95 Tenn. 172 | Tenn. | 1895
This bill was tiled in the Chancery Court of Shelby County by the Commercial
The Motherwell Iron & Steel Company filed an apswer to the original and amended bills, in which it was averred that, prior to the rendition of the judgment in Ohio, where both corporations were domiciled, certain creditors filed their petition against it in the Court of Common Pleas of Hocking County, Ohio, to have it dissolved as a corporation and its affairs administered under the statutes of Ohio; that, in pursuance of such proceedings, the Court, on July 6, 1892, made an order appointing one Frank C. Kochester temporary receiver, with authority ■ to take charge of all the property, of every kind and de
It further appears that .on the twenty-eighth of February, L893, Frank C. Rochester, the Ohio receiver, hied his bill in the Chancery Court of Shelby County against the Commercial National Bank, and McLendon, the Sheriff of said county. The bill recites in full the proceedings in the State of Ohio for the dissolution of the Motherwell Iron & Steel Company as an insolvent corporation, and his appointment as temporary receiver. It also exhibits the decree of October 12, 1892, dissolving the Mother-well Iron & Steel Company as a corporation, and the appointment of complainant as permanent receiver. The bill then claims that the judgment rendered in .Ohio was void, for the reason that the Motherwell J Iron • & Steel Company was then in the hands' of complainant as receiver. The bill further charges that, at the date of the filing of its bill, the Commercial National Bank and its officers ■ knew of the proceedings in Ohio to wind up the Motherwell Iron & Steel Company, and that complainant had been appointed receiver and directed to take charge of all the assets of the company, and had entered upon the discharge of his duty. It is then stated that,
The prayer of the bill is that a receiver he appointed to take charge of the goods in Memphis, and sell them, or that they be turned over to complainant under his appointment as receiver in the State of Ohio, so that, in either event, he may realize the proceeds thereof and take them to Ohio.
Answer was filed by the Commercial National Bank, in which it relied upon the validity of its judgment recovered in Ohio. It submits that the appointment of Rochester as receiver in Ohio, gave him no title to or right to the possession of the property of the Motherwell Iron & Steel Company in Tennessee, and avers the fact to be that Rochester had not taken such property into possession, and had not assumed any control of it when the judgment was recovered in Ohio, and when the bill was filed in Tennessee and the property attached by the Commercial National Bank.
The answer then denies that the Courts of Tent nessee have any jurisdiction to administer the laws of Ohio with reference to its corporations, and insists that in Tennessee the Motherwell Iron & Steel Company, at the bringing of this suit, was only an
On the twenty-ninth of March, 1893, after the last hill was filed, a decree was entered in both suits, by agreement of parties, that all the property in controversy in Tennessee be turned over to Rochester, the Ohio receiver, to be sold by him for the best price possible, and that the fpnd arising from the sale be held by him as a separate fund, to be disposed of according to the final decree made by the Court in the two suits.
The two causes were heard together, and the Chancellor decreed: First, the confession of the judgment by the Motherwell Iron & Steel Company, in the State of Ohio, on July 20, 1892, in favor of the Commercial National Bank, was, by the laws of Ohio, absolutely void, as against Rochester, the receiver, and he accordingly dismissed the bill of the Commercial National Bank. Second, that Rochester, as receiver of said defunct corporation, have and retain possession of. said property, to be administered by him as directed, by the proper Court, in the State of Ohio. The Commercial National Bank appealed, and has assigned errors.
The insistence of complainant is that, by virtue of its original and amended bills, and the attachment sued out thereunder, it acquired a lien upon the property in controversy, and that such lien is superior to any claim or title of Rochester, the Ohio receiver. Complainant bases its remedy upon § 5040
It will be remembered that oiie of the present bills was filed by the receiver, in which he prays that said goods be turned over to him under his appointment as receiver in the State of Ohio, or that a receiver be appointed to take charge of and sell the goods, so 'that, in either event, he may realize the proceeds of the goods and take them to Ohio to enable him to administer his trust, to the end that the assets of the corporation may be divided pro rata among all its creditors. This bill cannot be maintained for any purpose, for want of authority in the receiver to institute an action in a jurisdiction beyond that of his appointment. Says Mr. High, in his work on Receivers, § 239, viz.: “Upon the question of the territorial extent of a receiver’s jurisdiction and powers for the purpose of instituting actions connected with the receivership, the prevailing doctrine, established by the Supreme Court of the United States and sustained by the weight of authority in various States, is that the receiver, has no extraterritorial jurisdiction or power of official ac
The next question presented is, .whether, in view of the proceedings in Ohio and the laws of that State, where both of these corporations az-e domiciled, the Commercial National Bank is entitled to enforce its judgment against the Motherwell Iron & Steel Company in the Courts of Tennessee, and to subject to the satisfaction thereof property belonging to the latter in this State. It will be observed that the Motherwell Iron & Steel Company made no voluntary conveyance or transfer of its property in Ohio. The proceedings against it in Ohio weye in invitum, and under statutes authorizing the dissolution of insolvent corporations.
Says Mr. Wharton, in his Conflict of Laws, §§ 799, 800, viz.: “With regard to proceedings in bankruptcy or insolvency of the Courts of the several States in invitum, the universal rule is that such proceedings are ineffective as against attaching
In Reynolds v. Adden, 136 U. S., 348, Mr. Justice Bradley referred to the same distinction, viz.: “ Every State exercises to a greater or less extent, as it deems expedient, the comity of giving effect to the insolvent proceedings of other States, except as it may be compelled to give them full effect by the Constitution of the United States. Where the transfer of the debtor’s property is, the result of a judicial proceeding, as in the present case, there -is no provision of the Constitution which requires the Courts of another State to carry it into effect, and, as a general rule, no State Court will do this to the prejudice of the citizens of its own State.” Our statute (§ 5040, M. & V. Code) is not limited to citizens of this State, but, as held by this Court in Taylor v. Badoux, 8 Pickle, a citizen df another State is entitled to pursue the remedy it affords. Lisenbee v. Holt, 1 Sneed, 42-51.
It was held by the Court of Appeals of New York in Hibernia National Bank v. Lacombe, 84 New York, 367, that an assignment by virtue of or under a for
In the later case of Waite, reported in 99 New York, 448, the Court of Appeals of that State held that, where neither the rights of domestic creditors, nor of foreign creditors proceeding against the property under State laws were involved, the foreign assignees may be permitted to sue in their Courts for the benefit of all the creditors, on principles of national comity, without a surrender of the principle that a foreign statutory assignment does not operate as a transfer of the property in that State. It was distinctly held in that case that the statutory title of foreign assignees can have no recognition in that' State solely by virtue of the statute. The case of Cole v. Cunningham, 133 U. S., 107, is not an authority against the principles already announced. It appeared in that case that all the parties were domiciled in the State of Massachusetts. The debtor had made a general assignment of all his property for the benefit of all his creditors, as required by the laws of that State. A creditor was proceeding, in a foreign jurisdiction, to subject property of his
It is contended, however, on behalf of defendant, that complainant’s judgment cannot be enforced in the State of Tennessee, because it was void in the State of Ohio, where rendered. This contention is based upon the statute of that State, which provides, viz.: “And all judgments confessed by such corporation (after the petition - for the dissolution of the corporation is filed) shall be absolutely void as against the receiver appointed on such petition, and as against the creditors of the corporation.” It will be observed that the statute does not, in terms, declare that the judgment shall be void as against the corporation, nor does it undertake to vest the receiver with the title to property belonging to the insolvent corporation situated beyond the limits of
It is true, the petition for the dissolution of the corporation was filed on the sixth of July, 1892, and this judgment was confessed afterwards, to wit, on the twentieth of July. It is only against the receiver and creditors of the corporation that such judgment is by the statute declared void. We are of opinion that this statute is only operative in Ohio in favor of the receiver, and in respect of property situated in that State. The chattels in controversy were in the State of Tennessee, and subject to its laws when those attachment proceedings were begun, and, being the property of the Motherwell Steel & Iron Company, were subject to complainant’s judgment, and the lien of complainant’s attachment is in nowise affected by the proceedings that transpired in Ohio.
Finally, it is insisted by counsel for defendant
It results that the bill of Rochester, receiver, filed herein, must be dismissed, and complainant will be entitled to a decree for the amount, of its judgment and interest, and to subject the property herein attached, or its proceeds, to the satisfaction of said decree.