(8 F. (2d) 437.) moieties, but both are seised of the entirety per tout et non per my, the consequence of which is that neither the husband nor the wife can dispose of any part without the assent of the other, but the whole must remain in the survivor." " Describing the estate on the same page, 285 (119 S. E. 367), the court further said: "When land is conveyed or devised to husband and wife, nothing else appearing, they take by the entirety, and upon the death of either, the other takes the whole by right of survivorship"and concluded by citing an array of North Carolina authorities to the same effect. On page 286 of the same case (119 S. E. 368) the court, speaking as bearing especially upon the rights of trustees in bankruptcy in estates by entireties, said: "This peculiar estate has come down to us from the common law, and we deduce from the authorities in this state. . . That neither can such land be sold under execution or order of court, nor can the interest of either husband or wife be thus sold. That the interest of neither becomes subject to the lien, or any proceeding to sell for the satisfaction of any judgment during their joint lives; nor can the interest of either be reached by the trustee in bankruptcy during their joint lives." The still more recent decision of Johnson v. Leavitt, 188 N. C. 682, 125 S. E. 490, further emphasizes the fact that lands held by tenants by entirety cannot be sold to satisfy judgments rendered alone against either tenant upon their separate obligations; for, as stated, the right of survivorship in such property is merely an incident of the estate, and does not constitute either a vested or contingent remainder, and, as between husband and wife holding lands as tenants by entireties, there is but one owner, both together, in their peculiar relations to each other, constituting the proprietorship of the whole and every part thereof. In this case the court held that the interest of husband and wife was not a leasehold estate, but one that existed entirely by virtue of the marriage relation. Federal authorities, including decisions of the district courts, the decisions of this court, and those of the Supreme Court, seem to us to make it no less clear than those of the state of North Carolina, that this peculiar estate by entireties cannot be subjected to the payment of the individual debts of either tenant during their joint lives, inasmuch as the title of the bankrupt's trustee vests only in property to which he is entitled at the date of the adjudication in bankruptcy, and does not become and form a part of the assets of the bankrupt's estate. Collier, discussing this estate, says: "An estate by the entirety being without possibility of severance, may not be transferred by the husband without the consent of his wife and may not be levied upon by his creditors, and does not therefore pass to his trustee in bankruptcy." Collier, Bankr. 13th ed. p. 1672, id. 10th ed. p. 1007. In Healey Ice Mach. Co. v. Green (C. C.) 181 Fed. 890, 894, Judge Connor, sitting in the eastern district of North Carolina, said: "The complainant is met, at the threshold, with the fact that the land upon which it seeks to fix a lien is owned by the defendant R. L. Green and his wife, Louisa A. Green; and this, as uniformly held by the supreme court of this state, which is the 'rule of property' controlling this court, gives them an estate by entireties, which cannot be aliened, burdened, or in any manner affected, except by their joint action. In Hood v. Mercer, 150 N. C. 699, 64 S. E. 897, it is held, in accordance with an unbroken line of decisions, that a judgment against the husband does not constitute a lien upon land owned by his wife and himself. They may convey a good and indefeasible title subsequent to, and notwithstanding, the docketing of the judgment. thorities from other states are cited to the effect that the interest of the husband may be burdened with the Au lien. Boisot, Mechanic's Liens, § 28. The law in this state is otherwise." This decision, on appeal to this court, was affirmed in a per curiam opinion, as follows: "Per Curiam: This case is governed by the provisions of the statutes of North Carolina, relating to the questions involved. The court below (181 Fed. 890, 184 Fed. 515) properly applied the facts disclosed by the record to said statutes as they have been construed by the supreme court of that state. That court did not err in dismissing the bill, as under the statutes mentioned no lien could have attached to the land proceeded against by reason of the mechanic's lien originally relied on, and therefore the suit should have been dismissed. There is no error. Affirmed." Healey Ice Mach. Co. v. Greene (C. C. A. 4th) 111 C. C. A. 668, 191 Fed. 1004. In a later decision (September, 1922) Judge Connor said: "It is settled by numerous and uniform decisions of the supreme court of North Carolina that the title to real estate conveyed to husband and wife vests in them as tenants by entireties, and neither as joint tenants nor tenants in common. Douglas, J., in Ray v. Long, 132 N. C. 891, 44 S. E. 652, discusses the character and incidents attaching to the estate, saying that a conveyance to them creates an estate in entireties, in which the parties will hold, in the ancient language of the law, per tout et non per my. This estate is fully recognized by our law, and has not been impaired by § 6 of article 10 of the Constitution.' Taylor v. Carraway (D. C.) 282 Fed. 878, 880. Other Federal district court decisions, among them the following: Hesseltine v. Prince (D. C.) 95 Fed. 802; Re Hoadley (D. C.) 101 Fed. 233, 2 N. B. N. Rep. 704; Re Beihl (D. C.) 197 Fed. 870, 28 Am. Bankr. Rep. 310; Cox v. Wallace, 134 C. C. A. 562, 219 Fed. 126; Re Berry (D. C.) 247 Fed. 700, 41 Am. Bankr. Rep. 357; Re Ford-Rennie Leather Co. (D. C.) 2 F. (2d) 750-will be found to sustain the views herein stated, and the Supreme Court of the United States in a long line of decisions also sustains the same. Mr. Chief Justice White, in the case of Holden v. Stratton, 198 U. S. 202, 214, 49 L. ed. 1018, 25 Sup. Ct. Rep. 656, 659, quoted Circuit Judge Caldwell, in delivering the opinion in Steele v. Buel, 44 C. C. A. 287, 104 Fed. 972, 3 N. B. N. Rep. 330, as follows: "From the organization of the Federal courts under the Judiciary Act of 1789, the law has been that creditors suing in these courts could not subject to execution property of their debtor exempt to him by the law of the state. Judiciary Act of 1789, 1 Stat. at L. 93, chap. 21; Wayman v. Southard, 10 Wheat. 1, 32, 6 L. ed. 253; Lamaster v. Keeler, 123 U. S. 376, 31 L. ed. 238, 8 Sup. Ct. Rep. 197; Dartmouth Sav. Bank v. Bates (C. C.) 44 Fed. 546. The same rule has obtained under the bankrupt acts, which have sometimes increased the exemptions, notably so under the act of 1867 (Rev. Stat. § 5045) but have never lessened or diminished them. An intention on the part of Congress to violate or abolish this wise and uniform rule observed from the creation of our federal system should be made to appear by clear and unmistakable language. It will not be presumed from a doubtful or ambiguous provision fairly susceptible of any other construction." Eaton v. Boston Safe Deposit & T. Co. 240 U. S. 427, 429, 60 L. ed. 723, 36 Sup. Ct. Rep. 391, Ann. Cas. 1918D, 90; Hull v. Farmers' Loan & T. Co. 245 U. S. 312, 62 L. ed. 312, 38 Sup. Ct. Rep. 103. The decision sought to be reviewed, in our judgment, is right, and the judgment of the District Court is affirmed, at the cost of petitioners. The late Judge Woods concurred in the affirmance of the judgment below, but died before he passed upon the above opinion. Petition for writ of certiorari denied by the Supreme Court of the United States, January 11, 1926, 269 U. S. 587, 70 L. ed. 426, 46 Sup. Ct. Rep. 203. ANNOTATION. Estate by entirety as an asset in bankruptcy. [Bankruptcy, § 30.] The common-law estate by entirety exists only as to a husband and wife. It is founded upon the unity of the marital relation. It exists simultaneously as to each without possibility of severance or partition so long as the marital relation continues. Neither spouse can dispose of any part of the estate without the concurrence of the other. As to each of them it is an estate in expectancy, the survivor taking the whole estate under the original title, as distinguished from a title by survivorship. Hence, it is not subject to a sale under an execution running against either of the parties, and no portion of the estate passes to the trustee in bankruptcy of either of the spouses as an asset of the estate of the bankrupt. Not even the right of possession passes, for each of the parties owns the entire estate, subject only to the right of the other to share in the enjoyment thereof. Re Beihl (1912; D. C.) 197 Fed. 870, 28 Am. Bankr. Rep. 310; Re Berry (1917; D. C.) 247 Fed. 700, 41 Am. Bankr. Rep. 357; McMullen v. Zabawski (1922; D. C.) 283 Fed. 552, 49 Am. Bankr. Rep. 357; Taylor V. Carraway (1922; D. C.) 282 Fed. 878; Re Flynn (1924; D. C.) 1 F. (2d) 566; Armold V. Lang (1926; D. C.) 11 F. (2d) 630, 7 Am. Bankr. Rep. (N.S.) 650; CULLOM V. KEARNS (reported herewith) ante, 432; Frey v. McGaw (1915) 127 Md. 23, L.R.A.1916D, 113, 95 Atl. 960; Ades v. Caplan (1918) 132 Md. 66, L.R.A.1918D, 276, 103 Atl. 94, 41 Am. Bankr. Rep. 391; Meyer's Estate (1911) 232 Pa. 95, 81 Atl. 147; Weiss v. Beihl (1911) 232 Pa. 97, 81 Atl. 148. In recognition of the foregoing rule it is held in Re Beihl (Fed.) supra, that the trustee in bankruptcy of one tenant by the entirety can have no present right in the possession of the estate, and hence the court will not restrain an attempted conveyance thereof by the bankrupt and his wife, after trustee has never been actually or constructively in possession of the estate in controversy. And, not being [the husband], he has no present right to the possession, and cannot have. He is already clothed with all the interest the bankrupt could have conveyed to him at the date of the adjudication, and a restraining order now would, therefore, be superfluous. Whatever title the bankrupt had then has already passed from him by operation of law, and-on his own account and for his own benefit-he has no longer anything to convey. It might do no harm, indeed, to restrain him formally from an act that he is already unable to do; but it would be a mistake to regard his interest only, and to overlook his wife's. So far as she is concerned, I certainly have no power to make an order that would interfere with her right to dispose of her own property, and I shall not attempt to do so." It is also held in Weiss v. Beihl (Pa.) supra, that a court will not enjoin the bankrupt and his wife from alienating the property which they hold as tenants by the entirety. The same rule is applied in Meyer's Estate (Pa.) supra, as to a fund bequeathed to a husband and wife by entirety. It was held that the court would not require the wife to give security that the fund would be forthcoming in the event the bankrupt subsequently had an interest therein that would pass to the trustee. In so holding, the court said: "Inasmuch as the husband and wife held by entireties, no present right of enjoyment resulted to one claiming through the husband, or in his right; and . . . the demand for security for the income was properly refused. The wife's right to present enjoyment of the estate is not to a part, but to all of it; and this may not be denied her in order to protect a contingent interest of one claiming through the husband. To impose such condition upon the exercise and enjoyment of her right, as was here directed, resolves the estate into a tenancy in common. Being an estate by entireties, neither husband nor wife could, under any circumstances, require an accounting by the other; nor could either restrain the other against consuming more than an equal part. The effect of requiring security as a condition of the wife's enjoyment of her estate would be to restrain consumption by her of her own property in order that her husband's creditors might be protected. She received the estate on no such condition. It is hers to consume if she so desires. The husband would be powerless to prevent it by legal proceedings, and those claiming under him have no higher rights." In Re Berry (1917; D. C.) 247 Fed. 700, 41 Am. Bankr. Rep. 357, supra, the bankrupt owned an interest in land by entirety with his wife, the land having been purchased under an executory contract which had not been completely fufilled by the vendees. The vendor was a corporation, and by the terms of the purchase the vendees were also entitled to certain shares of stock in the corporation, which went with the land and was valueless without it. Under these circumstances, it was held that the bankrupt's interest in the land was held by the entireties, and that, since the stock in the corporation was without value without the land, no conveyance thereof would be required, although under the laws of Michigan an estate in personalty by the entireties was not permissible. (Generally as to estates by entirety in personal property, see annotation in 8 A.L.R. 1017 [Husband and Wife, § 63].) By the death of the wife, the bankrupt husband's expectancy in the real estate held by them by the entireties is realized before the date of his discharge in bankruptcy, and while the trustee is vested with a lien of a judgment creditor against the premises in question, such premises are subject to seizure and sale by the trustee for the benefit of the estate. Re Flynn (1924; D. C.) 1 F. (2d) 566. In McMullen v. Zabawski (1922; D. C.) 283 Fed. 552, 49 Am. Bankr. Rep. 357, supra, where the bankrupt, when about to engage in a retail business, and in order to avoid the hazard thereof, purchased property in the name of himself and wife, thereby establishing an estate by the entirety, and subsequently represented the property to be in his own name, it was held that the conveyance was fraudulent as to a trustee of the creditors of the bankrupt, even though their debts were created subsequently to the acquiring of the estate under the provision of § 70e of the Bankruptcy Act, which provides in effect: "The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the adjudication. Such property may be recovered or its value collected from whoever may have received it, except a bona fide holder for value. For the purpose of such recovery, any court of bankruptcy as herein before defined, and any state court which would have had jurisdiction if bankruptcy had not intervened, shall have concurrent jurisdiction." The court said the right to avoid a transfer is not limited to creditors who were such at the time of the transfer, if the latter was prompted by an actual intent on the part of the transferrer to hinder, delay, or defraud his subse quent creditors. This case was disposed of upon demurrer to the bill of complaint, and it is of interest in that connection to observe that allegations in the bill are merely to the effect that the bankrupt paid a portion of the purchase price, the bankrupt's wife paying the balance, and that the bankrupt, with the intent of placing the property beyond the reach of his creditors, arranged for and took the title in the name of himself and his wife jointly, with the fraudulent intent and purpose to secure the property against seizure for debts which he expected to contract in the business. Apparently there is no allegation that the wife participated in this fraudulent intent on the part of the husband. The holding that a conveyance of an estate by entirety, or the purchasing of land with the deed running to the husband and wife for the purpose of creating an estate by the entireties, is invalid as against subsequent creditors of the husband if he took the deed in this manner with the fraudulent intent of defeating the claims of subsequent creditors, is hardly supported by the Michigan case cited. Cole v. Brown (1897) 114 Mich. 396, 68 Am. St. Rep. 491, 72 N. W. 247. This case involved an action by a judgment creditor to set aside a conveyance by which the husband created an estate by the entireties, on the ground that he did so with the fraudulent intent to defeat his creditors, some of whom were existing creditors at the time of the creation of the estate, and others were subsequent creditors. In these circumstances the court said: "It is urged that complainant's rights must be determined upon the basis that he is a subsequent creditor, because four of the items of indebtedness upon which the judgment was rendered were incurred after the deed to Mrs. Brown was made and recorded. In Maine and Illinois it is so held. The contrary rule prevails in Pennsylvania, and it is there held that the conveyance is void as to that part of the judgment incurred before the conveyance and valid as to the part incurred subsequently. . . . We think the latter rule the more just and equitable, and therefore adopt it." Further in the opinion, the court continues: "There are cases where conveyances are fraudulent as to subsequent creditors when it is proven that that was the purpose of the conveyance. Such a case is Savage v. Murphy (1866) 34 N. Y. 508, 90 Am. Dec. 733. In Baker v. Gilman (1868) 52 Barb. (N. Y.) 26, it was held that where a creditor knew of the conveyance, and then trusted the debtor, he could not recover. This is based upon sound sense and reason. The former decisions of this court, we think, rule this case against complainant. While no fraudulent intent is necessary to set aside voluntary conveyances as to existing creditors, it must be established in order to set them aside as to subsequent creditors. In other words, actual fraud must be shown, and as well the specific intent to defraud the individual subsequent creditor complaining, or subsequent creditors generally. . . . It must be remembered that we are dealing with a case where there was no actual intent to defraud any creditor, existing or subsequent, but where the law sets the conveyance aside as to existing creditors, regardless of the intent. We are not called upon to determine whether a subsequent creditor can successfully attack a conveyance by the sole proof of an actual intent to defraud existing creditors." Upon this point, see Armold v. Lang (1926; D. C.) 11 F. (2d) 630, 7 Am. Bankr. Rep. (N. S.) 650, holding that where a husband expends his own money, at a time when he is not indebted, in the improvement of premises which are owned by himself and wife as tenants by the entirety, his acts in this regard will be treated as a gift or provision for his wife, of which subsequent creditors have no right to complain. Where a father, by parol contract, gave to his son and his son's wife certain land, upon which the son built valuable improvements at a time when he was not indebted, it was held that this constituted an estate by the entirety, and no rights therein passed to the trustee in bankruptcy of the son, while the relation of husband and wife continued. Ibid. It is held in Taylor v. Carraway (1922; D. C.) 282 Fed. 878, that where a husband used partnership funds, while he was insolvent, for an improvement on property owned by him and his wife as tenants by the entirety, the trustee in bankruptcy of the partnership was not entitled to a lien on such estate for the amount thus paid. A. G. S. |