Christopherson v. Harrington
| Decision Date | 31 May 1912 |
| Docket Number | 17,504 - (89) |
| Citation | 136 N.W. 289,118 Minn. 42 |
| Parties | CONRAD H. CHRISTOPHERSON v. P. H. HARRINGTON |
| Court | Minnesota Supreme Court |
Action by the trustee of the estate of Herman Wiese, bankrupt, in the district court for Murray county to recover a payment of $5,503.50, made by the bankrupt as part of the purchase price of land under a certain contract. From an order, Nelson, J. overruling plaintiff's demurrer to the second defense in the answer, he appealed. Affirmed.
Title to bankrupt's property.
The title to the property involved in bankruptcy proceedings remains in the bankrupt until the appointment and qualification of the trustee; the title of the trustee, when appointed, relating back as of the date of the adjudication in bankruptcy.
Cancelation of executory contract of sale.
During the interval between the adjudication in bankruptcy and the appointment of the trustee, the vendor in an executory contract for the sale of land to the bankrupt may serve notice upon the bankrupt for the termination and cancelation of the contract for default in payment of the purchase price as provided for by chapter 355, Laws 1909, and the notice so served and given is valid and effectual unless the result of fraud or collusion with the bankrupt and for the purpose of defeating the rights of creditors.
Jay A. Kennicott and R. W. Parliman, for appellant.
A. J. Daley, M. J. Harrington and B. H. Whitney, for respondent.
The pleadings in this action disclose the following facts: On November 25, 1910, Herman Wiese, of whose property and estate plaintiff is now trustee in bankruptcy proceedings, and defendant entered into an executory contract by the terms of which defendant agreed to sell and convey to Wiese certain real property situated in Murray county for the consideration of $17,446.65, to be paid at the time specified by the contract, upon which payment defendant was to convey to Wiese, the property by a good and sufficient deed. A down payment of $5,503.50 was made at the time the contract was entered into; a deferred payment of $1,615.15 fell due March 1, 1911; and the balance, $4,328, was payable on or before March 1, 1915. The sale was subject to an existing encumbrance of $6,000 which Wiese assumed and agreed to pay. Thereafter, on February 17, 1911, Wiese was, in proceedings had for that purpose, upon his voluntary petition, duly adjudged a bankrupt by the Federal district court of the district of Minnesota, and on March 31 of the same year plaintiff was duly commissioned trustee and clothed with the usual power and authority in such cases provided. He thereafter brought this action to recover the amount of the down payment made by Wiese upon the contract upon the ground, as alleged in the complaint, that defendant had no title or interest in the property agreed to be conveyed, that he was not in position to perform the contract, and therefore that the down payment should be returned.
Defendant answered, and among other defenses interposed that Wiese made default in the payment of $1,615.15 which fell due on the contract March 1, 1911, and that, acting under and pursuant to the provisions of chapter 355, p. 406, Laws 1909, defendant on March 2, 1911, duly gave notice of the cancelation of the contract unless Wiese should within thirty days thereafter make payment of the instalment then due. The statute referred to authorizes this form of canceling and terminating such contracts. The notice of cancelation was served on the day of its date upon Wiese. The answer also alleges that defendant had no notice or knowledge of the pending bankruptcy proceedings at the time of the service of this notice; that no trustee in bankruptcy had been appointed, or record made in Murray county, in which the land is located, of the adjudication in bankruptcy, or other notice given thereof. The answer further alleges that payment was not made as required by the notice of cancelation, and that thereby the contract became fully terminated.
Plaintiff demurred to this part of the answer on the ground that the facts stated did not constitute a defense, and appealed from an order overruling the same. The only question presented, aside from the objections made by counsel for defendant to the sufficiency of the complaint, which we do not deem it necessary to consider, is whether the service of the notice of cancelation of the contract upon Wiese, the bankrupt, was valid and effectual as against plaintiff, who was subsequently appointed trustee; the service having been made between the date of the adjudication in bankruptcy and the appointment of the trustee. Our examination of the authorities bearing upon the question leads to the conclusion that an affirmative answer must be given.
It is contended by plaintiff that, upon the adjudication in bankruptcy, Wiese, the bankrupt, became civilly dead, and that the service upon him was a nullity and wholly ineffectual for any purpose; that the title and interest of the bankrupt in all nonexempt property owned or held by him passed to the trustee as of the date of the adjudication, free and clear of any proceedings taken against the bankrupt between the date of the adjudication and the appointment of the trustee.
There is probably no doubt that counsel's position is sustained by some of the decisions of the Federal courts. It has often been said by those courts, particularly with reference to the old...
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