214 A.D. 238 | N.Y. App. Div. | 1925
The question to be determined by means of this appeal is the validity of an attachment. Upon such validity depends the jurisdiction over the defendant in this action, since the defendant has not been subjected to personal service but only to service by publication. (Pennoyer v. Neff, 95 U. S. 714; Bryan v. University Pub. Co. of N. Y., 112 N. Y. 382.) The action is brought by a resident of this State against a foreign corporation not engaged in business herein. Whether said corporation has property herein which is subject to attachment is the question upon which the validity of the attachment depends. An order for service by publication was obtained, and the plaintiff has sought jurisdiction of the defendant through the attempted attachment of a debt owing to the defendant by a corporation known as Southern Enterprises, Inc., which latter also is a foreign corporation, authorized
So far as this court is concerned, this question has been settled by the decision in Bridges v. Wade (113 App. Div. 350). There Mr. Justice Clarke (now presiding justice), writing for a majority of the court, held that a plaintiff who brings action against a foreign defendant (not licensed nor doing business in this State) to recover the agreed price of goods sold in another State, is not entitled, under a warrant of attachment, to levy upon an indebtedness due the defendant from a foreign corporation which has complied with our laws by filing, its certificate and paying its taxes so as to entitle it to sue on its own contracts in our courts, and which, as a matter of fact, has its chief office and transacts much of its business in this State.
A different rule prevails in the courts of the United States, namely, that if the defendant could by action recover in this State, then the attaching creditor, standing in the shoes of the defendant, could attach the debt. In Harris v. Balk (198 U. S. 215) Mr. Justice Peckham said: “We do not see the materiality of the expression ‘ situs of the debt,’ when used in connection with attachment proceedings. If by situs is meant the place of the creation of the debt, that fact is immaterial. If it be meant that the obligation to pay the debt can only be enforced at the situs thus fixed, we think it plainly untrue. The obligation of the debtor to pay his debt clings to and accompanies him wherever he goes. He is as much bound to pay his debt in a foreign State when therein sued upon his obligation by his creditor, as he was in the State where the debt was contracted. We speak of ordinary debts, such as the one in this case. It would be no defense to such suit for the debtor to plead that he was only in the foreign State casually or temporarily. His obligation to pay would be the same whether he was there in that way or with an intention to remain. It is nothing but the obligation to pay which is garnished or attached. This obligation can be enforced by the courts of the foreign State after personal service of process therein, just as well as by the courts of the domicil of the debtor. If the debtor leave the foreign State without appearing, a judgment by default may be entered, upon which execution may issue, or the judgment may be sued upon in any other State where the debtor might be found. In such case the situs is unimportant. It is not a question of possession in the foreign State,
Recognizing the difference in doctrine between the two courts, Mr. Justice Clarke in Flynn v. White (122 App. Div. 780, 783) said: “ It is true that under the rule as laid down by the Supreme Court of the United States in the cases noted in Bridges v. Wade (supra), that court has held such service good, that the debt was migratory in character and followed the person. The rule, however, as laid down by the Court of Appeals, as indicated in National Broadway Bank v. Sampson (179 N. Y. 213), is otherwise, and we are bound to follow the Court of Appeals.”
In National Broadway Bank v. Sampson (179 N. Y. 213) the court, per Martin, J., said: “ 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. Nor, as we have seen, could the State make a debtor a resident by so declaring, when such was not the fact. If, under the circumstances of this case, it could be properly said that the situs of the debt owing by Charles E. Sampson was in this State and that it could be attached here, it would follow that it had no actual situs anywhere, but was transient, following the person of the debtor and could be attached in any State or country where the debtor might be temporarily found. Such a principle would give rise to most embarrassing conflicts of jurisdiction, and would lead to great confusion and uncertainty, and greatly prejudice the rights of creditors.”
In Douglass v. Phenix Ins. Co. (138 N. Y. 209) the plaintiff had sued in this State upon a policy of fire insurance issued to him by the defendant, a domestic corporation. By way of defense it was alleged by the answer that the debt owing by the defendant to the plaintiff had been prior to the commencement of this action attached in the State of Massachusetts in an action to recover a debt owing by the plaintiff to the attaching creditors, and that
It thus appears that our courts, having before them the difference in the rule applicable between the State courts and the United States courts, have adhered to the former.
It follows that the order appealed from should be reversed, with ten dollars costs and disbursements, and the appellant’s motion for an order vacating and setting aside the writ of attachment, the attempted levy of attachment and the alleged service of summons by publication should be granted, with ten dollars costs.
Clarke, P. J., Dowling, McAvoy and Burr, JJ., concur.
Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.