Smith v. Berman
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Opinion of the Court
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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.
Concurrence
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Russell, J.,
concurring specialty. Errors in the charge of the court (which are not referred to in the opinion, but as to the quality of which we all agree) require the grant of a new trial; and hence I admit that there must be a reversal of the judgment refusing a new trial. However, I do not assent to the reasons upon which the reversal is predicated. Conceding that the State court has no jurisdiction to adjudicate the title, or right of property, as against the bankrupt, and that if the bankrupt had even a constructive possession of the persónal property in question it would *274 be and become the posession of his trustee in bankruptcy, I do not think the testimony required the jury to find any such constructive possession. On the contrarjq I think there is sufficient evidence to have 'authorized the jury to find that the trunk and its contents were in the possession of the plaintiff at the time it was taken from her by the defendant, who happened also to be trustee in bankruptcy, and not in the possession,, either actual or constructive, of her husband. I think the evidence authorized the conclusion that the money which was taken from the trunk was the plaintiff’s, and I am clearly of the opinion that it was within the power of the jury to award the plaintiff punitive damages, in addition to the general damages consequent upon her being deprived of the possession of her money. The jury were not required to find the trunk was in the possession of the bankrupt. While the furnishings of a home are presumptively in the possession of the hu.sband as head, of the family, the wearing apparel of a wife need not be treated as even constructively in the possession of her husband. Certainly there is no presumption that a wife’s clothing is not her own. In the absence of any evidence to the contrary, a satchel or a trunk which contains a married woman’s garments, in my opinion, is to 'be treated merely as the receptacle which segregates the wife’s indispensable belongings from other household effects over which, presumptively, her lord and master exercises dominion. It is to be treated as a mere wrapping which aids to maintain a portion of that privacy to which every female, married or single, is entitled. I think the seizure and entry into the plaintiff’s trunk, even by a trustee in bankruptcy, could be adjudged to be a trespass, and that it was for the jury to say whether the circumstances of the case were such as to call for the allowance of punitive damages.
Concurrence
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Powell, J.,
concurring specially. I agree with the Chief Judge in the main, but do not go quite so far as he does as to some of the salient points of the case.
There is no question that the trial court’s jurisdiction in this ease rests on possession, and not on title. The petition presented a prima facie case of possession unlawfully invaded by the trustee in bankruptcy, and was not subject to demurrer; the question is, how far did the proof sustain the petition?
In order for the plaintiff to recover, it was necessary for her to show not merely that she had title to the personal property, but *275 also and specifically that she held possession of it exclusively of her husband, the bankrupt, and that the trustee in bankruptcy invaded this exclusive possession. The State court has no jurisdiction to settle the title of th'e property in a suit against the trustee in bankruptcy; but if the trustee, in the attempt to discharge his duties, violates an actual possession of propertjr lawfully held by an adverse claimant, he -can be held liable in a State court for the trespass — the violation of the possession being the gist of the trespass.
Under the bankruptcy act, 30 Stat. 544 (U. S. Comp. St. 1901, p. 3418), as construed by authoritative decisions, all possession of property held, actually or constructively, by a bankrupt, at the time of the filing of the petition, passes to the bankruptcy court and confers on it exclusive jurisdiction to settle contests as to the ownership. So that the possession of the bankrupt becomes the possession of the trustee in bankruptcy whenever the latter qualifies — the possession of the trustee being constructive or legal possession until he reduces' the propert}1, to his actual detention and corporeal control.
In the case at bar, therefore, if the bankrupt, at the time of the adjudication, had the possession (actual or constructive) of the property involved, the subsequent transaction which gave rise to the present action was not a taking of possession by the trustee, but .the mere retention and enforcing of a possession which in the eye of the law he already had.
As to the house, and as to the household furniture, it is clear that the bankrupt had the possession, and that the possession passed to the trustee. The court plainly erred in submitting to the jury any right of the plaintiff to recover because the trustee went into the house (though the plaintiff, being the wife of the bankrupt, was using it as a home), or because he took the furniture, irrespective of whether in point of fact it was the wife’s furniture or not.
As to the money: While the husband is prima facie in possession of the family home, where he and his wife jointly reside, and of the things located therein, yet this presumption is rebuttable. A wife may, even as against her husband, maintain such exclusive corporeal control of property that he will not in law he regarded as having possession of it, either actual of constructive. In this case, if the plaintiff, notwithstanding she was the wife of the bankrupt and notwithstanding she resided in the house with him, *276 had exclusive physical control and detention of the trunk and the money, her possession would be such as to. make the defendant’s act in taking the trunk and the money away a trespass, provided, of course, the trunk and the money did not in fact belong to her husband. Compare Pollock & Wright on Possession, 38, 4-0. I think, therefore, that so far as the money was concerned (the trunk and the remainder of its contents having been returned), the plaintiff might recover in the State court; and my associate, Judge Russell, concurs with me in this view.
As to the punitive damages I am inclined to agree with Judge Hill. The alleged invasion of the house and the seizure of the household goods being out of the case, for lack of jurisdiction in the State court, the question is, did the defendant’s act in taking and keeping the money indicate such wantonness as to authorize the assessment of punitive damages? I think not. Any prudent man under similar circumstances would have kept it till the title to it could have been decided; and it must be remembered, so far as the mere taking of it is concerned, that the defendant did not even know that there was any money in the trunk when he took and carried it away from the defendant’s possession. It is true that the trustee and the bankrupt had an altercation in the presence of the plaintiff, and that in the course of it the defendant used profane language to the bankrupt, but this was a separate affair and not a part of the damage of taking the trunk and the money, which the trustee did not even decide to take until after this' altercation was ended. Besides, it is impossible for an impartial mind to overlook the glaring fact that the bankrupt and his wife were acting very suspiciously and in apparent bad faith. The money and the furniture may have belonged to the plaintiff (personalty, I think that the money and most of tire furniture'probably did belong to her), but, with all that, there are many things which would have fully justified the trustee in believing that the property belonged to the estate in bankruptcy and that the plaintiff and her husband were about to move it away to another State. However, as the question of punitive damages is dependent purely on the facts, which may vary in the different trials, we deem it unnecessary to malee an authoritative ruling on this point at this time.
The judgment of the court below must be reversed, but I concur specially upon the points mentioned above.
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