Foley-Bean Lumber Company v. Sawyer

• Citation: 78 N.W. 1038,76 Minn. 118
• Decision Date: 26 April 1899
• Docket Number: 11,612 - (52)
• Parties: FOLEY-BEAN LUMBER COMPANY v. E. P. SAWYER
• Court: Supreme Court of Minnesota (US)

78 N.W. 1038

76 Minn. 118

FOLEY-BEAN LUMBER COMPANY v. E. P. SAWYER

Nos. 11,612 - (52)

Supreme Court of Minnesota

April 26, 1899

Petition in the district court for Anoka county by Foley-Bean Lumber Company for the appointment of a receiver of the property of E. P. Sawyer, insolvent. From an order, Tarbox J., appointing such receiver, the insolvent appealed. Reversed.

SYLLABUS

Insolvency -- Federal Bankrupt Act of 1898 -- Laws 1881, c. 148.

The federal bankrupt act of 1898 superseded the state insolvent law of 1881 from the date of its passage (July 1, 1898), except as to proceedings commenced prior to that date.

James A. Kellogg, for appellant.

From the time of the passage of the national bankruptcy act, all state laws concerning persons and cases within the purview of the act were suspended. Sturges v. Crowninshield, 4 Wheat. 122; Ogden v. Saunders, 12 Wheat. 213; In re Reynolds, Fed. Cases, No. 11,723; Boyle v. Zacharie, 6 Pet. 635; Thornhill v. Bank of Louisiana, Fed. Cases, No. 13,992; Clarke v. Rosenda, 5 Rob. (La.) 27; Beach v. Miller, 15 La. An. 601; Fisk v. Montgomery, 21 La. An. 446; Van Nostrand v. Carr, 30 Md. 128; Rowe v. Page, 54 N.H. 190; In re Reynolds, 8 R.I. 485. The act was in force from and after its passage. Traders Bank v. Campbell, 14 Wall. 87.

Jenkins & Jenkins, for respondent.

The state insolvency laws remain in force when not in conflict with a national bankruptcy act, and state courts do not lose jurisdiction merely by the passage of such an act. Eyster v. Gaff, 91 U.S. 521. The passage of this act, inoperative in one class of cases for one month and in another for four months, did not destroy the insolvency laws of Minnesota, so far as they affected the present case. Ogden v. Saunders, 12 Wheat. 213; Chamberlain v. Perkins, 51 N.H. 336; Hutchins v. Taylor, 5 Law Rep. 289; Swan v. Littlefield, 4 Cush. 574; Judd v. Ives, 4 Met. (Mass.) 401; In re Horton, 5 Law Rep. 462; In re Holmes, 5 Law Rep. 360; Day v. Bardwell, 97 Mass. 246; Martin v. Barry, 37 Cal. 208.

OPINION

MITCHELL, J.

On July 15, 1898, the respondent petitioned the district court for the eighteenth judicial district for the appointment of a receiver of the property of one Sawyer, an insolvent debtor, pursuant to the provisions of section 2 of the insolvent law of 1881 (G.S. 1894, § 4241). The court overruled the insolvent's motion to dismiss the petition, and appointed a receiver as prayed for. This appeal is from the order appointing a receiver.

Numerous questions have been raised and argued by counsel for the appellant, but the only one which we find necessary to consider is whether the federal bankrupt act approved July 1, 1898 (30 St. [U.S.] 544 [c. 541]), had suspended and superseded the state insolvent law of 1881 at the time the petition for a receiver was presented. The act of 1881 is in all essentials a bankrupt act, and not merely an act regulating common-law assignments for the benefit of creditors. It and the federal bankrupt act cover the same general ground. The two act upon the same subject-matter, upon the same persons, both debtors and creditors, upon the same rights, and, generally, have the same object. Hence it is obvious that both cannot operate at the same time without collision; and the federal law being paramount, the state law must yield.

These propositions are not controverted by the petitioner, but his contention is that the federal law having postponed the filing of any petition for voluntary bankruptcy until August 1, and for involuntary bankruptcy until November 1, 1898, the act had not yet become operative, and that it is only when a federal bankrupt act becomes operative remedially that it has the effect of superseding state bankrupt laws. The federal statute, 30 St. 566, provides that:

"This act shall go into full force and effect upon its passage; provided, however, that no petition for voluntary bankruptcy shall be filed within one month of the passage thereof, and no petition for involuntary bankruptcy shall be filed within four months of the passage thereof. Proceedings commenced under state insolvency laws before the passage of this act shall not be affected by it."

This language, in our opinion, shows that the manifest intention of congress was that the rights and liabilities of all persons, in the particulars to which the act refers, should be determined by the act from the time of its passage although the institution of proceedings to enforce them is postponed to the dates specified. The only saving clause in favor of the jurisdiction of the state courts is for...