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In re Colwell


December 3, 1937


Appeal from the District Court of the United States for the Eastern District of Illinois; Walter C. Lindley, Judge.

Author: Evans

Before EVANS, SPARKS, and MAJOR, Circuit Judges.

EVANS, Circuit Judge.

The District Court overruled a motion which sought (1) to vacate a final decree, (2) to secure a rehearing, and (3) leave to offer additional evidence. The previously entered final decree ordered the reduction of a mortgage given by bankrupts to defendant, because, in part, a fraudulent conveyance.

The Facts: Plaintiff, as trustee in bankruptcy of the estate of William H. Colwell, bankrupt, and also as trustee of Adda Colwell, bankrupt, brought this plenary suit to reduce or to set aside, as a fraudulent conveyance, an $18,000 mortgage on the farm of said bankrupts. In the Spring of 1932, Mrs. Colwell was adjudged a voluntary bankrupt. Shortly thereafter her husband, William Colwell, was also adjudged a voluntary bankrupt. In the preceding November they had executed and delivered a mortgage for $18,000 to Mrs. Colwell's mother, Mrs. Burnett. This mortgage was recorded the next day. It covered a farm in which Mrs. Burnett had an unassigned dower right and was given to secure two notes, one for $5,000 and the other for $13,000, an amount alleged to be due Mrs. Burnett as rental for her unassigned dower interest, from 1920 to 1931 with 6% compound interest. The District Court held the mortgage valid as to the $5,000 and a fraudulent conveyance as to the rental of dower interest. The court' reasons are well stated and excerpts from his memorandum appear below.*fn1

It appears, or is at least inferable, that Mr. Colwell learned that other creditors with claims approximating $30,000 were about to obtain judgments against him. He and his wife thereupon executed this mortgage to his wife's mother.

The material dates are: Nov. 18, 1931, mortgage executed Nov. 19, 1931, mortgage recorded Jan. 6, 1932, judgments totalling nearly$35,000 obtained Jan. 21, 1932, $3,000 judgment obtained Mar. 28, 1932, Mrs. Colwell's voluntary petition in bankruptcy filed May 3, 1932, Mr. Colwell's petition in bankruptcy filed July 29, 1932, trustee in bankruptcies suit to set aside mortgage instituted July 25, 1936, Decree reducing amount of mortgage cutting out fraudulent part of debt Sept. 4, 1936, Motion to vacate decree Oct. 27, 1936, Motion denied Jan. 23, 1937, Notice of Appeal.

It appears that the mortgage was given upon a farm of 324 acres which had belonged to Mrs. Burnett's husband who died in the '80s. The bankrupts purchased the property and paid Mrs. Burnett rental to cover her dower interest up to 1920, when Mr. Colwell began making extensive improvements. Mrs. Burnett, a woman of 86 years of age and infirm, did not testify, but bankrupts stated she had often asked for her rent during the period in question. On the motion for rehearing, it was stated that Mrs. Burnett's deposition could be taken to substantiate the testimony given by the bankrupts, but the court declared such evidence was merely cumulative.

Were it necessary so to do, we would be compelled to find that there was substantial evidence to support the cogent reasons given by the district court for its conclusions.

We must, of necessity, however, dispose of this appeal on the ground that the order of which review is sought is not appealable.

The decree from which this appeal is taken is as follows:

"The court filed its formal findings of fact and conclusions of law herein, in favor of plaintiff and against defendants, on May 29, 1936. Following this, a decree was entered on July 5, 1936 in accordance with the finding and conclusions. This was a final disposition of the case.

"Thereafter on September 4, 1934 Anna E. Burnett filed a motion to set aside the decree and to grant a rehearing. On October 17, 1936, plaintiff filed his objections to said motion.

"After due consideration, the court is of the opinion that the motion to set aside the decree should be denied. Passing any question as to the jurisdiction of the court to reopen the case at this stage, there remains the further obstacle that the evidence is merely cumulative; that it is not newly discovered; that it was known to defendants at all times; that no continuance was ever requested because of illness of the tendered witness. I believe, therefore, that it would be an abuse of my discretion to grant a rehearing, and same is hereby denied."

Only final decrees, save those provided for in U.S.C.A. ยง 227 (receiverships and injunctions), are appealable. Orders denying petitions for rehearing and motions to set aside decrees and grant a new trial are not appealable orders. Smith v. U.S. ex rel. Gorlo (C.C.A.) 52 F.2d 848; Glinski v. U.S., 7 Cir., 93 F.2d 418, decided by this court, November 9, 1937, and Andris v. Du Pont Cellophane Co., 7 Cir., 93 F.2d 421, decided by this court, November 30, 1937.

The appeal is dismissed.

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