McFarland Carriage Co. v. Solanes

• Decision Date: 02 March 1901
• Parties: McFARLAND CARRIAGE CO. v. SOLANES et al. (JAMES, Intervener).
• Court: U.S. District Court — Eastern District of Louisiana

108 F. 532

McFARLAND CARRIAGE CO. v. SOLANES et al. (JAMES, Intervener).

United States Circuit Court, E.D. Louisiana.

March 2, 1901

Denegre Blair & Denegre, for plaintiff.

Rice &amp Montgomery, for defendant.

Saunders Gurley & James, for intervener.

BOARMAN District Judge.

The original suit, still pending, was brought on a rule nisi on the trustee to show cause why a certain fund in his hands as the 'trustee of the estate of E. C. Fenner bankrupt,' should not be paid over to the McFarland Carriage Company. The intervention of A. De Gasquet-James, now on trial, is to secure a landlord's lien on that fund. E. C. Fenner was a carriage dealer in New Orleans. On the 26th of May, 1899, he was adjudicated a bankrupt. In June following, Claude D. Solanes was appointed trustee. Fenner turned over to Solanes, trustee, as a part of his estate, a lot of carriages which were then in the storehouse leased, by the bankrupt, Fenner, from the intervener herein, who then held certain unpaid monthly rent notes, against Fenner, for back rent and for the unexpired term of the lease. The McFarland Carriage Company, a citizen of Indiana, claiming to be the legal owner of said certain lot of carriages, and, having made demand in vain on the trustee for the carriages, instituted a suit in the circuit court against 'Claude D. Solanes, trustee of the estate of E. C. Fenner, bankrupt,' to recover title to and possession of said carriages. The plaintiff therein obtained a final judgment; the circuit court decreeing it to be the legal owner of the same, and that they were no part of Fenner's estate. During the pendency of that suit, and before a decree therein, for title to the carriages, the bankrupt court, at the instance of the trustee, and with the consent of the McFarland Carriage Company, ordered the trustee to sell some of said carriages. A number of them were sold, accordingly, and the proceeds, $819.50, were deposited, presumably, by the trustee in the depository designated by the bankrupt court to the credit of the bankrupt's estate. After the final decree mentioned herein, in which plaintiff was adjudged to be the owner of the entire lot of carriages, the plaintiff, McFarland Carriage Company, instituted a suit, on a rule to show cause, against Solanes, trustee, why the money for which the carriages were sold should not be paid over to the company. On this rule the circuit court entered judgment as follows: 'Dismissing the rule, and reserving to the plaintiff the right, if it be so advised, to institute proceedings in the bankrupt court in the district. ' On writ of error to the circuit court of appeals, this judgment dismissing the rule was reversed. 106 F. art. After the mandate therefrom was sent down, the intervener, claiming that the lot of carriages sold in pursuance to the bankrupt court's order were, with the consent of said company, on the premises leased from him by Fenner, on the date he was adjudged to be a bankrupt, instituted his intervention to recover a lien or the said proceeds for all the unpaid rent evidenced by the several lease notes.

The articles in the Revised Civil Code relied upon for the lien claimed are as follows: Article 2705 provides, 'The lessor has for the payment of his rent and other obligations of the lease a right of pledge on the movable effects of the lessee which are found on the property leased. ' Article 2707 provides, 'This right of pledge affects not only the movables of the lessee, and under-lessee, but all those belonging to third persons when their goods are stored in the house or store by their own consent, express or implied. ' The McFarland Carriage Company resists the claim made by the lessor on the said fund: 'First, because the fund is not now, or has not been, in custodia legis; second, that under the law plaintiff is not entitled to be paid out of the fund on any of the lease notes; third, that the trustee represents the mass of creditors in the management of the bankrupt's estate, but they (the creditors) may and must for themselves, in their own right, pursue the property in the prescribed period, or lose their privilege.

The contention of defendant's counsel as to the property or fund not being in custodia legis is founded, as it appears from his argument, largely on what he says is the legal import of the language which counsel quotes from the opinion of the court of appeals reversing the circuit court's judgment on the motion to show cause, which quotation is as follows:

'In addition to the facts above recited from the transcript of the record, we learn from the brief of counsel submitted on behalf of the defendant trustee that pending a decision of the suit (intermediate the filing of the petition and the decree), and with the consent of the plaintiff, sales were made of the goods claimed, and the trustee retained the proceeds of the sale of the goods to respond to the final judgment of the court. * * * It thus appears that the defendant trustee did not receive this fund as the trustee of the bankrupt, but as trustee of the parties to the present suit, and to respond to the final judgment of the court therein.'

Counsel contends that this statement appearing in the court of appeals opinion has the legal effect, in the pending suit, of res judicata on the issue as to whether or not the fund in question is in custodia legis. He further contends that the circuit court of appeals, in reversing the circuit court's judgment on the rule nisi, passed on that issue finally, and adversely to the pending claim of the intervener, and the question now of custodia legis to no longer an open one. A transcript of the record, showing the case that was tried on the rule nisi, in the circuit court between the carriage company, plaintiff, and Solanes, 'trustee of the estate of E. C. Fenner, bankrupt,' as defendant, shows all the evidence which was administered therein by either side, and is now before this court as a part of intervener's evidence. There does not seem to be anything in that transcript to show that the trustee, Solanes, held the fund otherwise than in his official capacity, or that any issue of law or fact pertaining to the matter as to whether or not the proceeds in question were or were not in custodia legis was material to the determination of the claim made by the McFarland Carriage Company for said proceeds on the said trustee. It seems from the evidence in the said transcript that the matter heard and passed upon therein by the circuit court was limited to the question as to who was the legal owner of the carriages or proceeds thereof, and there was no issue therein as to where the fund then was, or as to in what capacity it was then held by Solanes. The facts not disputed show that the carriages were scheduled as the bankrupt's property, and that as such property they were turned over to the trustee, who took possession of them and subjected them to his official possession, as he did other property belonging to the bankrupt; that subsequently the carriage company made demand for their property on the trustee of the bankrupt, which was refused by him; that the trustee asked for and received an order from the bankrupt court to sell certain carriages at private sale, and in the court's order there was reserved all the rights of interested parties over the proceeds (then in the bankrupt court's depository) of the sale. It appears, too, that the carriage company consented, on certain conditions, for the trustee of the bankrupt to make the sale; that the proceeds of the sale are now in the bankrupt court's depository, to the credit of the trustee; that plaintiff, the landlord, now intervening in this suit, was not a party to any of the proceedings heretofore had in the circuit court. On this statement of undisputed facts, it appears that the carriages, even though they did not belong to the bankrupt at...