Morning Telegraph Publishing Co. v. S. B. Hutchinson Co.

109 N.W. 42, 146 Mich. 38, 1906 Mich. LEXIS 849
CourtMichigan Supreme Court
DecidedOctober 1, 1906
DocketDocket No. 15
StatusPublished

This text of 109 N.W. 42 (Morning Telegraph Publishing Co. v. S. B. Hutchinson Co.) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morning Telegraph Publishing Co. v. S. B. Hutchinson Co., 109 N.W. 42, 146 Mich. 38, 1906 Mich. LEXIS 849 (Mich. 1906).

Opinion

Hooker, J.

The plaintiff brought replevin for some type-setting machines against the S. B. Hutchinson Company and John B. Corliss, trustee. The property was taken under the writ and delivered to the plaintiff, a proper bond having been given by him. The affidavit and writ were dated February 25, 1905. The sheriff’s return shows a service of the writ on February 25 th, and delivery of the goods .to the plaintiff on March 2d. Declaration was filed March 10th, and on some day, [39]*39not stated, Corliss, Leete & Joslyn entered their appearance for the defendants, and demanded a copy of the declaration.

On November 2, 1905, Adolphus Pixel, describing himself as trustee of the estate and effects of the S. B. Hutchinson Company, a Michigan corporation, bankrupt, and appearing specially for the purpose, moved the court (1) to set aside the appearance of counsel for the defendant as unauthorized and void; (2) to set aside the service of the writ of replevin, and the seizure of the goods described as null and void; (3) that the action be dismissed; (4) that the plaintiff deliver to Pixel, trustee in bankruptcy, the goods and chattels aforesaid; and (5) if the goods have been disposed of, the value thereof.

No specific ground was stated in the motion. An affidavit was filed as the foundation of the motion. It alleges the filing of a petition in bankruptcy against the S. B. Hutchinson Company on February 23d; that on February 21st the S. B. Hutchinson Company had executed a mortgage to Corliss, trustee, and that such was an act of bankruptcy; that the S. B. Hutchinson Company had been insolvent for many months, and that on February 25th Paddock, a member of the firm of Miller,. Smith, Alexander Sc Paddock, plaintiff’s counsel, having in charge the replevin suit, had reason to believe, and actually did believe, said company to be then insolvent; that subpoena in the bankruptcy case was served on the S. B. Hutchinson Company on February 24th; that deponent was appointed receiver in the bankruptcy proceedings on March 2d; that on March 10th said S. B. Hutchinson Company was adjudicated a bankrupt, and that he qualified as such trustee; that the replevin suit was not commenced until February 25th, after the service of the subpoena in the bankruptcy case; that Corliss, Leete & Joslyn entered a general appearance for the S. B. Hutchinson Company on March 14th, and that he, the trustee, never authorized it, and any authority previous to his appointment had been terminated by the adjudication in [40]*40bankruptcy; that the delay in filing the motion was caused by the delay in filing the sheriff’s return in the replevin case which was not done until some time in October, 1905. A transcript of the record in bankruptcy was also filed. Upon the hearing the motion was denied and proceedings stayed for 30 days. A writ of certiorari has been issued at the instance of the intervener.

We pass all questions relating to the right of a stranger to the record, who has obtained no order permitting him to intervene, to interrupt the proceedings in an action, by removing it to this court on an interlocutory application to dismiss, and assuming, but not deciding, that Act No. 310, Pub. Acts 1905, authorizes such procedure for removal, we proceed to a consideration of the question whether the cause should have been dismissed for want of jurisdiction, as that is the only question that can be raised on this record, if the act applies. Petitioner’s motion rests on the claim that when the petition in bankruptcy was filed, and process was served upon the S. B. Hutchinson Company, the Federal court acquired jurisdiction of the bankrupt’s estate, and constructive possession of all the bankrupt’s property in its possession, or in the possession of its agent; that this property was in the possession of one or the other, and that a seizure upon a writ of replevin issued later, was a violation of the rule that property in the custody of the law is not subject to seizure on judicial process, issued from another court.

It appears that on February 21st Louis Katz, a creditor, caused a writ of attachment to be levied on certain property of the S. B. Hutchinson Company, about 2 p. m. of that day, and it is claimed that the sheriff maintained his possession throughout February 21st, 22d, and 23d. On February 21st the Hutchinson Company made a mortgage to Corliss, in trust for the benefit of certain of its creditors. Corliss accepted the trust on the same day. There is testimony tending to show that he took possession of the property on February 21st, and maintained it until the goods were replevined on the writ in this cause, and the [41]*41referee in bankruptcy seems to have so found. We incline to the opinion that the weight of authority sustains the petitioner’s claim, that jurisdiction, over the property of the bankrupt in his possession, attached with the service of process, and constructive possession thereof was thereby acquired by the Federal court. It is, however, unnecessary to determine this question, for the reason that the case can turn upon another.

At the time that the Federal court process was served this property was not in the possession of the bankrupt. He had parted with such possession, and there is testimony showing it to have been in the hands of Corliss, not in the capacity of agent of the bankrupt, but as a representative of certain creditors, under a conveyance which conferred subh rights, and against whom, by reason of such conveyance, the bankrupt had no right of possession. Consequently when the petition in bankruptcy was filed, the court did not acquire constructive possession, because it could not acquire possession of property held and claimed adversely by third parties. Such party was entitled to a hearing before he could be deprived of his possession. We need not spend time in a .discussion of the means necessary for the petitioner to adopt to acquire possession of such property, if he claimed the adverse holding was fraudulent. It is enough that by reason of the situation that court did not acquire actual or constructive possession, through the filing of the petition in bankruptcy, and had not done so up to the time the plaintiff asserted his claim, by commencing the replevin suit, whereby he terminated the possession of Corliss, and established his own, one no less adverse to the bankrupt. ■ If it be said that Corliss did not have the possession, and that the property was in the actual possession of the sheriff, holding by virtue of a levy of an attachment issued from a State court, the case is not weaker, for it not only shows that it was held adversely by the sheriff, but that actual possession was in the court issuing the attachment, and hence could not be in the Federal court, and before those [42]*42proceedings were terminated the plaintiff acquired his possession through a writ issued by the same court.

That property held adversely at the time the petition in bankruptcy is filed is not the subject of summary appropriation by the district court, and that such a holding as this is an adverse holding are rules deducible from the following cases:

In re Rockwood, 91 Fed. 363, is a case where one holding under a chattel mortgage at the time that the petition in bankruptcy was filed was held to be an adverse claimant and the property was not subject to seizure upon a warrant issued to the marshal. It was said:

“ Section 69 [Act July 1,1898, 30 U. S. Stat. chap. 541] does not confer any authority on the court to arbitrarily deprive her of the possession of property held by her under a claim of title.”

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Cite This Page — Counsel Stack

Bluebook (online)
109 N.W. 42, 146 Mich. 38, 1906 Mich. LEXIS 849, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morning-telegraph-publishing-co-v-s-b-hutchinson-co-mich-1906.