26 F. 812 | U.S. Circuit Court for the District of Eastern Missouri | 1884
(orally.) The facts, as developed in this case, in a few words, are these: Mr. Yaegerman, having a business establishment, executed a mortgage for an antecedent debt to Miss Betsy Holts, which debt it is alleged had existed for some two or three years. That mortgage, from its terms, was inoperative; in that there were provisions which the law does not tolerate. It occurred to the attorneys of the parties, very properly, that the provisions of that mortgage might invalidate it; therefore it was thought a general assignment should be made under the state law. It was made. The assignee under the state law took possession. The bill was filed here for.injunction. By agreement among the parties the assignee proceeded to sell said property. It was sold. The proceeds are in his hands.
The following opinion was delivered March 2, 1886:
Treat, ,) ., (orally.) In this case of Freund v. Yaegerman, the court, some days ago, passed, a decree, which was withheld, at the request of the parties, for further consideration. I have gone over all the authorities presented on either side, and a great many other authorities not presented in the briefs. The early Missouri cases were determined under an entirely different statute, where the right to prefer in an assignment was a statutory right. In the various courts of the country decisions have been made, under the respective statutes of those states, which throw very little light upon the question under consideration. The nearest cases, perhaps, other than those here, are the New Hampshire and Tennessee cases cited by Mr. Mills in a case decided a few days ago. The question involved in the matter now before the court has undergone adjudication in the federal courts, and never yet been decided expressly by the supreme court of the state. This court would follow the decision of the supreme court of the state if any had been made on the propositions involved. There is one case cited by the counsel for the defendants, by the supreme court, and a recent case by the court of appeals at Kansas City, which seem to come very near to the views he seeks to uphold. Neither of them reaches the point involved here. When the question was first presented in the United otates circuit court for the Western district of Missouri, Judge Kbekel, with the concurrence of Judge McCrary, laid down what he considered the true interpretation of the statute concerning the facts then involved. Subsequently a case arose here in which, sitting alono, I considered it my duty to follow the rulings of the circuit court judge. Subsequently Brother Bee web came on the bench. He did not like
The case before the court falls within that decision. Without discussing the question as to whether the mortgage in this case, executed the same day as the general assignment, was valid on its face or invalid, (and it appears it was invalid,) and admitting — and there is nothing here to show to the contrary — that the mortgagee was a creditor in perfect good faith, the proposition is to be determined whether a mortgage thus executed, conveying the entirety of the insolvent’s estate, followed simultaneously, or a few minutes thereafter, by a general assignment, can operate to defeat that statute of Missouri which says that all creditors shall share pro rata. I have examined all .the authorities named, together with additional authorities cited by the counsel for the defendants, and I still think that Justice Miller’s ruling, in which I fully concur, is the true interpretation of the Missouri statute.
Mr. Goode. The only thing left out in that ruling is that your honor will permit a motion for rehearing, which I would like to argue before Judge Brewer, with your honor, for the reason, as I understand, that you, as well as Judge Brewer, think that Judge Mc-Crary-, in laying down that doctrine, was wrong.
Treat, J. No, you mistake; I think he was right.
Mr. Goode. Judge Brewer thinks he was wrong, and has so expressed himself. Now, Judge Brewer, in his last decision, stated that he wished the United States supreme court, or, rather, our state supreme court, would authoritatively construe that statute. That wish has not been complied with yet. But in the case cited from the Kansas City court of appeals there was an authoritative construction of that statute'satisfactory to myself, and I must concede, while
Treat, J. It was my thought to suggest to the counsel that this hearing should be had before Judge Beewee, but you forced me to hear it, and I have had to decide it in the light of what must be considered the authoritative ruling in this circuit until something happens, which has not happened, in the way of a decision of the supreme court of the state, or Brother Millee overrules himself. It does not become me to overrule Justice Millee.
Mr. Goode. I wish, as Judge Beewee said in my hearing once, and as he has also said in the Nordmeyer Case, 25 Fed. Rep. 71, (reported and read by Mr. Smith,) that he wished the state supreme court would authoritively construe the statute; indicating, by his expression and wish, his belief that they would construe it differently from Justice Millee, and satisfy him that he was right in differing with that opinion. I wish, therefore, to show him the Kansas City court of appeal’s decision, which has, for the first time in the history of any court in this state, construed section 354, and ask him if that is not sufficient authority, I have that confidence in Judge Beewee that he will consider it sufficient, and as ho will be here within 15 days, there will be no harm in granting me that privilege.
Treat, J. I have no objection to your motion. You can file it under the rules. I will not hear the motion until he comeas. There will be no great delay. There -was a difficulty wrhen this case was first presented, which suggested itself to the mind of the court, viz., that here was an officer of the state court, Mr. Carter, who was a general assignee, and, being an officer of the state court, was bound to comply with its provisions with regard to inventories, bonds, etc. To what extent would this court interfere therewith? Why not go into that court, and have the matters determined? Possibly, that court had taken a different view of the question from what this court had taken. But parties came here, and asked to get by a decree of this court what they wrere satisfied they could not get from a decree of the local court. That is the first difficulty. Of course, if they had a constitutional right to come here, this court must uphold their right jurisdiction-ally. Now, what should be done? The original bill, as it stood here, as I have read it, only asked that this mortgage might be decreed a general assignment under the statute. This technical difficulty arose: the fund and the jurisdiction, as of a general assignment, were in the state court. Then, by consent of parties, Mr. Carter, the as-signee of that tribunal, was made a party defendant. That was done to avoid confusion, ete. He came in. Now, the theory of the bill was to declare the mortgage an assignment. Suppose, technically
Mr. Goode. That shows our bona fides.
Treat, J. It is not a question of bona fides, but of comity. Of course, as far as the case discloses, your client Holts — not speaking of the other one — is a creditor to the extent of the amount stated, and the only question is, what is the law ? So far as the bill discloses, there is no question as to the custody of the estate. Otherwise we would have unseemly conflicts between the state and the federal courts.