Case Name: Disconto Gesellschaft, Respondent, vs. Umbreit, Intervener, Appellant; Same, Respondent, vs. Same, imp., Appellant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1906-04-17
Citations: 127 Wis. 651
Docket Number: 
Parties: Disconto Gesellschaft, Respondent, vs. Umbreit, Intervener, Appellant. Same, Respondent, vs. Same, imp., Appellant.
Judges: 
Reporter: Wisconsin Reports
Volume: 127
Pages: 651–677

Head Matter:
Disconto Gesellschaft, Respondent, vs. Umbreit, Intervener, Appellant. Same, Respondent, vs. Same, imp., Appellant.
October 5, 1905
April 17, 1906.
Aliens: Right to maintain actions: Comity: Garnishment: Lien: Negotiable instruments: Certificate of deposit: Judgments: Publication of summons: Jurisdiction: Equity.
1. Aliens who are sui juris and not specially disabled by the law of tbe place where action is brought may there maintain suits to vihdicate their rights and redress their wrongs.
2. Plaintiff, a resident and citizen of Germany, occupied nominally the character of a creditor, but really was the mere agent of a foreign trustee of a debtor’s estate appointed in involuntary bankruptcy proceedings, to whom plaintiff had agreed to hand over all it might recover. Plaintiff had no property in Wiscon sin, or contract within or with a resident of that state, and brought action in a court of that state against a nonresident alien, temporarily within the state, to recover on a transitory cause of action arising without the state, and hy the process of garnishment sought to impound property of the debtor within this state to satisfy its judgment therefrom. XJ., another creditor of the debtor, was a resident and citizen of Wisconsin, and had secured hy garnishment a lien on the same property, hut his proceedings were subsequent in point of time to those initiated hy the alien creditor. The domestic creditor, having obtained judgment, thereafter intervened in the action brought by the alien. On appeal from a judgment in favor of the alien, held:
(1) The main action could not be maintained by the alien as a matter of right, but only on the principles of comity.
(2) The auxiliary action of garnishment by the alien was "governed by the same principles that applied to its main action, notwithstanding the fact that residents and citizens of Wisconsin were parties to the auxiliary action as stakeholders or claimants of impounded property.
.(3) Comity does not allow an alien creditor to seize and carry away property within the jurisdiction of Wisconsin courts . when a resident creditor stands also at the bar of the same court with a judgment and provisional lien, and thus force such resident creditor to go to a foreign court to collect his debt.
(4) It makes no difference that the home creditor’s claim may have accrued after that of the alien; the question is not to be determined by priority in point of time, but by the situation at'the time the court is called upon to finally decide which creditor shall receive its aid.
(5) To allow the alien creditor, really the mere agent of a foreign trustee in bankruptcy, to recover would overrule the policy of the state that a foreign trustee or receiver in involuntary bankruptcy proceedings can obtain no title to the debtor’s property in Wisconsin.
3. The rule that a resident of another state may sue another nonresident on a transitory cause of action arising out of Wisconsin, in the Wisconsin courts, as a matter of strict right, is based solely upon the provisions of sec. 2, art. IV, Const, of U. S. (declaring that the citizens of each state shall be entitled to all the privileges and immunities of citizens of the several states), and does not apply to nonresident aliens.
4. By the rules of comity, the courts of one state will voluntarily enforce the laws of a friendly state or nation when, by such enforcement, they will not violate their own public policy or laws or injuriously affect the interests of their own state or of their own citizens.
5. Under subd. 1, sec. 2769, Stats. 1898, no lien is obtained by an attempted garnishment where the fund is represented by a certificate of deposit.
6. In an equitable action to determine the rights of two creditors to a fund, it appeared, among other things, that one creditor was a nonresident alien whose cause of action arose in Germany, and that it had agreed to turn over all it realized thereon to a trustee of the debtor’s estate, appointed in involuntary bankruptcy proceedings had in Germany, and that the other creditor, U., had reduced his claim to judgment, obtained by default upon substituted service of the summons, for the full amount demanded in his complaint and had garnished the fund in question, which consisted of a certificate of deposit issued by a bank. On the trial of such equitable action the court gave judgment in favor of the alien creditor, but made no finding as to the merits of U.’s claim, or that it was named or described in the papers upon which the order of publication was based, and there was no bill of exceptions returned with the record on the appeal from the judgment entered in the equitable action. Kelcl, that a mere finding that a judgment was obtained by U. by default upon substituted service was insufficient to authorize the appellate court to hold that any jurisdiction was obtained of the debt due from the bank, since it did not appear affirmatively, from such findings, that the property was described in the complaint, or in the affidavit on which the order of publication was based.
7. In such case the judgment was reversed for the purpose of allowing U. to introduce proof showing that the debt due from the bank was described in the affidavit or in the complaint, in which event judgment was directed in his favor; but in case such was not the fact, it was directed that U. be allowed to introduce extrinsic evidence of the amount justly and equitably due him, which the alien creditor was to b.e allowed to meet, and the amount found to be justly due U. was directed to be given the preference over the alien creditor’s claim.
8. Treaties between the United States and the Kingdom of Prussia dated in 1799 and 1828, referred to in the opinion, are considered to have no bearing on the controversy raised in this action.
9. Cassodat, C. X, dissenting, is of the opinion that by its garnishment proceedings the-alien creditor obtained an equitable lien which should be preferred over that of the resident creditor.
Appeals from judgments of tbe circuit court for Milwaukee county: LaweeNce W. Halsey, Circuit Judge.
'Reversed.
Tbe two actions above named, tbe first by way of garnishment and- tbe second by way of creditors’ bill to reach non-leviable assets, were consolidated for tbe purposes of trial, and from a judgment in favor of the plaintiff in each action tbe defendant TJmbreit appeals. Tbe facts in tbe cases were not in dispute, and were substantially as follows: Tbe plaintiff is a banking corporation of tbe German Empire, having its principal banking bouse at Berlin. Gerhard Terlinden, tbe defendant in tbe main action, was and is a subject of tbe German Empire. In July, 1901, Terlinden absconded from Germany to this country, and was arrested at Milwaukee, August 16, 1901, as a fugitive from justice in extradition proceedings, which proceedings afterwards resulted in bis being extradited to Germany. In May, 1901, Terlinden bad committed torts in Germany, by which tbe plaintiff bank bad sustained damages amounting to nearly $100,000, and on August 1Y, 1901, tbe plaintiff commenced an action by personal service of a summons upon Terlinden in tbe Milwaukee circuit court to recover its damages for said torts, and at tbe same time garnished tbe Eirst National Bank and tbe Marine National Bank of said city. Tbe Eirst National Bank answered, admitting tbe previous deposit by Terlinden of two sums aggregating $6,420. Tbe Marine National Bank answered, admitting tbe previous deposit by him of $5,000, for which it bad issued to him a negotiable certificate of deposit ■in tbe usual form, which bad not been returned. Eebruary 19, 1904, tbe plaintiff recovered judgment in the main action against Terlinden for $94,105.11. Tbe appellant TJmbreit is, and was at all times named, a citizen and resident of Wisconsin, and rendered services for Terlinden beginning August 16, 1901, and ending Eebruary 1, 1903, and, on March 21, 1904, commenced an action against Terlinden to recover for sucb services, in which action he obtained service by publication only. At the time of the commencement of such action he also garnished the defendants Eirst National Bank and Marine National Bank. XJmbreit obtained judgment against Terlinden in his main action by default on June 11, 1904, for $7,500 damages; thereupon he intervened in the plaintiff’s garnishee action against the Eirst National Bank, and claimed that his lien by garnishment was superior to that of the plaintiff. April 1, 1904, the plaintiff brought an action in equity in the nature of a creditors’ bill against Ter-linden, the Marine National Bank, John C. Ames, and Um-breit, the object of the action being to aid its lien by garnishment against-the Marine Bank, and it demanded judgment that the $5,000 certificate of deposit, which was in the possession of the defendant Ames, not indorsed, be subjected to the lien of its judgment against Terlinden, and that the claims of Umbreit and the other defendants be cut off. In this action a temporary injunction, preventing the transfer or payment of the certificate of deposit, was issued and served upon the defendants. The defendant Ames surrendered the certificate into court and disclaimed title thereto; the defendant Umbreit answered, setting up his own judgment and garnishment, and claiming that his lien thereby was superior to that of the plaintiff. On or about July 27, 1901, proceedings in bankruptcy were instituted in Germany against Terlinden, and one Heeking was appointed trustee of the estate. On or about August 20, 1901, the plaintiff presented its claim to said trustee in bankruptcy, being the same claim upon which the main action was brought. The main action was commenced with the approval of the trustee, Heeking, and after its commencement the plaintiff agreed with Heeking that all moneys he should recover in the action should form part of the estate in bankruptcy and be handed over to trustee Heck- ing. It appears, that the German bankruptcy act contains the following provision (sec. 14) :
“Pending the bankruptcy proceeding neither the assets nor any other property of the bankrupt are subject to attachment or execution in favor of individual creditors.”
The garnishment action against the First National Bank and the bill in equity against the Marine National Bank were thereupon consolidated and tried together, and the court, upon the above facts, awarded the money in both banks to the plaintiff.
For the appellant there were briefs by August C. Umbreit, in propria, persona, Joseph B. Doe, attorney, and Hoyt, Doe, Umbreit & Olwell, of counsel, and oral argument by Mr. Uwibreit and Mr. Doe.
They contended, inter alia, that domestic creditors will be protected to the extent of not allowing property or the funds of a nonresident debtor to be withdrawn from the state before such domestic creditors have been paid. Every country will first protect its own citizens. Woodward v. Broolcs, 128 Ill. 222; Chicago, M. & St. P. B. Go. v. Keokuk N. P. Go. 108 Ill. 317; Gatlin v. Wilcox Silver-Plate Go. 123 Ind. 477; Ohafee v. Fourth Nat. Banlc, 71 Me. 514, 524; Bagby v. Atlantic, M. & O. B. Go. 86 Pa. St. 291; Ly-coming F. Ins. Go. v. Wright, 55 Vt. 526; Thurston v. Bosen-feld, 42 Mo. 474; Willitts v. Waite, 25 N. T. 577. Citizens and residents of a country where insolvency proceedings have been instituted are bound by such proceedings and cannot pursue the property of an insolvent debtor in another country. Gole v. Owmdngham, 133 U. S. 107; Limille v. Hadden, 88 Md. 594; Chafee v. Fourth Nat. Bank, 71 Me. 314; Finer v. Beste, 32 Mo. 240; Long v. Girdwood, 150 Pa. St. 413; Bacon v. Home, 123 Pa. St. 452. A creditor, by proving his claim in bankruptcy or insolvency proceedings, submits to the jurisdiction of the court in which the proceeding is pending and cannot pursue his remedy elsewhere. Cooke v. Coyle, 113 Mass. 252; Ormsby v. Dearborn, 116 Mass. 386; Batchelder v. Batchelder, 66 N. H. 31; Wilson v. O apuro, 41 Oal. 545; Wood v. Hazen, 10 Hun, 362; Olay v. Smith, 3 Pet. 411. Where both parties, plaintiff and defendant, are residents of a foreign state, a plaintiff cannot come into this state and obtain an advantage bj our law which he could not obtain by his own. If he seeks to nullify the law of his own state and asks the court to aid him in so doing, he cannot have such assistance, if for no other reason than that it is forbidden by public policy and the comity which exists between states and nations, which comity will always be enforced when it does not conflict with the rights of domestic citizens. Beacon v. Home, 123 Pa. St. 452; In re Waite, 99 N. Y. 433; Bagby v. Atlantic, M. & O. B. Oo. 86 Pa. St. 291. Citizens of a foreign state or country will not be aided by the courts of this state to obtain by garnishment a preference of their claim against a foreign debtor, in disregard of proceedings in their own country for the sequestration of a debtor’s estate and the appointment of a trustee thereof in bankruptcy. Long v. Girdwood, 150 Pa. St. 413. It is the uniform rule and doctrine of all courts that the principles of comity do not require that the courts confer powers upon a foreign receiver or trustee in bankruptcy, or permit him to bring and maintain actions in this state that interfere with and impair the rights of domestic creditors. Humphreys v. Hophins, 81 Cal. 551; Ward v. Pacific Muí. L. Ins. Oo. 135 Oal. 235; Hunt v. Columbian Ins. Oo. 55 Me. 290; Pierce v. O’Brien, 129 Mass. 314; Rogers v. Riley, 80 Eed. 759; OatVm v. Wilcox Silver-Plate Go. 123 Ind. 477.
Eor the respondent there were briefs by Winkler, Flanders, Smith, Bottum & Fawseft, and oral argument by F. O. Winkler.

Opinion:
WiNslow, J.
The general question here presented is whether a nonresident and alien creditor may sue a nonresident and alien debtor in the courts of this state upon a cause of action accruing in a foreign country, and may by means of garnishment or other provisional remedy impound property of the debtor within the state, and obtain judgment permitting it to apply such property upon the debt when one of our own citizens is shown also to be a creditor of the alien debtor and to have taken subsequent legal proceedings to impound the property for the payment of his claim. The general rule that all foreigners sui juris who are not specially disabled by the law of the place where the suit is brought may there maintain suits to vindicate their rights and redress their wrongs is undoubted. Story, Conflict of Laws (8th ed.) § 565; 2 Cyc. 107, 108, art. "Aliens." Resident alien friends are said to have practically the same rights and privileges, so far as the protection by law of their persons, liberty, reputation, and property rights is concerned, as citizens; and to protect these rights they must possess the legal remedies necessary for their due vindication. Alien friends, whether resident or nonresident, also have, in the absence of disabling statutes at least, the right to take, hold, enjoy, and dispose of property, real and personal, and to make contracts with residents, and so must have the right to invoke legal remedies to maintain these rights. In both cases the remedies are commensurate with the rights to be protected.
The plaintiff, however, is within neither of these principles. It is a nonresident, it has no property of any kind within the state, it has made no contract within the state or with any resident of the state. It has brought action against another nonresident alien, temporarily within the state, to redress a wrong committed without the state, and it asks the courts of this state not only to give it judgment for that wrong, but also to lend the aid of its process to impound property within the state and satisfy such judgment therefrom to the prejudice of one of the state's own citizens who has a claim against the same debtor. It is true that the cause of action is transitory and the parties both within the jurisdic tion of tbe court, and so tbe court bas jurisdiction, and may doubtless rightly entertain tbe cause; but is tbe court compelled to do so, because of an inherent right which tbe alien bas to demand tbe action of tbe court; or does it do so upon tbe principles of comity, with the right to refuse relief when such relief prejudices tbe interests of resident citizens ? This is tbe initial question in tbe case, and tbe one upon which, as it seems to us, it must turn. In considering this question there should be no confusion of ideas as to tbe exact situation and relation of tbe various actions and proceedings. It must be kept in mind that tbe original action is between two nonresident aliens upon a foreign cause of action; tbe appeals in tbe present cases are from judgment in two auxiliary actions brought in aid of tbe main action, to impound property, which actions are, in effect, only proceedings to secure payment of tbe judgment in tbe main action by equitable execution upon nonleviable property. Had tbe property sought to be reached been tangible and leviable in its nature, writs of attachment and execution issued in the main action would have accomplished tbe same purpose. It is manifest, therefore, that if the main action cannot be maintained as matter of right, but only (if at all) on tbe principles of comity, tbe auxiliary actions or equitable proceedings in tbe nature of attachment and execution must fall under tbe same rule which applies to tbe main action out of which they spring, notwithstanding tbe fact that residents of tbe state may be parties to tbe auxiliary. actions as stakeholders or claimants of the impounded property. That tbe main action is not an action maintainable as a matter of right, but only upon the principles of comity, seems unquestionable.
This court bas held that a resident of another state may sue another nonresident upon a transitory cause of action arising outside of this state, in our courts, as a matter of strict right. Eingartner v. Illinois S. Co. 94 Wis. 70, 68 N. W. 664. This ruling was, however, based solely upon that provision of the constitution of the United States which' declares that "the citizens of each state shall be entitled to all the privileges and immunities of citizens in the several states." Sec. 2, art. IV, Const, of U. S. It will be noticed that the present chief justice, though concurring in the result, disagreed with the court in that case upon this question, and took the position that the action could not be maintained, as matter of right, even under the constitutional provision named, but only upon the principles of comity. It is very manifest that, had the case been one between alien nonresidents, to whom the constitutional provision does not apply, the court would have taken the same view. It is not intended, however, to base the decision of this case upon a mere inference of this nature, nor is it necessary. The principle that an action between nonresident aliens upon a cause of action arising in a foreign country is entertained or not in the courts of this country as the principles of comity may dictate is very well supported. It is said by Mr. Wheaton in his Elements of International Law (8th ed., edited by R. H. Dana) pt. 2, § 140:
"It is the duty as well as the right of every nation to administer justice to its own citizens; but there is no uniform and constant practice of nations as to taking cognizance of controversies between foreigners. It may be assumed or declined at the discretion of each state, guided by such motives as may influence its judicial policy."
Mr. Webster, in his argument in the case of Bank of U. S. v. Primrose, defined the doctrine of comity as follows:
"It is, in general terms, that there are, between nations at peace with one another, rights, both national and individual, resulting from the comity or courtesy due from one friendly nation to another. Among these is the right to sue in their courts, respectively." 6 Webster, Works, 117.
The principle is impliedly recognized in Mason v. Ship Blaireau, 2 Cranch, 240. This was a libel for salvage upon a French vessel which had been damaged in a collision on the high seas and brought into an American port by a crew put on ber by an English vessel. All the parties were foreigners, and a question as to the jurisdiction of the court was raised, and thus treated by Chief Justice Maesi-iall (p. 264) :
"These doubts [i. e. doubts as to the jurisdiction] seem rather founded on the idea that upon the principles of general policy this court ought not to take cognizance of a case arising entirely between foreigners, than from any positive incapacity to do so. On weighing the considerations drawn from public convenience, those in favor of the jurisdiction appear much to overbalance those against it, and it is the opinion of this court that whatever doubts may exist in a case where the jurisdiction is objected to, there ought to be none where the parties assent to it."
It is very manifest that the case was entertained and decided not because the alien parties had a right to demand it, but because considerations of public convenience seemed in that case to require it. Had considerations of public policy, convenience, or the protection of the interests of our own citizens been upon the other side of the question, it seems evident that the court would have refused to exercise its jurisdiction. This is really the principle of comity. It is a question of discretion in the exercise of power, not a question of the existence of the power itself, for that is admitted.
In an early case in New York it was said that while our courts may take cognizance of torts committed on the high seas on board a foreign vessel where both parties are foreigners, still "it must, on principles of policy; often rest in the sound discretion of the court to afford jurisdiction or not according to the circumstances of the case. To say that it can be claimed in all cases, as matter of right, would introduce a principle which might oftentimes be attended with manifest disadvantage and serious injury to our citizens abroad as well as to foreigners here." Gardner v. Thomas, 14 Johns. 134. This doctrine was approved in Johnson v. Dalton, 1 Cow. 543; Dewitt v. Buchanan, 54 Barb. 31; Olzen v. Schierenberg, 3 Daly, 100; and the doctrine was also held in that state to apply to actions between nonresident citizens of other states (Burdick v. Freeman, 120 N. Y. 421, 24 N. E. 949), wbicb, as we have seen, is contrary to the rule in this state as declared in the Eingartner Case, supra. The same rule as to foreigners is held in Michigan (Great Western R. Co. v. Miller, 19 Mich. 305), where it was said that "where the parties are not residents of the United States and the trespass was committed abroad, the right of action in our courts can only be claimed as a matter of comity, and they are not compellable to proceed in such cases." See, also, 7 Am. Law Rev. 417, art. "Suits Between Aliens." The doctrine is reasonable; in fact, any other doctrine would seem to be an anomaly. The laws of a state are enacted primarily for the regulation, benefit, and protection of persons, rights, and propeifiy within its jurisdiction. To hold that two foreigners may import, bodily, a cause of action, and insist, as a matter of right, that taxpayers, citizens, and residents shall await the lagging steps of justice in the ante-room while the court hears and decides the foreign controversy, seems, on the face of it, to be unreasonable, if not absurd.
Holding, therefore, that the main action in the present case, with its equitable auxiliary proceedings to impoqnd nonleviable property, is to be maintained in the courts of this state (if at all) upon the ground of comity rather than upon the ground of right, we are to inquire what the general principles of comity are, and what circumstances in the present case are to be considered in deciding whether the courts of this state should extend their aid to the plaintiff. Comity is defined as: "Courtesy; a disposition to accommodate." By the rules of comity between nations, the courts of one state will voluntarily enforce the laws of a friendly state or nation when, by such enforcement, they will not violate their own public policy or laws or injuriously affect the interests of their own state or of their own citizens. While this court has not had occasion to consider the application of the principles of comity to an action between nonresident aliens upon & canse of action accruing abroad, like tbe present, it bas passed upon cases involving other phases of the question, and has clearly recognized the principle and its limitations. Thus, in Mowry v. Crocker, 6 Wis. 326, this court held that a voluntary assignment of property for the benefit of creditors made in another state passes the title to personal property of the assignor within this state, and will be given full effect by the courts of this state; and this ruling was followed in Cook v. Van Horn, 81 Wis. 291, 50 N. W. 893, and recognized in Segnitz v. Carden City B. & T. Co. 107 Wis. 171, 83 N. W. 327, as well as in Gilman v. Ketcham, 84 Wis. 60, 54 N. W. 395. But in McClure v. Campbell, 71 Wis. 350, 37 N. W. 343, it was held that an assignment of property made in another state pursuant to a law which amounts to a state bankrupt law has no extraterritorial effect, and will not be given effect by the courts of this state as to property within this state, and this doctrine has been subsequently approvingly cited in Filkins v. Nunnemacher, 81 Wis. 91, 51 N. W. 79; Wells, Fargo & Co. v. Walsh, 87 Wis. 67, 57 N. W. 969; Hughes v. Hunner, 91 Wis. 116, 64 N. W. 887; and Segnitz v. Garden City B. & T. Co., supra. The vital distinction between the two principles is that in the first case the title to the property passes by act of the owner, which is effective as to personal property wherever situate, while in the second case the assignment is either actually or practically made by decree of the court or operation of law in proceedings in in-vitum, and hence it has no effect outside of the jurisdiction of the court. See, also, Smith v. C. & N. W. R. Co. 23 Wis. 267. It is well to note, however, that even in the first line of cases, where effect is given to the assignment in this state, the ruling is distinctly based upon the principle of interstate comity, though the principle was not discussed at any length in any of the eases.
In Gilman v. Ketcham, 84 Wis. 60, 54 N. W. 395, the subject received attention in an opinion written by tbe late Mr. Justice PiNNEV, which is valuable and instructive. In this case it appeared that a New York manufacturing corporation had commenced proceedings in the courts of that state for its own voluntary dissolution, and had been adjudged insolvent and dissolved, and all its property, effects, and credits transferred to the defendant Ketcham as receiver; that in course of the proceedings an order had been made enjoining all creditors of the corporation from commencing or prosecuting any actions against the corporation to collect their debts,-which order had been served upon G-ilman, who resided in New York; that the New York statute under which the proceedings were brought did not contemplate or provide for a discharge of the debtor, but simply for division of its property among its creditors and stockholders; that, after the in-junctional order aforesaid had been made and served, Gilman commenced action in this state against the corporation, and garnished one of its debtors in this state, who brought the money into court, and Ketcham was thereupon interpleaded and made claim to the fund, by reason of the facts above stated. In this case it was held that the effect of the voluntary dissolution proceedings in New York was to place all of the corporate property and assets in custodia, legis, to be collected and applied by the receiver; that there was nothing in the proceeding or the statutes of New York in contravention with the law or public policy of this state, and that to give effect to such proceedings would not prejudice the rights of any citizen of this state. On these grounds the claim of the receiver was recognized and upheld upon the principles of comity, as against the plaintiff who was seeking the aid of the courts of this state in violation of the law, and evading the process of his own state. In discussing the question it was said:
"Our own citizens, in a proper case, would no doubt be protected against the effect of such extraterritorial act and adjudication, if injurious to tbeir interests or in conflict with tbe laws and public policy of Wisconsin, and effect would not be given to it at tbe expense of injustice to our own citizens."
Tbis was not a cbance remark, but a .careful statement of tbe principle of comity as applied to tbe case before tbe court, and was thoroughly supported by citations of and quotations from tbe authorities, which need not be repeated here. Tbis case has since been cited with approval in Hughes v. Hunner, 91 Wis. 116, 120, 64 N. W. 887; Parker v. Stoughton M. Co. 91 Wis. 174, 180, 64 N. W. 751; Wyman v. Kimberly-Clark Co. 93 Wis. 554, 559, 67 N. W. 932; Finney v. Guy, 106 Wis. 256, 82 N. W. 595; and by tbe present chief justice in bis concurring opinion in Eingartner v. Illinois S. Co. 94 Wis. 70, 84, 68 N. W. 669, where be also says:
"Actions like the- one at bar [which was an action by one nonresident against another for a tort committed in Illinois] are generally governed by tbe principles of interstate comity."
In Finney v. Guy, supra, it is said in tbe opinion of Mr. Justice Marshall:
"Tbis court recognizes fully tbe importance of interstate comity and uniformly freely gives effect to it as regards tbe laws of sister states when it will not seriously violate tbe policy of our own laws or tbe rights of our own citizens. . . . A liberal course in tbe enforcement of the laws of other states in proper cases should be tbe rule, but the paramount duty of our judicial system is to safeguard our own state policy and prevent injustice to our own people within reasonable limits." 106 Wis. 276, 277 (82 N. W. 602).
Upon these principles, then, we are to determine whether tbe plaintiff should be allowed by tbe courts of tbis state to take tbe moneys which it has impounded, and in determining tbis question a brief reference to tbe facts at tbis point will be helpful. Terlinden committed a tort (tbe nature of which does not appear) against tbe plaintiff in Germany in May, 1901, and fled to tbis country, bringing tbe money in question and depositing it in bank. It appears to have been bis own money; at least there is nothing before ns to show to the contrary. The intervener, Umbreit, began to render services to Terlinden (the nature of which does not appear) on August 16, 1901, and continued to render services until February 1, 1903, when his bill amounted to $7,500, which has not been paid. The plaintiff commenced suit against Terlinden to recover damages for said tort August 17, 1901, and obtained judgment for more than $94,000 February 19, 1904; more than $85,000 thereof being still unpaid. At the time of commencing suit it garnished the banks. Um~' breit brought action against Terlinden in March, 1904, and-garnished the banks, obtained service by publication, and was given judgment by default in his main action for $7,500-June 11, 1904. Terlinden was thrown into involuntary bankruptcy in Germany July 27, 1901, and the plaintiff has taken part in the proceedings. The German law prohibits the creditor of a bankrupt from seizing the bankrupt's property by attachment or execution pending the bankruptcy proceedings. The plaintiff, after the commencement of its action, agreed with the trustee in bankruptcy that it would hand over all moneys it might recover in the action to the trustee to go into the general estate.
It may be admitted that there is nothing contrary to our laws or public policy in the prosecution of an action by a foreigner against another to recover damages for a tort committed abroad, provided that the legal business of citizens is not materially interfered with thereby. The policy of our laws is to give every man a certain and efficient remedy in the courts for the wrongs which he may suffer. It may be admitted, also, that by the mere prosecution of the action to judgment in the present case no interest of the public nor of any of our citizens was prejudiced. But the plaintiff was not content simply to prosecute his action to judgment. At the inception of his action he asked and obtained the help of the court to seize and hold property of the defendant within. the jurisdiction of the court to answer the demands of its expected judgment. At this very time Terlinden was indebted to Mr. TJmbreit^ a citizen of our own state, in some amount, and evidently upon a contract for continuous service. There is nothing in the record to impeach the bona, fides of that debt or service. Before the plaintiff obtained any judgment on its claim, TJmbreit's claim had become large; action was begun upon it in March, 1904, the same property impounded by garnishment, and in June, 1904, judgment was obtained. Thereupon TJmbreit intervened in the plaintiff's garnishment action, and thus the foreigner and the citizen were brought face to face, each demanding the aid of the court in subjecting the funds in bank to the payment of its claim in preference to the other. If the foreigner was entitled to maintain his action and prosecute all the statutory auxiliary remedies as matter of right, his present claim would have to be sustained, because he obtained the prior lien by garnishment (so far, at least, as the funds in the Eirst National Bank are concerned) ; but being only entitled to ask the help of the court on the ground of comity he must, necessarily, only take such help as the rules of comity will give. It is confidently believed that no court in such case ever has allowed or should allow the foreigner to seize and carry away property within the jurisdiction when a resident creditor stands also at the bar with his judgment and his provisional lien, and thus force such resident creditor to go to a foreign country to collect his debt. If such action be not prejudicial to the rights and interests of our own citizens, it is difficult to see what action would be prejudicial. Nor does it make any difference that the home creditor's claim may have accrued after that of the foreign creditor; the question is not to be determined by priority in point of time any more than by priority of garnishment, but by the situation at the time when the court is called upon to finally decide which creditor shall receive its aid. So, if the pase were devoid of any other facts, comity would require that the interests of the borne creditor be protected. But there are other facts which have a material bearing. The foreign creditor is here nominally in his character as a creditor, but really as the mere agent of the foreign trustee in bankruptcy, who could not himself come here and assert any right to the property. The creditor has agreed to hand over to the trustee for general distribution all that he may recover in this action. Thus it is proposed by the aid of our courts to set at naught the policy of our own law to the effect that a foreign trustee or receiver in involuntary bankruptcy proceedings obtains no title to the debtor's property within this state. This is certainly imposing upon good nature, and comity is, after all, simply good nature. So we reach the conclusion that so far as the case against the First National Bank is concerned, the judgment is erroneous and should have been in favor of the intervener.
As to the equitable action in aid of the garnishment against the Marine National Bank, while the general principles of comity already discussed are equally applicable, there are some further considerations. In this case neither party obtained any lien on the fund by reason of the attempted garnishments, because it was represented only by a negotiable instrument which the bank had issued to Terlinden. Stats. 1898, sec. 2769, subd. 1. The equitable action was, therefore, brought by the plaintiff, to which Umbreit was made a party, in order to reach the indebtedness represented by the negotiable instrument and subject it to any judgment which might be obtained in the main action. At the time this action was brought Umbreit had brought his action against Ter-linden, obtained service by publication only, and had attempted to garnish the Marine National Bank, but had obtained no judgment. In the complaint in the equitable action the plaintiff alleged that Umbreit claimed a lien on the instrument by reason of his subsequent garnishment of the bank, but alleged that such garnishment was without validity and without jurisdiction, and therefore prayed that Um- breit's lien be cut off. Umbreit answered, claiming an indebtedness of Terlinden to bim of $7,500 as aforesaid, and setting up tbe commencement of bis action tberefor and bis garnishment of tbe Marine Bank. Tbe court found that Um-breit commenced bis action and obtained service by publication only; that be obtained bis judginent by default for tbe full amount claimed, but made no findings as to tbe merits of Umbreit's claim. Tbe court also found that Umbreit, at tbe commencement of bis suit, served garnisbee process on tbe Marine National Bank, but concluded that, as tbe only liability of tbe Marine Bank arose by reason of tbe issuance of a negotiable instrument to Terlinden, no lien thereon or on the liability of tbe bank was secured by either plaintiff's or defendant's garnishment proceedings-.
There is no bill of exceptions in the case, and hence tbe findings of fact are solely to 'be considered, and by them we are only informed that Umbreit obtained judgment by default upon substituted service of tbe summons, and tbe question has occurred to us (though not suggested in tbe briefs) whether such a judgment constitutes any proof that any sum was owing from Terlinden to Umbreit; in other words, is tbe judgment itself proof of personal liability, especially when tbe parties are litigating their rights before a court of equity ? Tbe validity and justice of tbe plaintiff's judgment in tbe main action cannot be questioned, because it was rendered after personal service of tbe summons and is unappealed from, but the defendant Umbreit has no such judgment and is not found, as matter of fact, to have bad any claim against Terlinden, except bis judgment obtained by default on substituted service. When be comes into a court of equity and makes bis affirmative claim for priority of right in property which tbe plaintiff bad in form equitably impounded and upon which be ( Umbreit) bad no actual lien, must there not be a finding that be actually bad a just claim in order to justify tbe court in protecting bim? Is bis judgment any proof of bis claim against Terlinden, except as to property garnished or attached? The principle is familiar and well settled that in an action against a nonresident, where there is only substituted service of the summons, the court acquires no jurisdiction for mere purposes of personal adjudication, but only to enter a judgment with reference to or to be enforced upon property within the state or a judgment concerning the status of one of our own citizens. Moyer v. Koontz, 103 Wis. 22, 79 N. W. 50; Pennoyer v. Neff, 95 U. S. 714. The judgment in such action will, of course, be effective so far as it affects or may be enforced against the property of the defendant which has actually been seized by attachment or garnishment. It has also been held by this court, contrary to the rulings in some jurisdictions, that it is not essential that the property within the state be seized by writ of attachment, but that, if the facts required by the statute to authorize the order for publication appeared by proper affidavit, the court would acquire jurisdiction to render a judgment good at least against the property described in the moving papers, providing it had not been removed from the state or sold to an innocent purchaser before the rendition of the judgment. Jarvis v. Barrett, 14 Wis. 591; Gallun v. Weil, 116 Wis. 236, 92 N. W. 1091. But it was further held, prior to the passage of ch. 29, Laws of 1868 (secs. 13-15, ch. 124, Tay. Stat.), that the property within the state must be specifically described in the' moving affidavit upon which the order of publication is based or the court will acquire no jurisdiction. Winner v. Fitzgerald, 19 Wis. 393. The property so described need not be property which can be attached, but may be such property which can only be reached by creditors' bill, such as debts owing by a resident to a nonresident, and it is now sufficient if it be described in the complaint. Bragg v. Gaynor, 85 Wis. 468, 55 N. W. 919.
The act of 1868, above named, as codified by subd. 1, sec. 2639, B. S. 18Y8, added a new class of cases in which service by publication was authorized, namely, cases where tbe cause of action arose in tbis state and the court has jurisdiction of the subject of the action. In Witt v. Meyer, 69 Wis. 595, 35 N. W. 25, this court expressed a grave doubt whether, in such case, the court would obtain any jurisdiction either of person or property unless it also appeared by the affidavit that the defendant had property in this state which was described; citing, in addition to Jarvis v. Barrett, supra, Rape v. Heaton, 9 Wis. 328, and Jones v. Spencer, 15 Wis. 583. Just previous to this decision it had been held, in Smith v. Grady, 68 Wis. 215, 31 N. W. 477, that a foreign personal judgment founded alone upon service of process, outside of the jurisdiction, there being no property within that jurisdiction, was absolutely void; citing Jarvis v. Barrett, supra. In view of the doctrine announced by the supreme'court of the United States in Pennoyer v. Neff, 95 U. S. 714, which is a leading case on this subject, and which was cited with approval by this court in Moyer v. Koontz, supra, we think it must be considéred as settled that the doubt expressed in Witt v. Meyer was well founded, and that such judgments, except those affecting the status of a citizen, can go no farther than to be effective as to property within the state at the time of the commencement of the action, which property must be described in the moving papers. New, it does not appear in the findings in the present case that the debt from the Marine Bank to Terlinden was named or described in the papers upon which the order of publication was based. It is true that it appears that judgment was entered in the action, and it may be claimed that the presumption of regularity in the proceedings of a court of general jurisdiction should be indulged in. The difficulty with this claim is that it appears that Mr. TJmbreit did have a valid garnishment of the funds in the First National Bank, which he acquired at the time he commenced his suit, and this would fully justify the court in entering the formal judgment in the main action, so the office of any presumption seems very doubtful at best.
We conclude that in the case of the creditors' bill against tbe Marine Bant tbe mere finding tbat a judgment was obtained by Umbreit by default upon substituted service is insufficient to authorize tbis court to bold tbat any jurisdiction was obtained of tbe debt due, from tbe bank, because it does not appear affirmatively tbat in tbat action tbis .property was described in tbe affidavit or complaint on wbicb tbe order of publication was based. In view of tbe fact tbat tbis point seems to bave been overlooked in tbe trial of tbe case, judgment will not be directed bere, nor, on tbe other band, will a new trial of tbe case be ordered. Tbe Marine Bank Case will be sent back with directions to allow tbe defendant Um-breit to introduce proof showing that tbe debt due from tbe Marine Bank was properly described in tbe affidavit or complaint upon wbicb tbe order for publication was based, in wbicb event bis judgment will be'given preference over tbe plaintiff's claim to tbe full amount thereof; in case, however, such was not tbe fact, be should be allowed to introduce extrinsic evidence of tbe amount justly and equitably due him, and the plaintiff should be allowed to meet such claim by evidence to tbe contrary, and tbe amount found by tbe court to be justly due Mr. Umbreit over and above what be may actually realize from tbe judgment in tbe garnishment action should be given preference, after wbieb the plaintiff's claim should be allowed.
By the Court. — Tbe judgments in both actions are reversed, with costs. Tbe garnishment action is remanded with directions to render judgment for tbe defendant Umbreit tbat be recover tbe sum garnished, with costs. Tbe equitable action is remanded to take further proof, and for judgment in accordance with tbe opinion.-