Williamson v. Selden

Collins, J.

This action was brought by the receiver of an insolvent to avoid and annul certain conveyances of real property, and to recover such property, as provided by Laws 1881, ch. 148, § 4. The appeal is from an order overruling a demurrer to the complaint interposed by the defendant, Selden, upon the ground that there is a defect of parties defendant. Selden is the creditor to whom the alleged fraudulent and forbidden preference is said to have been made by means of the conveyances before mentioned, and it is contended by his counsel that the insolvent, Philo L. Hatch, and his wife, Eleanor W. Hatch, who, from the complaint, appears to have taken some part in the transactions, are necessary parties, and should have been made defendants. We think not.

1. If Mrs. Hatch ever had or held an inchoate interest or right in the premises involved, said to have belonged to her husband, although he never held the legal title, she still retains that interest or right, so far as it now appears. She was not divested or deprived of it through the insolvency proceedings against Mr. Hatch. Dayton v. Corser, 51 Minn. 406, (53 N. W. Rep. 717.) Nor has she parted with or conveyed it in any manner. It is obvious that she will not be affected personally by the outcome of this action.

2. When this plaintiff became the receiver of the insolvent, under the provisions of chapter 148, supra, all property of such insolvent, and every part of the same, vested forthwith in him. The title to all, whether the insolvent held the legal title or possessed an equitable interest only, was wholly and altogether in the receiver for the purposes of the trust with which he was charged. The insolvent retained no interest to be affected by the proceedings in execution of the trust, except such as were represented by the receiver, and has no interest in the result of this action save that directly represented by this plaintiff as receiver. Langdon v. Thompson, 25 Minn. 509; Donohue v. Ladd, 31 Minn. 244, (17 N. W. Rep. 381;) Buffington v. Harvey, 95 U. S. 99; Bank v. Sherman, 101 U. S. 406. For these reasons an insolvent is not a necessary party defendant to an action instituted by an assignee or receiver to annul and avoid a conveyance of real property alleged to have been a fraudulent and forbidden preference of a creditor. Buffington v. Harvey, supra; Weise v. Wardle, L. R. 19 Eq. 171. See, also, in this connection, Leonard v. Green, 34 Minn. 140, (24 N. W. Rep. 915.)

Order affirmed.

Vanderburgh, J., did not sit.

(Opinion published 54 N. W. Rep. 1055.)