Duryea v. Muse

Cassoday, C. J. Our statute declaims that: “All voluntary assignments or transfers whatever of any real estate, chattels real, goods or chattels, rights, credits, moneys or effects for the benefit of or in trust for creditors shall be void as against the creditors of the person making the same unless the assignee shall be a resident of this state and shall, before taking possession of the property assigned and before taking upon himself any trust conferred upon him by the instrument of assignment, deliver to the county judge or court commissioner of the county in which such assignor or some one of the assignors at the time of the execution óf such assignment shall reside, not being a creditor of such assignor, a bond duly executed” as therein prescribed. Sec. 1694, Stats. 1898. In the case at bar the assignor was a resident and citizen of Superior, and the assignee was a resident and citizen of Chicago. The assignee gave no bond before or after taking possession of the property assigned, nor before or after taking upon himself the trust conferred upon him by the assignment, [404] as required by that section of the statutes, uor at all. Such being the facts, there can be no question but that prior to the passage of the federal bankrupt law of July 1, 1898, 30 Stat. 544, c. 541 [U. S. Comp. St. 1901, p. 3418], such an assignment would have been “void as against the creditors of the person making the same,” regardless of the question whether or not such assignment was otherwise made in good faith and without-any intent to hinder, delay, or defraud creditors of the assignor. This had been repeatedly held by this court. Cribb v. Hibbard, S., B. & Co. 77 Wis. 199, 208, 209, 46 N. W. 168; Maxwell v. Simonton, 81 Wis. 635, 639, 51 N. W. 869; Fuller & F. Co. v. McHenry, 83 Wis. 573, 582, 53 N. W. 896; Northern Nat. Bank v. Weed, 86 Wis. 212, 56 N. W. 634; Jameson v. Maxcy, 91 Wis. 563, 65 N. W. 492; Sweet, D. & Co. v. Neff, 102 Wis. 482, 78 N. W. 745. The important question presented, therefore, is whether the passage of the federal bankrupt law ipso facto suspended the operation of the provisions of our statute above quoted. Counsel for the appellant seems to think that the decision of this court in a recent case supports his contention. Segnitz v. Garden City B. & T. Co. 101 Wis. 171, 83 N. W. 327. In that case it was held that an assignment made in accordance with the statutes of this state did not operate to transfer the title to personal property in Illinois, at least as against creditor’s residing in that state. In that case our late Brother BaRdeen, speaking for the court, called attention to the fact that ch. 80, S. & B. Ann. Stats., “only assumes to regulate and control the manner in which such assignments shall be made and executed ;” that it “only assumes to deal with the making and administration of common-law assignments;” but that ch. 80a of S. & B. Ann. Stats., formerly ch. 179, R. S. 1878, under the general title of “The Relief of Insolvent Debtors” and “Proceedings in Insolvency,” now incorporated in a modified formpn ch. 80, Stats. 1898., had “added some new features, [405] which led this court to speak of our whole system relating to voluntary assignments as an insolvent law.” Segnitz v. Garden City B. & T. Co. 107 Wis. 174, 175, 83 N. W. 328. Then, after stating some of the features of ch. 80a, S. & B. Ann. Stats., now found in ch. 80, Stats. 1898, he said: “Thus the way was opened to every debtor making an assignment, not only to distribute his property to his creditors, but to demand a discharge from his indebtedness as to every creditor who should come in or accept a dividend. It was, in legal effect, tacking a bankrupt law to the assignment law; and inasmuch as the distribution of the estate depends, not upon the will of the assignor, but upon the positive requirement of the law-making power, we can see no escape from the conclusion that in so far it becomes statutory, and not voluntary. . . . When the state steps in and regulates the distribution of the assigned estate in accordance with conditions which only the sovereign can prescribe, and the conditions so prescribed are such as to bring into play the essential features of a bankrupt law, the operation of the assignment will be limited to the state where' made.” 107 Wis. 176, 83 N. W. 329. Thus it appears that the bankrupt features of the statutes were not found in ch. 80, R. S. 1878, or in ch. 80, S. & B. Ann. Stats., which, as stated by Mr. Justice Bardeen, “only assume to regulate and control the manner in which such assignments shall be made and executed;” that is to say, “with the making and administration of common-law assignments.” Such bankrupt features relate to the distribution of the estate of the insolvent debtor and his discharge from his debts. The distinction so pointed out by Mr. Justice Bardeen is clearly made by the federal court in Missouri, where it was held that: “While the insolvency laws of the several states are superseded by the enactment of the national bankrupt law, this is not the case with state statutes which merely regulate the administration of the trust created by an assignment for the benefit of creditors; and proceedings under such statutes or under a common-law deed of assignment are not void or void [406] able by reason of tire existence merely of a bankrupt law, or unless proceedings in bankruptcy are subsequently instituted against the assignor.” In re Sievers, 91 Fed. 366. As briefly indicated in Binder v. McDonald, 106 Wis. 332 (5), 340, 82 N. W. 156, only “the insolvency features” of ch. 80, Stats. 1898, are “to be regarded as an insolvency law.” In that case it was held that, as there had been no proceedings in bankruptcy under the federal act, the state court had jurisdiction to determine a motion by the assignee under sec. 1694a, Stats. 1898, to dissolve an attachment levied within ten days prior to the making of a voluntary assignment. As already indicated, that section did not include any of the insolvency features of ch. 80, Stats. 1898, but only related to enforcing the assignment. So it is true that the portion of sec. 1694, Stats. 1898, above quoted, only relates to the execution of assignments; and hence it was not ipso fado suspended by the passage of the federal bankrupt law. 2. Counsel contends that that provision of the statute is void because it requires the assignee to be a resident of this state. The purpose of this requirement is obvious. It was to keep the property assigned within the state where the court having “supervision of the proceedings in all voluntary assignments . . . may make all necessary orders for the execution of the same.” Sec. 1693, Stats. 1898. Eor that purpose, and to secure creditors, the bond of the assignee is required to be given. It is claimed that such statute is repugnant to the provision of the federal Constitution which declares that “the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states.” Sec.'2, art. IY, Const. U. S. It was held at an early day that the privileges and immunities thus mentioned were confined to those “which are in their nature fundamental, which belong of right to the citizens of all free governments, and which have at all times been enjoyed by the citizens of the several states which compose this Union from the time of their becoming [407] free, independent, and sovereign.” Corfield v. Coryell, 4 Wash. C. C. 371, cited approvingly in Eingartner v. Illinois S. Co. 94 Wis. 75, 76, 68 N. W. 664. In the language of Mr. Justice Eield, “special privileges enjoyed by citizens in their own states are not secured in other states by this provision.” Paul v. Virginia, 8 Wall. 180. See, also, Slaughter House Cases, 16 Wall. 76, 77. ISlo case is cited, and we find none, holding that the constitutional provision quoted bars a state legislature from regulating the making of assignments in the manner indicated. The same is true as to the abridgment of “the privileges or immunities of citizens of the United States,” in sec. 1, art. XIY, of the amendments to the constitution of the United States. That the state legislature had the power to enact sec. 1694, Stats. 1898, seems to be too plain' for argument. 3. The case is anomalous. The assignment by Guthrie to Muse was void under the statute of this state. It was, moreover, an act of bankruptcy, and made in violation of the federal bankruptcy law. West Co. v. Lea, 174 U. S. 590, 19 Sup. Ct. 836. The plaintiff proceeded in the ordinary way to collect a debt by bringing suit against Guthrie and garnishing Muse, to whom Guthrie had transferred all of his property in violation of the state law and the federal law. [Nevertheless, the court is asked to defeat the plaintiff in order to allow Muse to distribute all of the property of the debtor as prescribed in the void assignment. The contention of the appellant is without foundation. By the Court. — The judgment of the circuit court is affirmed.