C. Reiss Coal Co. v. Stroik

• Decision Date: 08 April 1947
• Citation: 26 N.W.2d 645,250 Wis. 201
• Parties: C. REISS COAL CO. v. STROIK (LORBIECKI, Garnishee).
• Court: Wisconsin Supreme Court

250 Wis. 201

26 N.W.2d 645

C. REISS COAL CO.

v.STROIK (LORBIECKI, Garnishee).

Supreme Court of Wisconsin.

April 8, 1947.

Appeal from a judgment of the Circuit Court for Marathon County; Gerald J. Boileau, Judge.

Vacated.

This action was begun by The C. Reiss Coal Company, plaintiff, on the 13th day of February, 1946, against Raymond Stroik, doing business as Stroik Produce Company, defendant, and Joseph Lorbiecki, garnishee defendant.The defendant Stroik was an operator of a feed mill in connection with which he conducted a small retail business.He purchased coal from the plaintiff and on September 5, 1945, the plaintiff took judgment against the defendant Stroik for $1,074.53 on account of coal sold and delivered by the plaintiff to the defendant.

On May 18, 1944, Stroik executed a chattel mortgage to secure the payment of $1,300 to the Bank of Rosholt.

On February 6, 1945, Stroik sold his entire business to the garnishee defendant Lorbiecki.In the transaction the real property was valued at $2,500, the machinery, fixtures, equipment, elevator and truck at $2,500, and the stock of flour, feed, seed, medicines etc. at $5,736.The entire amount was paid to the Bank of Rosholt which held the mortgages against the real and personal property used by Stroik in his business, which amounted to $6,196.62.Payment was made for the purpose of securing to Lorbiecki an unencumbered title to the business, stock of goods, real estate and other personal property.No attempt was made to comply with the bulk sales law.St.1945, § 241.18 et seq.

In December, 1945, Stroik was adjudged a bankrupt in bankruptcy court for the Western District of Wisconsin at La Crosse.On February 13, 1946, these garnishment proceedings were begun, the plaintiff claiming that the transfer in violation of the bulk sales law was fraudulent as to creditors.A trustee was appointed in the bankruptcy proceedings on February 18, 1946, and he filed his bond on the same day.

Near the close of the trial the garnishee defendant discovered for the first time that a petition in bankruptcy had been filed.Thereupon without amending the pleadings, the garnishee defendant claimed that a cause of action, if any existed, on account of the alleged fraudulent transfer was in the trustee in bankruptcy.

The trial court did not pass upon this contention but decided the case upon the merits in favor of the defendant.Judgment was entered accordingly on the 22d day of June, 1946, from which the plaintiff appeals.A. H. Eberlein, of Wausau (Buchen, Currie, Federer & Grote, of Sheboygan, of counsel), for appellant.

Smith, Okoneski, Puchner & Tinkham, of Wausau, for respondent.

ROSENBERRY, Chief Justice.

The plaintiff argues that if the defendant's contention is sound, then the trustee in bankruptcy should have been joined as a plaintiff, that he was not joined, therefore there is a defect of partiesplaintiff and the question not having been raised by demurrer or answer, it is waived.

It is well established by the decisions of the United States Supreme Court that the trustee in bankruptcy gets the title to all property which has been transferred by a...