In re Kahn
| Decision Date | 18 December 1893 |
| Docket Number | 8473 |
| Citation | 57 N.W. 154,55 Minn. 509 |
| Parties | In re Ludwig Kahn, Insolvent |
| Court | Minnesota Supreme Court |
Argued December 7, 1893.
Appeal by claimant, Eau Claire National Bank, from a judgment of the District Court of St. Louis County, J. D. Ensign, J., entered July 25, 1893, disallowing its claim against the estate of Ludwig Kahn, Insolvent.
On December, 28, 1892, Ludwig Kahn of Duluth made an assignment of all his nonexempt property to Morris L. Fischbein for the benefit of his creditors, under Laws 1881, ch. 148, as amended. On February 17, 1893, the Eau Claire National Bank of Eau Claire, Wisconsin, presented to the assignee its claim for $ 3,053.77. He disallowed it and the Bank appealed to the District Court where after trial the claim was again disallowed. From that judgment the Bank brings this appeal.
Judgment affirmed.
R. R Briggs, for appellant.
Twohey & Morris, for respondent.
In and prior to December, 1892, Ludwig Kahn was a merchant, residing and doing business at Duluth, in this state. Alfred Kahn, his brother, was a merchant residing and doing business at Eau Claire, Wis. Ludwig was indebted to Alfred in the sum of $ 6,750, on three promissory notes, -- one for $ 3,000; one for $ 2,500; and one for $ 1,250, -- all past due on the 5th of December; and on that date, at Duluth, Alfred demanded payment from Ludwig, and was informed by him that he could not pay them, or any of them, and thereupon, as found by the court below, (and the evidence sustains the finding,) it was agreed between them that Ludwig should ship some goods from his store at Duluth to Alfred, at Eau Claire to be applied on the indebtedness, the goods not being then selected, but their general character agreed on. Between the 7th and 28th days of December, Ludwig, pursuant to that agreement, shipped at Duluth, by railroad, consigned to Alfred, at Eau Claire, and which were delivered by the railroad company to the latter at that place goods to the amount of $ 3,948.02, and the latter applied the amount to satisfy the $ 2,500 and $ 1,250 notes, and indorsed $ 106.68 on the $ 3,000 note. December 28, 1892, Ludwig made and filed in the county of St. Louis an assignment for the benefit of his creditors to Fischbein, who accepted the trust. January 14, 1893, Alfred transferred the $ 3,000 note to the appellant, the Eau Claire National Bank, which, on February 17th, filed the same as a claim in the insolvency proceeding and, on the disallowance by the assignee, it appealed to the court, and it also disallowed the claim, and from that this appeal is taken. On the evidence there can be no question but that, at the times mentioned, Ludwig was insolvent, and that Alfred had reasonable cause to believe -- indeed, that he knew -- him to be insolvent, and that the transfer of the goods was made with intent to give a preference to Alfred over the other creditors. The ground upon which the court disallowed the claim was, as stated in its conclusions of law, that Alfred was not entitled to prove the claim against the insolvent estate, and participate in the distribution thereof, without first restoring to said estate said goods, or the value thereof, and that the bank occupies no better position than Alfred would have occupied had he filed the claim. This conclusion of law presents the only question of importance in the case. The appellant makes a good many points in its brief, but, except so far as they will be referred to in this opinion, they are without foundation.
The appellant contends that, inasmuch as the title to the property did not vest in Alfred until delivery by the carrier to him at Eau Claire, the transfer was a Wisconsin transaction, and, as our statute can have no extraterritorial force, it must be judged by the laws of that state. If this were an action against Alfred to recover the property or its value, the question would be presented whether it was legal and valid in the place where the transaction was had. But in that case, as the agreement for the preference was made in this state, and as everything done or to be done by the debtor, to wit, the separating and shipping the goods, was done in this state, leaving nothing to be done by the creditor but to receive them on their arrival at Eau Claire, it was a Minnesota transaction, so far as the question of its legality was concerned. The agreement was unlawful, the separating and shipping the goods were unlawful, and those acts did not become lawful merely because the title to the property vested in Wisconsin. See In re Howes, 38 Minn. 403...
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