In re Assignment of Gilbert

| Wis. | Oct 13, 1896

Pinney, J.

1. Some question was made at the argument •as to the appealability of the order of the circuit court, upon the gronñd that it was not a final order settling and adjusting the assignee’s account, under E. S. sec. 1701, and that the right of appeal that had been given under sec. 16, ch. 385, Laws of 1889, in cases like the present, had been repealed by subd. 2, sec. 1, ch. 212, Laws of 1895, which provides only for appeal from “a final order affecting a substantial right, made in special proceedings.” In Lamont v. Hibbard, Spencer, Bartlett & Co. 88 Wis. 109" court="Wis." date_filed="1894-05-25" href="https://app.midpage.ai/document/lamont-v-hibbard-spencer-bartlett--co-8184586?utm_source=webapp" opinion_id="8184586">88 Wis. 109, it was held that a creditor had sufficient standing and interest to sustain an appeal from proceedings under voluntary assignments. Sec. 16, ch. 385, Laws of 1889, provides that “ appeals may be taken to the supreme court by any such insolvent debtor, or by any creditor, from any order, or judgment, made or entered in such proceedings, by such judge or court.” The appellants had proved their claims against the estate of T. I. Gilbert & Co., and had become parties to the proceedings in the matter of such assignment. "Within the decision of Lamont v. Hibbard, Spencer, Bartlett & Co., the order in question was appealable, under sec. 16 of the act of 1889. Subd. 2, sec. 1, ch. 212, Laws of 1895, was in force, as a part of sec. 3069, E. S., before the act of 1889 allowing appeals and proceedings under voluntary assignments was passed. The entire scope and effect of the act of 1895, amending sec. 3069, was to amend other subdivisions of that section by repeating the section in the act of 1895, as intended to be amended, but leaving subd. 2 intact, and as it was when the act of 1889 allowing appeals in cases like the present was passed. This was a special provision relating to a particular subject, and controlled the general provision relating to the same subject, so far as there was any conflict between them. E. S. sec. 4972, subd. 14. The special provision must be taken still as an exception to the general statute, as amended by the act of 1895. Mead v. Bagnall, 15 Wis. 156" court="Wis." date_filed="1862-05-15" href="https://app.midpage.ai/document/mead-v-bagnall-6598651?utm_source=webapp" opinion_id="6598651">15 Wis. 156-161; Western Bank v. Tallman, 17 Wis. 532; Hancock v. Merriman, 46 Wis. 159" court="Wis." date_filed="1879-01-15" href="https://app.midpage.ai/document/town-of-hancock-v-merriman-6602748?utm_source=webapp" opinion_id="6602748">46 Wis. 159. The intent of the legislature is clear, and sec. 1, ch. 212, Lawá of 1895, does not therefore affect or repeal the special provisions of sec. 16. ch. 385, Laws of 1889. The order was therefore appealable.

2. The firm of T. I. Gilbert & Co., as a partnership, was a member of the firm of Gilbert & Hallenger. The debts of Gilbert & Hallenger were therefore debts for which the firm of T. I. Gilbert & Co. and it's individual members were liable. Their assignment was in trust for all their creditors. Neither of its members had any individual property or estate that passed to their assignee, and it does not appear that they had any individual creditors. Therefore, after the application of partnership property of the firm to the payment of the debts contracted in carrying on its business at Blair, the residue, so far as necessary, would be applicable to the payment of the debts of the firm of Gilbert & Hallenger, for which the firm of T. I. Gilbert & Co., as such, was liable, in so far as the same could not be discharged by and with the assets of the firm of Gilbert & Hallenger. Such debts are clearly included in the words in the assignment of T. I. Gilbert & Co., as “ all other debts of every kind and description ” of that firm, and required by their assignment to be paid out of the proceeds of the assigned property before any residue of such property, or its proceeds, could be reassigned or delivered to the assignors. It is evident from the manner in which the two firms dealt with each other, and the account that was kept between them, that the firm of T. I. Gilbert & Co., as such, was, as it well might be, an individual member, so to speak, of the firm of Gilbert & Hallenger. Bates, Partnership, § 150; Gulick v. Gulick, 14 N. J. Law, 582; In re Hamilton, 1 Fed. Rep. 800; Bullock v. Hubbard, 23 Cal. 495" court="Cal." date_filed="1863-07-01" href="https://app.midpage.ai/document/bullock-v-hubbard-5435379?utm_source=webapp" opinion_id="5435379">23 Cal. 495. Therefore the creditors of Gilbert & Hallenger might, as the contestants in this case did do, come into the case of the T. I. Gilbert & Co. assignment and prove their claims, and obtain payment out of the assets of that firm, after the creditors of the latter firm in their business at Blair have been paid, for any unsatisfied balance remaining unpaid after the application of the assets of Gilbert & Hallenger, and which would constitute a primary fund for their payment. Thayer v. Humphrey, 91 Wis. 276" court="Wis." date_filed="1895-11-08" href="https://app.midpage.ai/document/thayer-v-humphrey-8184961?utm_source=webapp" opinion_id="8184961">91 Wis. 276. The same result would follow if the members of the firm of T. I. Gilbert & Co. were individually liable for such debts of Gilbert & Hallenger, instead of the firm of T. I. Gilbert & Co. being liable for them as such, by reason of its being, as stated, an individual member of the firm of Gilbert & Hallenger.

3. The assets and property sought to be reached by the contestants by their judgments and executions were assigned, for distribution, to the petitioner Trowbridge as the assignee of T. I. Gilbert & Co.; and it would be wholly inconsistent with the theory and purpose of the assignment law to permit the contestants, by means of their executions and levies, to secure to themselves a preference over other creditors of Gilbert & Hallenger having the same rights, as against the estate of T. I. Gilbert & Co. The court had complete jurisdiction over the assignment and the assigned estate. It had supervision of the proceedings in the matter of the assignment, and might make all necessary orders for the execution of the same. E. S. sec. 1693. The contestants, before they commenced their proceedings at law, by filing and proving their claims in the matter of the assignment of T. I. Gilbert & Co. as well as of Gilbert & Hallenger, had thus made themselves parties to the proceedings in the matter of the assignment of T. I. Gilbert & Co., and were in effect suitors before the court in relation to its execution. They had thus conclusively admitted the validity of the assignment and the jurisdiction of the court to make all proper and necessary orders for its execution. Upon general principles the court had a right to control their conduct, as suitors, in relation to the proceedings, and to grant, if need be, an order to restrain them from carrying on an independent proceeding, at law or otherwise, the effect of which would be to embarrass or defeat its power to direct and control the administration of the estate. Having thus become parties to the proceeding, they were barred, and are estopped, not only from disputing the validity of the assignment, but from taking any action which would defeat its purpose, or prevent its proper execution under the direction of the court. Boynton Furnace Co. v. Sorensen, 80 Wis. 594" court="Wis." date_filed="1891-12-15" href="https://app.midpage.ai/document/boynton-furnace-co-v-sorensen-8183818?utm_source=webapp" opinion_id="8183818">80 Wis. 594; Lawson v. Stacy, 82 Wis. 303" court="Wis." date_filed="1892-05-24" href="https://app.midpage.ai/document/lawson-v-stacy-8183990?utm_source=webapp" opinion_id="8183990">82 Wis. 303; Olson v. O’Brien, 16 Minn. 87.

4. The right of the creditors of the firm of Gilbert & Hallenger to prove and proceed against the balance of the assets of the firm of T. I. Gilbert & Co., as above stated, is one personal to each such creditor, to be enforced by him, and not by the assignee of Gilbert & Hallenger. It relates wholly to matters arising in the administration of the estate of T. I. Gilbert & Co., and in which the assignee of Gilbert & Hallenger, as such, had no interest or concern. He has no authority to sue for, get in, or divide any part of that estate; and the rule laid down in the case of Valley L. Co. v. Hogan, 85 Wis. 366" court="Wis." date_filed="1893-05-23" href="https://app.midpage.ai/document/valley-lumber-co-v-hogan-8184294?utm_source=webapp" opinion_id="8184294">85 Wis. 366, is not applicable to the case. Hence the rights of such creditors could not be litigated or prosecuted in his name.

The court rightly restrained the threatened sale of the real estate of the assignors under the executions ujoon judgments in favor of the contestants, and properly ordered the sale of the property and assets of T. I. Gilbert & Co., and the application of the proceeds thereof.

By the Gourt.— The order of the circuit court is affirmed.