McFarlan Carriage Co. v. Wells
| Decision Date | 11 May 1903 |
| Parties | McFARLAN CARRIAGE COMPANY, Respondent, v. CHARLES B. WELLS et al., Appellant |
| Court | Kansas Court of Appeals |
Appeal from Pettis Circuit Court.--Hon. George F. Longan, Judge.
REVERSED AND REMANDED.
Reversed and remanded.
Bente & Wilson and C. C. Kelly for appellant.
(1) The receiver and trustee, took the title to sad property as of the date of the filing of the involuntary bankruptcy suit against the said Wells, to-wit, on the 8th day of November 1900. Bankruptcy Act, 1898, sec. 67a, 70, sub. 4 and 5; In re Pekin Plow Co., 112 F. 308; In re Burka, 104 F. 326. (2) The bankruptcy court acquires jurisdiction upon the filing of the petition. This jurisdiction covers the entire subject. It includes the person and subject-matter and all the property of the bankrupt in his possession at that time. From that time possession of the property is in custodia legis. In re Appel, 103 F. 931; In re Schloerb, 97 F. 326; In re Lewis, 91 F. 532; In re Kindt, 98 F 867; Brandenburg on Bankruptcy (2 Ed.), pp. 33, 34; Loveland on Bankruptcy, pp. 68, 187; Bankruptcy Act 1898, sec. 2 subd. 3; sec. 70a, subd. 5; White v. Schloerb, 178 U.S. 542; In re Burka, 104 F. 326; In re Pekin Plow Co., 112 F. 308. (3) The involuntary petition in bankruptcy having been filed on November 8, and confession of bankruptcy having been signed by the bankrupt and filed on the same day, all the property that the bankrupt had at that time was from the date of the filing of the petition in custodia legis and being so held was not subject to the process of any other court, not having supervisory or appellate jurisdiction over the court of bankruptcy. In re Schloerb 97 F. 326; In re Ward, 104 F. 985; In re Whittener, 105 F. 180; White v. Schloerb, 178 U.S. 542; Hudson v. Lamar, 74 Mo.App. 238; State ex rel. v. Netherton, 26 Mo.App. 424; Marx v. Hart, 166 Mo. 503; Green v. Tittman, 124 Mo. 372; Patterson v. Stevenson, 77 Mo. 329 (332); Bank v. Owen, 79 Mo. 429; State ex rel. v. Six, 80 Mo. 61; State ex rel. v. Boothe, 68 Mo. 546; Loveland on Bankruptcy, sec. 152, p. 290; Moran v. Sturges, 154 U.S. 256. (4) The jurisdiction of the bankruptcy court is supreme--it is exclusive. In re Smith, 92 F. 135; In re Richard, 94 F. 633; In re Frances-Valentine Co., 93 F. 953; Keegan v. King, 96 F. 758; In re Cobb, 96 F. 821; In re Endl, 99 F. 915; In re Chambers, 98 F. 865; In re Wells, 114 F. 222; In re Tune, 115 F. 906; Bryan v. Bernheimer, 181 U.S. 188; In re Pekin Plow Co., 112 F. 308; In re Schloerb, 97 F. 326; In re Ward, 104 F. 985; In re Whittener, 105 F. 180; Metzner v. Graham, 57 Mo. 404; Carter v. Hobbs, 92 F. 594; Thornton v. Hogan, 63 Mo. 143; Bankruptcy Act 1867, secs. 4991, 5046; 22 S.Ct. 275; Bank v. Sherman, 101 U.S. 403. (5) Bankrupt courts are courts of limited jurisdiction. They are not inferior courts whose jurisdiction must be shown. They are courts of record and their jurisdiction is presumed in their judgments, orders and proceedings. Reed v. Vaughn, 10 Mo. 447; In re Columbia Real Estate Co., 101 F. 965; Bankruptcy Act 1898, sec. 70, subd. 5; Mueller v. Nugent, 22 S.Ct. 275; In re Pekin Plow Co., 112 F. 308. (6) Where goods are delivered to the vendee, all conditions as to the property remaining in the vendor and the satisfaction of the vendee with the property, must be in writing, acknowledged and recorded, or the goods will be considered as the property of the vendee, and subject to the claims of his creditors. Imp. Co. v. Price, 81 Mo.App. 243; Collins v. Willhoit, 108 Mo. 451; Oester v. Sitlington, 115 Mo. 247. (7) The contract under which the bankrupt, C. B. Wells, held this property is clearly a conditional sale contract and it stands admitted by the respondent that said contract was not acknowledged and recorded as made and provided in such cases. R. S. 1899, secs. 3410, 3412; Dry Goods Co. v. Bank. 72 Mo.App. 226; Peters v. Fetherston, 61 Mo.App. 466; Dry Goods Co. v. Buchanan, 79 Mo.App. 528; Imp. Co. v. Price, 81 Mo.App. 243; Loeffler v. Damoree Bros., 75 Mo.App. 207; Oester v. Sitlington, 115 Mo. 247. (8) The contract entered into between the McFarlan Carriage Company and Wells, although good between the parties, was void as to prior and subsequent creditors, and all other parties purchasing said goods without notice. It should have been acknowledged and recorded as in cases of mortgages on personal property. R. S. 1899, secs. 3410, 3412; Oester v. Sitlington, 115 Mo. 247; Peters v. Fetherston, 61 Mo.App. 466; Imp. Co. v. Price, 81 Mo.App. 243. (9) By bringing of the involuntary bankruptcy proceedings the rights of creditors to have the property mentioned in respondent's petition became absolute. They were diligent creditors and their rights attached. The respondent can not now maintain its replevin suit to gain possession of said property, since they neglected to comply with the statutes of Missouri as made and provided in such cases. In re Pekin Plow Co., 112 F. 308; In re Burka, 104 F. 326; In re Legg, 96 F. 326; Imp. Co. v. Price, 81 Mo.App. 243; Peters v. Fetherston, 61 Mo.App. 466; McDonald D. G. Co. v. Bank, 72 Mo.App. 226; Brittan D. G. Co. v. Buchanan, 79 Mo.App. 528; Oester v. Sitlington, 115 Mo. 247; Mueller v. Nugent, 22 S.Ct. 275.
Sangree & Lamm for respondent.
(1) We submit, there is no merit in appellant's chief contention that the State court was without jurisdiction. In re Wells, 114 F. 222, and cases cited; Trust Co. v. Comingor, 184 U.S. 18; Wagner v. U.S. 104 F. 133; Mishawaka Woolen Goods Co. v. Powell, not yet reported; In re Russell, 101 F. 248. (2) The contract under review, while somewhat ambiguous, is susceptible of being construed as creating Wells the factor or agent of McFarlan Carriage Company. In this view of the case, it needs no citation of authority to sustain our right to the vehicles as against the whole world. (3) But, if it be construed as not a contract creating in effect an agency, it is at least a contract of conditional sale or mortgage and, though unacknowledged and unrecorded, it was good between plaintiff and Wells; and, therefore, plaintiff, having in good faith taken the vehicles into its possession on November 5, 1900, with Wells' consent, before any of his creditors had acted, defeated all rights of creditors thereto. Drug Co. v. Self, 77 Mo.App. 284; Dobyns v. Meyer et al., 95 Mo. 132; Mallman v. Harris Brothers, 65 Mo.App. 127; Halderman v. Stillington, 63 Mo.App. 212; Barton v. Sitlington, 128 Mo. 164; Keathing v. Hannenkamp, 100 Mo. 161; Thompson v. Foerstel, 10 Mo.App. 290; State ex rel. v. Rover, 55 Mo.App. 448; Furniture Co. v. Fricke, 39 Mo.App. 146; Scully v. Albers, 89 Mo.App. 118; Live Stock Co. v. Hunter, 91 Mo.App. 418; Landis v. McDonald, 88 Mo.App. 335; Gentry v. Templeton, 47 Mo.App. 55. (4) But the decision below was right because, if the redelivery of the vehicles to us on the 5th of November, 1900, be considered (as it well may be) a preference within four months, and thus obnoxious to the bankrupt act, yet this availeth nothing to the trustee, because such payment by preference can not be recovered back if made in good faith, without knowledge by creditor of insolvency. Bankrupt Act 1898, sec. 60, subdiv. b; Bankrupt Act, sec. 57, subdiv. g; Pine v. Trust Co., 182 U.S. 438; Peet v. Spencer, 90 Mo. 384; Huse v. Ames, 104 Mo. 91; Green v. Conrad, 114 Mo. 651; Homer v. Bank, 104 Mo. 225; Mfg. Co. v. Huff, 62 Mo.App. 124; Gregory v. Tavener, 38 Mo.App. 627; Stewart v. Platt, 101 U.S. 735; In re Economical Printing Co., 110 F. 514; Bank v. Iron Co., 102 F. 755; In re Kellogg, 112 F. 52; In re Shirley, 112 F. 301; In re Hinsdale, 111 F. 502; In re Sewell, 111 F. 791; In re Standard Laundry Co., 112 F. 126; In re Wright, 96 F. 187; In re Neely, 113 F. 210.
--This is an action of replevin which was begun to recover the possession of certain wheeled vehicles.
The case may be shortly stated in this way, viz.: On November 5, 1900, the defendant Wells was engaged in carrying on business under the name of the "Sedalia Implement Company," and then had in his possession certain vehicles claimed by the plaintiff--a corporation; that on that day he recognized the title of plaintiff and voluntarily turned over the possession of such vehicles to one Holcomb, agent of plaintiff, who listed and moved them to another floor of the warehouse. On the morning of November 6th, he placed them in the possession and custody of one Richardson, and on the next morning he commenced to move them to Planck's storehouse. He had removed part of them there when defendant Franklin, a hired man of defendant Wells, acting under the latter's orders stopped the further removal. Wells thereupon took possession of such vehicles as had not been removed to Planck's. Two days later, and on November 9th, this suit was brought, and the vehicles in the possession of Wells were taken under the writ and delivered to plaintiff.
It further appears that on November 8, 1900, certain creditors of Wells filed a petition in bankruptcy in the United States District Court; that on the same day Wells signed a confession of bankruptcy and an application was made to a referee in bankruptcy for a receiver, which appointment was accordingly made. On the 15th, the receiver so appointed took charge of the bankrupt's estate. On the 26th, Wells was duly adjudged a bankrupt, and on December 10th, following, defendant was elected trustee of the bankrupt's estate.
There was a trial which resulted in judgment for plaintiff and defendant brings the cause here by appeal.
One of the questions which counsel have discussed here at the bar and in their printed briefs, is, whether or not the State court issuing the writ under which the caption of the property took place thereby...
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