by the bankruptcy of the judgment debtor his assignee in bankruptcy acquired the right to make himself a party to the pending creditors' bill, and prosecute the same, it by no means follows that because he did not do so the state court was deprived of jurisdiction. The assignee succeeded to the right the creditors of the bankrupt or any one of them had, or might have obtained, by appropriate action, to avoid any conveyance made by the bankrupt in fraud of his creditors. But in any suit brought by the assignee for this purpose the creditors' liens on the property, whether acquired by creditors' bill or otherwise, would not be displaced or annulled; and, if the suit was successful, the assignee would have to distribute the fund according to priority of liens and right between the creditors. And if the property did not exceed in value the amount of Hartly's lien upon it, and other creditors would derive no benefit from the suit, the assignee acted wisely in not intervening and allowing the lien creditor and the bankrupt to settle the controversy between themselves in the state court without expense to the estate. "Assignees are not bound to take all the property of the bankrupt, but may reject such as may be rather a burden than a. benefit to the estate." 1 Deu,con on Bank. 535;
Amory v. Lawrence, 3 Clifford, 523, et seq.; McLean v. Rocky, 8 McLean, 235; Rugely It Harrison v. Robin8on, 19 Ala. 404, 417; Glening v. Langdon, 98 U. S. 20, 30; In Ife Lambert, 2 Bank. Reg. 138. . The judgment creditor filed his bill, had a subpoona. served, and thereby acquired a lien before the commencement of proceedings in bankruptcy. He did not prove his debt against the estate of the bankrupt, or in any manner voluntarily submit himself to the jurisdiction of the bankrupt court, but was allowed to proceed to enforce his lien without objection from that court or the assignee. In this state of the case the state court had a right and it was its duty to proceed with the cause; its jurisdiction was complete, and its decree and. the title acquired under it are as valid and effectual as if the bankruptcy of the defendant had not intervened. Sedgwick v. Mench, 6 Blatch. 156; Clark v. Rist, 3 McLean, 494; In 'I'e Davis, 1 Sawyer, 260; Goddard v. Weaver, 6 Bank. Reg. 440; Second Nat. Bk. v. Nat. St. Bk. 10 Bush. 367; S. C. 11 Bank. Reg. 49; Davis v. Railroad Co. 1 Wood, 661; Norton's Assignee v. Boyd, 3 How. 426; Townsend v. Leonait'd, 3 Dill. 370; Johnson v. Bishop, 1 Wood, C. C. R. 874:; Reed v. Bullington, 49 Miss. 223; S. 0.11 Bank. Reg. 408; Waller's Assignee v. Best,3 How. 111. Cases holding a contrary view have been cited in the argument; but all doubts and conflict of authority upon the question have been removed by the authoritative judgments of the supreme court of the United States. Marshall v. Knox, 16 Wall. 551; Doe v. Childress, 21 Wall. 642; Eyster v. Gaff, 91 U. S. 521. In Dorr v. Childress the facts were that the land, was attached in a suit in the state court in April, 1867, and that the defendant was declared a bankrupt in February, 1868, four months before a decree was obtained in the suit, and seven months before the sale took place under the decree, and the court said: "The Tennesse court of chancery having jurisdiction of the subject of the proceeding in the attachment suits, no defence being interposed by the assignee in the state court, and no means having been taken to arrest theu
proceedings, or to transfer them to the bankrupt court, (if power to take such steps existed,) and there being no fraud. pl'Oven or alleged, we are of opinion that a good title was obtained under the decree of sale made in the state court." In Eyster v. Gaff the facts were that a suit to foreclose a mortgage was commenced in the state court in 1868; that the mortgagor an'd defendant in the suit was adjudged a bankrupt in May, 1870, and that a decree was rendered in the foreclosure suit in the state court in July, 1870, upon which the property was sold. The bankrupt's assignee did not intervene and was not made a party. The court held that the state court had jurisdiction, and that the decree and sale were valid. Mr. Justice Miller, delivering the opinion of the court, said: "It is almost certain that if at any stage of the proceedings, before sale or confirmation, the assignee had intervened, he would have been heard, to assert any right he had, or set up any defence to the suit. The mere filing in the court of a certificate of his appointment as assignee, with no plea or motion to be made a party or take part in the case, deserved no attention and received none. In the absence of any appearance by the assignee, the validity of the decree can only be impeached on the principle that the adjudication of bankruptcy divested the other court of all jurisdiction whatever in the foreclosure suit. * · · This court has steadily set its face against this view." There is nothing in the case of Gleaning v. Langdon, 98 U. S. 20, that conflicts with these views. In that case So creditor, after his debtor had been adjudged a bankrupt. brought a creditor's bill to recover property conveyed by the bankrupt in fraud of his creditors, alleging, as ground for doing so, that the assignee refused to bring the suit, and for that reason making the assignee a defendant. The creditor had no lien on the property, and suit' was brought after the adjudication in bankruptcy and the appointment of an assignee, and the court say that in such case the assignee must bring the suit, and point out the proper mode of proceeding by the creditors, in the event that he wrongfully refuses to do so. There was no lis pendens and no lien in that case before
the bankruptcy, and the property and right of action passed absolutely to the assignee, and he alone had the right to sue. In the case at bar there was a lis pendens and a lien, and the creditor had a right to proceed to satisfaction in the state court unless he was stayed by some appropriate affirmative action of the assignee or the bankrupt court. The .distinction in the two cases is obvious, and is clearly pointed out in Wintersv. Claiton, 54 Miss. 341; S. C. 18 Bank. Reg. 533. The rule is well settled that an assignee pendente lite, whether he be the claimant of a legal or equitable interest, or whether he be the assignee of the plaintiff or of the defendant, need not be made a party to the bill, and is bound by the decree. Story's Eq. PI. § 156. It is generally true that this rule does not apply to assignments by mere operation of law, and it has been held not to apply to an assignee in bankruptcy of the defendant. Story's Eq. PI. § 158a; Lowry v. Morrison, 11 Paige, 237. But the supremf< court of the United States, in Eyster v. Gaff, supra, seems t,(} place assignees in bankruptcy, so far as relates to pending to enforce liens on the bankrupt's property, on the sam f, tooting as a. purchaser pendente lite. The court say: "We see no reason why the same principle [that one who purchases pendente lite is bound by the subsequent proceedings] should not apply to the transfer made by a bankrupt proceeding... In that case, as we have seen, pending an action to foreclose a mortgage, the mortgagor was adjudged a bankrupt, and the conrt, after stating that the assignee might have made himself a party, say that "if he chose to let the suit proceed without such defence he stands as any other person would on whom the title had fallen since the suit was commenced." And see Carr v. Farmington, 63 N. C. 560. The discharge of the bankrupt pending the spit did not discharge or impair the lien acquired by the commencement of the suit. A decree in personam, against which the discharge,if properly pleaded, would have been effectual, was no\ sought or rendered, and the discharge was agitinsi v.l,no.8-37
Kn.GOBB t1. CROSS & DIVER.
(Circuit Court, E. D. Arkansas. --,1880.)
CONTRA.CT-MENTAL OONDITION.-Facts upon which it was held the mental condition of a party was such as to incapacitate him to enter into a valid contract. SAME-IMPOSITION-EQUITABLE RELIllllr.-Against the consequences of mistaken judgment, or mere imprudence and folly on the part of one making a contract, courts can grant no relief. But the acts and contracts of persons who are of weak understanding, and who are thereby liable to imposition, will be held void in courts of equity, if the nature of the set or contract justifies the conclusion that the party has not exercised a deliberate judgment, but has been imposed upon, circumvented or overcome by cunning artifice or undue influence. SAME-ExERCISE OF REASONING FACULTIEB.-A party is not barred by a contract entered into when his mental condition is such as to pr,eclude any fair or reasonable exercise of the reasoning faculties. SAME-INCAPACITy-ExpERT TESTIMONY.-Opinions of witnesses not experts are competent evidence on the question of capacity orincapacity to make a contract, when the facts or circumstances are disclosed 011 which they found their opinions.
CALDWELL, J. The plaintiff was the owner, among other property, of five head of horses, two sets of double harness, and one Concord eight-seat stage coach or wagon. Hedesired to sell or exchange this property, and having been informed that Cross & Diver, the defendants, had obtained a contract for carrying the United States mail, and were running a street railway in Little Rock, and that they would probably purchase the property, he caused inquiry to be made of them on the subject and received an answer, in substance, that if he would bring his property from Hot Springs, where plaintiff then was, to Little Rock, they might purchase or trade for it. Encouraged to believe that he could dispose of his property to the defendants, the plaintiff, on the day of hly. 1878, started from Hot Springs to Little Rock with his stage
&ILGORB 'V. OROSS.
coach, drawn by four horses, himself driving. In or near Hot Springs the horses drawing the coach took fright, ran away and overturned the coach, seriously injuring the plaintiff. The extent and character of this injury is the turning point in this case and will be more fully considered hereafter. On the next day after he received his injury the plaintiff directed one of his hired men to take his coach and five horses to Little Rock and sell or trade them at his discretion, and on the sixteenth of July his hired man proceeded to Little Rock with the property upon the understanding that he was to sell or dispose of the same for the plaintiff according to his own discretion, unless the plaintiff should, himself, go to Little Rock by rail the next day. On the seventeenth of July the stock and coach arrived at Little Rock, and were put up at defendants' stable, and in the afternoon of the same day the plaintiff arrived by rail. . The naxt day the plaintiff and defendants effected an exchange of property, as follows: the plaintiff gave the defendants his five horses, two sets of harness, and stage coach and $150, for an old glass front Clarence carriage. The $150 was not paid in'money, but the plaintiff gave his notes for that sum; and, to secure its payment, executed to defendants a mortgage on the carriage. The defendants loaned plaintiff a span of horses to haul the carriage which he received in the trade to Hot Springs, and it was driven to the latter place by the plaintiff's hired man. The plaintiff arrived at Hot Springs with the carriage on the nineteenth or twentieth of July, and within a week thereafter returned to Little Rock with the carriage, and tendered it back to the defendants and demanded a return of the property which they had received from him for the carriage, upon the ground that at the time he made the trade he was non
The defendants refused to rescind the trade, and thereupon the plaintiff filed his bill, alleging that by reason of the injury plaintiff received when thrown from his coach he was, at the time of the trade, incapable of transacting business, or knowing what he was doing, and was in fact non compos mentis;