Argument for Plaintiffs in Error.

195 U. S.

made parties defendants to the bill, and subsequently filed answers and a cross bill.

It appeared that Gage, after the beginning of the suit, bought the interest of Lilly B. Dresser, and also that the purchase by Snow at the bankruptcy sale was made in his interest, so that the real parties to this litigation are Gage upon one side and Wilson upon the other.

Upon the first hearing, the court entered a decree of partition denying Wilson's claim of title, and holding that his interest passed to Snow by the assignee's sale. This decree was reversed by the Supreme Court of Illinois upon the ground that the plaintiff had not proved her title from the Government to the property. Leave was given the parties to amend, and subsequently an amended bill was filed and answered. Upon the second hearing, the court held that the premises were the property of Frederick R. Wilson, and had been his from 1864 until 1877, when he conveyed them to his sister; that at the time of bankruptcy proceedings, in 1878, the title was in Julia Wilson, and that upon the death of Julia Wilson in 1887 the title again vested in Frederick R. Wilson; that at the time Frederick R. Wilson was adjudged a bankrupt Julia Wilson was alive and vested with the title to this property, and that the defendant Snow acquired no title when he purchased all of the estate, real and personal, of the bankrupt, Frederick R. Wilson.

This decree was affirmed by the Illinois Supreme Court, 202 Illinois, 83, and it is to reverse that decree that plaintiffs have taken a writ of error from this court.

Mr. Frederick W. Becker, Mr. Robert A. Childs and Mr. Charles Hudson for plaintiffs in error:

The points involved in this case are Federal questions. Williams v. Heard, 140 U. S. 529; Central Nat. Bk. v. Stevens, 169 U. S. 432, 460; Dushane v. Beall, 161 U. S. 513; N. O., S. F. & L. R. R. Co. v. Delamore, 114 U. S. 501; Chapman v. Goodnow, 123 U. S. 540.

195 U.S.

Argument for Plaintiffs in Error

The deed to Julia Wilson was fraudulent and void as against creditors, because absolute in form but conditional in fact, creating a secret trust. Lukins v. Aird, 6 Wall. 78; Beidler v. Crane, 135 Illinois, 92, 98; Bostwick v. Blake, 145 Illinois, 85, 89; Metropolitan Bank v. Godfrey, 23 Illinois, 579; because colorable; and because voluntary and made while the grantor was insolvent or contemplating insolvency. Dillman v. Nadelhoffer, 162 Illinois, 625.

Such a deed is void not only as to existing but also as to subsequent creditors. Bostwick v. Blake, supra; Gordon v. Reynolds, 114 Illinois, 118, 127. Hence no right or title passed to the sister by virtue of that deed as against creditors, but upon Wilson's bankruptcy all his original right and title passed to his assignee in bankruptcy.

The Bankrupt Act of 1867 vested in the assignee all property of the bankrupt conveyed in fraud of creditors. Rev. Stat. § 5046; Holbrook v. Coney, 25 Illinois, 543, 547; Foraast v. Hyman, 138 Illinois, 423; no judicial determination of that fact was necessary to pass title. Freeland v. Freeland, 102 Massachusetts, 475.

As to nature of title of assignee in bankruptcy, see Bouton v. Dement, 123 Illinois, 142; Choteau v. Jones, 11 Illinois, 300; Hardin v. Osborne, 94 Illinois, 571. That this asset was not scheduled is immaterial. Holbrook v. Coney, 25 Illinois, 543.

Two years' limitation as to suits in bankruptcy has no application to sales, Holbrook v. Brenner, 31 Illinois, 501; and if it has, it would only commence to run from the discovery of the fraud. Beatty v. Nickerson, 73 Illinois, 605; Dushane v. Beall, 161 U. S. 513. Election to take by assignee, if necessary, shown by sale. McKinny v. Farmers' Nat. Bk., 104 Illinois, 130; Freeland v. Freeland, 102 Massachusetts, 475. All these questions are res adjudicata by the denial of Wilson's application to set aside sale, and he is estopped from raising them now, Bennitt v. Star Mfg. Co., 119 Illinois, 9; not only as against the parties thereto, but as against all whose interests are involved. Barney v. Patterson, 6 H. & J. 182, 203;

Argument for Plaintiffs in Error.

195 U.S.

Tyler v. Tyler, 126 Illinois, 525; Jamieson v. Beaubien, 3 Scam. 113; Rogers v. Bent, 5 Gil. 573; Kirkpatrick v. Clark, 132 Illinois, 342.

Whether the assignee lost his title by laches is immaterial; it is enough that he acquired title, though but for a day, to interrupt the continuity of Wilson's possession. C. & A. R. R. Co. v. Keegan, 185 Illinois, 70.

The bankruptcy proceedings had the effect on Wilson's adverse possession of a voluntary conveyance, which breaks the continuity, even if the actual possession be not disturbed. Gower v. Quinland, 40 Michigan, 572; Root v. Woolworth, 150 U. S. 401; Hintrager v. Smith, 89 Iowa, 270; Oberein v. Wells, 163 Illinois, 101.

The deed to Julia Wilson being unrecorded was not notice, Ill. Rev. Stat., ch. 30, § 30; nor was Wilson's possession of the premises after the conveyance. 23 Am. & Eng. Ency. of Law, 2d ed., 506; Robertson v. Wheeler, 162 Illinois, 566, 575.

Property fraudulently conveyed clothes the grantee with no ownership as against the creditors of the grantor. 1 Am. & Eng. Ency. of Law, 2d ed., 813 n.; Jones v. Wilson, 69 Alabama, 400; Townsend v. Little, 109 U. S. 504.

Julia Wilson participated in the fraud, 14 Am. & Eng. Ency. of Law, 2d ed., 271, and is not a bona fide purchaser. Met. Bk. v. Godfrey, 23 Illinois, 579; Powell v. Jeffries, 4 Scam. 387.

The opinion of the Supreme Court of Illinois ignores the real character of the deed to Julia Wilson, and the effect of the bankruptcy proceedings and the Bankrupt Act upon a conveyance in fraud of creditors. The fraudulent features of the deed could not be eliminated by the alleged subsequent agreement.

The suggestion of collusion is ill timed and inconsistent. The motive in instituting the suit is immaterial. Trainor v. Greenough, 145 Illinois, 543, 549. The following statutes of Illinois are applicable. Rev. Stat., Ch. 106, §§ 1, 6, 39; ch. 59, §§ 4, 5; ch. 30, § 30; ch. 83, § 1.

195 U. S.

Argument for Defendant in Error.

Mr. David K. Tone and Mr. George Gillett for defendant in

error:

No Federal question is involved. The state court found that Julia Wilson was the owner of the premises in controversy on August 30, 1878, when this petition in bankruptcy was filed, and that the purchaser took nothing at the assignee's sale. On a writ of error to a state court the findings of fact of the state court are conclusive in this court. Egan v. Hart, 165 U. S. 188; Bement v. National Harrow Co., 186 U. S. 70, 83. A decision of a state court against a party who claims that the title to his demand comes through a bankrupt assignee cannot be reviewed by this court when no construction of such bankrupt act was called in question. Calcote v. Stanton, 18 How. 243; Scott v. Kelly, 22 Wall. 57; McKenna v. Simpson, 129 U. S. 506.

The case should be affirmed on the merits.

The court should refuse to take jurisdiction of a collusive suit prosecuted by a party who has no interest in the controversy as is the case with plaintiff in error. In re Burdick, 162 Illinois, 48, 52, 64; Cleveland v. Chamberlain, 1 Black, 419; American Wood-Paper v. Heft, 131 U. S. 92; Dakota Co. v. Glidden, 113 U. S. 222; The People v. Gen'l Elec. Ry. Co., 172 Illinois, 129, 143.

That Wilson actually conveyed to his sister is res judicata by the final state court judgment. Wilson v. Dresser, 152 Illinois, 387; Smith v. Neff, 123 Illinois, 310; West v. Douglass, 145 Illinois, 164; McFarland v. Washburn, 26 Ill. App. 355; World's Columbian Exposition v. Lehigh, 94 Ill. App. 433; Newberry v. Blatchford, 106 Illinois, 593.

The denial by the District Court of the petition of Wilson. to set aside the sale is not res adjudicata in reference to Wilson's title, as his present title is based upon a subsequent devise. Julia Wilson was not a party to the bankruptcy proceeding, and hence not bound by it. Attorney General v. C. & E. R. R. Co., 112 Illinois, 520, 539; McCartney v. Osburn, 118 Illinois, 403, 410; White v. Sherman, 168 Illinois, 589, 612

Plaintiffs in error were not creditors of Frederick R. Wilson, and hence cannot raise the question, as a fraudulent conveyance can only be assailed by bona fide creditors of the grantor. As to third persons, who do not stand in the position of creditors of the grantor, such a conveyance is valid. Fetrow v. Merriwether, 53 Illinois, 275, 279; Willard v. Masterson, 160 Illinois, 443; Rappleye v. International Bank, 93 Illinois, 397, 403; 14 Am. & Eng. Ency. of Law, 280c.; Etter v. Anderson, 84 Indiana, 333, 337.

MR. JUSTICE BROWN, after making the foregoing statement, delivered the opinion of the court.

Upon the first hearing, the Superior Court entered a decree of partition, finding that the Dresser sisters were the owners of the property at the beginning of the suit, through a title derived from the Government; that after the suit was begun Lilly B. Dresser conveyed her interest to Henry H. Gage; that Julia Wilson, to whom her brother, Frederick R. Wilson, had conveyed his interest in the property, died testate, leaving her interest in the property to Frederick R. Wilson, and that this interest subsequently passed to Snow by purchase from the assignee, Jenkins.

This decree was reversed by the Supreme Court, 152 Illinois, 387, which held that there was no evidence of a title in fee in complainants derived from the Government; that, although Frederick R. Wilson showed a deed to himself from the city of Chicago, dated May 24, 1864, and possession under such deed, he conveyed his interest to his sister, Julia Wilson, in 1877; that about a year thereafter he went into bankruptcy, and that at the assignee's sale nothing passed to the purchaser, Snow, but the interest of the bankrupt on August 30, 1878. "But," said the court, "the evidence shows that at that time he had no interest, having more than a year prior to that date, July 6, 1877, conveyed it to Julia Wilson, and the evidence is undisputed as to the fact that she took pos