229 F. 644 | 8th Cir. | 1915
(after stating the facts as above). Thirty-five errors were assigned to the action of the court below, and 14 were specified in the brief as relied upon by plaintiffs in error. Stripped of repetition and alternative statement, the following considerations are presented:
(1) That the court of bankruptcy was without jurisdiction to hear and adjudicate the claim of Thomas A. Smith as against third parties, to wit, the sheriff and attaching creditors; and, as an incident thereto, that the court erred in holding that the judgment of the bankruptcy court, in making the award to Smith, was binding upon plaintiffs in error; further, that Smith and his mortgagee should have been required to litigate the question of ownership in the state court.
(2) That the court erred in refusing to hold as matter of law that Thomas A. Smith and the plaintiff were estopped from asserting title to or interest in the property in question, and, in this connection, that certain evidence tendered by plaintiffs in error, was improperly excluded.
*647 (3) That the court erred in directing a verdict for plaintiff and refusing to direct a verdict for the defendants.
(4) That the court erred in its charge respecting the measure of damages, that the verdict was excessive, and that a new trial should have been granted.
In the foregoing cases nearly every phase of the question presented is discussed and adjudicated. In Chauncey et al. v. Dyke Bros., supra, Judge Thayer made a comprehensive statement of the principle involved, which this court has often cited with approval:
“It, will be conceded that the authority to try the issue which arose between the lien claimants, and to determine their respective priorities, could only be exercised by the bankrupt court in virtue of the fact that by the proceeding in bankruptcy it had acquired the custody ,of the res to which the controversy related. The bankrupt court had no right to assume jurisdiction of a controversy between third parties, in which the trustee was not concerned, and decide whose claim was paramount in equity, merely because the claimants happened to be creditors of the bankrupt estate, or merely because the liens affected a part of the bankrupt’s property. The Bankruptcy Act confers no such authority. But if, in the exercise of its customary jurisdiction, the bankrupt court obtained the lawful custody of the res to which the liens related, or of a fund realized from its sale, then the duty, which was thereby devolved upon it, of distributing the fund among those to whom it rightfully belonged, did empower it to determine tho relative priorities of the conflicting claims to the fund. A court which has lawfully acquired the custody of property or money must of necessity dispose of the same according to law; and, when conflicting claims are preferred, it is not bound to require the claimants*648 to litigate their claims in some other forum, and to adopt the judgment of that tribunal, although it may do so, but it is at liberty to dispose of such controversies according to its own ideas of right and justice. This is one of those incidental powers which may be exercised by any court of record, in the absence of an express prohibition.”
It is true that a court of bankruptcy cannot make final disposition of property or funds in its possession as against third parties without affording to such, by proper notice or its equivalent, an opportunity to appear and assert their claims. Here, however, Smith, Bonfils and Tammen voluntarily appeared and submitted themselves to the jurisdiction of the court. They asked its judgment upon the issues joined. The challenge of the latter was directed at the claim of Smith, rather than at the jurisdiction of the court to decide between them. In any event, all these parties were before .the court asserting a claim to property in its possession, and therefore, as to them, and as to the sheriff as representing Bonfils and Tammen, the requirements of due process were fully satisfied. Furthermore, if either party deemed himself aggrieved by the decree entered by the District Court, that decree was reviewable by appeal. Mound Mines Co. v. Hawthorne, 173 Fed. 882, 97 C. C. A. 394. None was taken. The property was turned back to the sheriff to be dealt with in accordance with the terms of that decree and otherwise in accordance with law; that officer accepted it and proceeded, originally, to sell subject to the adjudication of the court of bankruptcy. The state court, acting upon the representations of the attaching creditors, refused to confirm the sale thus made, and ordered all the property to be sold prior to fin^al determination as that of the defendants in the attachment proceedings. This order was duly executed by the sheriff. Thereupon the defendant in
The distinction between the case at bar and that of a suit on the attachment bond as in Emerson & Co. v. Converse, 106 Iowa, 330, 76 N. W. 705, is apparent. This action was brought originally, not only against the sheriff and Bonfils and Tammen, but against the United States Printing & Lithograph Company as well. The latter company demurred to the complaint, challenging the jurisdiction of the court upon the ground that the plaintiff was a citizen and resident of Pennsylvania and the defendant Printing & Lithograph Company was a citizen and resident of the state of Ohio. The demurrer was sustained, and that defendant is not before this court. The other defendants, however, appeared and answered. They had every opportunity to defend in their own right and in that of any interest represented by them. Whether or not the original order of the court of bankruptcy, awarding an undivided one-half interest in the property to Smith, was binding upon the sheriff, need not, therefore, be considered. The
But complaint is made that the trial court treated said order as binding upon all the defendants before it, and predicated thereon its direction to the jury to find for the plaintiff in some amount. Neither the charge itself nor an examination of the record sustains this contention. The court did say that the one-half interest involved was decreed to Smith as against the defendants Bonfils and Tammen, but it went farther than that. It said:
“When we come to look at the testimony, we have upon this question the testimony of two witnesses. Colonel Cody testified that this property was owned by Major Lillie and Mr. Smith, but in just what proportion he did not know. Smith testified that he owned a half interest in the property, and went into detail concerning his interest. Now there is not a scintilla of evidence in this case to dispute that testimony, as I view the case. Therefore the court instructs you, as I stated a moment ago, the plaintiff is entitled to recover one-half the property upon which this mortgage was given.”
The record supports the trial court in this respect. The evidence upon this point is so clearly preponderant, and of such a conclusive character, that a directed verdict, in the exercise of sound judicial discretion, was justified. Railway Co. v. Oleson, 213 Fed. 329, 130 C. C. A. 31.
“Every sale made by a vendor of goods and chattels in his possession or under his control, and every assignment of goods and chattels, unless the same be accompanied by an immediate delivery and be followed by an actual and continued change of possession of the things sold or assigned, shall be presumed to be fraudulent and void, as against the creditors of the vendor, or the creditors of the person making such assignment, or subsequent purchasers in good faith, and this presumption shall be conclusive.”
It should be noted at the outset that the ruling of the court, as to the ownership of an undivided one-half interest by Smith, was not based upon the bill of sale from Lillie to Smith of July 22, 1913. On the contrary, thp court expressly held that that transfer was subordinate to the lien of the attachment writs. It is further to be noted that the chattel mortgage of defendant in error is relied upon only as conveying an interest of Smith which was superior to and unaffected by any rights flowing from these attachments. The evidence is that Smith was the original owner of this one-half interest in the plant property; that he, in company with Lillie, leased the plant property to the circus corporation. It is true that that corporation exercised dominion over the property, and the same was appropriately labeled to indicate its connection with the circus exhibition. The
These considerations dispose, in large measure, of the assignments of error predicated upon the exclusion of evidence. Furthermore, these alleged errors were not properly preserved as required by the rules of this court which provide that:
“When the error alleged is to the admission or to the rejection of evidence, the assignments of error shall quote the full substance of the evidence admitted or rejected.”
However, an examination of the excluded evidence discloses that it is largely hearsay in its nature and otherwise negative and immaterial in character. AVe perceive no substantial error in its rejection.
It is urged that the court erred in its charge respecting the measure of damages. It said:
“I think in no possible view of the case, under the evidence, the amount that you find should be less than one-half of the amount the property was actually sold for. It was certainly worth that, because It brought that; and if you believe that on the date of the levy of the writ of attachment it was worth more than that, you are entitled to so find, if you can base your finding upon he evidence given upon the trial of the cause.”
It is objected that the-price at which the property was actually sold by the sheriff furnished no criterion of its actual value at the date of the levy. AVhatever merit there may be in this contention is rendered immaterial by other language of the court, and by the subsequent action of the jury. Later in its charge the court said:
“The mortgagee is entitled to recover its value at the time of the levy of the attachment. Whatever that value may be you are to determine from the evidence in the case. Counsel discussed the testimony of several witnesses bearing upon that question. I leave that question to you, to exercise your good judgment, and return such amount as you can say tho half interest in this property was fairly worth at the time of the levy.”
The entire property was sold for $49,257.25; one-half that amount is $24,628.63. The jury returned a verdict for $43,390.55, far in ex
No prejudicial error is disclosed in the record, and the judgment is accordingly affirmed.