Henry Sonneborn & Co. v. Rhodes
Henry Sonneborn & Co. v. Rhodes
Dissenting Opinion
The next inquiry is whether this apparent conflict between these two provisions can be reconciled; for if so, the well settled rule is that it must be done, before resort can be had to the extreme rule whereby the last provision shall be regarded as the latest declaration of the legislative will, and practically operating as a repeal or abrogation of the preceding provision. It seems to me that this apparent conflict between these two provisions of the bankrupt act — -subdivision c and subdivision f — can and should be reconciled by reading the particular or special provision contained in subdivision c, as an exception to the general provisions in subdivision f, under the well settled rule which is thus stated in Endlick on Stat., sec. 216: “Where a general intention is expressed, and also a particular intention which is incompatible with the general one, the particular intention shall be considered an exception to the general one” (citing several cases, amongst which is Churchill v. Crease, 5 Bing., 180, which seems to be a leading case on the subject), and the author proceeds, in the same section, to illustrate the rule as follows : "Hence, if there are two acts, or two provisions in the same act, of which one is special and particular, and clearly includes the matter 'in controversy, whilst the other is general, and would, if standing alone, include it also; and if, reading the general provisions side by side with the particular one, the inclusion of that matter in the former would produce a conflict between it and the special provision, it must be taken that the latter was designed as an exception to the general provision.” To the same effect, see Potter’s Dwarris on Stat., at pp. 272-3, and 23 Ency. of Law, 428, where it is said that the rule applies without regard to priority of enactment of the two provisions. See, also, Townsend v. Little, 109 U. S. Rep., 504, where the rule is said to be well settled' and is thus stated: “That general and specific provisions in apparent contradiction, whether in the same or different statutes, and without regard to priority of enactment, may subsist to
I think that the judgment of the Circuit Court should be reversed.
Opinion of the Court
The opinions herein were filed on this day, but the remittitur stayed on petition for writ of error to United States Supreme Court. No further order having been taken in this Court, the Reporter thinks best to publish the case now.
It seems that between the dates of the 8th day of October, in the year 1898, and the 19th day of the same month and year, Henry Sonneborn & Co. and sixteen other persons, firms and corporations as plaintiffs, respectively, began their respective seventeen actions against Thomas D. Rhodes, as defendant, on money demands which were not yet due, alleging in their complaint that the said Thomas D. Rhodes has assigned, disposed of or secreted some of his property with intent to defraud his creditors, and
“I, therefore, find that as a conclusion of fact, no preference was given or permitted by these attachments, and their .existence and enforcement will not work a preference. I find further,’that neither the 'attaching creditors nor their attorneys had reasonable cause to believe the defendant, Thomas D. Rhodes, was insolvent and in contemplation of bankruptcy when these attachments were taken out, and that the liens created by the attachments were not sought and permitted in fraud of the provisions of the bankrupt act.
“On the 2d of November (several days after these attachments were levied and the property attached had been sold and converted into money, and the money deposited in this Court), a petition in involuntary bankruptcy against Thomas D. Rhodes was filed in the United States District Court for the District of South Carolina, and on this petition the said Thomas D. Rhodes was afterwards adjudged a bankrupt. On the day of November, 1898, Judge Buchanan, upon application of the plaintiffs in most of the attachment suits, ordered that the complaints be amended by inserting the following clause: ‘And that the debt sued for was incurred by the defendant, T. D. Rhodes, through his having obtained property, to wit: said goods, wares and merchandise, by fraud and by pretenses and false representations, and that but for said false pretenses and false representations, said debt could not have been incurred by said T. D. Rhodes.’ After this adjudication in bankruptcy, the petitioner, Robert C. Chase, was appointed as trustee under the terms of the bankruptcy act, and has filed his petition in this Court in this cause, praying ‘that he be held to be entitled to move to set aside said attachments, and that he be
“For matters not resting upon the bankrupt act, the trustee claims: First. That the amendments made to the complaint herein by the order of Judge Buchanan, so far altered and amended the cause of action as to entirely destroy the original cause of action, and create a new one; and the attachments as an incident to that. original cause of action was abandoned and destroyed by the amendments.' Under the Code of Procedure, sec. 194, the Court may, before or after judgment, in furtherance of justice, amend any pleadings, process or proceedings, when the amendment does not change substantially the claim or defense. In the present case, the amendment allowed by Judge Buchanan amends the complaint by characterizing the cause of action sued upon as having been accompanied by the incident that it was occasioned or brought about by false representations and false pretenses. I must assume that Judge Buchanan, when he allowed this amendment, was satisfied that the amendment was one proper to be allowed in furtherance of justice and material, and that it did not substantially change the claim; and his finding upon that point is one, I think, which should control the Court; and I, therefore, hold that the allowing of this amendment did not destroy the action so as that the attachment based thereon was waived and destroyed thereby.
“Second. The next ground advanced by the petitioner, Robert C. Chase, for setting aside the attachments outside of the bankrupt law, is that an attachment cannot be issued in cases of tort or fraud similar to this. I do not think the authorities cited support the contention in the present case. While an attachment may not be allowed in cases of slander or other similar cases where it is impossible to definitely fix
“For matters under the bankrupt law, for which the attachment should be set aside, the petitioner, Robert C. Chase, relies upon: '
“First. Subdiv. c, of sec. 67, of the bankrupt act. That subdivision provides that a lien obtained in or pursuant to any suit or proceedings, including an attachment upon mesne process, which was begun against a person within four months before the filing of a petition for bankruptcy, by or against such person, shall be dissolved by the adjudication of such person .to be bankrupt; if (1) It appears that said lien was obtained and permitted while the defendant was insolvent, and that its existence and enforcement will work a preference. I think the words ‘obtained and permitted * * * so as to work a preference’ in this section mean, that the bankrupt himself shall procure, or by some act of his knowingly suffer and permit an attachment to be procured or entered against him, so as that the party procuring or entering the same shall thereby obtain a preference. As I have already found as a conclusion of fact in this case that these present attachments were obtained without any knowledge or permission on the part of Rhodes, but by his creditors in hostile character against him, for the purpose of protecting themselves against Rhodes’ apparent intention to conceal and dispose of his property so as to defeat the claim of his creditors, I must hold that under this clause the attachments cannot be set aside.
*361 .“The same subdivision c provides further that the attachments should be set aside if, (2) The party ór parties to be benefited thereby had reasonable cause to believe that the defendant was insolvent, and in contemplation of bankruptcy. The evidence does not satisfy me that the creditors who attached in this cause had any reasonable cause to believe that T. D. Rhodes was insolvent. Each creditor attaching knew of the amount of his own claim, but I find no evidence to show that he iwas aware of the aggregate of claims against T. D. Rhodes, so as to be aware that he was insolvent. On the contrary, the attachments in this cause are not predicated upon any supposed insolvency on the part of Rhodes, but upon his attempts to conceal and dispose of his property so as to defraud his creditors, including the particular creditor who attached in each cause. Nor is there any testimony to show that any of the creditors attaching had reason to believe that the defendant, Rhodes, was in contemplation of bankruptcy. I, therefore, hold that under this clause of section 67, also, the attachments cannot be set aside.
“But the language of subdiv. f, sec. 67, is, that all levies, judgments, attachments or other liens obtained through legal proceedings against a person who is insolvent at any time within four months prior to the filing of the petition in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt, and the property affected by the levies, judgments, attachments or other liens shall be deemed wholly discharged and released from the same, and shall pass to the trustee as a part of the- estate of the bankrupt. The language of this section, it seems to me, is imperative. It declares all such attachments obtained against persons who are insolvent at any time within four months prior to the filing of the petition in bankruptcy against them shall be deemed null and void. I, therefore, hold that under the language of this section, which is imperative upon this Court, the attachments in this case were obtained within four months before the adjudication of T. D. Rhodes as a bank*362 rupt, and when he was insolvent, and that, therefore, the attachments must be set aside; and it is so ordered.
“The attaching creditors having expressed to the Court their intention to appeal from this order, it is ordered, that the fund in question shall be retained in the Court subject to the final decision upon appeal of the question involved, unless within the time fixed by law for taking an appeal no appeal was taken, but that if an appeal be-taken, no payment shall be made of the fund in Court to any of the parties until the determination of such appeal; the fund in Court then to be paid in accordance with the ultimate determination upon such appeal.
“With regard to the injunction prayed for in the petition herein, counsel for Robert C. Chase, trustee, have withdrawn any application for injunction, and, therefore, it is not necessary for this Court to consider the same, the original injunction against the attaching creditors having been dissolved by order of Judge Benet, and such attaching creditors being, therefore, not now under any injunction from this Court.”
From this judgment both sides appeal. Petitioner upon the grounds:
“4. That his Honor, the presiding Judge, should have held that in construing a statute due effect, if possible, must be given to every provision of the same, and that where a general provision of any clause or section of a statute seems to contradict or conflict with special provisions contained in any other clause of the provisions of the same, then, and in such case, it should be construed as having been made with a view to such special provisions.
“5. That his Honor, the presiding Judge, should have ruled that in construing the bankrupt act of 1898, effect must be given, if possible, to all of its provisions. And that especially in construing section 67, with its various subdivisions, the same should, if possible, be so construed as to give effect to all of its subdivisions, and then give effect to the section as a whole, and not give such effect to any provisions of any*363 one subdivision as would thereby result in making the provision of any subdivision wholly nugatory.
“6. That his Honor, the presiding Judge, should have held that the provisions of the subdivisions c and f must be construed together, so as to give effect to both, and that this result can be attained only by construing the provisions of subdivision f as containing an exception to the general language thereof in the special provisions of subdivision c. In other words, that subdivision f should be read as containing the proviso that everything therein contained should be subject to the provisions of subdivision c, which said subdivision should be read as a special exception to the provisions contained in the language of subdivision f.
“7. That his Honor, the presiding Judge, erred in holding that the language of subdivision f was imperative on him as follows: ‘The language of this section, it seems, to me, is' imperative. It declares all such attachments obtained against persons who are insolvent at any time within four months prior to the filing of the petition in bankruptcy against them shall be deemed null and void. I, therefore, hold, that under the language of this section, which is imperative upon this Court, the attachments in this case were obtained within four months before the adjudication of T. D. Rhodes as a bankrupt, and when he was insolvent; and that, therefore, the attachments must be set aside, and it is so ordered.’ But, on the contrary, should have held that what was imperative on him was the language of the act, and that in giving effect to the provisions of the subdivision f, he should do so only with regard and consideration to the provisions of the other subdivision of section 67; and that if the force and effect he gave to the subdivision f were such as to practically strike out and render null and void the subdivision c, then, and in such case, it was his duty, if possible, to construe subdivision f so as to leave the provisions of subdivision c with proper force and effect.
“8. That the presiding Judge should have ruled that the attachments in this case were valid and subsistent attach*364 ments under the provisions of subdivision c of the bankrupt act, and give the same due force and effect in connection with the provisions of subdivision f.
“9. That his Honor should have held the attachment creditors entitled to proceed under the attachments, and apply the proceeds of the property attached in the several cases to the judgmnts which they obtained therein.”
The respondent offered the following: “Please take notice, that the respondent proposes to rely upon the following additional ground in order to sustain the order appealed from, viz: That the testimony shows that the attachments attacked were liens by attachments in suits at law which were begun against Rhodes within four months before the filing of the petition in bankruptcy against him, and that it appears that said liens were obtained and permitted while the defendant, Rhodes, was insolvent, and that their existence and enforcement will work a preference, and so said attachments should on this ground have been dissolved. Please take notice, that the respondent proposes to rely upon the following additional grounds, in addition to the one heretofore served upon you, on the 8th day of November, 1899, to sustain the order appealed from, viz: First. That the amendments made to the complaints herein by the order of Judge Buchanan, so far altered and amended the causes of action as to entirely destroy the original causes of action and create new ones, and the attachments as incidents to the original causes of action were abandoned and destroyed by the amendments. Second. That an attachment cannot issue when the ground of such attachment is fraud in contracting the debt for which the action is brought.”
These attachments now sought to be set aside were issued in law actions in the Courts of South Carolina, and not in equity actions in said State. These actions being on the law side of the Court of Common Pleas for Florence County, this Court has no power, under the Constitution of this State, to pass upon any appeals herein based upon supposed errors of the Circuit Judge in any of his findings of fact. Questions of law are presented by both parties litigant in this Court as to subdivisions c and f, of the 67th section of the United States Bankrupt Act, passed in the year 1898. We should always remember that under sec. 3, of art. I., of the Constitution of the United States, Congress is vested with full power to establish uniform laws on the subject of bankruptcy throughout the United States. Congress having passed an act on the subject of bankruptcy, all laws of each State of this Union of States on this subject, or in any manner trenching upon the subject matter of bankruptcy, must be regarded as repealed as if specifically named in an act repealing such State laws. This idea is necessary in the judicial mind as the preliminary to any investigation of matters relating to the national bankrupt act. Whenever, however,
With these few preliminary observations, let us now regard the text of these two parallel columns thus present subdivisions. Appellants by these subdivisions:
Subdivision c.
“A lien created by or obtained in or pursuant to any suit or proceeding at law or in equity, including an attachment upon mesne process or a judgment by confession, which was begun against a person within four months before the filing of a petition in bankruptcy by or against such person, shall be dissolved by the adjudication of such person to be a bankrupt, if (1) it appears that said lien was obtained and permitted while the defendant was insolvent, and that its existence and enforcement will work a preference; or (2) the party or parties to be benefited thereby had reasonable cause to believe the defendant was insolvent and in contemplation of
Subdivision f.
“That all levies, judgments, attachments or other liens, obtained through legal proceedings against a person who is insolvent, at any time within 'four months prior to the filing of a peti - tion in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt, and the property affected by the levy, judgment, attachment or other lien shall be deemed wholly discharged and released from the same, and shall pass to the trustee as a part of the estate of the bankrupt, unless the Court shall, on due notice, order that the right under such levy, judgment, attachment or other lien shall be preserved for the benefit of the estate; and thereupon the same may
Under subdivision f, as has been adjudged by the Circuit Judge, the language is imperative,. “That all * * * attachments * * * obtained through legal proceedings against a person who is insolvent at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void, in case he is adjudged a bankrupt * * *” And the Circuit Judge held under f that the attachments were void, as before stated. Now, to so hold, it was essential that the Circuit Judge should have found as facts: (1) That these attachments were obtained through legal proceedings. (2) That Thomas R. Rhodes, against whom the attachments were issued, was an insolvent during the four months next preceding the 2d November, 1898, at which date the petition to have said Thomas B. Rhodes adjudicated a bankrupt was filed. (3) That said Thomas D. Rhodes has been adjudicated a bankrupt by the District
Having reached the conclusions hereinabove announced, I found that Chief Justice Mclver, who was supported in his view by Mr. Justice Eugene B. Gary and Mr. Justice Jones, took an opposite view of one of the points involved in this decision. This being so, the very great respect I entertain for the views of my brethren caused me to look more carefully into the matters in controversy, and while still entertaining some doubts, I feel that I should concur in the judgment which the said Justices have recommended — thus making the judgment of reversal by this Court unanimous.
It is, therefore, the judgment of this Court, that the judg
Reference
- Full Case Name
- EX PARTE CHASE, AS TRUSTEE OF THE BANKRUPT ESTATE OF THOS. D. RHODES. IN RE HENRY SONNEBORN & CO. v. THOS. D. RHODES
- Status
- Published
- Syllabus
- 1. Attachment. — An Amendment of a complaint on a debt not due after attachment of property thereunder, does not avoid the attachment. Addison v. Sujette, 50 S. C., 192, distinguished from this. 2. Ibid. — Bankruptcy—Bankrupt Act. — Attachment obtained by a creditor within four months before his debtor is declared an involuntary bankrupt, where (1) attachment action was brought without the knowledge of the debtor; (2) the creditor had no knowledge of the insolvency of his debtor; (3) attachment is not predicated on insolvency, but upon attempts of the debtor to conceal and dispose of his property, and (4) the creditor had no reason to believe his debtor contemplated bankruptcy, are not void under subdivision c, of sec. 67 of the bankrupt act of 1898, and that section is construed as an exception to. the general provisions in subdivision f of same section.