Court Opinion

ID: 6123546
Source: CourtListenerOpinion
Date Created: 2022-02-04 20:13:25.296607+00
Date Added: 2024-06-11T08:24:24.213905
License: Public Domain

Boardman, J.:
After the defendant was appointed assignee in bankruptcy, he was authorized by the.bankrupt court to saw certain saw-*116logs belonging to the plaintiff in a saw-mill belonging to the bankrupt’s estate. In pursuance of this authority the logs wore afterwards sawed under a contract with the defendant specifying the price to be paid for such sawing. When the logs were sawed and converted into lumber, the lumber belonged to the plaintiff. The defendant, as assignee, had no title thereto. When the defendant converted the lumber to his own use he committed a wrong, and became liable to the plaintiff for the damages arising from his tort. It was of no consequence what wrongful use Watkins made of the converted lumber. It did not change his personal liability into a claim against the bankrupt’s estate even if the proceeds went to such estate. It would prove á gross wrong to the plaintiff to compel him to take a dividend with other creditors of the bankrupt for the tortious act of the assignee in misappropriating plaintiff’s lumber. It would be equally a wrong to the creditors of the bankrupt if they were required to contribute out of the bankrupt’s assets towards the satisfaction of damages arising out of the wrongful and tortious act of the person acting as assignee. The authority given by the bankrupt court to contract to saw plaintiff’s logs did not sanction the appropriation by the assignee of the lumber. In doing that he was acting without authority or right. ■ His official position as assignee would not protect him for the personal wrong done.
If these principles are correct the plaintiff mistook his remedy in bringing his action against' the defendant in his representative character. It was not a claim which could be proved against the bankrupt’s estate, or which was payable therefrom. The cause of action had no relation to the. bankrupt proceedings, and hence ought not to be controlled by the bankrupt law. The action should have been against Watkins personally by reason of his tort in converting to his own use plaintiff’s lumber. To such an action, so far as the case shows, the defendant Watkins had no defence.
Wo conclude, therefore, that in the respect already stated, no cause of action was alleged or proved against the defendant as assignee in bankruptcy.
Upon the same principle services rendered or money paid to Watkins are chargeable to him personally. The services of per*117sons employed by the assignee in the discharge of his duties are expenses to be first paid in full. They are not claims against the estate to be proved and to take dividends on the final distribution. By procuring such services Watkins becomes individually liable therefor, and they are to be allowed to him in his settlement, just as in the case of executors or administrators. If the assignee employs an attorney or other agent in the proper discharge of his duties he will be held personally responsible for the value of his labor. The same rule should apply to the case of money paid by the plaintiff to "Watkins for services to be rendered by him, but •which he fails to perform.
These considerations are, however, of slight importance, since a recovery for the conversion of plaintiff’s property would more than compensate plaintiff for all his losses.
If it were possible in other respects to maintain this action against the assignee to reach the bankrupt’s assets in his hands, we think the State courts have no jurisdiction. By section 711 United States Revised Statutes, subdivision 6, the jurisdiction of the United States courts is exclusive in all cases of matters and proceedings in bankruptcy. The present action is an attempt to reach and share in the bankrupt’s assets in the hands of the assignee, and for that reason it would, if successful, infringe upon the special jurisdiction and duties of the United States courts, as prescribed by the bankrupt law and defined by Judge Andrews in Kidder v. Horrobin (72 N. Y., 167). Besides, the plaintiff in this action was not a creditor of the bankrupt. , If he had been a creditor of the bankrupt, and his suit pending when bankrupt proceedings were commenced, they might have been continued against the assignee to judgment, for the sole purpose of establishing the amount of the debt (Norton, Assignee, v. Switzer, 3 Otto, 355.) But no case has been found where such an action, begun after the appointment of the assignee in a State court, has been sustained.
The plaintiff appears to have a just claim against Watkins, and we should have been glad to have found some way in which a personal judgment could have been rendered against him in this action. But we are unable to see how a judgment can be had or proper relief granted in the present action.
*118The judgment dismissing the plaintiff’s complaint, with costs, must, therefore, be affirmed, with costs.