Case Name: Samuel Johnson v. Benjamin M. Sharp
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1877-12
Citations: 31 Ohio St. 611
Docket Number: 
Parties: Samuel Johnson v. Benjamin M. Sharp.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 31
Pages: 611–621

Head Matter:
Samuel Johnson v. Benjamin M. Sharp.
S,, a resident of this state, and a creditor of W., who resided in the State of Missouri, prepared and sent to "W\,-for execution, a deed of assignment to himself, in trust, of all the debtors property, real and personal, situate in this state, “ for the benefit of all his creditors, under the insolvent laws of Ohio,” which deed W. duly executed and placed in 'a post-office in the State of Missouri, addressed to S., in the State of Ohip, who received the same by due course of mail, and immediately entered upon the execution of the trust: Held, The assignment was complete and effectual to pass title to the assignee, from the time the deed was placed in the post-office, as against subsequent attaching creditors.
Error to the District Court of Jefferson county.
The original action was brought by Benjamin Sharp, as assignee of Charles M. Wallace, against Samuel Johnson, as sheriff of Jefferson county, to recover the possession of certain personal property.
On the trial in the court of common pleas, a jury being waived, the court found specially the following statement of facts.
“First. That Charles M. Wallace, on the 16th day of November, a. d. 1874, at the' town of Rolla, in the State of Missouri, executed a deed of assignment, and deposited the same in the post-office of said town of .Rolla, at 7| o’clock in the morning of the said 16th day of November, conveying all his property, both real and personal, situated in the city of Steubenville, State of Ohio, to the plaintiff, Benjamin M. Sharp, for the benefit of'all his creditors, under the insolvent laws of the State of Ohio, which said deed of assignment ivas directed to the said Benjamin M. Sharp, and received hy him at the said city of Steubenville, in the county of Jefferson, State of Ohio, through the mail, on the 19th day of November, a. d. 1874, and on the same day filed by him in the probate court of said county of Jefferson; that the said plaintiff, Benjamin M. Sharp, as such assignee, on the same day took possession of the said property of the said Charles M. Wallace, which was not attached, as hereinafter found, situated in the said city of Steubenville, under said deed of • assignment, which consisted principally of a woolen mill and its fixtures and materials in their raw and manufactured state; that said deed of assignment was prepared in the said city of Steuben-ville, by the said plaintiff, Benjamin M. Sharp, who was a creditor of the said Charles M. Wallace, and sent to the State of Missouri, for the purpose of being executed by him, but that the said plaintiff, Benjamin M. Sharp, had no communication with the said Charles M. Wallace, respecting said assignment, previous to the time of sending said deed of assignment by him from the said city of Steubenville to said Charles M. Wallace, in the State of Missouri, to be so executed by him; that, in the acknowledgment attached to said deed of assignment, the words ‘ notary public,’ both at the beginning of said acknowledgment, and following the signature of the person claiming to be a notary public, at the conclusion of the same, were not written by the person so claiming to be a notary public in the State of Missouri, where said deed of assignment was acknowledged, but a notarial seal was attached 'to said acknowledgment, but said notarial seal did not contain the name of the person whose signature was attached to said acknowledgment as notary public, or of any other person ; that the said plaintiff, Benjamin M. Sharp, filed his bond as such assignee in the said Probate Court of Jefferson county, on the 21st day of November, a. d. 1874.
“ Second. That one Henry K. List, on the 16th day of November, A. d. 1874, caused an order of attachment to issue from the court of common pleas of said Jefferson county, State of Ohio, against the said Charles M. Wallace, which order of attachment was duly levied by the defendant, Samuel Johnson, as sheriff of said county of Jefferson, at 3 o’clock in the afternoon of said 16th day of November, A. d. 1874, upon the property replevied in this action, which said property was a lot of raw and manufactured material, situated in the woolen mill of said Charles M. Wallace, in the said city of Steubenville, Jefferson county, State of Ohio, and which said property was included in said deed of assignment from said Charles M. Wallace to said Benjamin M. Sharp; that the said proceedings in said attachment suit of said Henry K. List against said Charles M. Wallace were formal and legal in every particular, and that, at the time of the issuing of said order of attachment, the said Charles M. Wallace was a non-resident of the State of Ohio, as set forth'in the affidavit in said attachment suit, he having left Jefferson county, Ohio, where he had always resided, on the 9th day of November, a. d. 1874, and proceeded to the State of Missouri, and that, on the said 16th day of November, a. d. 1874, he had no present intention of returning to Jefferson county, Ohio, but afterward, to wit, on or about the 10th day of December, A. d. 1874; he did return to Jefferson county, Ohio, and now resides in said county of Jefferson. That Henry K, List is a resident of Wheeling, State of West Virginia.”
Upon these facts, the court rendered judgment for the plaintiff below, and the defendant alleged error. The judgment was affirmed by the district court, and the plaintiff in error now seeks to reverse both judgments.
Trainer S; Cook, for plaintiff in error,
claimed that there was no delivery or acceptance of the assignment at the time the attachment was levied, and therefore it had no legal effect. Burrill on Assignments, 274, 275, and note 3 on page 282 ; lb. 321, 322.
But, admitting the assignment to have been good and valid in law, will the trustee, under an assignment made by a non-resident Of the state, take personal property in preference to a subsequent attaching creditor, when the attachment is levied before the trustee takes possession of the property or does any other act toward the execution of his trust ? We think not.
If the trustee should have a preference when the assignment was made in the State of Missouri by a resident of that state, he should have a preference if made in the most distant foreign nation. As for the purposes of such a question, the states are. foreign to each other. Iloyt v. Thompson’s Hxr., 19 N. Y. 226; Lemon v.' The People, 20 N. Y.' 602 ; Guillander v. Howell, 35 N. Y. 661.
This court has already decided that an assignment to trustees by an insolvent debtor in Pennsylvania, under the laws of that state, does neither pass the legal title to the trustees nor create an equity to be enforced in chancery to land situate in Ohio. 2 Ohio, 235 ; 3 Ohio, 489.
• At common law an .assignment of personal property to trustees for the benefit of creditors must be accompanied by delivery of possession of the property, or it has no effect against subsequent attaching creditors. Burrill on Assignment, 285-290; also pp. 294, 295, and 298.
It was decided in New York, many years ago, that an assignment under a foreign bankrupt law would be sufficient to give the trustees under the assignment the preference over trustees appointed under an attachment process issued by the state courts. Holm.es v. Remsen, 5 John’s Ch. 460.
And that case is also cited approvingly by this court in Rogers v. Hatton, supra, but Chancellor Kent, who wrote the opinion in Holmes v. Remsen, speaking of it afterward, in' an elaborate opinion, says : “ But whatever consideration might otherwise have been due to the opinion in that ease and the reason and decisions on which it rested, the weight of American authority is decidedly the other way, and it may now be considered as part of the settled jurisprudence of this country that personal property as against creditors has locality, and the lex loci rei sitae prevails over the law of the domicile with regard ta the rule of preference in the case of insolvent estates. A prior assignment in bankruptcy under a foreign law will not be permitted to prevail against a subsequent attachment by an American creditor of the bankrupt’s effects found here. 2 Kent’s. Com. '(11th ed.)- 406; Burk v. McLain,.1 Harr. & Mellen. 286 ; Wallace v. Patterson, 2 Id. 463 (Maryland Rep.) ; Tay lor v. Geary, Kirby, 313 (Conn.); TJpton v. Hubbard, 28 Conn. 274; Milne v. Moreton, 6 Binney, 353; Mullikenv. Aughinbaugh, 1 Penn. 117 ; McNeil v.' Colquhoon, 2 Ilayw. 24 (N. C.); Assignees of Topham v. Chapman, 1 Const. S. C. 283; Robinson v. CrouMer, 4 McCord, 519 (S. C.); Ingraham v. Geyger, 13 Mass. 146. All cited by Chancellor Kent in his Commentaries, supra, in support of h'is later opinion1.
The Supreme Court of the United States has also peremptorily disclaimed the English doctrine, which was adhered to in Holmes v. Remsen. Ogden v. Saunders, 12 Wheaton, 213 ; Harrison v. Sterry, 5 Cranch, 289.
In the last case, the court held that the bankrupt law of a foreign country could not operate-a legal transfer of personal property in this country, and in the former case the court says that the doctrine rests upon the same footing between one state and another under the bankrupt and insolvent laws of the different states. Opinion of Johnson, J., p. 358.
See also tó same point: Johnson v. Hunt, 23 Wend. 87 ; Hoyt v. Thompson’s JSxrs., 1 Seld. 329 ; lb., 19 N. Y. 207.
Since the decision in Holmes v. Remsen, blew York has also repudiated the English doctrine laid down in that case. Willis v. Waite et al., 25 N. Y. 577; Guillander v. Howell et al., 25 N. Y. 657.
It has also been directly determined in quite a number .of the states that an assignment voluntarily made, independent of statute regulating assignments, but in trust for creditor's, has no effect as to subsequent attaching creditors outside of the territory or j urisdiction where made. 2 Kent’s Com. 407; Ingraham v. Geyger, 13 Mass; 146 ; Borden v. Sumner, 4 Pick. 265; Blake v. Williams, 6 lb. 286; Fall River Iron Works v. Croade, 15 lb. 11; Fox v. Adams, 5 Green 245; Oliver v. Townes, 14 Martin (Louis.), 93 ; Norris v. Mumford, 4 lb. 20; The Brig Watchman, in.the District Court of Maine, Ware, 232 ; Saunders v. Williams, 5 N. H. 213; Mitchell v. McMillan, 8 Martin (Louis.), 676.
Ih Yermont it has been determined that a voluntary foreign attachment takes precedence of a subsequent attach ment where an actual change of the possession of the property has taken place. Hanford, v. Paine, 32 Vt. 442.
But otherwise, where there is no change of possession of the property, and the subsequent attachment takes precedence. Pice v. Courtis, lb. 460.
And certainly this is as far as the rule could be carried in any of the states with a just regard to the interests and rights of creditors and the rules which regulate and govern the transfer of personal property. Determining the case at bar, even by the limited rule laid down in Vermont, and the judgments of the district and common pleas courts, can not stand.
Hays $ McCauslin, contra :
The validity of an assignment for the benefit of creditors, made- in another state, and operating upon property in this state, will be determined by the law of this state. Brown v. Knox, 6 Mo. 302 ; Barclay’s Dig. 58 ; Forbes v. Scanned, 13 Cal. 242; George’s Miss. Dig. 26; Fliner v. Bestie, 32 Mo. 240; SartweU v. Jewitt, 9 Ohio, 181; Fuller v. Steiglitz, 27 Ohio St. 355.
And as to. what is the legal effect of the assignment, see Burrill on Assignments, 325 (ed. 1853); Ingraham v. Wheeler, 6 Conn. 283 ; Caldwell v. Williams, 1 Ind. 405; Merrick v. Bragg, 102 Mass. 437.
As to whether the assignment or attachment prevails, see Story on Sales, sec. 515 ; Brooks v. Marbury, 11 Wheat. 78 ; Halsey v. Whitney, 4 Mason. 213.
Delivery of possession is not essential to pass title to personal property. Hooban v. Bidwell, 16 Ohio, 509 ; 2 Kent’s Com. 393; 3 John. 170; 3 Parsons on Contracts, 455 ; Burrill, 1; Story on Sales, sec. 311.
As to when tbe assignment took effect, see 1 Parsons on Contracts, 484; Willard’s Eq. Jur. 46; Tiffany and Bullard, 282, 296, 297, 298; 1 S. & C. Stat. 709; Burrill on Assignments, 275, 322; McKinney v. Rhoades, 5 Watts, 345 ; Klaqrp v. Shirk, 13 Penn. St. 589.

Opinion:
McIlvaine, J.
If it were conceded that under the act of April 6, 1859, regulating the mode of administering assignments in trust for the benefit of creditors, as amended March 16,1860, such assignments only as are made by debtors residing in this state, are subject to the supervision and control of probate courts, such restriction upon the jurisdiction of the probate courts in such matters would not affect the validity of an assignment in trust for the benefit of creditors, of property situate in this state, made by a debtor residing in another state or country; nor is the title of an assignee of such non-resident debtor at all affected by the fact that a probate court of the county in which such assigned property may be located has assumed jurisdiction over the administration of such trust. The validity of such assignments is not, in any case, affected by this legislation, but only the mode.of administering them-so that the validity of all such assignments must be determined by the general law in relation thereto ; and the administration of those made by non-resident debtors would remain subject to the control of courts of equity.
The deed of assignment, made by Wallace to Sharp as trustee, is unobjectionable in form and substance, and the power of the parties to enter into the contract is not disputed ; nor is there any question as to the effect of an assignment executed in another state and valid under the laws thereof, but in contravention of the established law of this state; as the terms and intent of the assignment before us are in entire harmony with the .policy of our laws in relation to such assignments. It would seem, however, that some reliance is placed by plaintiff in error on the fact, that possession of the assigned property was not transferred to the assignee before the seizure under the attachment. As to this point we will only say, in this connection, that, under the law of this state, actual change of the possession of personal property from a vendor to the vendee, or from the assignor to the assignee, is not essential to a complete sale and transfer of the title.
The sole question in the case is, did the assignment of the attached property from Wallace to Sharp take effect, as against the attachment of the plaintiff in error, under the rules of the common law ? '
The inquiry therefore arises, first, was the contract of assignment complete, as a common law contract, before the attachment was levied ? The record shows, that the deed of assignment was prepared by Sharp, the assignee, who was a creditor of the assignor, and a resident of the State of Ohio, and was sent to Wallace, the assignor', who was a resident of the State of Missouri, for execution ; and that Wallace having duly signed, sealed, and acknowledged the same; deposited the deed in the post-office at Rolla, in the State of Missouri, to the address of Sharp in the State of Ohio, at the hour of 7|- o'clock a. m., of November 16,1874, which was seven and a half hours before the attachment was levied upon the property. The deed was received by Sharp in due course of mail, who immediately entered upon the execution of the trust. In our opinion, the assignment was complete and effectual to pass title to the assignee, eo instanti, that the deed was placed in the post-office. By that act the assignor ceased to have control of it, and having placed it in the- mail for Sharp,
the assignee, who, by his jwevious conduct, had consented to accept the trust, the possession of the carrier must be. regarded as the possession of the assignee. This view is-sustained by the following authorities. Prince v. Yates, 2 Tread. 770; Dargan v. Richardson, Cheves, 197; Merrills v. Swift, 18 Conn..257 ; McKinney v. Rhoads, 5 Watts, 343; Smith v. Bank of Washington, 5 Serg. & Ráwle, 318; Shuber et al. v. Winding, Cheves, 218 ; Wilt v. Franklin, 1 Binn. 502 ; SJdpwith v. Cunningham, 8 Leigh. 271; Read v. Robinson, 6 Watts & Serg. 329.
The next inquiry is, whether the assignment, being executed in Missouri, of property situated in Ohio, was effectual to pass iitle as against subsequent attaching creditors in the latter state ?
The proposition involved in this inquiry is somewhat analogous to the conflicting claims-arising" under our at tachment laws and a foreign bankrupt assignment; but, in our judgment, the solution of the question before us can not be determined by the weight of the authorities upon the latter ; and chiefly for the reason, that the principle of comity should be recognized in a greater degi'ee between the members of our union, which are subject, under the general government, to a common system of bankrupt-laws, than between our own and foreign governments with whom we sustain no such intimate governmental relations.
It must be conceded, that the decided weight of authority, in this country, is, that our courts will not subject our citizens to the inconvenience of seeking dividends under a foreign assignment in bankruptcy, when they have the means of satisfying their claims at home; and, possibly, the same may be said when the preference is sought over any involuntary assignment of the debtor's property, made' in inviium or by operation of law.
But it appeal's to us that a different rule should be maintained where a voluntary assignment is made in one state of the Union of' property situate in another, and in conformity with the policy and requirements of the laws of the latter state. The common right of every one to dispose of his property wherever he may be, and a reasonable acknowledgment of the principle of comity, which should exist between sister states of this Union, would seem to require a different rule, and such doctrine has been recog-' nized in several of the states. Hanford v. Payne, 32 Vermont, 442; Farrington v. Allen, 6 Rh. Isl. 449; Law v. Mills, 18 Penn. St. 185; Varnam v. Camp, 1 Green, 326; Moore v. Bonnell, 2 Vroom, 90; Caskie v. Brown, 2 Wallace, Jr. 131; Bholen v. Cleveland, 5 Mason, 174; Moore v. Willett, 35 Barb. 663.
In our own state, it was held in Sortwell v. Jewett, 9 Ohio, 180, that an assignment made by an insolvent debtor, residing abroad, of lands situate in Ohio, will not be superseded by a subsequent foreign attachment, and in Fuller v. Steiglitz, 27 Ohio St. 355, it was held that an assignment of a chose in action by a foreign insolvent debtor for the benefit of his creditors passed the title and right of action to the assignee, as against a subsequently matured cross-demand held by the debtor in this state.
It is true, that great contrariety of opinion on this general subject has been expressed by the courts of this country, but on the whole, we think, that Mr. "Wharton, in his work on the Conflict of Laws, section 353, has fairly stated the view most fully sustained, in these words: "We may, therefore, hold it to be the law in the United States, that an assignment made in one state of personal property in another (such property not being in transit or following the owner's person), passes no title to such property as against attaching creditors of the assignor, such creditors being domiciled in the latter state, when such assignment is invalid by its laws." And we think the implication arising from the language quoted is also sustained by the weight of current authorities, namely : that if such assignment be valid, or, in other words, be in harmony with the laws of the state where the property is situated, the title, passes, and the rights of the assignee should be protected against subsequent attaching creditors.
There is another ground, however, upon which the assignment should be preferred to the attachment in this case. The assignee was a creditor of the assignor and a resident of this state. The conditions of the trust, as well as the form of the assignment, was in strict conformity to the policy and laws of this state; and by the express terms of the assignment the trust was to be administered " for the benefit of all his (the assignor's) creditors under the insolvent laws of the State of Ohio." Now, surely, under these conditions, the assigned property also being in this state, there can be no good reason found, why the courts of this state should refuse to recognize and administer this trust for the beneficiaries in as full aud ample a manner as it' the assignment had been executed in this state or by a resident of this state. Surely the rights and conveniences of our own citizens under such an assignment should not be deferred to those of a subsequent attaching creditor residing in another state.
Judgment affirmed.