United States District Court, Southern District of Illinois, N.D
June 17, 1963
IN THE MATTER OF CHARLES L. VICTOR, BANKRUPT.
The opinion of the court was delivered by: Mercer, Chief Judge.
On September 4, 1962, Charles L. Victor was adjudicated a
bankrupt by this Court. John G. Ames was appointed trustee of
his estate. At the time of that adjudication, Victor and his
wife, Rosie L. Victor, owned real estate in joint tenancy,
which had a fair market value of approximately $6,000.00 and
was subject to a mortgage to First Federal Savings & Loan
Association of Davenport, Iowa.
On November 2, 1962, the trustee filed a petition for the
sale of said real estate, asserting the power under Section 2,
sub. a(7) of the Bankruptcy Act, 11 U.S.C.A. § 11, sub. a(7),
to sell the whole of the real estate, including the undivided
interest of the non-bankrupt wife.
The wife appeared specially, challenging the jurisdiction of
the court to order the sale of her undivided interest in the
real estate. The petition came on before the Referee upon
stipulated facts, and the Referee determined that the court
was without jurisdiction to order a sale of the undivided
interest of the wife in the premises. The trustee has filed
his petition for review, praying that that decision by the
Referee be overruled.
The issue presented is the question whether a court of
bankruptcy is empowered by the provisions of Section 2, sub.
a(7) of the Act to authorize a trustee to sell the undivided
one-half interest of a non-bankrupt spouse in real estate
which she owns jointly with her bankrupt husband?
In my opinion, the Referee correctly held that the court is
without jurisdiction to decree the sale of such property.
Certainly, fulfillment of the object which the Bankruptcy Act
is designed to attain does not require the existence of
jurisdiction in this instance.
The Act contemplates that a trustee shall succeed to the
rights of the bankrupt in the bankrupt's property. It further
contemplates that a summary jurisdiction shall exist in the
bankruptcy court to obtain the sale and liquidation of the
assets of a bankrupt with the minimum of delay and expense
which shall be consistent with the protection of the rights of
other persons claiming an interest in a bankrupt's
property.*fn1 The jurisdictional grant of 2, sub. a(7) is
designed to achieve that object of the Act.
Thus, Section 2, sub. a(7) gives the court jurisdiction to
cause the estate of a bankrupt to be collected, liquidated and
distributed to creditors and to "determine and liquidate all
inchoate and vested interests of the bankrupt's spouse in the
property of any estate whenever, under the applicable laws of
the State, creditors are empowered to compel such spouse to
accept a money satisfaction for such interest." 11 U.S.C.A.
§ 11, sub. a(7).
The trustee argues that the power of the court to order the
liquidation of inchoate and vested interests of a spouse in a
bankrupt's property should be construed as a grant of power to
order the sale of all property owned jointly by a bankrupt and
his spouse, because, under the law of Illinois, such property
might be sold by a partition suit. In re Blodgett, E.D.Wis.,
115 F. Supp. 33, seemingly supports the trustee in that
argument, although it is not clear from the reported opinion
that the question was squarely presented to that court as a
jurisdictional issue. To the extent that Blodgett, does
support the trustee's position, I must, respectfully, disagree
with the able jurist who decided that case.
When measuring the summary jurisdiction of a bankruptcy
court, the distinction between the property of the bankrupt
and the property of others which is collaterally affected by
the bankruptcy must always be kept true and clear. In this
instance, the summary jurisdiction
attaches to the bankrupt's title to an undivided one-half of
the real estate and to any interest which the wife may have in
his title, but not to the title of the wife in her own right.
Under 2, sub. a(7), the jurisdiction of the court over
property of the wife is coextensive with, but no greater than,
the power of a creditor to compel, under Illinois law the sale
of such interests by execution upon a judgment against the
Upon the adjudication of bankruptcy, the joint tenancy
theretofore prevailing between the bankrupt and his wife was
ended. Thereafter, they held title to the premises as tenants
in common. Morris Investment Co. v. Skeldon, 399 Ill. 506,
78 N.E.2d 504. Tenants in common share a unity of possession of
premises so owned, but each holds a several and distinct title
to his undivided interest in the premises. Mittel v. Karl,
133 Ill. 65, 24 N.E. 553, 8 L.R.A. 655; 34 I.L.P., Tenancy in
Common, § 2. The title of each is subject to levy and sale by a
judgment creditor, but such sale does not affect the title of
any other of the tenants in common. Cf., e.g., Jackson v.
Lacey, 408 Ill. 530, 97 N.E.2d 839; Van Antwerp v. Horan,
390 Ill. 449, 61 N.E.2d 358,161 A.L.R. 1133.
Under the jurisdictional provision of 2, sub. a(7), the
trustee may obtain the sale of the bankrupt's undivided
one-half interest in the premises, together with any inchoate
or vested right which the bankrupt's wife may have in the
bankrupt's title. He may, also, have a partition of the real
estate by a proceeding in an appropriate state court if he
deems jurisdiction over the whole title necessary to the
obtaining of a fair value of the bankrupt's undivided
interest. He may not, through the summary power of the
bankruptcy court, take and obtain a sale of the wife's
undivided interest in the title to the premises.*fn2
The petition to review the order of the Referee is