Cleland v. Anderson

66 Neb. 252 | Neb. | 1902

Lead Opinion

Pound, C.

Anderson, one of the defendants in error, who will be referred to as plaintiff, brought this action against Cle-land, Carroll, Back and West, and the Nebraska Retail Lumber Dealers’ Association', who will be called defendants, under section 11, chapter 91a, Compiled Statutes,^* 1901, to recover damages sustained by reason of an alleged unlawful combination and conspiracy to prevent competition, regulate prices, and control the purchase and sale of lumber, whereby he alleged he had been driven out of business as a dealer in lumber, and forced into bankruptcy. Plaintiff was a contractor and builder and alleged also that he was a buyer, seller and shipper of lumber at wholesale and retail, doing business at Gothenburg and North Platte, and maintaining a lumber yard at the place last named. Cleland was secretary of the defendant association. The defendants Carroll, Back and West were retail dealers at Gothenburg, and Carroll was a member of the association. It appears in evidence that in May, 1899, the defendants Carroll, West and Back, with three retail lumber dealers at North Platte, members of the association, signed a circular, which was signed and attested by the defendant Cleland as secretary of the association, addressed “To the Trade,” in which they set forth that “there; is no such concern as the Anderson Lumber Co. of North Platte,” that G. E. Anderson is not a “regular dealer,” and “warn all shippers and dealers to refrain from quoting or shipping to either of the above names or by their order.” This circular was printed at Fremont, where the secretary of the association resided, and was shown to- have been sent to wholesale dealers of whom plaintiff had been purchasing. It was also shown that members of the association had sent letters and telegrams to wholesale dealers protesting against sales to plaintiff, or stating that he was not a regular dealer entitled to buy at wholesale as such. The constitution and by-laws of the association were put in evidence, and from them it appears that the object and purpose of the organization, among other things, are to prevent its members from being subjected to competition of wholesalers. They provide who, shall be considered a retail dealer, entitled to purchase at wholesale as such, and require a stock of 75,000 feet, continuously carried, and a yard and office continuously occupied, in order to make a dealer at retail “regular,” so as to be entitled to membership. They provide for a penalty to be levied upon and collected from wholesalers who sell directly to consumers, or to others than “regular” dealers; and they permit wholesale dealers to become “honorary members.” There are other provisions in the constitution and by-laws whereby 'similar organizations in other states are to be advised and warned against irregular dealers, and sales to such persons by the wholesalers. A resolution adopted by the association in February, 1899, is also in evidence, wherein all manufacturers and jobbers of lumber are requested to abstain from selling to certain dealers named, and are “solemnly assured” that the members of the association will not buy of anyone who sells to such dealers under any circumstances. One wholesale dealer, ivho, it appears, had paid a penalty levied upon him for selling to plaintiff, testifies that he ceased to sell to him because of the objections made thereto; and there is evidence tending to show that by reason of the circular, letters and telegrams referred to, plaintiff became unable to buy further of those from whom he had been purchasing, and was driven out of business. The several defenses urged may be stated most conveniently in connection with the points argued in this court. Upon trial to a jury, the court directed a verdict in favor of Back and West, who were not members of the association. The jury found against the remaining defendants, and error is prosecuted from the judgment rendered thereon.

The first and most important question raised relates to the constitutionality of chapter 91a,Compiled Statutes,^* 1901, entitled “Trusts.” Counsel challenge the constitutionality of this statute on three grounds: (1) Because section 9 expressly excepts organizations of laboring men for the purpose of raising wages from its operation, whereby it is contended special and exclusive privileges and immunities are granted to laborers, contrary to section 15, article 3, of the state constitution; (2) because the bill for the act was amended while under consideration by the legislature, and after amendment was not read three times in each house; and (3) on the ground that said section 9, which was probably an inducement to the passage of the act, is broader than its title. The first of these objections is much the most serious. If laborers are clearly within the general scope and reason of the act, so that the provisions exempting them from its operation arbitrarily permit them to do acts in contravention of its terms and purposes which are forbidden to the public at large, there can be no doubt that the statute must fail. Statutes must be general and uniform throughout the state, and must operate alike upon all persons and localities of a class reasonably constituted with reference to the relations and circumstances provided for. State v. Farmers & Merchants’ Irrigation Co., 59 Nebr., 1; Low v. Rees Printing Co.,^* 41 Nebr., 127; Van Horn v. State, 46 Nebr., 62. On the other hand, if the legislature has made a reasonable classification, — not a mere cloak or cover for an arbitrary exemption of certain persons or a certain class of persons, but a natural and proper selection of those who, upon a reasonable view of the mischiefs to be met, should be subject to the regulations prescribed, — and the law is made to operate generally and uniformly upon all of the class so constituted, the constitutional provision in question is not violated. The power of the legislature to make classifications resting upon reasons of public policy and substantial differences of situation or circumstances which naturally suggest the justice or expediency of diverse legislation with respect to the objects classified, is undoubted. Wenham v. State, 65 Nebr., 394; State v. Farmers & Merchants’ Irrigation Co., supra; Cooley, Constitutional 'Limitations [5th ed.], 481. Hence the question to be determined is whether the exception contained in section 9 of the act under consideration is arbitrary and without sound reason, arising from the situation and circumstances of the subject of the legislation (Livingston Loan & Building Ass’n v. Drummond, 49 Nebr., 200, 205), or based on a reasonable and just view of the subject-matter, and the different conditions it presents. Wenham v. State, supra. Applying these principles, and bearing in mind that all doubts are to be resolved so as to uphold the enactments of the legislature, if possible, we think the statute is constitutional and valid. In its letter and spirit, it refers only to combinations and conspiracies of persons engaged in the manufacture, sale and transportation of goods, wares and merchandise, to prevent or hinder competition, and regulate and control prices. No express exception of organizations of laborers intended to maintain or advance wages was necessary to exempt them from its operation. The section in question is inserted, rather, out of abundance of caution, to prevent judicial extension of the terms of the act beyond its scope and purpose, than to grant a privilege or immunity to persons who would otherwise fall within its terms. The distinction between goods and merchandise produced by skill and labor and the skill and labor which produce them is manifest and reasonable. The statute does not say that laborers who have goods, wares or merchandise, the product of labor, for sale, may combine to advance or control the price, but only that the law designed to prevent combinations in restraint of trade in such articles, when produced, shall not be construed to affect organizations formed to regulate the wages or compensation of the labor and skill which produce them. This distinction is suggested in Downing v. Lewis, 56 Nebr., 386, 389. In that case it was held that a laundry was not within the purview of the statute under consideration. It is pointed out very aptly that the business of a laundry is “to make clothes clean rather than to make clean clothes.” In other words, it sells no goods or wares. It merely bestows labor and skill upon them. The purpose of the statute, as stated in that case, is “to prevent manufacturers and dealers in articles of commerce from combining for the purpose of lessening competition, regulating production, and increasing profits.” Labor and skill are not articles of commerce, — at least not in the same sense as the articles thereby produced; and we think the classification which distinguishes between them, and provides for a diversity of legislation with respect to them, is reasonable and proper. The decisions to which Ave have been referred by counsel do not conflict Avith this view. In Low v. Rees Printing Co., 41 Nebr., 127, a statute regulating the hours of labor excepted certain kinds of laborers from its operation. The court held that classification for legislative purposes must have some reasonable basis, and that the exemption in question Avas arbitrary and unreasonable. It will be seen that the exemption in that case applied clearly >to persons Avho would otherwise have fallen within the purview of the statute. The scope and purpose of the act was to regulate the hours of labor, but laborers engaged in certain kinds of work were excepted. In Connolly v. Union Sewer Pipe Co., 22 Sup. Ct. Rep., 431, the statute under consideration exempted agricultural products or live stock, while in the hands of the producer or raiser, from the operation of a statute against combinations in restraint of trade. Here, again, the classification aauis arbitrary and unreasonable. One set of persons might, while others might not, combine to fix the price of precisely the^ same articles. Persons producing and selling ordinary articles of commerce were not alloAved to combine, while those who sold agricultural products or live stock, if raised by themselves, might do so. In the case at bar, the statute applies equally to all kinds of goods and products, and the exception relates only to a matter not Avithin the general scope of the act, which is not necessarily reached by its language nor covered by its intent, even without the section here in question. In Niagara, Fire Ins. Co. v. Cornell, 110 Fed. Rep., 816, the federal circuit court for this district reached the opposite conclusion. The discussion ■ of this point (p. 825) is very brief, and is based on Low v. Rees Printing Co.,^* supra. Tlie court says: “Dozens of statutes have been held invalid by appellate courts which sought to make it invalid for one class of men to do one 'thing and lawful for other men, practically under the same circumstances, to do another, but like, thing.” This is true, but the application made seems to us superficial. It assumes the whole issue. Statutes are not to be set aside lightly, and Ave are unable to concur in the view which the federal court has taken. The other objections urged against the statute in that case have not been argued and are not before us. But we may say that in our judgment it proceeds too much upon questions of expediency, which are for the legislator, rather than the judge, and does not sufficiently attend to the salutary principle that statutes are to be construed so as to make them constitutional and valid, if possible.

The other objections to the constitutionality of the statute do not impress us as very substantial. In State v. Liedtke, 9 Nebr., 490, it was held that an amendment to a bill made by a conference committee after the two houses had failed to agree need not be printed as required by section 11, article 3, of.the constitution, because not within the scope of that section, as determined by its purpose. As to other amendments made to a bill while under consideration by the legislature, we think a fair construction of the constitution does not require that such amendments, or the bill as amended thereby, be read at large before each house on three different days, but that it is sufficient that they be printed, as required by the section in question, arid that the bill, as amended, be adopted by both houses. As the' court observed in State v. Liedtke: “Any other line of construction, if followed in its necessary sequence, would lead to a condition of repeated printings and readings on different days, which would tend to becloud rather than to enlighten the legislator, and would render it impossible to perform the necessary legislation within the forty days to Avhich another section of the constitution limits each session of the legislature.” Pp. 494, 495. The objection that the act is broader than its title is based upon the claim that section 9, already referred to, which provides that nothing in the foregoing sections shall be construed to embrace organizations of laborers to raise or maintain wages, is a special exemption or the grant of a privilege or immunity, which the title does not contemplate. But if Ave have construed that section correctly in passing on its effect upon the validity of the act as a whole, it is in no Avay beyond or without the purposes and objects indicated by the title. It does not add another provision, not embraced in the title; it restricts the provisions that precede it to those matters which the title indicates.

We have next to consider whether under the evidence in this case the organization knoAvn as the Nebraska Retail Lumber Dealers’ Association is an unlaAvful combination so as to subject the members thereof and those who may unite Avith them in furtherance of its objects, to suit under section 11, chapter 91 a, Compiled Statutes,^* and make them liable for the acts of such members or persons uniting Avith them, or some of them, AAdiich result in damage to others. Counsel have urged with no little ingenuity that the objects of the association are entirely lawful, and have cited in support of their position Bohn Mfg. Co. v. Hollis,^† 54 Minn., 223, 55 N. W. Rep., 1119; Macauley v. Tierney,^‡ 19 R. I., 255, 33 Atl. Rep., 1; and Herriman v. Menzies,^§ 115 Cal., 16, 46 Pac. Rep., 730. Those cases follow the principle, established in England in the leading case of Mogul Steamship Co. v. McGregor, 21 Q. B. Div. [Eng.], 544, and reiterated in the recent case of Allen v. Flood [1898], App. Cas. [Eng.], 1, that a number of persons may do jointly or by concert or agreement anything Avhich each of them might do singly. As a general proposition this is beyond controversy, and it is no less true that, the motive with which a right is exercised does not render the exercise thereof unlawful. Allen v. Flood, supra; Letts v. Kessler,^* 54 Ohio St., 73, 42 N. E. Rep., 765; Phelps v. Nowlen,^† 72 N. Y., 39; Jacobson v. Van Boening,^‡ 48 Nebr., 80. Hence, so long as one dealer may lawfully refuse to buy of or sell to another or others, if he pleases, whatever his motive, two or more may exercise the saíne power in concert. On the other hand it is equally well settled that combinations and conspiracies in restraint of trade are unlawful and actionable at common law, and it has been held that combinations between independent dealers which have, the effect of preventing competition are within this rule, without regard to what may be done in pursuance of them, and although the object is merely to protect against ruinous rivalry, without any attempt to charge undue and excessive prices. People v. Sheldon, 139 N. Y., 251 34 N. E. Rep., 785, 23 L. R. A., 221, 36 Am. St. Rep., 690. While persons have a right to withdraw their trade from whom and as they please, they have no right to unite in restraint of competition; and when they go beyond mere withdrawal of business and employ coercion or intimidation to prevent free dealing, a different question is presented. Upon these grounds, the decision in Bohn Mfg. Co. v. Hollis, supra, has been criticised in Jackson v. Stanfield,^§ 137 Inch, 592, 36 N. E. Rep., 345, and an association of lumber dealers in all respects of the same nature as the one here in question held unlawful. The general course of decisions has been to the same effect. More v. Bennett, 140 Ill., 69, 29 N. E. Rep., 888; Lovejoy v. Michels, 88 Mich., 15, 49 N. W. Rep., 901; Buffalo Lubricating Oil Co. v. Standard Oil Co., 106 N. Y., 669, 12 N. E. Rep., 825; Delz v. Winfree, 80 Tex., 400, 16 S. W. Rep., 111; United States v. Jellico Mountain Coal & Coke Co., 46 Fed. Rep., 432. The provisions of section 1, chapter 91a, Compiled Statutes, 1901,^* are very broad, and expressly coyer any combination of dealers intended “to prevent others from conducting or carrying on the same business” or which tends “to prevent or preclude a free and unrestricted competition among themselves or others or the people generally.” The express object of the association in question, is to prevent competition of wholesale dealers in selling directly to contractors and other consumers, and it endeavors not only to prevent this, but to prevent its members from selling in localities where other members are in business, and to prevent wholesalers from selling to dealers who do not carry a stock of 75,000 feet and maintain a permanent yard. . These purposes are clearly in contravention of the statute, and, hoAvever lawful its other objects, render its acts and the acts of its members and those who unite with them therein, so far as they are in furtherance of such purposes, unlawful and actionable. A point is made that a large number of dealers in the state are not members, and that the number of wholesalers who co-operate is relatively small. But the statute meets such a case expressly. It provides that combinations of this nature on the part of “two or more persons” shall be unlawful, and acts of even a single person, intended to prevent others from engaging in the same business, are prohibited. Hence the number of persons who engage in such combinations and the proportion they bear to the whole number of dealers in the same trade, is not material.

A number of errors are assigned upon rulings in the admission of evidence. One of these rulings, as will be seen presently, in our judgment, requires an order of reversal. Hence it will not be necessary to pass upon all of them. But several important questions are raised which will necessarily recur upon a new trial, and should be disposed of at this time. We think it clear, under the provisions of section 11, chapter 91a, Compiled Statutes,^† that a dealer who is injured in any way by an unlawful combination of the character referred to in the preceding-sections may maintain an action against the members thereof, or any one or any number of them, to recover his damages. But counsel contend that unless the association, as such, authorized or participated in the acts whereby the plaintiff was injured, neither the association nor those of its members who did not take part directly in the acts complained of should be held by reason thereof, and that such acts are not admissible in evidence against them. On this ground a number of letters and telegrams sent to wholesale dealers by individual members of the association were objected to, and the admission of this class of evidence is made the basis of several exceptions. We think the rulings of the trial court as to these offers were correct. One of the express objects of the association is to prevent competition by wholesalers in selling to consumers directly, or to retail dealers not eligible to membership in the organization. ’ According to the definition of the constitution and by-laws, plaintiff was a consumer, and was not entitled to become a member. The acts of the secretary and of the other defendants in endeavoring to prevent or hinder sales to the plaintiff were in furtherance of the common design. Hence they might properly be shown in evidence against all, whether directly participated in or expressly authorized by the association, as a whole, or not. These letters and telegrams, the circular, and the resolution passed by the association a few months before, were admissible to establish the nature and extent of the combination, as well as to charge the several persons engaged therein with the consequences of such acts. A well-known text-writer, quoted from in Farley v. Peebles, 50 Nebr., 723, says: “Wherever the writings or words of any of the parties charged with or implicated in a conspiracy can be considered in the nature of an act done in furtherance of the common design, it is admissible in evidence, not only as against the party himself, but as proof of an act from which (inter alia) the jury may infer the conspiracy itself.” 2 Archbold, Criminal Procedure [8th ed.], 621.^* Almost all of the acts, evidence whereof is objected to, were undoubtedly admissible as against those defendants who directly took part in them. If the combination, or the participation of others of the defendants therein, was not shown sufficiently, the court should have been requested to instruct that the evidence could be considered only against those whose acts or declarations were proved. The evidence was properly received. Farley v. Peebles, 50 Nebr., 723.

The defendants pleaded and offered to prove that prior to the commencement- of this action the plaintiff had brought an action for precisely the same wrong against Iddings, Birge and Field, three other members of the association, who had signed the circular above referred to; that pending such action he had gone into bankruptcy, and had listed the pending action among his assets; and that thereupon his interest therein had been duly sold at trustee’s sale, and the purchaser and assignee at such sale had made a settlement with the defendants sued, and satisfied the cause of action in full. This evidence was rejected. We have no doubt that several actions, might have been maintained at the same time against the various parties to the unlawful combination, and that they might have proceeded to judgment without one barring another. But it is equally clear that a satisfaction of any one of the judgments, or of the cause of action as against any of the defendants, would satisfy the whole claim. When an un-liquidated claim for damages against a number of joint wrong-doers is satisfied by one or more of the parties liable, it is extinguished as to all. Bryant v. Reed, 34 Nebr., 720. Hence we have to consider next whether the plaintiff’s interest in the pending action passed to the trustee, so that it was capable of transfer at the sale, and could come into the-hands of the purchaser and assignee who made the settlement._

Section 70^* of the national bankruptcy law provides that all property of the bankrupt shall vest in the trustee Avhich “prior to the filing of the petition he could by any means have transferred.” Defendants offered to prove that the cause of action against Iddings, Birge and Field was the basis of a pending suit at the time bankruptcy proceedings Avere instituted, and the question arises, therefore, Avhether either the cause of action or the interest of the bankrupt in the action based thereon was of such a nature that he might have transferred it “by any means” prior to the institution of the bankruptcy proceedings. It seems to be well settled that causes of action Avhich are purely personal in their nature and of such a character that the bankrupt alone can enforce them, do not pass to or vest in the trustee. In Rogers v. Spence, 13 Mees & Wel. [Eng.], 570, 580, a leading case, Lord Denman said: “As the object of the law is manifestly to benefit creditors, by making all the pecuniary means and property of the bankrupt available to their payment, it has, in furtherance of this object, been construed largely, so as to pass, not only Avhat in strictness may be called the property and debts of the bankrupt,, but also those rights of action to which he Avas entitled for the purpose of recoAmring, in specie, real or personal property, or damages in respect of that Avhich has been unlawfully diminished in value, withheld or taken from him; but causes of action not' falling Avithin this description, but arising out of a wrong personal to the bankrupt, for which he would be entitled to remedy whether his property were diminished or impaired or not, are clearly not within the letter, and have never been held to be within the spirit, of the enactments, even in cases where injuries of this kind may have been accompanied or followed by loss of property.” This principle has been followed in all subsequent cases, and the provisions of later bankruptcy acts appear to have been largely declaratory of the ruling here laid down. Accordingly it has been held that a cause of action for malicious prosecution (In re Haensell, 91 Fed. Rep., 355; Noonan v. Orton, 34 Wis., 259),for deceit (Tufts v. Matthews, 10 Fed. Rep., 609; Zabriskie v. Smith, 13 N. Y. 322; In re Crockett, 2 Ben. [U. S. C. C.], 514, Fed. Cas. No. 3402), or to recover usury under a statute making the cause of action personal to the borrower (Bromley v. Smith, 2 Biss. [U. S. C. C.], 511), will not pass to the assignee or trustee in bankruptcy. We think it reasonably clear that the cause of action in this case was one which, in the absence of legislation making it assignable, would not pass to the trustee. A very similar case -was presented in Murray v. Buell, 76 Wis., 657, 45 N. W. Rep., 667. In that case it Avas held that a cause of action arising out of a conspiracy to monopolize the entire coal business of a city, and to drive a coal dealer out of business, Avas not assignable, either at common laAV or under the statutes of that state. The general rule is that a right of action for injuries affecting the estate, rather than the person, is assignable, so that, for instance, conversion of property, trespass upon land or to personalty, deceit whereby money is fraudulently obtained, negligence resulting in injury to or destruction of property, and matters of that kind, give rise to causes of action which may be assigned. Oh the other hand, injuries affecting the person primarily, such as assault and battery, slander or libel, malicious prosecution, and the like, give rise to causes of action AAdiich are not assignable. The injury in the case at bar may.Avell be held to come within the latter category, and were it not for the provisions of section 455 of the Code of Civil Procedure, Ave -should hold that the interest of the' bankrupt in an action based upon such an injury did not vest in the trustee. But there is another principle which is well settled in this connection, namely, that causes of action which survive and pass to the personal representative may be assigned. It is obvious that if, upon the death of a plaintiff, his cause of action Avould pass to his personal representatives, and be enforceable by them, so as to constitute part of his estate Avhich might be administered for the benefit of creditors, it ought equally to pass to his trustee in bankruptcy for administration to the same end. The rule is universally recognized, that causes of action which survive and may be enforced by the personal representative are assignable, and may be enforced by an assignee. Zabriskie v. Smith, 13 N. Y., 322; Grant v. Ludlow, 8 Ohio St., 1; Stewart v. Balderston, 10 Kan., 131; Chouteau v. Boughton, 100 Mo., 406; Finn v. Corbitt, 36 Mich., 318; 2 Am. & Eng. Ency. Law [2d ed.], 1017. Section 455, Code of Civil Procedure,^* provides that “no action pending in any court shall abate by the death of either or both the parties thereto, except an action for libel, slander, malicious prosecution, assault, or assault and battery, for a nuisance, or against a justice of the peace for misconduct in office.” In Webster v. City of Hastings, 59 Nebr., 563, this court held that by reason of said section an action for personal injuries does not abate by the death of the plaintiff, but may be continued and the cause of action enforced by the plaintiff’s personal representative. As the statute is construed by the court, no action will abate by reason of the death of the plaintiff, whatever the nature of the cause of action upon which it is based, except such as are expressly named. Under that section, therefore, whatever might have been the rule had not an action been pending, it must be held that the interest of the bankrupt in the action brought by him against Iddings, Birge and Field would have passed to his personal representative upon his death, and in consequence was assignable. These considerations serve at once to distinguish the case at bar from Murray v. Buell, supra. In Wisconsin, section 4253 of the statutes of 1898 contains substantially the same provisions as section 454 of our Code.^† Under those provisions, causes of action which would not have survived at common law will not survive now except certain causes of action therein expressly named; and these do not include the one here in question. But the Wisconsin Code contains no such provision as section 455 of our Code, and consequently, whereas it is held in this state that a pending action for a personal injury will not completely abate on the death of plaintiff, but may be revived and carried on by his representative, in Wisconsin it is held that such an action does abate, and may not be maintained by the personal representative, except in so far as the plaintiff seeks to recover for injury to his property, and possibly for expenses of medical attendance and the like. Randall v. Northwestern Telegraph Co., 54 Wis., 140, 11 N. W. Rep., 419. It is clear, therefore, that Murray v. Buell is not an authority in this jurisdiction, and that we have no other course, under the provisions of our Code, than toehold that the plaintiff’s interest in the pending action was of such a nature that it might have been transferred, and, in consequence, came within the express provisions of section 70^* of the bankruptcy act. As to a cause of action of this nature not in suit, under the provisions of section 454, Code of Civil Procedure, and the ruling in Murray v. Buell, supra, we should be inclined to hold that nothing would pass to the trustee. Consequently the plaintiff’s bankruptcy would have no effect upon the present action, unless defendants sustain their allegations as to the action against Iddings, Birge and Field, the sale of plaintiff’s interest therein by the trustee, and the settlement by the pur-' chaser, by competent proof. ’

The petition alleges that the Nebraska Retail Lumber Dealers’ Association is a “chartered association organized under the statutes of the state of Nebraska.” Whether this means that the association is incorporated, is not clear. It certainly does not meet the requirements of the Code as to suits against voluntary associations. Burlington & M. R. R. Co. v. Dick, 7 Nebr., 242. Construing the pleading liberally, after judgment, we should hold that it sufficiently alleges incorporation. But the defendant denied incorporation, and alleged that it was a voluntary association, not organized, to trade or do business in this state, nor to hold property therein; and the evidence shows such to be the fact. The association, as such, does no more than hold certain meetings and choose certain officers, who take the initiative in carrying out its purposes. A voluntary association, unincorporated, which is not organized to carry on some trade or business or to hold property in this state, and does not in fact carry on a trade or business or hold property therein, can not sue or be sued as such. Burlington & M. R. R. Co. v. Dick, 7 Nebr., 242, 246. The individual members are to be sued in such cases, not the association.

Certain of the defendants complain of the action of the trial court in directing a verdict for their co-defendants Back and West. We do not think the fact that these defendants were not members of the association conclusive that they are not liable. They afterwards became members, and if they in fact united with the association,, or some of its members, in furtherance of its unlawful purposes, they brought themselves within the provisions of section 1, chapter 91a, Compiled Statutes. But the plaintiff, not the other defendants, should make this objection. An erroneous instruction directing a verdict in favor of certain defendants, participants in a joint wrong, affords no ground of complaint to co-defendants jointly and severally liable with them. In Gerner v. Yates, 61 Nebr., 100, cited by counsel, the plaintiff complained that one of the defendants had been released improperly, which is quite another matter.

We therefore recommend that the judgment be reversed, and the cause dismissed as to the defendant the Nebraska Retail Lumber Dealers’ Association, but remanded for a new trial as to the defendants Cleland and Carroll.

Barnes, C., concurs. Oldham, C., did not sit.

By the Court: For the reasons stated in the foregoing opinion, the judgment of the district court is reversed, and the cause dismissed as to defendant the Nebraska Retail Lumber Dealers’ Association and remanded for a new trial as to the defendants Cleland and Carroll.

National Bankruptcy Act: Phopkrty. Where the state statutes make a distinction between a plaintiff’s interest in • pending action and his cause of action before suit brought, making the one assignable in eases where the other is not, the interest of a bankrupt in a pending action, which he might sell and assign, and of which his creditors might obtain the benefit on administration of his estate, is to be held “property,” within the purview of subdivision 5, section 70, national bankruptcy act, rather than a “right of action” under subdivision 6.

Reversed and remanded.

The following opinion on rebearing was filed July 3, 1903. Former judgment adhered to:^*

Commissioner’s opinion, Department No. 3.

Pound, C.

Tbe facts are stated at length in the former opinion. It may be desirable, however, to restate briefly the particular circumstances out of which the point argued upon this rehearing arises. Anderson had a cause of action for injury to his business, under section 11, chapter 91 a, Compiled Statutes, against some seven joint tort-feasors. He brought an action against three of them. Pending the action he became bankrupt and listed his interest therein among his assets. In consequence, it was sold, along with his other property, and the purchaser made a settlement with the defendants. Afterwards, he brought the present action against the four other tort-feasors, who set up the settlement and satisfaction in bar. The question is whether the interest of the bankrupt in the pending action passed to the trustee and thence to the purchaser, so as to have enabled the latter to make a settlement.

Section 70^† of the national bankruptcy act, by which this question must be determined, is not entirely clear. While doubtless intended to cover everything of value which ought (o bo applied upon the claims of creditors, it does so in a ,somewhat clumsy and confused form, which makes construction difficult. It provides that the trustee shall be vested with the title of the bankrupt to “all (1) documents relating to his property; (2)'interests in patents, patent rights, copyrights, and trademarks; (3) powers which he might have exercised for his own benefit, but not those which he might have exercised for some other person; (4) property transferred by him in fraud of his creditors; (5) property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him: Provided, That when any bankrupt shall have any insurance policy which has a cash surrender value payable to himself, his estate, or personal representatives, he may, within thirty days after the cash surrender value has been ascertained and stated to the trustee by the company issuing the same, pay or secure to the trustee the sum so ascertained and stated, and continue to hold, own, and carry such policy free from the claims of the creditors participating in the distribution of his estate under the bankruptcy proceedings,, otherwise the policy shall pass to the trustee as assets; and (6) rights of action arising upon contracts or from the unlawful taking or detention of, or injury to, his property.”

We have no doubt that Anderson’s right of action against Iddings, Birge and Field, before suit brought, would not have passed, and that his cause of action against the defendants in the present action did not pass, to the trustee. Subdivision 6 clearly applies in each case; and, as the right of action did not arise upon contract nor from the unlawful taking or detention of, or injury to, the bankrupt’s property, that subdivision leaves it in the bankrupt. But the question remains whether the interest of Anderson in the action pending against Iddings, Birge and Field, at the time he became a bankrupt, as distinguished from his right of action before he brought suit, comes within the purview of subdivision 5, or is likewise to be governed by said subdivision 6. Ordinarily, we should consider the one as standing upon the same ground as the other. The Code, however, makes a clear and important distinction between them; the interest of a plaintiff in a pending action surviving and passing to the' personal representative, so as to be available to creditors, and hence becoming assignable and saleable, in many cases where the cause of action before suit brought would abate. It would be an anomaly indeed if creditors of an estate could take advantage of rights not available to creditors of a bankrupt. A construction which would produce such an anomaly should be avoided if possible. We must look to the state law to see what the bankrupt might “by any means have transferred.” Looking to the laws of this state, and finding that the interest in the pending suit here in controversy was transferable, and that our laws distinguished it from a right of action not in suit, it would seem that this distinction should be borne in mind in construing the general language of the. federal statute, which was meant to be adjusted to the many and diverse local laws and statutes of the several states of the Union, so as to subject all of the debtor’s estate, not exempt or otherwise beyond the reach of creditors, to the payment of his' debts. We think, therefore, that where' the state statutes make a distinction between a plaintiff’s interest in a pending action and his cause of action before suit brought, making the one assignable, in cases where the other is not, the interest' of a bankrupt in a pending action, which he might sell and assign, and of which his creditors might obtain the benefit on administration and distribution of his estate, in case of his death, is to be held “property” within the purview of subdivision 5, rather than a “right of action” under subdivision 6.

It may be said that subdivision 5 must be limited in meaning to tangible or corporeal property, by reason of the context, since subdivisions-2, 3 and 6 relate to particular species of incorporeal or intangible property. But subdivision 5 contains a proviso as to policies of life insurance which negatives this construction, and many valuable rights and species of intangible property have been held to come within its purview. In re Gaylord, 111 Fed. Rep., 717; In re Welling, 113 Fed. Rep., 189; In re Page,^* 46 C. C. A., 160, 107 Fed. Rep., 89; Travellers’ Ins. Co. v. Moses, 68 N. J. Eq., 260, 49 Atl. Rep., 720; In re Slingluff, 106 Fed. Rep., 154; Waldron v. Becker, 33 Misc. Rep., 182, 68 N. Y. Supp., 402.

1. Eight of Action: Tort: Property: National Bankruptcy Act: Pending Action: Trustee in Bankruptcy. A right of action for tort, is not property within the - meaning of the national • bankruptcy act; and, even though an action is pending thereon, such right does not pass to the trustee in bankruptcy. 2. Action for Tort: Statutes: Federal Bankruptcy Act. An action for conspiracy, whereby plaintiff was “driven out of business as a dealer in lumber,” under section 11, chaxiter 91ft, Compiled Statutes, 1901, is an action in tort, and does not arise “from the unlawful tailing or detention' of, or injury to, his property,” within the meaning of the federal bankruptcy act.

We therefore recommend that the former judgment be adhered to.

Dtjffie and Kirkpatrick, CO., concur.

By the Court: For the reasons stated in the foregoing opinion, the former judgment of this court is adhered to.

The following opinion on rehearing ivas filed March 17, 1904. Judgment below affirmed.^† Barnes, J., dissenting:

Sedgwick, J.

In each of the two former opinions in this case, the conclusion is based upon the proposition that a right of action in tort, upon which a suit is pending, passes to a trustee in bankruptcy under the fifth subdivision of the section of the bankruptcy act discussed in those opinions. It is assumed that our statute, which provides that 'a pending action in tort survives upon the death of the plaintiff, would enable ordinary creditors of tbe decedent to reach the cause of action in satisfaction of their claims. This is assuming a premise which is, to say the least, doubtful, and, even if sound, will not support the conclusion derived-therefrom. If a right of action in tort, upon which an action is pending, may under our statute be classed in any sense as property, it does not follow that it is included in the fifth subdivision of the federal statute in question. That statute classifies these matters for itself; it specifies, first, documents; second, interests; third, powers; fourth and fifth, property; and sixth, rights of action. Upon such a classification, it will not do to say that rights of action are property. The plain intention of the statute, is to otherwise classify them and to distinguish, for the purpose of this classification, between property and rights ■of action. The sixth subdivision, therefore, must be taken to specify all rights of action that pass to the trustee in bankruptcy; and, as the right of action involved in this case is not included, it follows that it did not pass.

Upon the last hearing, it was contended that the claim upon which the action is founded is not in tort, but is for injury to property, under the sixth subdivision of the section of the federal statute in question. The argument, is that by the action of the defendants the plaintiff’s business was destroyed, and that business is property, within the meaning of the statute. The gist of the action was the “unlawful conspiracy and combination of the defendants to prevent competition, regulate prices, and control the purchase and sale of lumber.” The resulting injury to plaintiff was that he was “driven out of business as a dealer in lumber and forced into bankruptcy.” The conspiracy was, of course, a tort against the plaintiff and the injury was personal to him. It disqualified him to do business by reason of the position in Avhich it placed him before the business world. His-creditors might, and no doubt would, be benefited by plaintiff’s ability to accumulate money. They were damaged by depriving hint of his ability to do so, through loss of his business reputation, just as they would have been, through the loss of a limb or other physical disability. Damages of this nature do not arise “from the unlawful taking or detention of, or injury to, his property.”

All other questions raised in this litigation seem to have been properly disposed of in the former opinions.

The judgments heretofore entered in this case, are vacated and the judgment of the district court is

Affirmed.

* Cobbey, Annotated Statutes, see. 11510.

* Cobbey, Annotated Statutes, sec. 11508.

* 24 L. R. A., 702, 43 Am. St. Rep., 670.

* 24 L. R. A., 702, 43 Am. St. Rep., 670.

* Cobbey, Annotated Statutes, sec. 11510.

† 21 L. R. A., 337, 40 Am. St. Rep., 319.

‡ 37 L. R. A., 455, 61 Am. St. Rep., 770.

§ 35 L. R. A., 318, 56 Am. St. Rep., 81.

* 40 L. R. A., 177.

† 28 Am. Rep., 93.

‡ 32 L. R. A., 229, 58 Am. St. Rep., 684.

§ 23 L. R. A., 588.

* Cobbyy, Annotated Statutes, sec. 11500, and note.

† Cobbey, Annotated Statutes, sec. 11509, and note.

* The law here laid down by Archbold is based upon the ruling’s of Mr. Justice Bayley in the trial of Henry Hunt and others for the alleged Peterloo riot in 1839. Narratives of State Trials -in the Nineteenth Century, vol. 3, 364-308. — W. P. B.

* 30 U. S. Statutes at Large, p. 565. U. S. Compiled Statutes, 1901, p. 3451.

* Cobbey, Annotated Code, sec. 455.

† Cobbey, Annotated Code, sec. 454.

* 30 U. S. Statutes at Large, p. 565. U. S. Compiled Statutes, 1901, p. 3451.

* Rehearing allowed. See opinion, p. 276, post.

† 30 U. S. Statutes at Large, p. 565. U. S. Compiled Statutes, 1901, p. 3451.

* 59 L. R. A., 94.

† Rehearing allowed.

---

Dissenting Opinion

Barnes, J.,

dissenting.

Having been a member of the department of the commission which formulated the former opinion in this case, I still adhere to that opinion, and therefore dissent, but without writing a dissenting opinion.

Not®. — Assignment of Tortious Rights of Action. — In distinguishing’ between tortious acts which are assignable and those which are not, the test ordinarily is: Will the right of action survive to the personal representatives of the assignor? A right of action for assault and battery, breach of promise, false impi’isonment, malicious prosecution .or slander — in which the damages consist in mental or corporal anguish — is not assignable. But a right of action for conversion, trespass, or case for negligence resulting in the injury or destruction of property, is assignable, for example:

A mere right of action for fraud unconnected with any property which has a legal existence and value, is not assignable. Archer v. Freeman, 124 Cal., 528.

A right of action for official fees illegally exacted, is assignable. Stewart v. Balderston, 10 Kan., 131.

Where an insolvent debtor makes an assignment for the benefit of his creditors, the assignee can not maintain an action against an attaching creditor and the sheriff for injury to the business credit and reputation of his assignor as a result of the alleged malicious levy of a writ of attachment prior to the assignment. Slauson v. Schwabacher, 4 Wash. [St.], 783.

A right to recover damages for a personal tort — false imprisonment — is a mere personal right and is not assignable, even after verdict and before judgment. Hunt v. Conrad, 47 Minn., 557.

A cause of action for fees collected in favor of a de-jure officer against a de-facto officer who wrongfully holds over, is assignable. Platt v. Stout, 14 Abb. Pr., o. s., 178.

Unearned Fees and Salaries of Public Officers, Are Not Assignable; and This, by the Great Weight of Authority, in the Absence of Any Statute.— The public service is protected by protecting those engaged in pel’-forming public duties, aud this, uot ,on the ground of their private interest, but upon that of the necessity of securing the efficiency of the public service, by seeing to it that the funds for its maintenance should be received by those who perform the work, at such periods as the law has appointed for their payment. The particular cases presented were of the assignment of a month’s salary in advance; and the claims were sold at ten per cent, discount. This being a sale and not a loan, presented no question of usury, but was held void as ag-ainst public policy. Opinion by Johnson, J., concurred in by all the judges, including Sanford E. Church and Charles J. Eolger. Bliss v. Lawrence, 58 N. Y., 442; Schloss v. Hewlett, 81 Ala., 266; Bangs v. Dunn, 66 Cal., 72; Ellis v. State, 4 Ind., 1; Holt v. Thurman, 63 S. W. Rep. [Ky., 1901], 280. Contra: State v. Hastings,^* 15 Wis.; *75; Brackett v. Blake, 7 Met. [Mass.], 335; Mulhall v. Quinn, 1 Gray [Mass.], 105; Macomber v. Doane, 2 Allen [Mass.], 541. Assignment held good as to unearned salary of school-teacher. Johnson v. Pacer,^† 78 Ill., 143. The assignment of unearned official salaries, is forbidden by federal statute and in England. Some American courts who have cited English cases-do not appear to have been advised of the latter fact. —W. E. B.

* By a divided court.

† This case arose under an attempt to garnishee the wages .of a school-teacher. The teacher had given an order for unearned salary to a‘preferred creditor; the board of directors accepted the order on condition of the completion of the contract. Another creditor brought the garnishment proceeding. Assig-nment held valid. —W. E. B.

Case Details

Case Name: Cleland v. Anderson

Court Name: Nebraska Supreme Court

Date Published: Nov 6, 1902

Citation: 66 Neb. 252

Docket Number: No. 12,160

Court Abbreviation: Neb.