Court Opinion

ID: 6467527
Source: CourtListenerOpinion
Date Created: 2022-06-26 14:07:56.395045+00
Date Added: 2024-06-11T09:11:06.465585
License: Public Domain

OPINION OF THE COURT. MANN, J. The question of law involved is, whether .or not Charles Springer is a bona fide purchaser for value, within the meaning of the proviso in paragraph f of Sec. 67, of the Bankruptcy Act, 30 Stat. L. 565; 1 Fed. St. Am. 693. . The answer to this question depends upon whether or not the trial court in the attachment case had authority to order the sale and if such authority existed, whether or not Springer was a purchaser for value in good faith, and without notice or reasonable cause for inquiry, as to the bankruptcy proceedings. The statute under which the dredge was sold; is section 2716, C. L. 1897, and reads as follows; “In all suits in the District Courts by attachment, when the property attached shall be of a perishable nature,, and liable to be lost or diminished in value before the final adjudication of the case and the defendant shall not give bond to retain the possession of the same, the plaintiff or defendant may make out a petition in writing setting forth the kind, nature and condition of the property, and present said petition to the judge of the district in vacation; and if he shall find it sufficient in form and conditions, he may hear the testimony of witnesses as to the property, and if he shall believe that the interests of both plaintiff and defendant will be promoted by the sale of the propert3r, may order such sale to be made, and direct the manner thereof.” We think this statute is clearly intended to provide for two contingencies (a) When goods are perishable in their nature, (b) When they are liable to be lost or diminished in value before the final adjudication of the case. This must be true, else the second clause of the statute must be taken as wholly meaningless, for property that is “perishable in its nature” would certainly be liable to be lost or diminished in value. It is a well settled rule of statutory construction that “a statute must receive such reasonable construction as will, if possible, make all its parts harmonize with each other, and render it consistent with its scope and object.” 2nd Lewis Sutherland Stat. Cons. (2nd. ed.) Secs. 368-370. The order of sale recites that the dredge in question was deteriorating in value, which brings it within one of the classes specified in the statute, so that the trial court had jurisdiction to order its sale. McCrery v. Berney Natl. Bank., 116 Ala. 224; 67 Am. St. Rep. 105; Bueler v. Woods et al., 43 Mo. App. 494; Young v. Kellar, 94 Mo. 581. Much has been said by counsel in their briefs and many cases cited, as to what kinds of property nray be sold under statutes similar to ours, as perishable, and many cases are to be found which hold that it must be property that has an inherent tendency to decay or become a total loss, such as fruits, fresh, meats, fish and like articles, which from their nature will become a total loss unless sold ¿t once, but the modern doctrine and we think by far the more, practical and common sense view is that stated in McCrery v. Berney Natl. Bank, supra. “This theory would limit the power of the court to order the sale of only such property as contained in itself the elements of spe.edy decay, such as fruits, fish, fresh moats, et cetra, or such as from its nature could be said to be perishable without any evidence to prove the fact and cannot be sustained without giving to our statutes regulating the subject, a constructon so narrow as to defeat the manifest purpose intended to be' accomplished by the legislature in their enactment, and to defeat also in many instances the purpose of the statutes authorizing the remedy by attachment.” The very fact that our statute gives the judge authority to hear the testimony of witnesses as to the property, and if he shall believe that the interests of both plaintiff and defendant will be promoted by the sale of the property, may order such sale to be made and direct the manner thereof, would indicate an intention on the part of the legislature to leave the question of what property or class of property might be thus ordered sold, in the discretion of the judge in each particular ca'se. . It is contended that the judge of the District Court had no power to order the sale because no formal petition therefor appears in the record. The third finding of fact of the learned trial court on page 144, of the record, is to the effect that on the first day of May, 1906, a petition was duly presented to the judge of this court for an order directing the sale of said mining dredge, etc.,” and in the stipulation of corn* sel at p. 120 of the record, Mr. McLeisk, appellant’s counsel states: “The application to sell the dredge was made, as'I understand it, under a statute of this Territory, which provides for the sale of perishable property.” It therefore seems that no such claim was made at the trial, and no such issue raised in the trial court, and this court will therefor indulge the presumption that the petition was duly filed in the absence of affirmative proof to the contrary. If the sale was regularly made upon an order of a court of competent jurisdiction, and if Springer was a purchaser of the dredge in good faith, and without notice, can his title be questioned?  1 The case of Young v. Keller, 94 Mo. 581, is a very instructive case upon this point, and after collating and analyzing the authorities lays down the rule that “where attached property is sold under an order of the court, because of its perishable nature, the purchaser takes a title good, as against the world.” The reason for this rule is obvious, such sales are made upon the theory that it is for the interest of all parties concerned. The title-to the property is in dispute and the property itself in custodia legis to abide the result of the suit. It is made to appear to the court that unless the sale is made the result of the suit will avail neither party, as its value will be diminished or destroyed before the right to the thing can be determined, in due course of law. It is therefore ordered changed from its perishable form into money, which is imperishable so that he who prevails in the suit may not be deprived of the benefits of 1ns victory. 'The purchaser at such a sale stands upon different ground than the ordinary purchaser at a Judicial Sale, upon execution, after judgment. He not only succeeds to the title of the judgment creditor but to the'rights of all parties, to the suit, which may be afterwards determined, and the rights of all the parties to the suit attach to the proceeds of the sale in lieu of the thing sold. 3 The proceeds of this sale then passed to the Trustee in Bankruptcy in lieu of the dredge itself, Springer, the purchaser at the sale, being a bona fide purchaser for value, without notice or reasonable cause for inquiry within the meaning of the proviso to Section 67 f, of the Bankruptcy Act of 1898, (30 Stat. L. 565); Clarke v. Larremore, 188 U. S. 486; in re Kenney, 105 Fed. Rep. 897; Id. 95 Fed. Rep. 427; in re Franks, 95 Fed. Rep. 635. In the case of York Manufacturing Company v. Cassell, 201 H. S. 344, the Supreme Court of the United States, speaking of the rights of the Trustee in Bankruptcy under the present bankruptcy law, through Mr. Justice Peckham says “Under the provisions of the bankrupt act the trustee in bankruptcy is vested with no better-right or title to the bankrupt’s property than belonged to the bankrupt at the time when the trustee’s title accrued, x xxx The remark in Mueller v. Nugent, 184 U. S., that the filing of the petition (in bankruptcy) is a caveat to all the world, and in effect an attachment, and injunction, was made in regard to the particular facts in that case.”  2 In this case neither the court below, the receiver making the sale, or the purchaser had any notice of the bankruptcy proceedings in the United States Court for the Northern District of Illinois. The sale was regularly made, under the .order of the court, and without any knowledge whatever of the bankruptcy proceedings. The court passed upon the necessity of selling the dredge and it was sold. and the proceeds are apparently still in the hands of the court. Under these circumstances the learned trial court was right in refusing to set aside the sale of the dredge and ordering it turned over to the trustee, and the judgment is affirmed.