Lapas attēli
PDF
ePub

Full faith and credit shall be given in each State to the public acts, records and judicial proceedings of every other State. And the Congress may by general laws prescribe the manner in which such acts, records and proceedings shall be proved, and the effect thereof. Section 2. The citizens of each State shall be entitled to all privileges and immunities of citizens in the several States." The act of May 26, 1790 (1 St. 122), now embodied in section 905 of the Revised Statutes, after providing the mode of authenticating the acts, records and judicial proceedings of the States, declares: "And the said records and judicial proceedings authenticated as aforesaid, shall have such faith and credit given to them in every court within the United States as they have by law or usage in the courts of the State from whence the said records are or shall be taken." This does not prevent an inquiry into the jurisdiction of the court in which a judgment is rendered to pronounce the judgment, nor into the right of the State to exercise authority over the parties or the subjectmatter, nor whether the judgment is founded in and impeachable for a manifest fraud. The Constitution did not mean to confer any new power on the States, but simply to regulate the effect of their acknowledged jurisdiction over persons and things within their territory. It did not make the judgments of the States domestic judgments, to all intents and purposes, but only gave a general validity, faith and credit to them as evidence. No execution can be issued upon such judgments without a new suit in the tribunals of other States; and they enjoy, not the right of priority or privilege or lien which they have in the State where they are pronounced, but that only which the lex fori gives to them, by its own laws, in their character of foreign judgments. McElmoyle v. Cohen, 13 Pet. 312, 328, 329; D'Arcy v. Ketchum, 11 How. 165; Thompson v. Whitman, 18 Wall. 457; Pennoyer v. Neff, 95 U. S. 714; Wisconsin v. Insurance Co., 127 id. 265, 292; Christmas v. Russell, 5 Wall. 290; Story Const., § 1303 et seq., and Story Confl. Laws, § 609. And other judicial proceedings can rest on no higher ground. These well-settled principles find pertinent illustration in the decisions of the highest tribunal of the State of New York, to one of which we refer, as the contention is that the decree under review was in some way an unconstitutional invasion of the jurisdiction of that State. In Dobson v. Pearce, 12 N. Y. 156, the plaintiff in a judgment, recovered in New York, brought an action upon it in the Superior Court of Connecticut, whereupon the defendant in the judgment filed a bill against the plaintiff on the equity side of the same court, alleging that the judgment was procured by fraud, and praying relief. The plaintiff in the judgment appeared in and litigated the equity suit, and the court adjudged that the allegations of fraud in obtain-subject, except when the power had actually been exing the judgment were true, and enjoined him from prosecuting an action upon it. He assigned the judgment, and it was held in a suit in New York, brought thereon by the assignee, that a duly-authenticated copy of the record of the decree in the Connecticut court was conclusive evidence that the judgment was obtained by fraud. The Court of Appeals held, that while a judgment rendered by a court of competent jurisdiction could not be impeached collaterally for error or irregularity, yet it could be attacked upon the ground of want of jurisdiction or of fraud or imposition; that the right of the plaintiff in the judgment was a personal right, and followed his person; that, when the courts of Connecticut obtained jurisdiction of his person by the due service of process within the State, these courts had full power to pronounce upon the rights of the parties in respect to the judgment, and to decree concerning it; that the jurisdiction of a court of equity anywhere, to restrain suit upon a judgment at law, upon sufficient grounds, was one of the firmly-established parts of the authority of courts of

equity; and that it could not be held that a court of equity in one State had no jurisdiction to restrain such a suit upon a judgment of a court of law of another State. If the objection to so doing was founded upon an assumed violation of the comity existing between the several States of the United States, that did not reach to the jurisdiction of the court, a rule of comity being a self-imposed restraint upon an authority actually possessed; and, as to the objection that the Constitution of the United States, and the laws made in pursuance of it, inhibited the action of the Connecticut courts, this could not prevail, since full faith and credit are given to the judgment of a State court when, in the courts of another State, it receives the same faith and credit to which it was entitled in the State where it was pronounced. Pearce v. Olney, 20 Conn. 544; Engel v. Scheuerman, 40 Ga. 206; Cage v. Cassidy, 23 How. 109.

The intention of section 2, article 4, was to confer on the citizens of the several States a general citizenship, and to communicate all the privileges and immunities which the citizens of the same State would be entitled to under the like circumstances; and this includes the right to institute actions. The fact of the citizenship of Butler and Hayden did not affect their privilege to sue in New York and have the full use and benefit of the courts of that State in the assertion of their legal rights; but, as that fact might affect the right of action as between them and the citizens of their own State, the courts of New York might have held that its existence put an end to the seizure of their debtor's property by Butler and Hayden in New York. If however those courts declined to take that view, it would not follow that the courts of Massachusetts violated any privilege or immunity of Massachusetts' own citizens in exercising their undoubted jurisdiction over them. Discharges under State insolvent laws exemplify the principle. Where the effect of the insolvent law is to relieve the debtor from liability on his contracts, such discharge, if the creditor and debtor have a common domicile, or the creditor, though non-resident, has voluntarily become a party to the proceedings, avails the defendant in all courts and places. It was decided in Sturges v. Crowninshield, 4 Wheat. 122, that State Legislatures have authority to pass a bankrupt or insolvent law, provided there be no act of Congress in force, establishing a uniform system of baukruptcy, conflicting with such laws, and provided the law itself be so framed that it does not impair the obligation of contracts. Eight years later, in Ogden v. Saunders, 12 Wheat. 213, the court held that the power of Congress to establish uniform laws on the subject of bankruptcies throughout the United States did not exclude the right of the States to legislate on the same

[ocr errors]

ercised by Congress, and the State laws conflicted with those of Congress; that a bankrupt or insolvent law of any State which discharged both the person of the debtor and his future acquisitions of property was not a law impairing the obligation of contracts, so far as respected debts contracted subsequent to the passage of the law; that a certificate of discharge under such law could not be pleaded in bar of an action brought by a citizen of another State in the courts of the United States, or of any other State than that where the discharge was obtained. The insolvent law could have no extra-territorial operation, and the tribunal administering it would have no jurisdiction over citizens of other States. But this objection would not lie where such citizens had become parties to the proceedings. Hence, in Clay v. Smith, 3 Pet. 411, it was held, where a citizen of Kentucky sued a citizen of Louisiana, and the defendant pleaded his discharge by the bankrupt law of Louisiana, that the plaintiff, who had received a dividend on his debt declared by the assignees of the defendant in Louisiana, had voluntarily made

himself a party to those proceedings, abandoned his extra-territorial immunity from the bankrupt law of Louisiana, and was bound by that law to the same extent to which the citizens of Louisiana were bound. And it may be considered as settled that State insolvent laws are not only binding upon such persons as were citizens of the State at the time the debt was contracted, but also upon foreign creditors, if they make themselves parties to proceedings under these insolvent laws by accepting dividends, becoming petitioning creditors or in some other way appearing and assenting to the jurisdiction. Baldwin v. Hale, 1 Wall. 223; Gilman v. Lockwood, 4 id. 409.

In New York an attachment is obtained on application to a judge of the Supreme Court or a county judge, affidavit being made as to the validity of the claim and the grounds of the attachment, and a bond furnished, with sufficient sureties. The judge, in his discretion, makes an order that a warrant of attachment be granted. The warrant is directed to the sheriff, and is subscribed by the judge, and requires the sheriff to attach and safely keep so much of the property as will satisfy the plaintiff's demand, with costs and expenses. This is served by the sheriff taking the property into his actual custody, or, in the case of a demand trust deed, by leaving a copy with the trustee or garnishee. The sheriff, under the direction of the court, must collect any debt or chose in action attached by him, and, if necessary, may bring an action in his own name, or in that of the defendant, against the garnishee. Code Civil Proc., tit. 3; 1 Bliss N. Y. Ann. Code, 545, et seq. An attachment is in the nature of, but not, strictly speaking, a proceeding in rem, since that only is a proceeding in rem in which the process is to be served on the thing itself. If, in an attachment suit, "the defendant appears, the cause becomes mainly a suit in personam, with the added incident that the property attached remains liable, under the control of the court, to answer to any demand which may be established against the defendant by the final judgment of the court. But if there is no appearance of the defendant, and no service of process on him, the case becomes, in its essential nature, a proceeding in rem, the only effect of which is to subject the property attached to the payment of the demand which the court may find to be due to the plaintiff." Cooper v. Reynolds, 10 Wall. 308, 318. The lien is inchoate, and the property attached held to await the result of the suit. If a judgment for the plaintiff is obtained, the lien becomes perfected, and the property is applied to satisfy the judgment. If plaintiff fails in his action, the lien falls with it; and he may so fail by reason of the discharge of the defendant in insolvency, when he is a citizen of the same State or has made himself a party to the proceedings in insolvency, or by the action of other courts of the State where the suit is pending, or elsewhere, if jurisdiction in personam be obtained. So, that after all, the inquiry is whether, in a proper case, the equity courts of one State can control persons within their jurisdiction from the prosecution of suits in another. If they can, in accordance with the principles of equity jurisprudence and practice, no reason is perceived for contending that the Constitution of the United States prescribes any different rule; and the determination of what is a proper case for equity interposition would seem to be reposed in the court whose authority is invoked, though some remarks in that regard may not improperly be made.

The jurisdiction of the English Court of Chancery to restrain persons within its territorial limits and under its jurisdiction from doing any thing abroad, whether the thing forbidden be a conveyance or other act, in pais, or the institution or the prosecution of an action in a foreign court is well settled. In Penn v. Lord Baltimore, 1 Ves. Sr. 444, Lord Hardwicke recognized

the principle that equity, as it acts primarily in per sonam, and not merely in rem, may, where a person against whom relief is sought is within the jurisdic tion, make a decree, upon the ground of a contract, or any equity subsisting between the parties, respecting property situated out of the jurisdiction. 2 Lead. Cas. Eq. (4th Am. ed.), 1806, and cases. In McIntosh v. Ogilvie, 4 Term R. 193, note; 3 Swanst. 365, note, Lord Hardwicke lays down the same doctrine as to restraining prosecution of suit. This case bears so close an analogy to that at bar that we give it in full, as follows: "The plaintiff was the assignee of a bankrupt, the defendant a creditor, who, before the bankruptcy, went into Scotland and made arrestments on debts due to the bankrupt from persons there. Upon an affidavit of the defendant's having got this money into his hands, a ne exeat was granted; and a motion was now made on the behalf of the defendant to discharge it, upon a supposition that he had a right to the goods, as creditor, by his arrestments. The lord chancellor asked whether he had sentence before the bankruptcy; and, being answered in the negative, he said: "Then it is like a foreign attachment, by which this court will not suffer a creditor to gain priority, if no sentence were pronounced before the bankruptcy. I cannot grant a prohibition to the Court of Sessions; but I will cer tainly make an order on the party here to restrain him from getting a priority, and evading the laws of bankruptcy here. If the gentleman were not going abroad, I would do nothing; but as he is, I will not discharge the writ without his giving security to abide the event of the cause.' 29 Penn v. Lord Baltimore is cited with approval by Chief Justice Marshall in Massie v. Watts, 6 Cranch, 148, where a suit was instituted in the Cir cuit Court of Kentucky to compel the conveyance by the defendant of the legal title of land in Ohio, on the ground that he had notice, when it was purchased, of the prior equity of the complainant. The defense was that the land was beyond the jurisdiction of the court, and within the State of Ohio. This defense was overruled by the court below and its decision affirmed by this court. "This court is of opinion," said the chief justice," that in a case of fraud, of trust or of contract, the jurisdiction of a Court of Chancery is sustainable wherever the person be found, although lands not within the jurisdiction of that court may be affected by the decree." And in Pennoyer v. Neff, 95 U. S. 714, 723, it is said in the opinion of the court, by Mr. Justice Field: "The State, through its tribunals, may compel persons domiciled within its limits to execute, in pursuance of their contracts respecting prop erty elsewhere situated, instruments in such form and with such solemnities as to transfer the title, so far as such formalities can be complied with; and the exercise of this jurisdiction in no manner interferes with the supreme control over the property by the State within which it is situated. Penn v. Lord Baltimore, 1 Ves. Sr. 444; Massie v. Watts, 6 Cranch, 148; Watkins v. Holman, 16 Pet. 25; Corbett v. Nutt, 10 Wall. 464." In Lord Portarlington v. Soulby, 3 Mylne & K. 104, 108, Lord Chancellor Brougham reviews the history of the jurisdiction to restrain parties from commencing or prosecuting actions in foreign countries, and concludes: "Nothing can be more unfounded than the doubts of the jurisdiction. That is grounded, like all other jurisdiction of the court, not upon any pretension to the exercise of judicial and administra tive rights abroad, but on the circumstance of the person of the party on whom this order is made being within the power of the court." Earl of Oxford's Case, 2 Lead. Cas. Eq. 1316. Mr. Justice Story states the principle thus: "But, although the courts of one country have no authority to stay proceedings in the courts of another, they have an undoubted authority to control all persons and things within their own territorial limits. When therefore both parties to a suit in a for

eign country are resident within the territorial limits of another country, the courts of equity in the latter may act in personam upon those parties, and direct them, by injunction, to proceed no further in such suit. In such a case these courts act upon acknowledged principles of public law in regard to jurisdiction. They do not pretend to direct or control the foreign court, but, without regard to the situation of the subjectmatter of the dispute, they consider the equities between the parties, and decree in personam according to those equities, and enforce obedience to their decrees by process in personam. * *k * It is now held that whenever the parties are resident within a country the courts of that country have full authority to act upon them personally with respect to the subject of suits in a foreign country, as the ends of justice may require, and with that view to order them to take or to omit to take any steps and proceedings in any other court of justice, whether in the same country or in any foreign country." Story Eq. Jur., §§ 899, 900. In Phelps v. McDonald, 99 U. S. 298, 308, Mr. Justice Swayne uses this language:ereignties, yet its existence cannot at this day be de"Where the necessary parties are before a court of equity, it is immaterial that the res of the controversy, whether it be real or personal property is beyond the territorial jurisdiction of the tribunal. It has the power to compel the defendant to do all things necessary, according to the lex loci rei sita, which he could do voluntarily, to give full effect to the decree against him. Without regard to the situation of the subjectmatter, such courts consider the equities between the parties, and decree in personam according to those equities, and enforce obedience to their decrees by process in personam.”

State for collection, in order to evade the exemption law. And see Chafee v. Quidnick Co., 13 R. I. 442, 449; Manufacturing Co. v. Worster, 23 N. H. 462; Pickett v. Ferguson, 45 Ark. 177. The rule is not otherwise in New York. It is true that in Mead v. Merritt, 2 Paige, 402, the chancellor said: "I am not aware that any court of equity in the Union has deliberately decided that it will exercise the power by process of injunction to restrain proceedings which have been previously commenced in the courts of another State." And the reason urged against the exercise of the power was that, if the courts of one State should see fit to enjoin proceedings in another, the latter might retaliate in like manner, in enjoining proceedings in the first, and thus give rise to an endless conflict of jurisdiction. But this reasoning has not commended itself to the judicial mind, for the injunction is not directed to the courts of the other State, but simply to the parties litigant; and, although the power should be exercised with care, and with a just regard to the comity which ought to prevail among co-ordinate sov

Such is undoubtedly the result of the clear weight of authority; and the rule has been often applied by the courts of the domicile against the attempts of some of its citizens to defeat the operation of its laws, to the wrong and injury of others. Thus, it was held by the Supreme Court of Ohio (Snook v. Snetzer, 25 Ohio St. 516) that where the statutes of that State exempted the earnings for personal service of a debtor who was the head of a family and a citizen of the State, the Ohio courts had authority to restrain a citizen of the county in which the equity action was commenced from proceedings in another State to attach the earnings of such head of a family, with a view to evade the exemption laws of Ohio, and to prevent him from availing himself of the benefit of such law. To the same effect is Keyser v. Rice, 47 Md. 203. The Court of Appeals of Maryland declared the power of the State to compel its own citizens to respect its laws, even beyond its own territorial limits, to be supported by the great preponderance of precedent and authority, and sustained an injunction to restrain the further prosecution in another State of an attachment, by which the defendant sought to recover wages due the complainant in Maryland, and there exempt from attachment. So, in Railroad Co. v. Thompson, 31 Kan. 180, though it was held that a foreign corporation doing business in Kansas might be garnished for a debt due to a non-resident employee, contracted outside of the State, and exempt from garnishment in the State where the defendant and garnishee resided, yet it was conceded by Judge Brewer, in delivering the opinion, that in the courts of a State any citizen of that State may be enjoined from resorting to the courts of any other State for the purpose of evading the exemption laws of his own State;" and this was so decided in Zimmerman v. Franke, 34 Kan. 650. In Wilson v. Joseph, 107 Ind. 490, the Supreme Court of Indiana ruled that an injunction would lie to restrain a resident of Indiana from prosecuting an attachment proceeding against another resident in the courts of another State, in violation of a statute which made it an offense to send a claim against a debtor out of the I

nied. In Vail v. Knapp, 49 Barb. 299, 305, an injunction was continued against citizens of New York, plaintiffs in attachment suits in Vermont, upon the ground that they were proceeding in Vermont in evasion of the laws of New York; and the court points out that, though, as a general rule, the courts of New York decline to interfere by injunction to restrain its citizens from proceeding in an action which has been commenced in a sister State (citing Mead v. Merritt, 2 Paige, 402; Burgess v. Smith, 2 Barb. Ch. 276, and other cases), yet "there are exceptions to this rule, and, when a case is presented fairly constituting such exception, extreme delicacy should not deter the court from controlling the conduct of a party within its jurisdiction, to prevent oppression or fraud. No rule of comity or policy forbids it." The same result was announced in Dinsmore v. Neresheimer, 32 Hun, 204, where the Supreme Court of New York held that an express company could maintain an action in New York to restrain the defendant, a resident of the State of New York, from prosecuting actions against the company in the District of Columbia, brought to avoid a decision of the Court of Appeals of New York, differing from the rule upon the same subject in the District of Columbia. In Railroad Co. v. Ramsey, 45 N. Y. 637, the Court of Appeals, speaking through Folger, J., treats the general question as not admitting of doubt.

At the time of these proceedings, as for many years before, the Commonwealth of Massachusetts had an elaborate system of insolvent laws, designed to secure the equal distribution of the property of its debtors among their creditors. Under these insolvent laws all preferences were avoided, and all attachments in favor of particular creditors dissolved. The transfer of the debtor's property to his assignees in insolvency extended to all his property and assets, wherever situated. This was expressly provided as to such as might be outside of the State. By one of the sections of the chapter of the Public Statutes of Massachusetts treating of this subject, the debtor was required to do all acts necessary to give the assignees power to "demand, recover and receive all the estate and effects so assigned, especially any part thereof which is without this State." Pub. St. Mass., 1882, chap. 157, $ 74. Whenever the debtor had made, to the satisfaction of the judge in insolvency, a full transfer and delivery of all his estate, and conformed to the directions and requirements of the law, he was entitled to be absolutely and wholly discharged from his debts, with certain exceptions; but it was provided that a discharge should not be granted to a debtor whose assets did not pay fifty per cent of the claims proved against his estate, unless upon the assent in writing of a majority

in number and value of his creditors who had proved their claims. §§ 80, 86. Nothing can be plainer than that the act of Butler, Hayden & Co. in causing the property of the insolvent debtors to be attached in a foreign jurisdiction tended directly to defeat the operation of the insolvent law in its most essential features; and it is not easy to understand why such acts could not be restrained, within the practice to which we have referred. But for the attachment suits the assignees in insolvency could have collected the claim of Bird against Claflin & Co., but could not have intervened in those suits and asked of the courts of New York the enforcement of their title. The rule in that State is that by the comity of nations the statutory title of foreigu assignees in bankruptcy is recognized and enforced, when it can be done without injustice to the citizens of the State, and without prejudice to creditors pursuing their remedies under the New York statutes, provided, also, that such title is not in conflict with the laws or public policy of the State, and that the foreign court had jurisdiction of the bankrupt. In re Waite, 99 N. Y. 433. Under such a rule, it is evident that the remedy of the assignees was in equity, and in the courts of their domicile. This is the conclusion reached in Kidder v. Tufts, 48 N. H. 121, 126, referred to by counsel for appellant. That was a case where citizens of Massachusetts commenced in New Hampshire an attachment against certain other citizens of the former State. Proceedings in insolvency against the defendants were afterward instituted in Massachusetts; and, subsequenty to this, certain New Hampshire creditors attached the same property, and then moved for a continuance to await the proceedings in insolvency, for the purpose of pleading the insolvent's discharge in bar of the first attachment. But the court denied the motion, holding that the Massachusetts creditors had availed themselves of their strict legal rights as established and allowed by the statute law of New Hampshire, and, for the purpose of an attachment, might properly be considered subjects of that State government; but the court added: "If the subsequent attaching creditors have a remedy, and can in any way prevent the plaintiffs from obtaining a preference, their appeal should be made, as creditors of the defendant, to the Massachusetts courts, which may exercise their jurisdiction over their own citizens if they have violated any of their laws by their experiment here." Bank v. Lacombe, 84 N. Y. 367, 386. So, in the case of Paine v. Lester, 44 Conn. 196, where a citizen of Rhode Island attached in Connecticut a debt due from a citizen of Connecticut to a corporation of Pennsylvania, which had made an assignment for the benefit of creditors, the lien of the attachment was held valid against the claim of the trustee in the assignment, because the right of the trustee in insolvency in Connecticut rested only on the comity which the court there could exercise or refuse to exercise at its discretion, while the plaintiff had a legal right, under the laws of Connecticut, to prosecute his suit. In Rhawn v. Pearce, 110 Ill. 350, the Supreme Court of Illinois declined to recognize at law the insolvent laws of Pennsylvania, by giving effect to a statutory assignment in that State, even as against an attaching creditor of the same State with the debtor. But the same tribunal found no difficulty in holding, in Sercomb v. Catlin, 128 Ill. 556, that the courts of Illinois, on the application of a receiver appointed by them, could enjoin a person within the jurisdiction of the court from interfering in respect to property belonging to an insolvent copartnership for which the receiver had been appointed, although that property was outside of the jurisdiction; and Chafee v. Quidnick Co., 13 R. I. 442; Dehon v. Foster, 4 Allen, 545, and Railroad Co. v. Railroad Co., 46 Vt. 792, were cited.

Dehon v. Foster, 4 Allen, 545, is the leading case upon

[ocr errors]

the subject, argued by eminent counsel on both sides, and decided upon great consideration. The Supreme Judicial Court of Massachusetts, speaking through Bigelow, C. J., points out that the jurisdiction of a court, as a Court of Chaucery, to restrain persons within its jurisdiction from prosecuting suits, upon a proper case made, either in the courts of Massachusetts or in other States or foreign countries, rests on the clear authority vested in courts of equity over persons within the limits of their jurisdiction and amenable to process, to stay acts contrary to equity and good con. science; and that, as the decree of the court in such cases is directed solely at the party, it is wholly immaterial that such party is prosecuting his action in the courts of another State or country. The action was a bill in equity to enjoin a citizen of Massachusetts from availing himself of an attachment of personal property in Pennsylvania, as against a debtor put into insolvency under the laws of Massachusetts, and thus preventing the same from coming to the hands of the assignee. The court held that it was obvious that the controversy was simply as to the relative rights of citizens of Massachusetts to personal property belonging to insolvent debtors domiciled in that State, and raised no question involving a conflict of rights between citizens of Massachusetts and another State, nor as to the validity of a foreign law, or of liens acquired under it. On the contrary, the case rested on the ground that the defendants, if allowed to proceed with their action, would perfect a lien then only inchoate under their attachment, and might thereby establish a valid title to the property of the insolvent debtors under the laws of Pennsylvania. Looking, then, at our own laws," said the court, "to ascertain which of the two parties to this suit has a paramount right or superior equity to the debts due to the insolvents from persons residing out of the State, there would seem to be but little if any room open for doubt or controversy." The fundamental principle of the insolvent laws of the Commonwealth, that all the property of the debtor should be taken and equally distributed among his creditors, was remarked on, and the provisions of the statute intended to secure that end recapitulated, The inevitable conclusion was announced, that as the act of the defendants in causing the property of the insolvent debtors to be attached in a foreign jurisdiction tended directly to defeat the operation of the law, by preventing a portion of the property of the debtors from coming to their assignees, to be equally distributed among their creditors, and giving a prefence to certain of their creditors, so that they would obtain payment of their debt in full, it was therefore an attempt by those creditors, citizens of Massachusetts, to defeat the operation of their own laws, to the injury of other creditors of the insolvents. And the court proceeded: "This is manifestly contrary to equity. The defendants, being citizens of this State, are bound by its laws. They cannot be permitted to do any acts, to evade or counteract their operation, the effect of which is to deprive other citizens of rights which those laws are intended to secure. Certain it is that they could not in any manner or by any process take from the assignees of an insolvent debtor property belonging to him within this State, and appropriate it to the payment of their debt in full. To prevent such appropriation, if the law furnished no adequate and complete remedy, this court would interfere by suitable process in equity. We are unable to see any reason for withholding such interference merely because our citizens seek to accomplish the same purpose by resorting to a foreign jurisdiction, and with the aid of the laws of another State or country. An act which is unlawful and contrary to equity gains no sanction or validity by the mere form or manner in which it is done. It is none the less a violation of our laws because it is effected through the instru

[ocr errors]

mentality of a process which is lawful in a foreign tribunal. By interposing to prevent it, we do not interfere with the jurisdiction of courts in other States, or control the operation of foreign laws. We only assert and enforce our own authority over persons within our jurisdiction, to prevent them from making use of means by which they seek to countervail and escape the operation of our own laws, in derogation of the rights, and to the wrong and injury, of our own citizens. To the argument that the bill could not be maintained, because the statutes of Massachusetts regulating the assignment and distribution of insolvent estates could have no extra-territorial effect or operation, the court answered that, while it was true that the statutes of Massachusetts, ex proprio vigore, had no effect or operation in other States, it was also true that, by the comity of States and nations, the laws of one country are allowed, to a certain extent, to control the rights of persons and property in other countries, though not allowed to have any effect to the injury of the citizens of such other country. From this principle it followed, as a necessary consequence, that personal property of a Massachusetts insolvent debtor situated in Pennsylvania would vest in the Massachusetts insolvent's assignees, with power to take possession of and collect them, either in their own names or in the name of the insolvent, if they were not held or attached by virtue of a process or lien in favor of a creditor which would be valid under the laws of Pennsylvania. Hence, if the attachment in Pennsylvania were valid and binding, the Massachusetts creditors would obtain a right superior to that conferred under the Massachusetts laws on the assignees in insolvency, by the act of such creditors, in defeat of the operation of the laws of their own State; so that a proceeding in equity might properly be resorted to to compel the defendants to desist from the prosecution of a suit which would have such an effect. Nor did the court regard the fact as controlling to the contrary that the attachment was made prior to the institution of the proceedings in insolvency, because the attachment tended to contravene the clear intent of the statutes, which aim to vest in the assignee all the property of the debtor which could have been assigned by him or taken on execution against him, at the time of the commencement of the insolvent proceedings, although the same is then attached on mesne process as the property of the debtor," and because, aside from that, it appeared that the defendants, when they instituted process in Pennsylvania and made their attachment, knew that the debtors were insolvent, and had reason to believe that proceedings in insolvency were about to be instituted against them, and caused the attachment to be made with an intent to obtain a preference over other creditors, and to avoid the operation of the insolvent laws of the Commonwealth. Under such circumstances, priority gave no equity to the defendants. The purpose to interfere with and prevent the proper distribution of the insolvent's estate took away all claim to equitable consideration which might exist when priority was obtained in good faith. The decree accordingly went, enjoining the defendants from prosecuting their attachments. The objection was urged that the effect of the restraint might be to enable all non-resident creditors to appropriate property by attachment to the payment of their debts, and thereby to gain a preference over attaching creditors residing in Massachusetts, as well as to prevent the property from passing to the assignees. This was, of course, a matter to be considered by the court in arriving at a conclusion as to granting the relief prayed. It may be remarked however that while, as between citizens of the State of the forum and the assignee appointed under the laws of another State, the claim of the former will be held superior to that of the latter by the courts of the former, yet this

[ocr errors]

has not been so ruled in many of the States, as between au assignee appointed in another State and citizens of other States than that of his appointment and of the forum. Undoubtedly, the fiction of law that the domicile draws to it the personal estate of the owner, wherever it may happen to be, yields whenever it is necessary, for the purposes of justice, that the actual situs of the thing should be examined, and always yields when the laws and policy of the State where the property is located invalidate a transfer, even though valid by the law of the assignor's domicile, in which State it was made, subject to the qualifications that property once vested in the assignee and in his possession will not be disturbed, and, that in some jurisdictions, when the attaching creditor is domiciled in the same State with the assignor, he may be precluded from disputing the assignment in a foreign court. Whether the law of the common domicile of two or more litigants determines their title to property in another Territory, so that an attaching creditor, whose domicile is the same as that of the assignor, cannot set up against an assignment the law of a foreign country where the property is actually situated, has been much discussed. It is certain that the law of the common domicile cannot overcome such registry and other positive laws of the other country as are distinctly politic and coercive. Whart. Confl. Laws, §§ 369, 371. If a State provides that no title shall pass to property within its borders, except on certain conditions, such provision cannot be overridden by the law of any other State which parties domiciled there may be held to have adopted. It was in this view that Mr. Justice Miller, referring to a voluntary conveyance, in Green v. Van Buskirk, 5 Wall. 307, 311, 312, said: "There is no little conflict of authority on the general question as to how far the transfer of personal property by assigument or sale, made in the country of the domicile of the owner, will be held to be valid in the courts of the country where the property is situated, when these are in different sovereignties. The learned author of the Commentaries on the Conflict of Laws has discussed the subject with his usual exhaustive research; and it may be conceded that, as a question of comity, the weight of his authority is in favor of the proposition that such transfers will generally be respected by the courts of the country where the property is located, although the mode of transfer may be different from that prescribed by the local law. ** * * But, after all, this is a mere principle of comity between the courts, which must give way when the statutes of the country where property is situated, or the established policy of its laws, prescribe to its courts a different rule."

Great contrariety of State decision exists upon this general topic, and it may be fairly stated that, as between citizens of the State of the forum and the assignee appointed under the laws of another State, the claim of the former will be held superior to that of the latter by the courts of the former; while, as between the assignee and citizens of his own State and the State of the debtor, the laws of such State will ordinarily be applied in the State of the litigation, unless forbidden by or inconsistent with the laws or policy of the latter. Again, although, in some of the States, the fact that the assignee claims under a decree of a court or by virtue of the law of the State of the domicile of the debtor and the attaching creditor, and not under a conveyance by the insolvent, is regarded as immaterial, yet, in most, the distinction between involuntary transfers of property, such as work by operation of law, as foreign bankrupt and insolvent laws, and a voluntary conveyance, is recognized. The reason for the distinction is that a voluntary transfer, if valid where made, ought generally to be valid everywhere, being the exercise of the personal right of the owner to dispose of his own, while an assignment by operation of

« iepriekšējāTurpināt »