The Mishawaka Woolen Manufacturing Co. v. Powell
| Decision Date | 02 March 1903 |
| Citation | 72 S.W. 723,98 Mo.App. 530 |
| Parties | THE MISHAWAKA WOOLEN MANUFACTURING COMPANY, Respondent, v. W. H. POWELL Trustee in Bankruptcy, Appellant |
| Court | Kansas Court of Appeals |
Appeal from Pettis Circuit Court.--Hon. George F. Longan, Judge.
REVERSED.
Judgment reversed.
Sangree & Lamm for appellant.
(1) The property in question, having been reduced to the actual possession of the Federal court and there held by its order at first by its receiver, and then by its trustee, which court was proceeding to sell the same as part of the bankrupt's estate to pay claims allowed against said estate in that court, was in custodia legis, and being so held was not subject to the process of any other court not having supervisory or appellate jurisdiction over said bankrupt court. State ex rel. v. Netherton, 26 Mo.App. 414; Bentley v. Shrieve, 4 Md. Chancery R. 412; Bank v. Owen, 79 Mo. 429; State ex rel. v Six, 80 Mo. 61; State ex rel. v. Boothe, 68 Mo 546; Patterson v. Stephenson, 77 Mo. 329; Marx v. Hart, 166 Mo. 503; Green v. Tittman, 124 Mo. 372. (2) And the root and source of said doctrine is in the decisions of the Supreme Court of the land, which holds that such comity between courts is essential to the prevention of scandals from unseemly conflicts of jurisdiction, and necessary to promote the decent and orderly administration of justice. Hagan v. Lucas, 10 Peters 400; Carryl v. Taylor, 61 U.S. (20 Howard) 583; Freeman v. Howe, 65 U.S. (24 Howard) 450; Buck v. Cobath, 3 Wall. 334; Porter v. Sabin, 149 U.S. 473; Shields v. Coleman, 157 U.S. 168. (3) And it is a doctrine self-evidently and peculiarly applicable to bankruptcy proceedings and the same is universally applied there--the decisions all going to the extent of holding that the jurisdiction of the bankrupt court, under the circumstances of our case, is exclusive, not only because of the theory, aforesaid, but because of the peculiar terms of the bankrupt act, itself. In re Cunningham, 9 Cent. Law Journal 208, and cases cited; In re Anderson, 23 F. 482; In re Smith, 92 F. 135; In re Francis-Valentine Co., 93 F. 953; In re Richard, 94 F. 633; Kreegan v. King, 96 F. 758; In re Cobb, 96 F. 821; In re Endl, 99 F. 915; In re Chambers, Calder & Co., 98 F. 865; In re Wells, 114 F. 222; Bryan v. Bernheimer, 181 U.S. 188; In re Tune, 115 F. 906; White v. Schloerb, 178 U.S. 542. (4) A claimant of property in custodia legis must intervene in the court having possession of the property. State ex rel. Netherton, 26 Mo.App. 414; Metzer v. Graham, 57 Mo. 404; Carter v. Hobbs, 92 F. 594; In re Copenhaver, 118 Mo. 377. (5) Bankruptcy proceedings are held to be proceedings in rem. Thornton v. Hogan, 63 Mo. 143; Carter v. Hobbs, 92 F. 594; Reed v. Vaughn, 10 Mo. 447; In re Columbia Real Estate Company, 101 F. 965; Hays v. Ford, 55 Ind. 52.
G. W. Barnett and E. C. White for respondent.
(1) Under the statutes of the State, replevin will lie where the defendant wrongfully detains plaintiff's personal property, without regard to how defendant got possession, or in what capacity he is holding it, unless it has been seized under some process, execution or attachment against the property of plaintiff. R. S. 1899, sec. 4463. (2) Plaintiff's property is not in custodia legis, so as to defeat the action of replevin, where it has come into the hands of an officer in a proceeding to which plaintiff is not a party. Whatever may be the law in other jurisdictions, this is clearly the law in Missouri. Mohr v. Langan et al., 162 Mo. 474; Overruling Bank v. Owens, 79 Mo. 429; Winn v. Madden, 18 Mo.App. 261; Criley v. Vasel, 52 Mo. 445; Bradley v. Holloway, 28 Mo. 150; Railway v. Castillo, 28 Mo. 379; Boot & Shoe Co. v. Bain, 46 Mo.App. 581. (3) But the property in this case was not in the custody of the law; it was not in the custody of any court. While the referee in bankruptcy is an officer of the court, the trustee is not, but is selected by the creditors. Section 44, Bankrupt Act. The strongest case cited by appellant, White v. Schloerb, 178 U.S. 542, recognizes this distinction, and calls especial attention to the fact, that the property was still in the hands of the referee, who is an officer of the court, and had not yet been turned over to the trustee. This same distinction is recognized in the Nugent case, 184 U. S. (4) The defendant, as trustee, had no greater rights or better title to the property in question, than the bankrupt had. The trustee took only a defeasible title of the bankrupt, as the plaintiff could have recovered the property from Huyssen & Holm, he can not recover from the trustee. Donaldson v. Farwell, 93 U.S. 631; Fletcher Estate v. Morey, 2 Story 555, 9 Fed. Case 266; Field v. Baker, 12 Blatchf. 438, 9 Fed. Case 9; In re Conner, 112 F. 666; Cook v. Tullis, 18 Wall. 332; Hawkins v. Blake, 108 U.S. 422; Yeatman v. Sav. Inst. 95 U.S. 764; Windsor v. McLellan, 2 Story 492; Safford v. Burges, 21 Fed. Case 145; Ex parte Newhall, 2 Story 360; Mitchell v. Winslow, 2 Story 630.
--This is an action of replevin to recover certain personal property consisting of men's knit, felt and rubber boots. The plaintiff is a manufacturing company incorporated under the laws of the State of Indiana.
The cause was submitted to the circuit court upon an agreed statement of facts which was to the effect: (1) That Huyssen & Holm were partners engaged in the boot and shoe business in this State; that they procured the goods described in the plaintiff's petition on a written order in which, amongst other things, it was recited that, "the title and property in all the goods herein mentioned shall remain in the vendor until fully paid for or sold in due course of business by the buyer, and if payment for the same shall not be promptly made when due, or, if at any time before the same shall be fully paid for or sold in the due course of business by the purchaser, the purchaser shall become insolvent or shall, in the opinion of the vendor, be in danger of insolvency, or the vendor, in its judgment, shall for any reason whatever deem itself in danger of losing the price of said goods, then the vendor may at its option reclaim and take possession of so much of said goods as shall then remain in the hands of the purchaser unsold." The order with the foregoing condition incorporated therein was not acknowledged and recorded as required by section 3412, Revised Statutes. (2) That the goods described in said order were delivered to Huyssen & Holm, and part of them sold and delivered to customers prior to the time when they made application to become voluntary bankrupts. (3) That Huyssen & Holm filed their petition in the District Court of the United States for the Western District of Missouri to be adjudged bankrupts and were so adjudged December 1, 1901. (4) That prior to the adjudication in bankruptcy the defendant was appointed by said United States District Court as receivers of the stock of goods and of the assets of Huyssen & Holm, to preserve the same under the Federal Bankrupt Act, and said goods in dispute, with the other goods, wares and merchandise in their possession, were turned over to him as such receiver by Huyssen & Holm. That afterwards, by its proper order, this defendant was appointed trustee of the estate of said bankrupts by said court; that as such receiver, he took possession of all the stock of goods, wares and merchandise in the possession of Huyssen & Holm, including what remained of the goods delivered by plaintiff to said Huyssen & Holm, claiming them as a part of the bankrupt estate, and that upon being appointed trustee (under the Bankrupt Act) of said estate, he turned over to himself all of said goods, wares and merchandise, and cease to hold them as received, and from thenceforward held them as trustee and claiming them as belonging to the bankrupt's estate and as subject to disposition under the Bankrupt Act under the orders of said United States District Court. That afterwards, he had all said goods inventoried and appraised as part of the estate, and that afterwards the said United States District Court ordered all said goods, including the goods claimed in this proceeding, sold as part of the bankrupt's estate, to pay claims allowed against the estate, and, in pursuance of said order of sale, bids were advertised for and afterwards, on the 6th day of January, 1902, when said bids had been opened and said sale about to be consummated, the defendant was served with a writ of summons and order of delivery in this cause, summoning him to appear and answer the plaintiff's petition that day filed in the circuit court of Pettis county, Missouri. Thereupon, it was by the parties hereto, agreed that the defendant might sell the goods replevined and the proceeds thereof should remain in lieu of said goods in the hands of the trustee to await the determination of this suit.
Upon the facts agreed the finding and judgment was for the plaintiff; and after an unsuccessful motion for a new trial, the defendant appealed.
The defense pleaded and relied on by the defendant in his answer was, that at the time of the commencement of the action the property, the possession of which it was thereby sought to recover, was in the custody of the law and under the control of the United States District Court, and that therefore the State court in which the action was brought was without jurisdiction. And so the question thus presented is, whether or not the replevined property was in custodia legis, or whether or not such property may be taken from the custody of the trustee under the writ of replevin issuing out of a State court?
Whether or not the property at the time was in custodia legis must be determined with reference to the Bankruptcy Act of 1898. By section 2 ...
To continue reading
Request your trial