The defendant in error questions the jurisdiction of this court. As the record shows that the plaintiff in error dispute the validity of a transfer to the defendant in error of the property in controversy, made to him by a trustee in bankruptcy, appointed under and deriving his authority from the bankrupt act, and as the question is made whether the suit is barred by the limitation prescribed by the same act, we are of opinion that the jurisdiction of the court to decide these questions is clear. Factors' Ins. Co. v. Murphy, 111 U.S. 738; S.C.. 4 Sup. Ct. Rep. 679; New Orleans R. Co. v. Delamore, 114 U.S. 501; S.C.. 5 Sup. Ct. Rep. 1009.
The record does not leave it in doubt that the purchase by Traer from Tappan of the rights incident to the stock in the construction company belonging to the bankrupt estate of Clews was brought about by the fraudulent practices of Traer. As stated by the supreme court of Iowa, he was a stockholder, officer, and trustee of the construction company, and had been, from the first, actively engaged in the management of its affairs. As trustee he was solely intrusted with the custody of the assets, books, and papers of the corporation, and had full and complete knowledge of all matters pertaining to the assets and business of the company. He knew that the plaintiff or his bankrupt estate was entitled to dividends amounting to at least $10,500, received by Traer upon entering upon the discharge of his duties as trustee. The assets of the company, much of them being in money, he held as a trustee for the stockholders, being so constituted by the act of dissolution of the corporation. He misrepresented the value of these assets to both Tappan and Clews, and induced them to believe that the sum to which they were entitled did not greatly exceed $1,200 in value, the amount of the consideration of the assignment of the stock by Tappan. He employed attorneys and agents to negotiate for the purchase of the stock, who concealed from Tappan that the purchase was made for Traer or his wife. These agents knew that they were making the purchase for Traer or his wife, and neither of them at any time was a good-faith purchaser. In all of the transactions connected with the purchase of the stock Traer acted as the agent of his wife, who knew that her husband was a trustee holding the assets for the stockholders of the construction company, and knew their value, and was guided in her purchase by his advice and direction. She knew that Tappan was ignorant of the value of the assets, and she had knowledge of the devices used by her husband to secure the purchase of the stock and dividends. By means of these fraudulent devices she purchased from Tappan, for the price of $1,200, property which the state circuit court found to be of the value of $15,000. The charge of fraud made in the petition was therefore fully sustained.
Among other defenses pleaded by Ella D. Traer was the following: 'That plaintiff's pretended right of action herein accrued in favor of plaintiff's assignor, J. Nelson Tappan, as trustee in bankruptcy of plaintiff's estate, more than two years before the commencement of this suit against this defendant, and more than two years before she was made a party defendant herein, and that this action is fully barred as to her by the provisions of the act of congress in that behalf, and was so barred before she was made a party defendant herein.' This plea sets up the bar prescribed by the second section of the bankrupt act, now forming section 5057 of the Revised Statutes, which declares: 'No suit, either at law or in equity, shall be maintained in any court between an assignee in bankruptcy and a person claiming an adverse interest touching any property or rights of property transferable to or vested in such assignee, unless brought within two years from the time the cause of action accrued for or against such assignee.' The suit was brought against John D. Traer within two years after the fraudulent purchase and transfer of the stock and dividends, but Mrs. Traer was not made a party to the suit until after the lapse of three years and a half from the time of the purchase and transfer. The question is presented by one of the assignments of error whether, upon the circumstances of this case, the suit was barred as to Mrs. Traer.