Mishawaka Woolen Manufacturing Co. v. Teasdale

129 N.W. 671, 145 Wis. 73, 1911 Wisc. LEXIS 11

• Court: Wisconsin Supreme Court
• Decided: January 31, 1911
• Status: Published

Opinion

Viitje, J.

Under the provisions of see. 2317, Stats. (1898), the contract set out in the complaint is void as to creditors of the vendee without notice. That section reads r

“No contract for the sale of personal property, by the terms of which the title is to remain in the vendor and the possession thereof in the vendee until the purchase price is paid or other conditions of sale are complied with, shall he valid as against any other person than the parties thereto and those having notice thereof unless such contract shall he in writing,, subscribed by the parties, and the same or a copy thereof shall be filed in the office of the clerk of the town, city or village where the vendee resides, or if he shall not be a resident of the state then in the office of the clerk of the town, city or village where the property may be at the time of making such contract, and such clerk shall file, keep and index the same in like manner as mortgages of personal property and receive a like compensation therefor; but the effect of such filing shall not extend for more than one year after the time fixed for payment of the contract price or for the performance of the other conditions of such sale.”

In the case of S. L. Sheldon Co. v. Mayers, 81 Wis. 627, 51 N. W. 1082, it was held that such a contract was void as to the assignee for the benefit of creditors of the vendee; that as to them, title passed to the vendee, and the assignee was entitled to the possession of the property sold under the contract. The decision in that case governs this. True, it was decided under the provisions of ch. 170, Laws of 1882, which reads:

“In all cases of voluntary assignment for the benefit of creditors made under the provisions of ch. 80 of the Revised Statutes, tlie assignee or assignees shall be considered as representing the rights and interests of the creditors of the debtor or debtors making the assignment, as against all transfers and conveyances of property which would be held to be fraudulent or void as to creditors; and shall have al-1 the rights which such creditors would have to bring and maintain an action to avoid such fraudulent conveyances and transfers.”

That chapter was repealed by the Statutes of 1898, but sec. 1693c, Stats. (Supp. 1906), enacted in 1901 (ch. 207), ■confers upon the assignee all the rights conferred by ch. 170, Laws of 1882, and additional ones also. That section provides :

“In all cases of voluntary assignment for the benefit of ■creditors made under the provisions of the laws of this state the assignee or assignees shall be considered as representing the rights and interests of the creditors of the debtor or debtors making the assignment, as against all transfers and conveyances of property and all liens or charges thereon which would be held to be fraudulent or void as to. creditors; and ¡shall have all the rights which such creditors would have to bring and maintain an action to avoid said fraudulent conveyances and transfers.”

It is evident that if ch. 170 was broad enough to confer ■upon the assignee the rights of creditors sufficiently to render the conditional sale void as to him, then all the more so must sec., 1693c confer such rights, for it contains all the provisions ■of ch. 170 and, in addition thereto, after the words “and conveyances of property” the words “and all liens and charges thereon.”

Our attention is called to the federal rule that a trustee in bankruptcy takes only such title as the bankrupt held and •acquires no greater rights than he had. 1 Remington, Bankr. § 1144; In re Pittsburgh Ind. Iron Works, 179 Fed. 151. That is the federal rule unaffected by statute. The same rule prevailed in this state previous to the enactment of ch. 170, Laws of 1882. See Hawks v. Pritzlaff, 51 Wis. , 7 N. W. 303. But the federal courts also hold that where there has been some transfer or incumbrance of property void as to creditors by state law for want of record or otherwise, the trustee succeeds to the rights of any creditor who' may be qualified under the state law to avoid the transfers or incumbrances or to take advantage of the fraud. 1 Remington, Bankr. § 1207. The state statute and the interpretation given it by the highest court thereof as to ownership and other interests in property will control the federal courts, unless affected by the peculiar provisions of the bankruptcy act itself. 1 Remington, Bankr. § 1139; York Mfg. Co. v. Cassell, 201 U. S. 344, 26 Sup. Ct. 481. The circuit court properly sustained the demurrer to the complaint.

By the Court. — Order affirmed.