Mlodzik v. Ackerman Oil Co.

• Decision Date: 09 November 1926
• Citation: 212 N.W. 790,191 Wis. 233
• Parties: MLODZIK v. ACKERMAN OIL CO. ET AL. IN RE MILWAUKEE TANK WORKS.
• Court: Wisconsin Supreme Court

191 Wis. 233

212 N.W. 790

MLODZIK

v.ACKERMAN OIL CO. ET AL.

IN RE MILWAUKEE TANK WORKS.^a1

Supreme Court of Wisconsin.

Nov. 9, 1926.

Appeal from Circuit Court, Milwaukee County; E. T. Fairchild, Judge.

Receivership proceedings by Paul Mlodzik against the Ackerman Oil Company and others; E. T. Sadler, receiver. From an order denying the petition of the Milwaukee Tank Works for delivery to it of certain property and moneys collected, it appeals. Order reversed, and affirmed in part, and cause remanded, with directions.--[By Editorial Staff.]

The appellant, the Milwaukee Tank Works, had sold to the Ackerman Oil Company certain tank equipment under an unfiled conditional sales contract. Some of the goods the buyer had sold, and payment in part had been made to it, when it made a voluntary assignment and a receiver was appointed. The appellant by petition asked among other relief (1) that the receiver should deliver up to it the pumps and tanks in his possession covered by the conditional sales contract; and (2) that the money collected or to be collected by the receiver on the resale should be paid to the appellant. The trial court held that the appointment of a receiver was tantamount to a levy within the meaning of the Conditional Sales Act, and operated to defeat the lien of the vendor, and entered an order denying the relief asked, from which order the appeal is taken.Armand J. Tuteur, of Milwaukee, for appellant.

Julius O. Roehl, of Milwaukee, for respondent.

VINJE, C. J.

[1] Does the taking possession by a receiver of the assets of a corporation that makes a voluntary assignment constitute a levy within the meaning of section 122.05, Stats., which provides that “every provision in a conditional sale reserving property in the seller, shall be void as to any purchaser from or creditor of the buyer, who, without notice of such provision, purchases the goods or acquires by attachment or levy a lien upon them, before the contract or a copy thereof shall be filed as provided in this chapter, unless such contract or copy is so filed within ten days after the making of the conditional sale”? Section 122.05 constitutes a part of the Uniform Conditional Sales Act, adopted by our state in 1919, and the question arises as to the meaning of the word “levy” therein contained.

It is argued by the respondent that a liberal construction should be given the word, and that it should be held to include an equitable as well as a legal levy, that our court has often spoken of the taking possession by a receiver as an equitable levy, and that the receiver represents both the insolvent and the creditors, and cases from both federal and state courts are cited to sustain the position that the taking possession by a receiver constitutes a levy that will defeat the lien of a vendor under an unfiled conditional sales contract. Some of these cases will be noted.

In Duplex Printing Press Co. v. Clipper Publishing Co., 213 Pa. 207, 62 A. 841, it was held that on a creditor's bill, when a receiver is appointed for an insolvent corporation, he is not limited, like an assignee for the benefit of creditors, by the right of the debtor corporation to property held by it under a conditional sale, but has the right of a levying creditor, and a sale by him passes a good title against the vendor, irrespective of the purchaser's status as a creditor either with or without notice. In this case the Conditional Sales Act was not discussed in any way, and it appears that it was the purchaser at a receiver's sale who sought to assert his right against the creditors of the insolvent corporation.

In Hamilton v. David C. Beggs Co. (C. C.) 179 F. 949, the District Court held that the Ohio rule that a receiver held in the same capacity as an attaching creditor or a levying creditor at law should be enforced because of the Ohio rule. It held that, if the federal rule applied, a different result would be reached. It stated the federal rule as follows:

“The possession of the receiver is only that of the court, whose officer he is, and adds nothing to the previously existing title of the mortgagee. He holds, pending the litigation, for the benefit of whosoever in the end it shall be found to concern, and in the meantime the court proceeds to determine the rights of the parties upon the same principles it would if no change of possession had taken place”--citing a number of federal cases, among others Fosdick v. Schall, 99 U. S. 235, 25 L. Ed. 339, and White v. Ewing, 159 U. S. 36, 15 S. Ct. 1018, 40 L. Ed. 67.

And the same rule is also announced in York Mfg. Co. v. Cassell, 201 U. S. 344, 26 S. Ct. 481, 50 L. Ed. 782.

In H. K. Porter Co. v. Boyd, 171 F. 305, 96 C. C. A. 197, the District Judge, being in the Eastern district of Pennsylvania, followed the decision in Duplex Printing Press Co. v. Clipper Publishing Co., that being the construction of the rights of a receiver by the Supreme Court of Pennsylvania. It places its decision on the ground that an equitable levy is equivalent to a legal levy, and that equality among the creditors is what is...