Binder v. McDonald

• Court: Wisconsin Supreme Court
• Writing for the Court: CASSODAY
• Citation: Binder v. McDonald, 106 Wis. 332, 82 N.W. 156 (Wis. 1900)
• Decision Date: 20 March 1900
• Parties: BINDER v. MCDONALD.

106 Wis. 332

82 N.W. 156

BINDER

v.MCDONALD.

Supreme Court of Wisconsin.

March 20, 1900.

Appeal from circuit court, Shawano county; John Goodland, Judge.

Motion by Charles H. McDonald, as assignee of the Wittenberg Veneer & Panel Company, to dissolve an attachment previously obtained by Herman Binder in a suit against the company and Thomas E. Daskam. From an order denying the motion, the assignee appeals. Reversed.Felker, Stewart & McDonald, for appellant.

M. J. Wallrich and C. F. Dillett, for respondent.

CASSODAY, C. J.

It appears from the record that prior to July, 1899, the defendant Wittenberg Veneer & Panel Company was duly incorporated and organized under the laws of this state; that July 23, 1899, its factory was destroyed by fire; that the same was insured for upwards of $12,000, and that all of such insurance was put up as collateral security to certain banks; that July 27, 1899, the plaintiff, Binder, commenced this action to recover $579.74 due on express contract from such corporation and one Thomas E. Daskam, and caused an attachment to be issued therein and levied upon certain real estate therein described, and certain personal property; that the ground upon which such attachment was issued is to the effect that such corporation had assigned, conveyed, disposed of, or concealed, or was about to assign, convey, dispose of, or conceal, its property, or some part thereof, with intent to defraud its creditors, and that it fraudulently contracted the debt and incurred the obligation; that August 1, 1899, that corporation made a voluntary assignment of all its property for the benefit of its creditors to the defendant Charles H. McDonald; that August 11, 1899, Charles H. McDonald, as such assignee, traversed such attachment; that August 26, 1899, upon the verified petition of McDonald as such assignee, and upon the records and files in the case, the plaintiff was ordered to show cause September 7, 1899, why such attachment should not be dissolved, and the attached property turned over to McDonald as such assignee; that upon the hearing of such motion, September 7, 1899, and upon such verified petition, records, and files, and the affidavits of M. J. Wallrich, Thomas E. Daskam, and A. H. Anderson, the court ordered that such motion be, and the same was thereby, denied, with $10 costs of motion, to be paid to the plaintiff's attorney. In denying such motion the court filed a written opinion, which, under the title of the cause, is as follows: “Motion under section 1694a, Rev. St., to dissolve an attachment levied within ten days before the making of a voluntary assignment. The controlling question upon this motion is whether the existence of a federal bankruptcy law in full force and effect suspends the operation of chapter 80 of the statutes of this state, which chapter includes the section above mentioned. It seems to be well settled that the exercise by congress of the power conferred upon it by the constitution of the United States by the enactment of a general bankruptcy law ipso facto suspends the operation of all state insolvency laws. This raises the question whether chapter 80 is an insolvency law or not. My conclusion is that, with the additions and amendments which have from time to time been made to said chapter 80, it is an insolvency law, and that all of its provisions are now suspended and rendered inoperative by the existence of a general or federal bankruptcy law. For this reason alone, and without deciding any other question in the case, the motion is denied on the usual terms.”

We are asked to dismiss the appeal because the clerk's certificate does not “show that the papers returned are the originals, or copies used on the hearing of the motion for the order from which the appeal is taken.” It does show, however, that the papers annexed “are the original and all the papers and pleadings which have been filed” in his “office in the above-entitled cause, except pages 1 to 13, inclusive, of the record, which are copies of the originals”; and the clerk also certifies that the 13 pages have been carefully compared with the original record on file in his “office, and that the same are true and correct copies of the originals, and of the whole thereof.” Such certificates and the order to show cause, mentioned in the statement, and the recitals in the order appealed from, also mentioned therein, would seem to be sufficient to identify the records and papers upon which the order was based. Cir. Ct. Rule 11. Besides, we are not called upon to determine whether the trial court should have dissolved the attachment upon the merits, since, as indicated in the statement, that court denied the motion solely on the ground that it had no power to determine the question. This court has held that: “Where the trial court has power, in its discretion, to do an act, a refusal to exercise such discretion on the ground that it has no such power is an error of law for which its order will be reversed; but this court will not determine in what way such discretion should be exercised.” Smith v. Dragert, 61 Wis. 222, 21 N. W. 46. To the same effect, Witham v. Mappes, 89 Wis. 671, 62 N. W. 430. The question, therefore, recurs whether the trial court had power to determine upon the merits the application to dissolve the attachment. As indicated, the trial court held that the passage of the federal bankrupt law, July 1, 1898, ipso facto suspended the operation of all state insolvency laws, including section 1694a, Rev. St., wherein it is provided that if an insolvent debtor make a voluntary assignment for the benefit of his creditors within 10 days after his property has been “attached or levied upon by virtue of any process in favor of a creditor or a garnishment is made against such debtor, * * * all such attachments, levies, garnishments or other process shall be dissolved and the property attached or levied upon shall be turned over to such assignee or receiver.” The effect of the passage of such federal bankrupt law upon such state laws is, manifestly, a federal question, which may be ultimately determined by the supreme court of the United States. Until such determination by that court, we must be governed by the import of its former decisions, and such aid as we may find in the decisions of other courts, and the law and reasons applicable to the case. After very able arguments and great deliberation, it was determined by the supreme court of the United States more than 70 years ago, that: “The power of congress ‘to establish uniform laws on the subject of bankruptcies throughout the United States' does not exclude the right of the states to legislate on the same subject, except when the power is actually exercised by congress, and the state laws conflict with those of congress.” Ogden v. Saunders, 12 Wheat. 213, 6 L. Ed. 606. See, also, Tua v. Carriere, 117 U. S. 201, 6 Sup. Ct. 565, 29 L. Ed. 855;Cole v. Cunningham, 133 U. S. 114, 10 Sup. Ct. 269, 33 L. Ed. 538;Brown v. Smart, 145 U. S. 457, 12 Sup. Ct. 958, 36 L. Ed. 773. Pending the bankrupt act of 1867, it was held by that court that “an assignment by an insolvent debtor of his property to trustees for the equal and common benefit of all his creditors is not fraudulent, and, when executed six months before proceedings in bankruptcy are taken against the debtor, is not assailable by the assignee in bankruptcy subsequently appointed; and the assignee is not entitled to the possession of the property from the trustees.” Mayer v. Hellman, 91 U. S. 496, 23 L. Ed. 377.

Notwithstanding the provision of the Revised...