State v. German Exchange Bank

90 N.W. 570, 114 Wis. 436, 1902 Wisc. LEXIS 168
CourtWisconsin Supreme Court
DecidedMay 13, 1902
StatusPublished
Cited by5 cases

This text of 90 N.W. 570 (State v. German Exchange Bank) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. German Exchange Bank, 90 N.W. 570, 114 Wis. 436, 1902 Wisc. LEXIS 168 (Wis. 1902).

Opinion

Maeshall, T.

Respondents’ counsel, pointing to Allen v. Boberg, 108 Wis. 282, 84 N. W. 421, for support, contend that the order is not appealable. In the case cited the order dismissed the suit as to one defendant, leaving it to proceed to final judgment as to others. We fail to observe any similarity between that situation and the one before us. The order in question was not entered between the parties to the action against the Kerstens. It was entered in a special proceeding instituted therein by the trustee in bankruptcy, who appeared in the state court for that purpose only. If the action were to proceed to judgment, an appeal therefrom would not bring the order up for review. That terminated [439]*439tbe special proceeding. It affected a substantial' right. Therefore it is appealable under the plain language of subd. 2, sec. 3069, Stats. 1898, unless it must be held otherwise upon the ground that the order was proper in the exercise of judicial discretion.

Connell, being a sole trustee, possessed, as such, at the time of his death, of personal property, the legal title thereto passed to his representative, the administrator of his estate. Such representative was bound to execute the trust1 so far as necessary to preserve the subject thereof till he should account to a successor appointed by the court, and was entitled to take all necessary proceedings to secure a settlement of the deceased receiver’s accounts. Perry, Trusts, §§ 341-344; 2 Woerner, Adm’n, § 321; Schenck v. Schenck, 16 N. J. Eq. 174, 182. Therefore it was proper to allow him to be substituted as appellant in this court for the purpose of prosecuting this appeal to a final determination.

The federal court did not decide that the bankruptcy proceeding entirely superseded the jurisdiction of the state court in the receivership casé, leaving the latter no authority in the matter other than to order the property in the hands of the receiver turned over to the trustee. That is clearly indicated by the opinion of the district judge, which appears in the record. It was competent for the federal court to declare the Kerstens bankrupts and to take such proceedings as were necessary to have a trustee elected and qualified to administer their affairs in that court, leaving the question of its jurisdiction over the property in the hands of the receiver appointed by the state court, for subsequent determination. It took that course. The trustee then presented to the latter court for consideration the question of his authority over the estates of the bankrupts in its charge. He did not, so far as appears, obtain any adjudication of his right in the matter or judicial advice in respect thereto in his own jurisdiction. On the hearing on such question in [440]*440tbe state court all persons interested seem to bave consented to its relinquishing jurisdiction of the property to the trustee, except the receiver, and his objection went no further than to question the trustee’s right thereto in advance of the former’s account for services and expenses being adjusted and paid by the court that appointed him. True, the circuit judge made the order complained of upon the theory that the jurisdiction of his court over the property terminated with the adjudication in bankruptcy, but no such effect of such adjudication had theretofore been asserted by the federal court, nor was it,' so far as appears, asserted thereafter. Whether the lower court’s theory is right or not we do not deem necessary to decide on this appeal. Since all parties interested as creditors, as before indicated, have submitted to the jurisdiction of the federal court, and the order relinquishing the property to the trustee was so framed that whatever legal claim the receiver had at the time of the entry thereof was not affected thereby but will follow the property covered by it into the hands of the trustee as a lien thereon, the receiver was not prejudiced by such order. Under the circumstances the circuit court was not without power to turn the property over to the federal court, so long as the rights of its officer were reasonably protected. The superior jurisdiction of the federal court over the property having been conceded, the proper manner of protecting the receiver in his right to compensation for services and expenses became a mere matter of judicial administration, and the action of the circuit court in respect thereto cannot be disturbed except for manifest abuse.

How the order appealed from can be justified upon the theory of the court below is not entirely clear, as a reference to the following authorities will indicate: In re Whipple, 6 Biss. 516, 29 Fed. Gas. 929, 11 Nat. Bankr. R. 524; In re Clark, 5 Fed. Gas. 835, 838; Clark v. Binninger, 39 How. Prac. 363; In re Lengert Wagon Co. 6 Am. Bankr. R. 535, [441]*441110 Fed. 927; In re Independent Ins. Co. 6 Nat. Bankr. R. 260, 13 Fed. Gas. 13; Black, Bankruptcy, 260; Thornhill v. Bank of La. 3 Fed. Gas. 1139. In In re Clark, supra, tbe court beld that jurisdiction over tbe assets of a person, acquired by tbe original exercise of tbe jurisdiction of a court of equity, is not superseded by a subsequent adjudication in tbe federal court declaring tbe owner thereof a bankrupt. Tbe following language is used in tbe opinion by Mr. Justice Blatcheoed :

“When property is lawfully placed in tbe custody of a receiver by tbe court wbicb appoints sucb receiver, it is in tbe custody, and under tbe protection and control, of sucb court, for tbe time being, and no other court has a right to interfere with sucb possession, unless .it be some court which has a direct supervisory control over tbe court whose process has first taken possession, or some superior jurisdiction in tbe premises. In tbe present posture of this case it does not appear that this court has sucb superior jurisdiction in tbe premises, or sucb supervisory control over tbe state court, in respect to the property in question, as to authorize it to take away from the state court the possession of sucb property, or to enjoin tbe receivers from further interfering with sucb property.”

In Thornhill v. Bank, opinion by Woods, Circuit Judge, it was beld that a law specially providing for tbe winding up of insolvent banking institutions and tbe distribution of their assets, — a law similar, in many respects, to tbe law of this state under wbicb tbe proceeding was commenced in tbe state court in which tbe receiver was appointed, — was a bankrupt law, and was suspended by tbe bankrupt act. Judge SbamaN, in bis opinion in tbe bankruptcy proceeding in question, recognized the legality of tbe proceedings in tbe state court appointing tbe receiver, and tbe existence of some doubt as to tbe power of tbe federal court to take tbe property from him in a compulsory way; that a solution of that question might involve a determination as to whether our state law in regard to winding up insolvent banking corpora[442]*442tions so far partakes of the character of a bankrupt act as to be entirely displaced by the national bankruptcy law.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Hartberg v. American Founders Securities Co.
249 N.W. 48 (Wisconsin Supreme Court, 1933)
Ajax Rubber Co. v. Western Petroleum Co.
200 N.W. 668 (Wisconsin Supreme Court, 1924)
Shannon v. Shepard Manufacturing Co.
230 Mass. 224 (Massachusetts Supreme Judicial Court, 1918)
Hume v. Myers
242 F. 827 (Fourth Circuit, 1917)
Kingston v. Kingston
102 N.W. 577 (Wisconsin Supreme Court, 1905)

Cite This Page — Counsel Stack

Bluebook (online)
90 N.W. 570, 114 Wis. 436, 1902 Wisc. LEXIS 168, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-german-exchange-bank-wis-1902.