Segnitz v. Garden City Banking & Trust Co.

• Decision Date: 21 June 1900
• Citation: 107 Wis. 171,83 N.W. 327
• Court: Wisconsin Supreme Court
• Parties: SEGNITZ v. GARDEN CITY BANKING & TRUST CO.

107 Wis. 171

83 N.W. 327

SEGNITZ

v.GARDEN CITY BANKING & TRUST CO.

Supreme Court of Wisconsin.

June 21, 1900.

Appeal from circuit court, Milwaukee county; D. H. Johnson, Judge.

Action by Herman Segnitz, as assignee of the Krull & Volger Company, against the Garden City Banking & Trust Company. From an order sustaining a demurrer to the complaint, plaintiff appeals. Affirmed.

Appeal by plaintiff from an order sustaining demurrer to the complaint. From the complaint, and certain stipulations and concessions added thereto, it appears that in June, 1898, the Krull & Volger Company was a corporation existing under the laws of Illinois, having its principal place of business at Milwaukee, and branch establishments at Chicago, Ill., and Kansas City, Mo., and on that day made a due and formal voluntary assignment in Milwaukee, in compliance with chapter 80, Rev. St., to the plaintiff, Herman Segnitz, a citizen and resident of Wisconsin. On that day the Krull & Volger Company had on deposit, subject to check, with the defendant, a banking corporation existing under the law of Illinois, and engaged in business at the city of Chicago, $1,652.39, and at the same time was indebted to that company on two promissory notes, of $1,000 each, due, one about June 15, and the other about July 15, 1897. At the opening of business on June 4th the plaintiff formally notified the defendant of the fact of such assignment, and of the claim by him, as such assignee, to the fund then on deposit. Later the defendant made application, by proper entries on its books, of said $1,652.39 to the said promissory notes. Thereafter, and about September 1st, the defendant filed with the clerk of Milwaukee circuit court, in the assignment proceedings, a claim for $347.61, being the balance of said notes remaining after the application of said deposit, which fact is set up as an estoppel of the defendant against denying either the validity of the assignment, or plaintiff's title to any of the assets of said Krull & Volger Company. The defendant has, on demand, refused to pay said deposit fund of $1,652.39, or any part thereof, to the plaintiff, and this suit is brought by the assignee to recover that amount.

McElroy & Eschweiler, for appellant.

Winkler, Flanders, Smith, Bottum & Vilas, for respondent.

BARDEEN, J. (after stating the facts).

The complaint shows that a corporation organized under the laws of Illinois, with its principal office and place of business in this state, made a voluntary assignment for the benefit of its creditors, in this state. The question for decision is whether such assignment carried title to the personal estate of the assignor, situate in Illinois. The general proposition may be stated that a voluntary, common-law assignment for the benefit of creditors, good in the state where made, carries title to personal property, wherever situated. This court has so held, and such holding is supported by the great weight of authority. Mowry v. Crocker, 6 Wis. 326;Cook v. Van Horn, 81 Wis. 291, 50 N. W. 893;Campbell v. Iron Co., 9 Colo. 60, 10 Pac. 248;Bank v. Walker, 61 Conn. 154, 23 Atl. 696;Walters v. Whitlock, 9 Fla. 86;Miller v. Kernaghan, 56 Ga. 155;Coflin v. Kelling, 83 Ky. 649;In re Paige & Sexsmith Lumber Co., 31 Minn. 186, 16 N. W. 700;Askew v. Bank, 83 Mo. 366; Frazier v. Fredericks, 24 N. J. Law, 162; Ackerman v. Cross, 40 Barb. 465;Noble v. Smith, 6 R. I. 446;Gregg v. Sloan, 76 Va. 497;Weider v. Maddox, 66 Tex. 372, 1 S. W. 168;Black v. Zacharie, 3 How. 482, 11 L. Ed. 690;Van Wyck v. Read (C. C.) 43 Fed. 716;Means v. Hapgood, 19 Pick. 105;Fuller v. Steiglitz, 27 Ohio St. 355. In Illinois, Louisiana, and Maine, and possibly some other states, the rule is limited, and will not be allowed to prevail as against creditors of the assignor residing in those states. Heyer v. Alexander, 108 Ill. 385;Beirne v. Patton, 17 La. 589;Fox v. Adams, 5 Me. 245;Chafee v. Bank, 71 Me. 514. The general rule, however, is as above stated; and if the assignment in question, under the law of this state, was but a common-law, voluntary assignment, it carried title to the assignor's property in Illinois, and the demurrer was improperly sustained. The assignment under consideration was made June 3, 1898, and the law applicable thereto may be found in chapter 80 and chapter 80a, Sanb. & B. Ann. St. So far as chapter 80 is concerned, it only assumes to regulate and control the manner in which such assignments shall be made and executed. Chapter 80a, however, added some new features, which led this court to speak of our whole system relating to voluntary assignments as an insolvent law. Holton v. Burton, 78 Wis. 321, 47 N. W. 624;Bank v. Schranck, 97 Wis. 250, 73 N. W. 31. In Binder v. McDonald, 82 N. W. 156, this court criticised these statements, and limited them to the additions made to the general assignment law by the Acts of 1889, now included in chapter 80a.

This court has never had occasion to examine and construe the purpose and force of those features of our assignment law which enable the debtor to obtain a discharge from his debts. A very similar system in Minnesota was considered in McClure v. Campbell, 71 Wis. 350, 37 N. W. 343, and it was distinctly held that an assignment made in that state, pursuant thereto, had no extraterritorial effect. Similar statutes have been the subject of frequent discussion in other courts, and the almost uniform line of decisions is in accord with the conclusion stated. Many of the cases are cited and reviewed by the supreme court of the United States in the recent case of Trust Co. v. Dodd, 173 U. S. 624, 19 Sup. Ct. 545, 43 L. Ed. 835. In Barth v. Backus, 140 N. Y. 230, 35 N. E. 425, 23 L. R. A. 47, and Townsend v. Coxe, 151 Ill. 62, 37 N. E. 689, the courts of last resort in New York and Illinois had occasion to consider the law of this state, and the legal effect of an assignment thereunder; and both courts came to the conclusion that those portions of our law which enabled the assignor to obtain a discharge from his debts gave it the character of a bankrupt law, and that such an assignment was ineffectual to transfer title to property of the insolvent situate in those states. Of course, we are not bound by those decisions; but, in so far as they rest upon valid reasons and sound conclusions, they are entitled to weight. Chapter 80, as already noted, only assumes to deal with the making and administration of common-law assignments. Prior to 1889 an insolvent debtor could only obtain a discharge from his debts by procedure under chapter 179,--an act entirely independent of the assignment statutes. This chapter provided for a petition, a schedule of all creditors, and an inventory of property; and, in a proper case, an assignment was directed....