Chesapeake & Ohio Railway Co. v. Swayze

60 N.J. Eq. 417 | N.J. | 1901

Dissenting Opinion

Collins, J.

(dissenting).

It cannot be successfully gainsaid that any Virginia creditor of the defendant, who had not voluntarily submitted to the jurisdiction of the New Jersey court of chancery in the insolvency proceeding, might properly have taken the action in the Virginia court that is reprobated by the learned vice-chancellor because taken by the complainant in that proceeding. The vessels attached were solely within the Virginia jurisdiction. They were so at the time the bill in insolvency was filed here, and for that' reason, and for that reason only, an ancillary bill and receivership became necessary there. They never left that jurisdiction except in custodia legis, and at the time of the attachment in equity their original status had been restored by procedure acquiesced in by the New Jersey court of chancery. True, the title of the defendant as mortgagor had passed to the principal receivers, but possession had not been obtained and the New Jersey court had no jurisdiction or means of compelling jurisdiction over the mortgagees. Had the ancillary receivers obtained possession of the vessels, they could not have transferred jurisdiction over them to the principal receivers. Reynolds v. Stockton, Receiver, 16 Stew. Eq. 211; 140 U. S. 254. That the same persons were both principal and ancillary receivers is an immaterial circumstance. That the receivers have resigned in both jurisdictions and that only in New Jersey has a successor as yet been appointed is unimportant. The Virginia court must, on application, make an appointment. The case shows that there are Virginia creditors. The Virginia court has the right to administer the assets in Virginia, not to give those creditors an undue share, but to give them their proper share in that state. Our court of chancery has very properly insisted on like right where the situation is reversed. Irwin v. Granite State Provident Association, 11 Dick. Ch. Rep. 244. We should accord the same respect that we exact. The New Jersey receiver, if need be, will be heard in the Virginia court. A Virginia creditor cannot be driven from the home court, and in no other court is jurisdiction to attack the mortgages possible to any creditor unless service upon the mortgagees can be secured. But the learned vice-chancellor thinks that the complainant, although a Virginia corporation, is estopped from seeking a remedy open to others because it had invoked the New Jersey jurisdiction in insolvency. It is difficult for me to see why this should be so. The scope of the bill was an adjudication of insolvency. The results of such a proceeding are entirely statutory. The complainant sought and could seek no individual relief. Its status would depend on proof of its claim before the receivers, not on the filing of the bill. But waiving this and waiving also the fact that in' the impugned proceeding in Virginia the complainant was the assignee of a stranger to the New Jersey record, I am convinced that its course was unexceptionable. It desired to attack certain mortgages claimed as liens upon the vessels in question. Its contention was that by reason of non-registry these mortgages were void as against creditors not having notice thereof, and it alleged that its assignor was such a creditor. It would have been perfectly proper to seek the relief which such conditions justified in any tribunal that could give it. There would have been nothing inconsistent in seeking it in the New Jersey suit itself or in one collateral thereto, brought for proper administration of assets. But the New Jersey court had jurisdiction neither over the vessels nor the mortgagees. Consequently the complainant followed the property, and, in the same court that was administering relief ancillary to the New Jersey jurisdiction, made its plaint. That was no contempt of the New Jersey court, but rather was it deferential to its supremacy. The course of procedure was this: first, a bill was framed against the defendant and the mortgagees, referring in terms to the original insolvency bill in New Jersey and. to the ancillary bill in the same court in which the.new bill was then exhibited, and-to the receivership, setting up the ground of alleged invalidity of the mortgages and'praying enforcement of complainant’s debt against the vessels. Upon this bill there was issued an attachment in equity the effect of which was to hold the vessels against removal, and on the next rule day the bill was duly filed according to the practice of the court. Meantime the complainant had amended the ancillary bill referred to by inserting like allegation and by bringing in the mortgagees as parties defendant and praying relief against their mortgages. It is said that in its separate bill and in the amendment the complainant asks relief for itself alone; but this criticism is captious. As to the amendment it appears that the bill amended was originally filed in behalf not only of the complainant, but of all other creditors. The independent bill was doubtless, supererogatory and in any case is not to be condemned- because of its limited prayer. Non constat that there are other creditors in the same situation as the complainant: If there are any such they can readily be heard. If there is a lack of parties to either bill by reason of the absence of a receiver to represent the general creditors, that is a defect to be remedied upon complaint to the tribunal whose jurisdiction is invoked.

Remembering that the Virginia- court is a court of equity and that all the facts have been ingenuously disclosed to it, we must assume that equity will be administered. Only by comity between the courts of general jurisdiction of the sister states can the harmonious working of our union be secured. The dissentients in this case are content to leave to the Virginia court the due administration of right and justice and therefore vote to reverse the order from which this appeal was taken. That order directs that the complainant must release its attachment and execute and deliver any papers necessary to enable the new receiver, appointed only in New Jersey, to obtain possession of the attached vessels, and must facilitate by every means in its power the acquiring possession of the vessels by such receiver. The saving clause that nothing in the order shall prevent the complainant from prosecuting its suit in the Virginia court to set aside the mortgages, provided it can do so without interfering with the New Jersey receiver’s paramount and unrestricted right ci possession and his immediate actual possession and right of removal of the vessels from the State of Virginia, is an idle form. Jurisdiction in Virginia exists only by reason of the presence of the vessels there. The mortgagees are non-resident and only through the res can they be reached.

I have put the case on a broad ground, but it should be added that there is a fact that in any view should relieve the complainant from censure even had it been seeking individual relief in an independent forum. Before the complainant took action, now reprehended, the court of chancery, under a petition on which the complainant was not heard, had, by order, directed the receivers to surrender to the mortgagees their title to these vessels. .

For affirmance — Depue, Van Syokel, Lipptncott, Gum-mere, Ludlow, Nixon, Adams — 7.

For reversal — Ti-ie Ci-iiee-Justice, Dixon, Garrison, Collins, Hendrickson, Vredenburgh — 6.

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Lead Opinion

Per Curiam.

The decree appealed from is affirmed, for the reasons given by Vice-Chancellor Pitney in the opinion below for advising it.