In re Howes

• Decision Date: 14 May 1888
• Citation: 38 Minn. 403
• Parties: In the matter of J. W. HOWES, Insolvent.
• Court: Minnesota Supreme Court

38 Minn. 403

In the matter of J. W. HOWES, Insolvent.

Supreme Court of Minnesota.

May 14, 1888.

In proceedings in the district court for Polk county, brought against J. W. Howes by Willys G. Peck and others of his creditors, an order was made by Mills, J., adjudging Howes to be insolvent, and appointing a receiver of his property, from which order he appeals.

Holland & McClenahan, for appellant.

White, Shannon & Reynolds, for respondents.

MITCHELL, J.

Appeal from an order appointing a receiver of the property of appellant, an insolvent, pursuant to section 2 of the "insolvent act," (Laws 1881, c. 148.)

1. The evidence fully justified the finding of the court that the appellant (a "trader") was, at the time of the alleged preferential conveyance, insolvent, within the meaning of the statute. Daniels v. Palmer, 35 Minn. 347, (29 N. W. Rep. 162.) It also justified the finding that, by this sale or conveyance, one of his creditors obtained a preference over the other creditors. The transfer by an insolvent, embarrassed as appellant was, of so large an amount of property to pay one creditor in full, could not well be otherwise than preferential in its nature. See In re Hapgood, 2 Lowell, 200; Toof v. Martin, 13 Wall. 40.

2. Appellant was a resident of the territory of Dakota, but owned property, and was engaged in carrying on business, at several places in this state. The property transferred was personal property, principally lumber, situated in this state. The contract of transfer was executed in Dakota, the domicile of the appellant. In that territory, the court finds, there was no such statute as our insolvent act, and no law prohibiting an insolvent from giving a preference to one creditor over others. Upon these facts appellant bases his principal contention, to wit, that this transfer, being made in Dakota, by a citizen of that territory, and being valid there, is valid everywhere, and therefore the court erred — to use his own language — "in giving effect to the Minnesota insolvent law, and declaring the transfer preferential thereunder." Counsel on both sides have argued the case as if this were a suit by the receiver, brought under section 4 of the insolvent act, to recover the property transferred to the preferred creditor, and consequently have gone extensively into the question of the conflict of laws, and whether, in determining the validity of such a transfer, as against insolvency proceedings, the law of Dakota or that of Minnesota would govern. We do not find it necessary for the purposes of this appeal to follow counsel to any great length into this field of discussion. This being an appeal from an order appointing a receiver, the question is merely whether the court was justified in making such an order. It would seem that this can admit of but one answer. If appellant's position be correct, then bankruptcy proceedings could never be instituted against a non-resident insolvent owning property and carrying on business in this state, no matter how many acts of insolvency he might commit with reference to his property in this state, provided only he committed the acts in a jurisdiction where no bankrupt act was in...