99 N.Y.S. 126 | N.Y. App. Div. | 1906
Lead Opinion
This is an appeal from an order of the Special Term denying the defendant’s motion to set aside a levy upon a certain indebtedness, under a warrant of attachment heretofore issued in this action. The plaintiffs and the defendant are non-residents of the State of Hew York, The action is ex contractu, to recover for goods, wares and merchandise sold and delivered. The Degnon Contracting Company, upon whom the levy was made, is the contractor for a certain portion of the work on the Cumberland extension of the Western Maryland Railroad Company, in the State of Maryland, and the defendant is a sub-contractor under said Degnon Contracting Company upon said work. Heretofore a warrant of attachment was issued to the sheriff of the county of Hew York commanding him -to “ attach and safely keep so much of the property within your county which the said defendant * * has, * * *• as will satisfy the plaintiff’s said demand of $1,507.29. * * * ” The sheriff delivered in the county of Hew York to the secretary of the Degnon
The learned counsel for the appellant states his point as follows : “ The debt due from the Degnon Contracting Company, a foreign corporation, to the defendant, a non-resident of this .State, on a contract entered into in thé State of Maryland, * * * payments on account of which were made by said company by check drawn in Maryland on a bank in-Maryland, attempted to be levied on herein, has no situs in the - State of Hew York and is not subject to levy under an attachment in the present action brought by residents of the State of Maryland against the defendant, also a resident of Maryland.” It becomes necessary to consider the facts ‘ shown by the papers.
. The moving papers set forth that the plaintiffs and the defendant are residents and citizens of the- State of Maryland, and that the goods, wares and merchandise mentioned in the complaint, for the' ■value of which the suit was brought, were contracted for and delivered in Maryland; that the Degnon Contracting Company is a corporation organized and existing under and by virtue of the laws of the State of Hew Jersey; that said Degnon Contracting Company, at the time of the issuance of the warrant of attachment herein, was indebted to the defendant in. an amount over the sum- of $1,507.29 ; that said indebtedness arose out of work performed and agreed to be performed by defendant for said Degnon "Contracting
The plaintiffs’ papers set forth that the Degnon Contracting Company was organized under the laws of the State of New Jersey under the name the “ Degnon McLean Contracting Company,” the name being thereafter duly changed to “ Degnon Contracting Company.” Its certificate states that the principal office of the company is at No. 15 Exchange Place, Jersey City, N. J., and that the agent therein in charge thereof and upon whom process against the corporation may be served is the Corporation Trust Company of New Jersey; that the Corporation Trust Company acts under the laws of New Jersey as the representative in New Jersey of corporations organized under the laws of New Jersey, but whose business and actual offices for the transaction of that business are outside of the State; that outside of the doors of the offices of said company are two bulletin boards, each about eight feet high and from ten to twelve broad, and each having twelve vertical columns, in which, under the heading “ Corporation Trust Company, principal and registered office of,” the names of hundreds of corporations are placed, among which in its proper alphabetical place appears the name Degnon Contracting Company ; that inquiry at the office of said Corporation Trust Company brought forth the statement that it was simply the agent of the Degnon Contracting Company in its "
It is upon these facts that we have to consider whether a company organized under the laws of the State .of New Jersey, but whose ' sole presence there seems .to be a name on a billboard, with- hundreds of others, outside the offices of a company organized to comply with the law of that State, to give a legal fiction to a principal ¡office within the State; "but whose .real main office is within this State, much of whose business is done within this ¡State, which has complied with our law by filing its certificate and paying its
Plimpton v. Bigelow (93 N. Y. 592) presented an appeal from an order reversing an order vacating a levy by virtue of an attachment. The plaintiffs were residents of Massachusetts, and brought the action against a defendant, who was a resident of Pennsylvania, on ■ promissory notes of the. defendant made and delivered in Massachusetts and payable generally. The sheriff undertook to execute an attachment by. levying upon 439 shares owned by defendant of, the capital stock of a Pennsylvania corporation. The defendant then had possession of the certificates in Pennsylvania. They had been issued and delivered to him at the office of the company at Philadelphia, in said State, at which place the stock and transfer books were kept. The court said that the question presented was “ whether the shares of a non-resident defendant in the stock of a foreign corporation can he deemed to be within this State, by reason of the fact that the president or other officers of the corporation are here engaged in carrying on the corporate business.” Judge Andrews said : “ If the corporation, by having its officers and by transacting business in a State other than its domicile of origin, is deemed to be itself present as an entity in such foreign State, to the same extent and in the same sense as it is present in the State which created it, it may be conceded that its shares might be properly attached in such foreign jurisdiction. But we regard the principle to be too firmly settled by repeated adjudications of the Federal and State courts' to admit of further controversy, that a corporation has its domicile and residence alone within the bounds •of the sovereignty which created it, and that it is incapable of passing personally beyond that jurisdiction. * * * The foreign corporation is not here because its agents are here, nor because it has property here; nor is the stock here because the corporation has property, or is conducting its business in this State,” and sustained the order vacating the levy.
In Douglass v. Phenix Ins. Co. (138 N. Y. 209) the defendant was a domestic corporation. It issued in this State to the plaintiff, a resident of this State, a policy of insurance against loss by
In Carr v. Corcoran (44 App. Div. 97) the plaintiff was a resident of Ohio, and the defendant was a resident of Pennsylvania.' One Rhodes, who was also a resident of Pennsylvania, Was temporarily sojourning in Mew York city, and upon him an attempted levy was made tmdev:an attachment of a debt due bv him to the defendant.
In Simpson v. Jersey City Contracting Co. (165 N. Y. 193) there .. was an appeal from an order reversing an order of the Special Term vacating a levy. The plaintiffs, who were residents, commenced an action against a foreign corporation and procured an attachment and a levy to be made upon its interest in certain shares of the stock of the Hew Jersey and Pennsylvania Telephone Company, a foreign corporation, which belonged to the defendant and the certificates of which it had delivered to the Produce Exchange Trust Company of the city of Hew York, as security for the payment of a note. The levy on these shares of stock physically within this State, at the suit of a resident, was upheld, Judge G-bay saying: “ The deféndant had to the extent of its ability, transferred to the trust company as security for the payment of its indebtedness, whatever was its interest in the foreign corporation as evidenced by the delivery of the certificates of stock. Did it not, therefore, clearly have property rights or interests within this State which could be impounded by our courts to abide the result of the litigation over the plaintiff’s claim ? I think so.” “ The defendant’s interest in the stock was held by a title and with a right which authorized ■ the trust company to possess it until the indebtedness was paid; and in the event- of non-payment to sell it in satisfaction of its claim. • The relation of the parties was that of pledgor and pledgee,
In National Broadway Bank v. Sampson (179 N. Y. 213) the action was brought in aid of an attachment issued against the property of a Massachusetts corporation. The indebtedness to that corporation was of a firm, one member' of which was a non-resident. Judge Mae-tih, after citing Plimpton v. Bigelow, Douglass v. Phenix.Ins. Co., and Carr v. Coreoran (supra), said: “ While it is true that he still owed the debt when temporarily within this State, yet, as it was contracted in Massachusetts, was owing by him, a resident of -that State,, and as the creditor was also a resident there, it is quite impossible to see how the debt had any situs in this State; even under the rule relating .to attachments. * * * It seems clear that a debt, to be subject to attachment, must have a situs somewhere and can be impounded only in the jurisdiction where such situs exists, which is clearly where either the creditor-or debtor resides. The laws relating to attachments do not authorize a proceeding in this State to seize a credit owing to a resident of another State, where neither the- creditor nor .the debtor is a resident here.”
The plaintiffs cite India Rubber Co. v. Katz (65 App. Div. 349). In that case the plaintiff, an Ohio corporation, with no office in this State, sued the American Bicycle Company, a New Jersey corporation" having an- office and transacting business in New York city, for goods sold and delivered. The American Bicycle Company admitted its indebtedness, and alleging that Katz claimed said sum by reason of a levy under warrant of attachment in an action brought by Katz, deposited the money with .the chamberlain and asked that the attachment creditor, Katz, and the sheriff be substituted as defendants, which was granted.. After the deposit was made, the sheriff, pursuant to the attachment mentioned, levied v upon the sum so deposited. The plaintiff — the complaint having been "dismissed — contended in this court that the levy made under the- attachment in favor of Katz was invalid for the reason that both the debtor and creditor were foreign corporations, and- that, there- . fore, no levy under an attachment- granted by the courts of this State is authorized. Mr. Justice Hatch said': “ The defendant Katz is a resident of this State, and the money represented by the debt is also within the jurisdiction of this court; consequently,
Both of those considerations distinguish that case from the one at bar.
In Lancaster v. Spotswood (41 Misc. Rep. 19; affd., 86 App. Div. 627) there was an application to vacate a levy upon a New Jersey corporation. The motion was denied, Mr. Justice Blanchard saying: “ In the case at bar the plaintiff’s proof is that the debt due to defendants was the result of a contract made in the State of New York and by the terms thereof payable in this State. In the face of such proof I am unwilling to direct the release of the levy upon the ground that the situs of the debt sought to be reached is outside of the State of New York.”
In Harris v. Balk (198 U. S. 215), Mr. Justice Beckham lias examined this question of the situs of a debt with great care. In that case Harris, a resident of North Carolina, was indebted to Balk, also a resident of North Carolina, for $180 borrowed money. Harris visited Baltimore, and there Epstein, a resident of Maryland, claiming that Balk was indebted to him in the sum of $300, issued a non-resident writ of attachment, attaching the debt due from Harris to Balk. Harris returned to North Carolina, judgment was entered in Baltimore against him as garnishee and lie paid the amount of the judgment. Balk commenced an action in North Carolina against Harris on the original debt, and Harris pleaded the aforesaid judgment and payment in bar thereof. This contention was not allowed, and judgment having been given against Harris, he took the case to the Supreme Court of the United States. In reversing the judgment the court said : “ Attachment is the creature of the local law; that is, unless there is a law of the State providing for and permitting the attachment it cannot be levied there. If there be & law of the State providing for the attachment of the debt, then if the garnishee be found in that State, and process be personally served upon him therein, we think the court thereby acquires jurisdiction over
This case was followed in Louisville & Nashville Railroad v. Deer (200 U. S. 176). The attachment of-a debt due from a railroad corporation'Was upheld, although a foreign corporation, Mr. Justice Holmes saying: “ The proceedings in Florida were strictly in- accordance with the laws of that State. - The railroad company' did business there and was permanently liable to service and -suit.” So. that while it would seem that the view of the Supreme Court of the Hnited States differs from that expressed.by the-Courts of this State as to the question of whether a migratory debt can be attached," yet even' if We applied the rule above stated, the levy
. In Plimpton v. Bigelow (93 N. Y. 592) the court said on an appeal from an order reversing an order vacating a levy : “We are also of opinion that the defendant was entitled to move to have the levy set aside and vacated, thereby relieving his stock from the cloud and embarrassment created by the proceedings. (See Dunlop v. Patterson Fire Ins. Co., 74 N. Y. 145; 30 Am. Rep. 283; Blossom v. Estes, 84 N. Y. 617.) ”
In Carr v. Corcoran (44 App. Div. 97) this court affirmed an order setting aside a levy upon the ground of non-residence.
It is- true that in Simpson v. Jersey City Contracting Co. (47 App. Div. 17) the learned justice writing the opinion, without alluding to the foregoing cases, did express his opinion that the question'should not be determined upon motion, saying: “By the service of the copy of this warrant of attachment upon the trust company there was either a valid levy or the notice was ineffectual for any purpose. If the service of such a notice was ineffectual, there
■ ¡tice concurred in the opinion, one upon the first ground only, and the third) -that ,as there was no valid- levy, no motion was necessary, and so concurred in the result. When -this -case reached the Court ■of Appeals -(165 N. Y. 193) that court considered the question involved upon the merits and -sustained the levy and affirmed the -order without alluding to-the point now u nder consideration. It seems- t.o me, therefore, that this court is not foreclosed .upon the .question, and I see no reason in principle why the earlier decisions ■should n.o.t be followed. The levy is a cloud on defendant’s- title to
• receive.this debt, We set aside, on motion, the service of summons and other papers, and this court and the Court of Appeals have heretofore sanctioned setting aside an “ attempted levy.”
Where it appears clearly, as it .does in this ease, that the levy is had . and cannot be cured, -and where •jurisdiction depends upon ,a levy having been made, why should not an end he put to uncertainty and to litigation which may be vexatious? It is _ to the interest of the ¡State that an -end be put to litigation.
It seenri to me that the .-order. appealed from ,-should be reversed and the attempted levy vacated and set aside, with costs, to the - .appellant. ,
Patterson and Laughlin, JJ., concurredO’Brien, P. J.,,and. Ingraham, J., dissented.
Dissenting Opinion
• I dissent. The motion in this case is to set aside a levy made by the sheriff under a warrant of attachment, in this action. No property of the defendant was taken into -the possession ■ of the sheriff, and if the .copy of the warrant of attachment and the notice-served ¡upon- the P.eghon Contracting Company was insufficient to attach the indebtedness of this corporation to-the defendant there was no levy. As I understand the .opinion of Mr. Justice. Clarke, he comes to the conclusion that there was no claim in favor of the defendant' against this contracting ..company that could .be enforced in this State, and consequently there was nothing upon which the
I think that this 'question is one which should not be passed upon on a motion, but should be left to be regularly determined in proceedings taken to establish a lien by virtue of this action of the sheriff. I am aware that these applications have been entertained, and upon appeal the effect of an attempted levy has been passed upon by the court, but where' the whole right to maintain the action depends upon this question as. to whether or not there was a leviable claim existing in favor of the defendants against the party upon whom the attachment was served, it seems to me that the orderly course of proceeding Would be to. determine the question upon the proper proceeding and not upon a motion. It cer-. tainly is somewhat illogical for a defendant to come into court and say that the sheriff has made no levy and, therefore, move'to have a levy vacated. If there was no levy, there is nothing to be vacated. If there is a levy, it should not be vacated.
Without expressing any opinion upon the other questions dis-_ cussed by Mr. Justice Clarke, for the reasons stated 'I think the order should be affirmed.
O’Brien, P. J., concurred.
Order reversed, with ten dollars costs "and disbursements, and motion granted, with ten dollars costs. Order filed.