Court Opinion

ID: 6602061
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:08:35.235768+00
Date Added: 2024-06-11T15:58:01.196531
License: Public Domain

Cole, J.
The circuit court clearly ruled that taking the property in controversy from the possession of the plaintiff, *136was not justified by the attachment; “that that was an unlawful act.” The principle was recognized, that under the state law a debtor had the right to prefer one creditor to another, and that the plaintiff acquired, by virtue of the bill of sale executed by Giles, a good title to the property, the bankrupt law being out of the question. But the court held, if the sale from Giles to the plaintiff was fraudulent and void under the provisions of the bankrupt law, that then only nominal damages could be recovered in the action. Indeed, the cause seems to have been tried wholly with reference to the bankrupt law, and upon the theory that the circuit court should exert its jurisdiction to enforce the penal provisions of that act. It is obvious that this was directly in the teeth of Brigham, Assignee, v. Olcoflvn, 31 "Wis., 607. In that case it was held that the courts of this state would not take jurisdiction of an action brought by the assignee in bankruptcy to recover the value of goods transferred in fraud of the bankrupt law, but that the proper tribunal for avoiding the 'sale was the bankrupt court. That decision certainly rules this case, and shows that the court below erred in submitting to the jury the question whether or not the sale from Giles to the plaintiff was fraudulent under the bankrupt law. The proper forum for litigating that question was the bankrupt court. The learned circuit judge remarked in his charge, that the bankrupt act was a law of the land, entitled to be respected as such, and to be carried out and enforced in all its import and vigor, just as any law which stands upon the statute book of the state. This is true in a certain sense, but plainly is not true in the sense in which the case was put to the jury, as the observations already made show. It has been decided that the state courts should not enforce, the penal provisions of that law, although they are doubtless bound to respect and sustain titles derived through bankrupt proceedings, and will give full effect to the adjudications of the bankrupt court. And had the sale from Giles to the plaintiff been avoided by any *137proper proceeding in the bankrupt court, and the property adjudged to be a part of the estate of the bankrupt, it would be the duty of the state court to carry out and enforce that decision whenever its jurisdiction was invoked. But that is quite a different matter from the state court attempting itself to-annul a sale valid under the state law because it was designed to give a preference to a creditor which was prohibited by the bankrupt act.
The bill of sale under -which the plaintiff claims was executed April 17, 1875, and actual possession of the property was delivered under it. The property remained in the plaintiff’s possession until it was taken on the attachment against Giles by the deputy sheriff. It appears that early in May, Giles, on bis own petition, was adjudged a bankrupt, and the marshal took the property from the possession of the deputy sheriff under a warrant from the bankrupt court. The property was afterwards sold by the assignee. As before remarked, the court decided that the defendants could not justify the taking and conversion of the property under the attachment; and further held that the marshal bad no right to take it under bis warrant, but having taken it and subjected it to the payment of the debts of the bankrupt, if the sale were void under the bankrupt law, no more than nominal damages could be recovered. This view we deem erroneous. It is conceded that the original taking of the property was unlawful, and we perceive no ground for bolding that the plaintiff’s right to recover its value was affected by the bankrupt proceeding. There are cases which bold that when property has been wrongfully taken by the defendant, the fact that it has been applied to the payment of plaintiff’s debt by means of legal process in favor of a third person, may be shown in mitigation of damages. Cotton v. Reed, 2 Wis., 458, and cases cited in the opinion; Kaley v. Shed, 10 Met., 317. And bad the safe to the plaintiff been annulled by a suit at law or in equity, brought by the assignee, as indicated in Smith v. Ma*138son, 14 Wall., 419; Marshall v. Knox, 16 id., 551, and Allen v. Massey, 17 id., 351, then, within the doctrine of Perry v. Chandler, 2 Cush., 237, the fact might be shown in evidence in reduction of the damages. But it is evident that the doctrine of these authorities has no application to the case at bar, for the reason that it is not pretended that the property wrongfully taken lias been appropriated to the payment of the plaintiff’s debt by means of legal process in favor of any creditor of bis; nor has the sale to him been avoided by any proper proceeding in the bankrupt court. The marshal had no right to take the property in the manner be did, and the mere fact that the sale was liable to be declared invalid and fraudulent in some suit which might be instituted by the assignee in the bankrupt court, cannot affect the amount of the recovery, or mitigate the damages. The plaintiff is entitled to recover the full value of the property wrongfully taken from bis possession. Wilkinson v. Wait, 44 Vt., 508.
Tbe judgment of tbe circuit court must therefore be reversed, and a venire de novo awarded.