Smith v. Berman

Hill, C. J. (After stating the foregoing facts.) • The conduct of the defendant relied upon by the plaintiff as constituting a trespass may be eondensedly stated as his acts in entering the house without warning and in the absence of the bankrupt, taking possession of the house and the household effects therein, and taking possession of the trunk, removing it from the house, having it opened, and taking therefrom the $1,940 in currency. The plaintiff claimed that the house was her home, which the trustee had no right to enter; that the household effects and the money belonged to her, and the trustee had express notice of her title; and she insists that the acts and conduct of the trustee above stated were tortuous and entitled her to damages, — not only to actual damages for the value of the property which it is alleged the trustee unlawfully took possession of, but also to punitive and exemplary damages arising from circumstances of aggravation in connection with the alleged trespass. The pivotal question, therefore, around which every other question revolves, and upon the decision of which depends the right of recovery, is: In whom was the right of possession, at the time the 269 house was entered, of the property seized by the trustee? If the right of possession, under the law and the facts, was in the trustee in bankruptcy/ it is clear he could not have been guilty of any trespass in asserting that right. If the right of possession was in the plaintiff, of which fact the trustee had notice either actual or constructive, and he nevertheless disregarded that right and violated it, he was guilty of trespass and should be responsible to the plaintiff for the wrongful conversion of her property; and if the jury believed- that there "were circumstances of aggravation, cither in act or intention, in the commission of the tort, she would also be entitled to punitive or exemplary damages. It is admitted that the defendant was not acting in his individual capaeitjq but -was acting as trustee in bankruptcy for Morris Berman, the husband of the plaintiff. It is admitted that he was duly appointed as such trustee on a voluntary petition in bankruptcy, on -which there had been an adjudication, and that he had given bond anck had qualified as such trustee. Under the provisions of the bankruptcy law, upon the filing- of a petition in bankruptcj', followed by an adjudication, all the property in the possession of 'the bankrupt of which he claims ownership passes into the custody of the bankruptcy court, subject to its jurisdiction to determine by plenary action or summary proceeding all adverse or conflicting claims. White v. Schoerb, 178 U. S. 542 (20 Sup. Ct. 1007, 44 L. ed. 1183); In re Schermerhorn, 145 Fed. 341 (76 C. C. A. 215, 16 Am. Bankr. R. 507). As is said by the Supreme Court in the White case, supra: “Property in the ¿etual possession of the bankrupt on the day his case is referred to the referee in bankruptcy thereby becomes property in the lawful possession of and custody of the referee in bankruptcy, and of. the bankruptcy court, whose representative and substitute he was.” “In short, the adjudication operates as a seizure of all the property of the bankrupt, by -which it is taken in custodia legis '. The possession of the bankrupt, without- more, is transferred to the trustee. No demand for the surrender and possession of the bankrupt’s property is necessary.” 2 Eemington onJBankruptcy, § 1807, pp. 1101, 1105, 1106, 1107. On page 1107 of this work the learned author states that “possession of the bankrupt may give jurisdiction to the bankruptcy court, even if the possession is not exclusive, and regardless of the capacity in which he holds, -whether in his own right or as agent for another.” And again, “The trus 270 tee’s right summarily to seize the property found in the possession of the bankrupt or his agent, or in the possession of one not claiming any beneficial interest in it, or to get an order from the bankruptcy court requiring the surrender, is not affected by the fact that liens in,favor of third persons exist on the property, or that third persons, not themselves in possession, are laying claim to the property, -for the property is brought into the bankruptcy court subject to all liens and claims, and the rights of lienholders and claimants will be fully protected, and can be worked out through the machinery of the bankruptcy court.” Idem, § 1816, p. 1113. It is clearly deducible from the above authorities that the title to all the property in the actual or constructive possession of the bankrupt at the date of the filing of the petition, followed by an adjudication, becomes ipso facto vested in the trustee in bankruptcy when appointed and qualified, subject to be administered by the bankruptcy court for the benefit of all claimants, lienholders, and creditors. Being vested with the title, the trustee is not only authorized by the statute to take possession of all the property in the actual or constructive possession of’ the bankrupt, but it is his imperative duty to do so. The question, therefore, recurs: In whom was the right of possession of the personal property in question and the house in question when .the trustee entered the house and took possession of the personal property found therein? If the bankrupt had the custody or possession of the property when he filed liis petition, it follows as a corollary that the trustee in bankruptcy had the right, under the plain provisions of the bankruptcy law, to enter the house and take possession of the property therein, notwithstanding any adverse claim as to title set up by a third person. In other words, if the right of possession was in the trustee in bankruptcy, he had the right to take the property into his possession, and the title to the property was not affected by his possession, but the possession in the trustee was subject to the title to be subsequently determined by the proper tribunal. A general principle of law well settled in this State is ’pertinent at this point, and, when concretely applied, would seem to be controlling. “In this State the husband is the head of the family.” Civil Code of 1895, § 2473. “Possession by the husband with the wife, he being the head of the house, is presumptively his possession.” Broome v. Davis, 87 Ga. 584 (13 S. E. 749). “In this State,” declares Chief Justice 271 Bleckley, “notwithstanding his reduced importance as a domestic factor, the husband is still the head-of his family, and though his wife may reside with him, she does not thereby divest his possession of the homestead, and make the possession her own.” Broome v. Davis, supra. “When husband and wife live together upon land, the possession is presumptively in him as the head of the family, and such joint residence would not alone be sufficient to give notice of any claim of interest in the land by the wife.” Garrard v. Hull, 92 Ga. 787 (20 S. E. 357). These decisions establish the doctrine that when husband and wife live together, the house in which they live and all property in the house, are in the legal possession of the husband as the head of the family, and presumptively the title to such property is also in the husband. The question of title, however, is not important, as possession is the determining factor in every case of this character. In the present case the trustee in bankruptcy is not compelled to invoke the general principle just considered, because the facts proved would seem fully to have justified his official conduct. Of course, when we say official conduct we leave out of consideration, as immaterial and irrelevant, the mere manner or method in which he asserted his rights as an official. It is conceded that the house was rented by the bankrupt at the time of his bankruptcy, and was in his possession under a rental contract when the adjudication in bankruptcy was made. The trustee was therefore entitled to the possession of the house for the remainder, of the term of the lease, whatever it may have been. Chambers v. Calder & Co., 98 Fed. 865; 2 Remington on Bankruptcy, 1118. It is conceded that the bankrupt had scheduled his household goods and had claimed them as the head of the family, and that the goods so scheduled and so claimed were in the house when the trustee entered and took possession. It is shown, by the undisputed evidence, that the house and the household effects had been left in the possession of the bankrupt by the trustee because of the sickness of the bankrupt’s wife. The plaintiff, the wife of the bankrupt, made no claim, prior to the seizure of the household goods by the trustee, to any part of the household goods; nor at the time of the seizure of the household goods did she make any specific claim to any part of them; nor did she at that time notify the trustee that there was any money in the trunk which was in the house, or that she claimed title to' any money therein. The money 272 was subsequently found concealed in the trunk, and it was only after the trunk had been seized by the trustee and opened and the money found therein, and the trunk, with the wearing apparel of herself and child, returned to her, that she made claim to the money. Without extending the discussion, we conclude that the house, the household furniture, and the trunks in the house were all legally in the possession of the bankrupt at the date of the adjudication, and that at the date of the alleged trespass by the trustee all this property was held by the bankrupt by the permission of the trustee, and simply as the agent of the trustee. In other words, the trustee, instead of being a trespasser, was endeavoring to assert and maintain his- possession of the property which presumptively belonged to the bankrupt and to which the trustee was entitled by virtue of his trust, and of which he had previously taken constructive possession when he left the bankrupt in the actual possession thereof. The trustee in bankruptcy, not being guilty of-any trespass against the rights of the plaintiff in connection with the matters charged against him, could not be legally liable in damages to her. Under the facts of this case and the law applicable thereto, we are satisfied that “there is not enough in the suit, independently of the effort to recover the $1,940 and the personal property, to make a case for damages.” And it follows that with the question of trespass and the right to recover damages eliminated, there only remains in the case the claim of the plaintiff’s ownership of the money and the other personal property which the trustee is alleged to have wrongfully converted by his seizure. This question of title is, in our opinion, under the evidence and the law, cognizable only in the bankruptcy court. As stated by Judge New-' man in this very case, “ The suit is in effect a proceeding to recover the property in the possession of-the trustee.” This personal property, having been taken possession of by the bankruptcy court through its lawfully appointed trustee, is thereby withdrawn from the jurisdiction of all other courts. The court, having possession of the property, has exclusive jurisdiction to hear and determine all questions respecting the title, possession or control of the property. Wabash R. Co. v. Adelbert College, 208 U. S. 38 (28 Sup. Ct. 182, 52 L. ed. 379). See opinion of Mr. Justice Moody in Murphy v. Hofman Co., 211 U. S. 562 (29 Sup. Ct. 154, 53 L. ed. 273 327), wlxere the learned Justice collates the decisions bearing on. the question, and deduces from them the proposition that when the court of bankruptcy, through the acts of its officers, such as referees, receivers, or trustees, has taken possession of the res as the property of the bankrupt, it has ancillary jurisdiction to hear and determine the adverse claims of third persons to it, and that its possession can not be disturbed by the process of another court. The foregoing opinion is not at all in conflict with the rule that an action may be brought in the State courts to recover damages for wrongful acts of officers of the bankruptcy court, clearly beyond their duty, to the prejudice of third persons. Berman v. Smith, 171 Fed. 735, and cases cited. We are clear that the evidence in the present case does not make this rule applicable, for here the trustee in bankruptcy was guilty of no wrongful act, as we have endeavored to show, in taking possession of the property in controversy, but was only in the exercise of his duty in the premises. The plaintiff’s title to the property can be fully determined by the court of bankruptcy where the matter was duty referred .by Judge Newman, and where such matters are properly cognizable. That court has lawful possession of the res, and its officer, the trustee in bankruptcy, is under bond to deliver the property to the plaintiff, if she proves her title and if the court decides in her favor. We conclude that when it appeared from the facts proved before the trial court that there was nothing in the suit but the question of title to the res, which was in the rightful possession of the bankruptcy court, and that the defendant was not guilty of trespass, a verdict should have been directed for the defendant, and the plaintiff left, without prejudice, to pursue her remedy in the court of bankruptcy, to recover therefrom the res to which she claimed title. Judgment reversed.