Lead Opinion
Upon a writ of error to a judgment, discharging a rule in prohibition and dismissing plaintiff’s petition, the inquiry is whether a justice of the peace has jurisdiction to proceed with an attachment against a railroad company, chartered by the legislature of Maryland and permitted by an act of the legislature of Virginia, before the division of the State, to build and operate its railroad through what is now West Virginia, as garnishee, for the subjection of a debt contracted by the same railroad company in the state of Pennsylvania, and payable there, to the satisfaction of a demand due from the creditor of said company to a third party, such creditor being a non-resident and not having appeared in the action. The supposed lack of jurisdiction is predicated upon two grounds: First. That the situs of the debt sought to be subjected is in the state of Pennsylvania, whеre the creditor resides, where it was contracted and where it is payable. Second. That though the situs of the debt be not in the state of the residence of the creditor, it is not in this State, because the garnishee is domiciled in another state and found here only temporarily.
H. F. Putnam, an employee of the Baltimore and Ohio Railroad Company on part of its line in Pennsylvania, to whom said company was indebted for services, was himself indebted to J. D. Miller and Son, also residents of Pennsylvania. Miller & Son assigned their claim against Putnam to W. W. Rogers of Wheeling, who
Great conflict and confusion characterize the decisions of the courts of the several states, respecting the right to proceed by garnishment against debts due from corporations to non-residents and made payable in a foreign jurisdiction. Many of them rest their decisions on the theory that the debt follows the person of the creditor and can be subjected only in the jurisdiction in which he resides. Others take the opposite view, sajdng it follows the person of a debtor and belongs to the jurisdiction of his residence. Still others give the idea of situs no peculiar force, holding that it may be subjected wherever the debtor may be sued. The adherents to the first proposition defend it upon thе ground, that the ownership of the debt is of necessity in the creditor, for no man , can have property in a debt that he owes to another.
Thus, in National Bank v. Furtick, 2 Marvel (Del.) 35,
In his very able note to this case, in 69 Am. St. Rep.,
Mr. Freeman does not mean to say, however, that the decisions in all the cases cited for the foregoing proposition were controlled by it. It is merely stated as a sort of basic principle which has been modified in several ways. In the next subdivision of his note, page 118, he says many of the leading cases cited hold that the rule has been dispensed with by statutes. “In States whose courts recognize the authority of the general rule that the situs of a debt is at the domicile of the creditor it is sometimes admitted that ‘this fiction always yields to laws for attaching the property of a non-resident, because such laws necessarily assume that the property has a situs distinct from the owner’s domcile.’ Wyeth Hardware etc. Co., v. Lang,
In a number of the cases referred to in these portions of the note, the decisions stand upon the view that neither debtor nor creditor resided in the state in which it wаs attempted to subject the debt, and whether it was with the
Though a great deal is said in the reported cases in support of the doctrine that the debt follows the person of the creditor, few decisions in attachment cases stand upon it. It is usually referred to as a general principle having more or less bearing upon some other proposition which forms the basis of the final disposition of the case. Missouri Pacific Railway Co. v. Sharitt,
It is manifestly át variance with a fundamental principle. of the law of attachment, and the conception of the nature of the rights to be vindicated and wrongs to be redressed, which originally called the remedy by attachment into being and has made its use indispensable in modern jurisprudence. All courts characterize it as a special, anomalous and harsh remedy, authorizing the seizure of the debtor’s property in advance of an adjudicаtion against him. It is based upon and deals with circumstances and conditions which put it beyond the power of the court to do justice and work out the substantial rights of the parties by the use of the ordinary legal remedies. Total want of remedy at law and inadequacy thereof in view of the peculiar situation of the parties, respecting property and personal, rights, necessitated the establishment of the system known as equity jurisprudence for the vindication of equitable rights of which the law courts could take no notice and for relief against fraud and mistake. Under this system, authority is generally exercised over the persons of the parties in respect to their rights, rather than over the property which is the subject matter of their differences, although in many instances the property itself is a subject of the direct and immediate action of the court. But the сircumstances are often such that the remedies in equity are not broad, flexible and swift enough to prevent the impending wrong, dr save the endangered right,
If, by giving a remedy against the resident.debtor of the non-resident creditor, who is 'the debtor of the plaintiff, the legislature has impliedly said the plaintiff may, by a legal process, resort to the man in whose hands the money belonging to the absent defendant is, and thereby make him hold the fund as a trustee, or deliver it to an officer of the court, all the right which the defendant may have to that fund shall be deemed to be within the jurisdiction of the courts, of this State for the purposes of the attachment, can the court say it shall not be so? The statute is founded upon a recognition of the plaintiff’s moral right to treat him as a trustee and declares that he shall be so treated in the law courts. But for the statute, the legal right and property in the debt would undoubtedly be with the absent creditor. As
To the anticipated suggestion that this line of argument assumes the determination of the very point in controversy, the reply is that one of the declared and primary objects of the remedy is to reach and subject the property and effects of non-resident debtors. Non-residence is the basic fact of the jurisdiction and the remedy. Are we to assume that it was not the intention to subject debts due the defendant, but оnly tangible property? Is it possible that the law makers of all the states have stood by in silence and watched the courts for centuries misapply the remedy to the detriment and injury of thousands of people, without inserting a simple exception in the statute?
As already indicated, the attachment system of law had its origin in the custom of London. By that law, it determined and announced that, for its purposes, the debt was annexed to the person of the debtor and not to that of the creditor. “By this custom, a debt contracted without the jurisdiction of the city may be attached, if the debtor is found within the jurisdiction, for every debt follows the person of the debtorf 3 Bac. Abr. 54. “Neither is it necessary to aver, that the plaintiff in the principal case was indebted to the plaintiff below within the jurisdiction of the Mayor’s Court; for it is not necessary that the debt should arise, or the defendant reside within it, or that he should be actually summoned.” Id. 56.
The position here adopted was taken by the Supreme Court of the United States in Railway Co. v. Sturm,
“ ‘Andrews levied a plaint in the Sheriff’s Court in London and, upon the usual suggestion that one T. S. (the garnishee) was debtor to the defendant, a foreign attachment was awarded to attach that debt in the hands of T. S., which was accordingly done; and then a diletur was entered, which is in nature of an imparlance in that court.
“ ‘Afterwards T. S. (the garnishee) pleaded to the jurisdiction setting forth that the cause of debt due from him to the defеndant Sir Robert Clarke, and the contract on which it was founded, did arise, and was made at H. in the county of Middlesex, extra jurisdiction eon curiae; and this plea being overruled, it was now moved (in behalf of T. S., the garnishee,) for a prohibition to the sheriff’s court aforesaid, suggesting the said matter, (viz.) that the cause of action did arise extra jurisclictioneni, etc., but the prohibition was denied because the debt always follows the person of the debtor, and it is not material where it was contracted, especially as to this purpose of foreign attachments; for it was always the custom in London to attach debts upon bills of exchange, and goldsmith’s notes, etc., if the goldsmith who gave the note on the person to whom the bill is directed, liveth within the city without any respect had to the place where the debt was contracted.’ The idea of locality of things which may be said to be intangible is somewhat confusing, but if it be kept up thе right of the creditor and the obligation of the debtor cannot have the same, unless debtor and creditor live in the same place. But we do not think it necessary to resort to the idea at all or to give it important distinction. The essential service of foreign attachment laws is to reach and arrest the payment of what is due and might be paid to a non-resident to the defeat of his creditors. To do it he must go to the domicile of his debtor, and can only do it under the laws and procedure in force there. This is a legal necessity, and considerations of situs are somewhat artificial. If not artificial, whatever of substance there is must be with the debtor.*396 He and he only has something in his lands. That something is the res. and gives character to the action as one in the nature of a proceeding in rem. Mooney v. Buford & George Mfg. Co., 72 Fed. Rep. 32; Conflict of Laws, section 549. and notes.”
Does the additional circumstance, that the debt is payable in the fоreignjstate, vary the law in this respect? The affirmative of this proposition is predicated upon the supposition that a debt made payable to a person in the state in which he resides is thereby specially annexed to him, and withdrawn from the jurisdiction in which the debtor resides, if they are in different states. It is not pretended that it can have a situs irrespective of both debtor and creditor. If it can be said to have a situs at all, it must be with the one or the other of them. It has no tangible existence. Hence, the only conceivable effect that could result from making the debt payable at the residence of the creditor, in this connection, would be the more effectual binding of it to his person. Can it be said that the circumstance of the place at which a debt is made payable makes it more effectually, or sacredly, the property оf the creditor? Suppose it did. Is it not the very object and purpose of the attachment to extinguish his right and property in the debt so far as may be necessary to effectuate satisfaction of the plaintiff’s debt? Does it depend upon whether the debt is bound to him tightly or not? If it were attached to his person at all, would it not defeat the jurisdiction? If this consideration could have any force, it would be necessary to give it some effect, when the debt is payable at a place in which neither party resides. What possible effect could it have. Would it put the debt beyond reach through either debtor or creditor? This would be a bald absurdity, in which everything of substance would be sacrificed to a bare technicality. Place of paj^ment has nothing to do with the place of enforcement. Ho action can be maintained for the debt by anybody until after dеfault. Action does not produce payment at the place named. It exacts damages for the breach, payable in the jurisdiction of the forum. There can be no action until after breach of the contract and then it may be maintained wherever the defendant can be sued. That the garnishment prevents compliance with all the terms of the contract is no valid objection,
Having no doubt about the untenableness of the position, that the proceeding must be at the place of residence of the defendant the next inquiry is whether the garnishee is within the jurisdiction of the court. In the case of Pennsylvania &c Co. v. Rogers,
As asserted in Pennsylvania &c. Co. v. Rogers, by way of marking the distinction between it and Mahany v. Kephart, this Court, in the latter, most assuredly decided the status of the Baltimore and Ohio R. R. Co. to be such as made it liable to the process of garnishment at the instance of a resident’ assignee of a debt contracted by the defendant in another state, on account of wages due the defendant from the as-signee for services rendered in such other state. In delivering the opinion of the Court, Haymond, Judge, said: “I am unable to see if the said railroad company can be sued for debts contracted in this State, why it may not also be sued in this State for debts contracted in other states. It would be strange indeed if residents of this State could sue and enforce the payment of their debts contracted in this State against said railroad company and its property in this State, through the courts thereof, and non-resident creditors, ánd resident
The Baltimore and Ohio R. R, Co. is undoubtedly a foreign corporation, as tested by the jurisdiction of the federal courts. Baltimore &c. Co. v. Harris, 12 Wall. (U. S.) 65; Marshall v. Baltt. & O. R. R. Co,
' Upon applications for removal of causes from state to federal courts, as in Rice v. N. N. M. & V. Co., cited, and perhaps a few other instances, the state ¿courts are called upon to notice and observe this distinction, but in the ordinary actions by and against corporations, jurisdiction is tested by the fact of residence, except when it is acquired under special statutes. Though a corporation is incapable of having a residence tn the sense in which 'that term is applied to an individual, just as it is not, in fact, a citizen, it may be and is often deemed to have a residence, or the equivalent thereof, in a state other than that of which it is a citizen.
There is no conflict between this view and the conclusion expressed in Pennsylvania &c. Co. v. Rogers. The garnishee in that case ivas only temporarily or casually in the state. It had an agent here for a special purpose. Its situation was analogous to that of a non-resident individual temporarily or casually in the 'state, having no usual place of abode at which service could be made in his physical absence therefrom. Here, the case is radically different. The corporation actually operates its road through the state, having agents along its line permanently, upon whom service may be had at any time, owning property of immense value and carrying on a business of vast proportions, in view of which the statute contains special provisions, applicable to such foreign corporations and to no other, as will be shown.
By the great weight of judiсial authority this gives it the equivalent of residence in the state, and as a resident it may be proceeded against as garnishee, just as a resident individual may. “Accordingly the doctrine of the court now is that several states may by competent legislation unite in creating the same corporation or in combining several preexisting corporations into a single one; that one state may make a corporation of another state, as thus organized and conducted, a corporation of its own, as to any property within its territorial jurisdiction; and that a state may by an enabling act authorize a corporation created in another state to build and use a railroad within its own limits without creating a new corporation. Illustrations of these conclusions are now
In Fire Ins. Co. v. Chambers, 53 N. J., Eq. 468, the court holds that 1 ‘A corporation is capable of having several domiciles and of being sued at the same time in more than one jurisdiction.” The opinion in that case reviews many decisions, English 'and American, holding this doctrine. Though not accrediting the foreign corporations with a domicile in the state, the following cases hold it liable as garnishee: Mooney v. Buford, 72 Fed. Rep. 32; Pomeroy v. Rand, NcNally & Co.,
There are decisions, however, which hold foreign corporations, having the right to do business, and consenting to be sued, in the state, not liable as garnishees, unless they have property of the defendant in their possession within the state, or are bound to deliver property or pay him money in the state. Railroad Co. v. Dooley,
Similarly, in Douglass v. P. Ins. Co.,
Bank v. Furtick,
Aside from the Alabama decisions, none of these were railroad cases. In Railroad Co. v. Chumley, the Alabama court says: “Several statutes of Tennessee, regulating proceedings of garnishment and service of process upon corpor-porations, were introduced in evidence; but we fail to find among them any statute providing for service of process upon foreign corporations in garnishment suits. It may be, that the language is comprehensive enough to include рroceedings by garnishment, when the property sought to be reached is in the jurisdiction of the State, though the garnishee may be a non-resident; but in the absence of evidence of any construction by the courts of Tennessee, we can not interpret the statutes as intending to place within the jurisdiction of the State, property which has no locality there. ’ ’
But the language of that section applicable to railroads is much broader, indubitably subjecting them to the liabilities and according them all the rights of residents, except in so far as it has been qualified by the decision in Rece v. N. N. M. & V. Co.,
The Baltimore and Ohio Railroad Company, and other corporations of its class, at the time of the decision of the case of Mahany v. Kephart, were distinguished in their status from other foreign corporations, by a statute passed Dec. 27, 1873, Acts 1872-73, chapter 227, section 16. It declared that “All railroad companies doing business in this state under charters granted or laws passed by the state of Virginia or
In view of it and of the reasoning of Judge Haymond in that case, we cannot say the decision is wrong or would have been wrong, had there been no appearance on the part of the defendant. Nor can we say now, in view of the existing statutory provisions adverted to, that the status of a railroad company doing business in this state within the meaning of those statutes, is not equivalent to that of a resident of the state. On the contrary we think it is, and, for that reason, it may be proceeded against as a garnishee to the same extent, and in respect to the same classes of debts, as natural persons, residing in this state. Just here it is proper to say the use of the word “domicile” in the case of Railroad Co. v. Rogers,
That this ruling may deprive the employes in other states of foreign railroad companies, doing business in this state, of the benefit of exemptions allowed them in such other states, cannot be permitted to alter the principles of law governing the case. Stevens v. Brown,
For the reasons aforesaid, the judgment will be affirmed.
Rehearing
On re-hearing.
The correctness of the conclusion above stated, as to the status of a foreign railroad corporation doing business in this state, is vigorously resisted on the re-hearing. . As that is the pivotal question in the case, the argument demands attention. First, it is said the case of Mahany v. Kephart,
A further contention is that, by alteration of the statute, governing foreign railroad corporations doing business in the state, since the decision in Mahany v. Kephart, the status of such corporations has been changed. The act of December 27, 1873, quoted in the opinion, was too broad. Its purpose went beyond the limits of legislative power, as was soon revealed by decisions of the federal supreme court. The legislature could not deprive the federal courts of their jurisdiction by declaring a foreign corporation to be a domestic one. It probably occurred to our legislators that, in some other respects, such corporations could not be domesticated. We could not annul or alter the charter of a corporation of another state or dissolve it. All we can do is to exclude it from the state or limit its powers and privileges here, and impose burdens and liabilities. We cannot-have or exercise any extra-territorial power over them. Realizing this and seeing
Having carefully re-examined the case and. considered the argument on the re-hearing, we are convinced that the conclusions set forth in the opinion filed on the former hearing are correct, and the judgment then rendered will be now reentered.
Affirmed.