Paine v. Lester

44 Conn. 196 | Conn. | 1876

Granger, J.

Paine, the present plaintiff, on the 7th of July, 1875, brought an action of assumpsit against the Gorman Insurance Company, and factorized Lester, the present defendant, as agent and debtor of the company. The insurance company was a corporation organized under the laws of the state of Pennsylvania, and located in that state. The company appeared in the action and made defense and judgment was rendered against it. Execution was issued on the judgment and demand made upon Lester for payment, but he refused to satisfy tlie same and the present action of scire facias was brought. It is not denied by the defendant that he was indebted to the insurance company at the time of the attachment in a larger amount than the judgment recovered. But he claims, and the fact is found by the court, that in September, 1874, the insurance company went into insolvency under the insolvent laws of the state of Pennsylvania, making an assignment of all its effects to one Eichenlaub, in trust for its creditors, and that, on the 31st of May, 1875, written notice of the assignment was given to Lester; and the question is, whether by such assignment and notice the assignee acquired a title to the debt due from Lester, so that it could not be taken by the later attachment of the present plaintiff.

It is a general principle that personal property, having no situs, is subject to the law of the owner’s domicil, and can be transferred by a voluntary assignment or sale made by him according to the law of his domicil. This well settled principle the courts of England have applied to transfers of personal property made by decrees of foreign courts, and to cases of succession to such property by will or intestacy under foreign laws, or by foreign bankrupt proceedings. Potter v. Brown, 5 East., 131. Judge Story, in reviewing the English decisions, which have not been in entire harmony on the point, comes to the conclusion that they sustain this broad application of the principle, and that the mode of transfer is immaterial, the only question being whether it is good by the law of the owner’s domicil. Story’s Conflict of Laws, § 404 et seq. .Chancellor Kent came to the same conclusion after elaborately reviewing the English authorities, in the case of Holmes v. Remsen, 4 Johns. Ch. R., 460, and regarded the rule as thus established as founded on sound legal principles and the only reasonable one. He says (p. 484): “ I entertain no doubt that the same rule is known and observed among the other nations of Europe. It is embraced by the general principle, so universally acknowledged by the civilians, that the distribution and disposition of personal property are governed by the law of the owner’s domicil.”

But neither the current of English decisions, nor the high authority of Chancellor Kent, in the elaborate and learned opinion which we have referred to, seems to have made a permanent impression upon the jurisprudence of this country, and the weight of American authorities is in favor of a much more restricted application of the rule that personal property follows the law of the owner’s domicil. While fully admitting this general principle, the American cases, instead of starting from it in entering upon the discussion, start from another equally well settled principle, that the laws of a state or country have no legal effect beyond the limits of its territory. This being so, they regard the giving effect to the laws of a sister state or foreign country, in the case of the transfer of or succession to personal property within their own limits, as wholly an act of comity, and not a recognition of a right. This comity they are prepared to extend where there is no reason to the contrary, especially if there is no interest of their own citizens or of the citizens of a sister state who are seeking to avail themselves of the protection of their laws, to be injuriously affected by such recognition. Story’s Conflict of Laws, § 414; Upton v. Hubbard, 28 Conn., 274; Fox v. Adams, 5 Greenl., 245; Ingraham v. Greyer, 13 Mass., 146; King v. Johnson, 5 Harring., 31; Hoyt v. Thompson, 19 N. York, 207; Willitts v. Waite, 25 N. York, 587; Kelly v. Crapo, 45 N. York, 86; Dunlap v. Rogers, 47 N. Hamp., 281; The Watchman, Ware, 232; Milne v. Moreton, 6 Binney, 361, 365.

The remarks of the court in the case last cited are specially noteworthy, as coming from the state of Pennsylvania, the effect of whose insolvent proceedings is in question in this case. The court say, (per Yeates, J., p. 353,) “ It is one thing to assert that assignees of bankrupts under foreign institutions should be allowed by the courtesy of nations to support suits as representatives of such bankrupts for debts due to them, and another thing to give efficacy to those institutions to cut out attaching creditors, although posterior in point of time, who have commenced their proceedings under the known laws of the government to which they owe allegiance and from which they are entitled to protection. The right of such assignees thus to sue in a foreign country does not result from the force or effect of the law, but from long used and well established comity.”

The title of a foreign assignee or trustee in insolvency, depending for its recognition here solely on our comity, that comity will not be shown where there is any good reason against if. Here the debt due from Lester to the German Insurance Company, and the right to which in the assignee we are asked to recognize, has been attached by the plaintiff, and all the necessary steps taken under our laws for its appropriation to the indebtedness of the insurance company to the plaintiff. It is of no consequence that the attachment was not made until after the assignment in insolvency, and after notice of the assignment had been given to Lester—for the right of the plaintiff is not the right of a prior attaching creditor, but the right of a creditor asserting his claim against the opposing claim of the assignee in insolvency, the one resting on legal proceedings authorized by our laws, and the other only on a comity which we can exercise or refuse to exercise at our discretion. In these circumstances the court owes a legal duty to the plaintiff which is far more imperative than the demands of mere hospitality to a stranger.

In this case the plaintiff is a citizen of Rhode Island, but that fact does not affect the case. Upton v. Hubbard, 28 Conn., 275. The citizens of all our sister states have by the constitution of the United States the same privileges with our own ciiizons, and any one of them who has availed himself of the legal remedies furnished by our laws, to secure payment of a debt due him, has the same claim to the assistance of our courts that one of our own citizens would have.

It does not appear very clearly by the finding whether the assignment was made by the insurance company in the first instance, and as an ordinary assignment for the benefit of cz’editors, or as a part of cezdain insolvent proceedings commenced by petition, in the course of which the petitioning creditor is required by the statute to execute an assignment of all his property to certain trustees appointed by his cz’editors at a meeting called by the insolvent court for that purpose. It is found only that the assignment was made “under the insolvent laws of the state of Pennsylvania.” It was however stated in the argument, and seemed to be agreed, that the assignment was made under the 22d section of the act with regard to “Insolvents,” which is a different statute and in a different part of the statute book, from that which regulates assignments for the benefit of creditors. 1 Brightly’s Purdon’s Digest of Penn. Statutes, pp. 90 and 775. Whatever therefore might be said with regard to a voluntary assignment for the benefit of creditors, the present assignment must be regarded as clearly a statutory and not a common law conveyance, and therefore as having no strictly legal effect beyond the limit of the operation of the laws of the state.

For the reasons which we have given we think the right of the plaintiff must prevail over the claim of the assignee of the insurance company, and advise that judgment be rendered in his favor.

In this opinion the other judges concurred; except Park, C. J., who dissented.