64 Minn. 339 | Minn. | 1896
Lead Opinion
The material facts in this case, as disclosed by the record and the findings of fact of the trial court, are substantially as follows: The defendant the Irish American Bank is a corporation of this state, and the city of Minneapolis is its only place of business, and all of the parties hereto are, and have been during all the times hereinafter stated, citizens and residents of this state, and have appeared in this action. The defendant Amos P. Ireland and Arthur H. Ives for eight months prior to February
Afterwards, and on February 27, 1895, an action, in which garnishee proceedings had been instituted, was pending against the firm of Ives, Ireland & Co., and on that day they made an assignment, under the insolvency laws of the state, to the plaintiff, of all of their firm and individual property wherever situated. The plaintiff accepted the trust, and promptly, at the request of the attorney of the defendant the Irish American Bank, commenced an action, filing a lis pendens, against Ireland and his wife in Steele county, North Dakota, to set aside the fraudulent conveyance, and have the land applied to the payment of all debts which might be proven against the estate of the assignors. This action, is still pending. When the assignment was made, the assignors were indebted to defendant the Irish American Bank in the sum of $4,000, one-half of which was incurred prior to the making of the deed in question. Immediately after the making of the assignment, the bank proved its full claim as a creditor in the insolvency proceedings, and has in all respects, from that time to this, assumed and claimed all. the rights of a creditor in such proceedings, and has filed petitions and made motions therein. Among others, it procured an examination of the insolvents in such proceedings by an order of the. court, whereby the facts were disclosed in relation to the making of the fraudulent deed by Ireland to his wife. It has never withdrawn any part of its claim as' proved against the
After the plaintiff had commenced his action in North Dakota to set aside the deed, the defendant bank also commenced an ac
In its answer to this action the bank alleges that on July 20, 1895, which was subsequent to the commencement of this action against it, it assigned its judgment against Ireland to W. C. McFadden. The trial court found that McFadden is a resident of North Dakota, and, further, that the evidence does not disclose that any consideration was paid by him for the judgment, and that the action in North Dakota is still being prosecuted in the name of the bank. There is no claim or suggestion in the record that there are any creditors of the assignors in North Dakota, except McFadden, or anywhere else outside of the state of Minnesota, or that there are any creditors who have not proved their claims in the insolvency proceedings, and become parties thereto. The record is simply silent as to these matters.
The trial court, as conclusions of law, found that the deed from Ireland to his wife was fraudulent and void as to creditors of Ireland and as to the plaintiff as assignee, and held that Mrs. Ireland should convey the land in question, to be disposed of in the insolvency proceedings, for the benefit of such creditors, and, further, that the defendant bank be enjoined from further prosecuting its action in North Dakota. From an order denying its motion for a new trial the bank appealed. Neither of the Irelands have appealed. They submit to the decision of the court, and the presumption is that they will obey its decree, and will convey the land to the plaintiff as directed, whereby the legal title to the land.
The appellant’s assignments of error present the general question, is the conclusion of law of the trial court, to the effect that the appellant be enjoined from further prosecuting its action in Steele county, North Dakota, correct? We answer the question in the affirmative.
1. The power of the court thus to enjoin the appellant is undoubted. All the parties to this action are citizens of this state, and subject to the jurisdiction of the court. The facts that the land is in another state, and the action which the appellant is forbidden to further prosecute is there pending, do not affect the question of the power of the court in the premises. The court, in such a case, simply commands its own citizens, not the courts of another state. A court of equity of this state has the power and will restrain its own citizens, of whom it has jurisdiction, from prosecuting suits in the courts of other states and foreign jurisdictions, whenever the facts of the case make such restraint necessary to enable the court to do justice, and prevent one citizen from obtaining an inequitable advantage over other citizens. “The court acts in personam, and will not suffer any one within its reach to do what is contrary to its notions of equity, merely because the act to be done may be, in point of locality, beyond its jurisdiction.” Phelps v. McDonald, 99 U. S. 298; Cole v. Cunningham, 133 U. S. 107, 10 Sup. Ct. 269; Cunningham v. Butler, 142 Mass. 47, 6 N. E. 782, and 56 Am. Rep. 663, and note. No general rule can be laid down as to when the court ought to exercise this power, and enjoin a party from prosecuting a suit in a foreign jurisdiction. Each case must be ruled by its own facts. If they show that it is necessary and equitable to exercise the power in the orderly administration of justice, the court should enjoin the party, otherwise not.
2. The practical question, then, in this case is, do the facts of this case justify' the action of the trial court in exercising this power? The appellant claims, in substance, that it would be inequitable to enjoin it from prosecuting its action to subject the land in question to the payment of its demand against the in-'
The assignment to the plaintiff is not an involuntary one, which, like an execution, has no extraterritorial force, but it is a voluntary assignment for the benefit of creditors. This proposition has been assumed to be correct in several cases in this court: May v. Walker, 35 Minn. 194, 28 N. W. 252; Covey v. Cutler, 55 Minn. 18, 56 N. W. 255. It is an admitted rule that general voluntary assignments for the benefit of creditors, valid by the laws of the state where made, pass the title of the assignor’s personal property wherever situated, as against subsequent attaching creditors or lienors, unless their operation is limited or restrained by the operation of some local law or policy of the state where situated. Covey v. Cutler, supra.
But, as to the assignor’s real estate located in a state other than the one of his domicile and where the assignment is made, the manifest weight of authority, at least as to the number of. the cases, is to the effect that the assignment does not pass the title to the renl estate as against subsequent attaching creditors. Such an assignment, when executed and acknowledged and recorded in conformity with the laws of the state where the real estate is situated, passes the title thereto as against the assignor and his heirs. Stahl v. Mitchell, 41 Minn. 325, 43 N. W. 385. Why it should not also pass such title as against subsequent attaching
It is not, however, our purpose to decide the question here suggested, because, for the purposes of this case, we assume the rule to be that an assignment for the benefit of creditors does not, as against the creditors of the assignor, pass the title to his real estate situated in a state other than the one where the assignment is made. Therefore, except for the special facts of this case, we should hold that the trial court erred in enjoining the appellant from prosecuting its action, for, if the appellant was not a party to the insolvency proceedings, and equitably estopped from claiming adversely to the plaintiff as assignee, and if there was a fair probability that the only result of its being so enjoined would be that some nonresident creditor would secure the land, and not the plaintiff, then clearly it would be inequitable to so enjoin the appellant. But this case is the reverse of the one supposed, as shown by the special facts we have already stated, and which need not be here repeated. It is sufficient to say that the fair conclusion from such facts is that the appellant requested the plaintiff .to take the necessary steps to secure the land in question for the benefit of all of the creditors of the insolvent, and that he did so; that it is a party to the insolvency proceedings, and has actively participated in the management of the same, and still
We base our decision upon this ground, and the special facts of this case. . In view of such facts, it would have been inequitable, and a wrong to the other creditors of the insolvent, if the trial court had refused to enjoin the appellant. This is so, even if it be conceded that it is not entirely certain that, if the appellant is enjoined, the plaintiff will secure the land; for, under the circumstances of this case, the plaintiff, and not the appellant, is entitled to the benefit of any fair doubt in the premises.
The case of Jenks v. Ludden, 34 Minn. 482, 27 N. W. 188, relied upon by the appellant, is not in conflict with the conclusion we have reached. As already suggested, whether a court will exercise its power to restrain a citizen of this state from prosecuting an action in another state depends upon the facts of each particular case. Now the case at bar and that of Jenks v. Ludden in their facts are the reverse of each other. In the latter case the defendant, a citizen of this state, secured a first lien by attachment of the land of the assignors in the state of Wisconsin, and another creditor, a citizen of the latter state, secured in like manner a second lien on the same land. After these liens were secured, the assignors, citizens of this state, made an assignment for the benefit of their creditors under our insolvency laws. They were indebted to nonresident creditors, including $10,000 to citizens of Wisconsin, in the sum of $40,000. The defendant never in any manner became a party to the insolvency proceedings, or in any manner asserted any claim against the estate of the insolvents in the hands of their assignee. Upon these facts the assignee commenced an action in the courts of this state to restrain the defendant from prosecuting his attachment suit in Wisconsin, and
3. It is immaterial whether McFadden paid any consideration for the judgment. There is no claim that he was a purchaser in good faith without notice, for it is an admitted fact that he purchased pendente lite. He is therefore bound by the result of this action.
Order affirmed.
Dissenting Opinion
(dissenting). I cannot concur in the foregoing opinion. It is true that there are many cases where, as between residents of, or persons in, this state, a court of equity can compel a conveyance of real estate situated in some other state, and can compel or enjoin the performance of some other act as to the same. But this jurisdiction should not be exercised where it is as likely to prove abortive as it is in the class of cases to which the present case belongs. In nine cases out of ten, it will result in a waste of time and energy, and bring the authority of the courts of this state into contempt, to try to seize, in this indirect manner, real estate situated in other states, to be applied, through assignment proceedings here, to the payment of the debts of the insolvent. There is such an almost universal and total want of comity between the states in this respect that the courts of the state where the land is situated will aid every creditor who can dodge the jurisdiction of our courts over his person to appropriate the land to the payment of his individual debt. When the action in this state is brought, and even when it is tried, it is impossible to tell whether the court has corralled all the creditors or not, and it will usually -turn out that it has not, but that some have escaped, who will seize the land in the state where it is situated,
