T. T. Haydock Carriage Co. v. Pier

LyoN, J.

Tbe question to be determined on this appeal is, Wbat expenses incurred by the assignee under a void assignment for the benefit of creditors, in the execution of the trust, will be allowed her, as against a creditor of the assignor, at whose suit the assignment has been adjudged void? Numerous adjudications have been cited by counsel for the respective parties, bearing upon this question, but it is unnecessary to refer to them in detail. They have been carefully examined, and the rule fairly deducible from them is that in a case like this, in which the assignee has acted under the direction of the court and in perfect good faith, believing the assignment valid, he will be allowed for all such necessary disbursements as benefit, or are intended to benefit, all the creditors of the assignor, excluding commissions of the assignee. See Hunker v. Bing, 9 Fed. Rep. 277. Under this rule the circuit court allowed the defendant $114.35. The items in the defendant’s account disallowed by the court are: (1) Cost of taking inventory; (2) postage, stationery, etc.; (3) costs in justice’s and circuit court in the case of White Sewing Machime Co. v. Kate Pier; (4) attorney’s fees; and (5) costs and disbursements in this court on the former appeal in this action. If any of these items of expenditure were for the benefit of all the creditors of the assignor, the same should have been allowed the defendant. We think the cost of taking an inventory, *582 and the expenditure incurred for postage and stationery, weré of this character, and should have been allowed. The same expenditures would probably have been necessary had no assignment been made, and had the plaintiff or any other creditor of the assignor seized the assigned property on attachment or execution.

After the assigned property came into the possession of the defendant, the White Sewing Machine Company commenced an action of replevin against her to recover a portion thereof, claiming to own the same. By direction of the court the defendant defended the action. Judgment was rendered against her by the justice. She appealed to the circuit court. The cause was tried in that court, and judgment again went against her. Such appeal was taken before the garnishee summons in this action was served upon her. After such service, the plaintiff herein made no objection to her defense of the action in the circuit court. Such defense was made for the purpose of saving the property there in controversy to the creditors of the assignor. The expenses incurred by her in making such defense was therefore within the above rule, and the plaintiff should be reimbursed therefor out of the proceeds of the assigned property. She must be allowed all her necessary disbursements in that action in both courts, including attorney’s fees.

Should the defendant be reimbursed out of the moneys in her hands for her costs and disbursements in this action in this court? We think not. Were she thus reimbursed, it would nearly absorb the fund, leaving the larger portion of the plaintiff’s judgment against Bartell unpaid. ITence, the effect would be to compel the plaintiff to pay such costs and expenses, although he has obtained a judgment therefor in this court against the defendant. Such costs and expenses were not incurred for the benefit of all the creditors (of whom the plaintiff is one), but in direct hostility to the *583 interests of the plaintiff. Such expenditure is not, therefore, within the rule above stated, and the defendant cannot be allowed therefor.

It is claimed that costs should not be awarded in this action against the defendant, for the alleged reason that she admitted by her answer a sum in her hands greater than the plaintiff recovered. She did not admit any sum in her hands subject to garnishment at the suit of the plaintiff, but denied her liability as garnishee substantially as prescribed in sec. 2759, E. S. She thus forced the plaintiff to take issue on her answer and litigate the question of her liability, or abandon his suit. Clearly the case is not. within the exemption from costs specified in sec. 2772, E. S. Neither is it within the case of Baker v. Lancashire Ins. Co. 52 Wis. 193 , for the same reason. Neither are the costs limited to $25, under sec. 2921, E. S., because this is not an action' at law on contract.

The judgment of the circuit court must be reversed, and the cause will be remanded with directions to that court to determine the necessary sums paid by the defendant for taking inventory, for postage and stationery, and for costs and disbursements in the replevin suit. The aggregate of these sums, when so ascertained, together with the $114.35 already allowed, will be deducted from the amount received by the defendant,— $606.04,— and judgment will be rendered for the plaintiff for the balance, with costs.

By the Oowrt.— It is so ordered.