Case Name: Solomon S. Mead vs. David Dayton
Court: Connecticut Supreme Court
Jurisdiction: Connecticut
Decision Date: 1859-02
Citations: 28 Conn. 33
Docket Number: 
Parties: Solomon S. Mead vs. David Dayton.
Judges: 
Reporter: Connecticut Reports
Volume: 28
Pages: 27–35

Head Matter:
Solomon S. Mead vs. David Dayton.
A creditor resided in the state of New York, and the debtor in the state of Connecticut. The debtor was in failing circumstances, which was known to the creditor. The latter applied to the debtor in Connecticut for payment, and it was arranged between them that the debtor should deliver to the creditor, at his residence in the state of New York, certain personal property owned by him which the creditor was to take in full of his debt: and the property was immediately afterwards so delivered. Two days after, the debtor made a general assignment for the benefit of his creditors under the insolvent law of Connecticut. One of the provisions of that law is, that all transfers of property made in view of insolvency at any time within sixty days before such an assignment, shall be void. The parties, in the arrangement for the payment of the debt in the particular mode agreed on, had it in view to evade the provisions of the Connecticut law. In an action of trover, brought by the trustee in insolvency against the creditor, it was held,—1. That the title to the property legally passed to the defendant in New York at tke time of its delivery to him there, such sale being legal under the laws of New York. 2. That the insolvent law of Connecticut could not divest the title thus legally acquired.
£ *34 J *Trover. The plaintiff claimed title to the property in question as the trustee in insolvency of one Joshua Sands. The defendant claimed title under a purchase from the insolvent, a short.time before his assignment in insolvency. The case was tried on the general issue closed to the court, and the following facts were specially found by the court.
The defendant, at the time of the purchase of the property, was and had long been a citizen and resident of the state of New York, and the said Sands, a citizen and resident of the state of Connecticut, the latter living near the line which divides the states, and which ran through his farm.
The said Sands, on the 21st day of October, 1857, being insolvent, made an assignment of all his property to the plaintiff as trustee for his creditors, pursuant to the statutes relating to insolvent debtors. For some weeks prior to the assignment Sands had been justly indebted to the defendant in about the sum of $590, and the defendant, a few days prior to the 19th of October, had required of him payment or security for the debt. A negotiation between them on the subject was then commenced in Connecticut, which was continued in the state of New York and finally completed in Connecticut, resulting in an agreement that Sands should sell and deliver to the defendant in the manner hereinafter described, the articles mentioned in the plaintiff’s declaration, in payment of the debt. The wagons, double harness and fanning-mill mentioned in the declaration, were then in the state of Connecticut, and the cart, corn and horses were on the farm in the state of New York. The hay and corn had been cut, but the carrots were then growing on the farm. The wagon, cart, harness and fanning-mill had been used constantly on the farm, and the cart had heen left by him beyond the line in New York. The horses had been kept in a stable in the state of Connecticut, and on the 18th of said October were turned out by Sands into a lot on the farm within the state of New York, for the purpose of being delivered to the defendant in the manner hereinafter described. On the 19th day of October, Sands and the defendant, in pursuance of their agreement, went from the house of Sands in Connecti- [ *35 1 cut *across the line to the part of his farm in the state of New York, and there consummated the sale and delivery of the property to the defendant in payment of the deht. At the time of- the negotiation and of the sale and delivery, Sands was insolvent and in failing circumstances, and was intend ing to make the assignment which he subsequently did make ; and these facts were at the time well known, to the defendant, and the mode adopted by them for the transfer and the delivery of the property was adopted with a full knowledge of the laws of this state respecting insolvent estates, and with a view to evade their effect, and to give a preference to tRe defendant over the other creditors of Sands, by paying the debt. The laws of the state of New York allowed a preference to he given to one creditor over another, and the sale was a valid one except as affected by the insolvent laws of this state. The property had been duly demanded by the plaintiff after the assignment and before suit., but the defendant refused to deliver it.
The court, upon these facts, decided that the defendant was liable in the action, and that the plaintiff could recover of him for the horses, harness, wagon and fanning-mill, but that the defendant was not liable, and the plaintiff could not recover of him for the corn, hay, carrots and cart; and rendered judgment for the plaintiff accordingly. The *defen- [ *86 ] dant thereupon brought the record before this court by motion in error.
Hawley, for the plaintiff in error.
The contract is to be governed by the laws of New York. It contemplated its execution there, and it was consummated there. Story Conf. Laws, §§ 102, 242. Had no assignment been made, the transfer to the defendant would clearly have been unquestionable. Whatever claim the plaintiff has, is by the mere operation of our statute on an instrument executed by Sands, by which he did not pretend to convey this property to the plaintiff, the instrument not naming this property at all. But that statute could in no way affect citizens of other states or their rights ■—certainly not their title to any property lying without this state they owing no allegiance to our laws. Story Conf. Laws, §§ 7, 20, 279. The defendant, having a just claim against Sands, had a right to obtain payment as he did, as much as if he had, instead of these articles, received cash in payment. His .knowledge of Sands’ insolvency can make no difference. This is not at all like the case of a violation of penal laws—laws for prevention of crime—for here the only object was to do that which in itself was perfectly justifiable—to obtain payment of a just debt. And the case shows that there was no evasion of our laws, otherwise than as the obtaining payment of-that debt incidentally prevented the operation of our laws on that property. There can be no wrong in such merely incidental evasion of the laws of our state by a transaction entirely justifiable in itself—a transaction the validity of which no one could have questioned had no assignment been made—by a person of another state owing no allegiance to that law. Had the property [ *87 ] been taken by legal process in New York it* would have been holden even though thus taken after the assignment. Blake v. Williams, 6 Pick., 286. Harrison v. Sterry, 5 Cranch, 289. The defendant had a good title by the laws of New York. It can not be that he would have good title there and none at all here; nor that he would be liable here when he would not be there. The property being in New York our law could not affect it. Harrison v. Sterry, supra. It is not like the case of a suit brought by a citizen of another state in our courts, to enforce a claim opposed to our laws, in which our courts can rightfully refuse to lend their aid to its enforcement. The defendant is not here seeking the aid of our courts. The suit is brought against him, to divest a title valid by the laws of the state to which he belongs and ever has belonged.
Dutton and Minor, for the defendant in error.
The sale of the personal property by Sands to Dayton was made when Sands was in failing circumstances, and about closing his affairs from inability to continue in business ' and meet his payments, with a view to insolvency and with intent to prefer one creditor over another, all which facts were well known to both Sands and Dayton. The sale was therefore utterly void according to the provisions of our insolvent laws. Insolvent act of 1853, sec. 1. Utley v. Smith, 24 Conn., 290. And it can make no difference that Dayton was at the time of the sale a resident of the state of New York, and that the delivery of the articles sold was made over the line and within that state; because, 1st. The manner and place of delivery were arranged bv Sands and Dayton with a full knowledge on the part of Dayton of the laws of this state respecting insolvent estates, and with a view to evade their effect, and therefore in fraud of the law. 2d. Such a sale is contrary to the policy of our laws, and ought not to be sustained in favor of a citizen of another state, who ought not to be held entitled by comity to any higher privileges than citizens of our own state. Reynolds v. Geary, 26 Conn., 179. If the sale was void, then no title passed to Dayton, but the title remained in Sands, and passed by his general assignment to *the plaintiff as trustee for his creditors, [ *88 ] who is expressly authorized by the statute to bring any suit or suits necessary in the settlement of the estate.
The court, so far from erring in holding the defendant liable for the articles carried from this state, should have held that the plaintiff could recover for the articles that were within the state of New ,Y°rk, they being articles of personal property, and transferred by the same sale and under the same circumstances as the articles in this state, and personal property being governed by the laws of the domicil of its owner.
The first section of the insolvent act of 1S53 is as follows:
“ All conveyances and assignments of any lands, tenements, goods, chattels, or dioses in action, made directly or indirectly by any person, persons, or corporation, in failing circumstances, with a view to insolvency, shall, as against the creditors of the party making such conveyance or assignment, be deemed and adjudged fraudulent and utterly void, unless the same shall be made in writing, for the benefit of all said creditors in proportion to their respective claims, shall embrace all the property of the assignor or assignors, both real and persona], except such as is exempt from execution and except real estate situated out of the state of Connecticut, and excepting also, in the case of sole assignors, the sum of one hundred dollars in cash, and shall be lodged for record in the office of the court of probate,” ifec.
An act passed in 1855 provides that such conveyances and assignments shall not be void, unless within sixty days thereafter a general assignment is made by the debtor, or proceedings 'in insolvency are instituted against him by his creditors.
The case was in fact brought up by a motion for a new trial, but after the papers had been read, the chief justice remarked that, as no exception had been taken to evidence, and the only question was whether the court hacl rendered the right judgment on the facts found, it was not a case for such a motion but for a motion in error. The counsel thereupon agreed that the mition should be treated as a motion in error, and I have so reported it.—K.

Opinion:
Ellsworth, J.
Several questions have been made in this case which we need not at length consider; for the main one, if decided for the defendant, as we think it must be, is decisive of the case, and must be fatal- to the title of the plaintiff as assignee of Joshua Sands.
On the 19th day of October, 1857, the defendant, a resident of the state of New York, occupying a farm near the line of the state, came into Connecticut to obtain payment of a debt due from said Sands. It appears from the motion, that the negotiation between the parties as to the mode of paying the defendant was commenced in Connecticut, continued in New York, and after-wards completed, (that is, the negotiation,) in the former state, which negotiation terminated in an agreement that the debtor should deliver to the creditor at his residence in New York, certain articles of property, (which are the articles in dispute,) in full payment and satisfaction of his debt of $590. On that day the property was accordingly carried from Connecticut and delivered, and by the creditor received, at his residence in New York, and the note was cancelled. The defendant has not at any time since brought the property into this .state, but has only made use of it in New York, as he would use his own property, claiming indeed that it was his own ; and it is for this *act of conversion that he is now sued in Connecticut, having come within our borders for a temporary purpose. If these are all the. facts in the case, it is obvious, we think, that the defendant is not liable for the property. But are they indeed all ? The plaintiff insists that they are not, for he says that on the 21st of October, Sands, being, and having been on the said 19th of October, in failing circumstances and insolvent, to the knowledge of'the defendant, and intending soon to make an assignment of his property under and in conformity to the statute of the state for the benefit of insolvent debtors, assigned his property to the plaintiff,, and that the defendant knew of this law and was willing and intended by the payment aforesaid to get his debt satisfied in full, while the other creditors might be able to get theirs paid only in part.
I do not understand that there is any claim of fraud or illegality in this transaction, beyond what is implied in the effort of the defendant, (which was attended with success,) to obtain the full payment of his debt in the manner stated. This then is the question ,• was his obtaining or receiving and applying the property of the debtor in New York, where by the law of New York the preference of payment was proper and legal a valid transaction, or was it under the circumstances, fraudulent and void ?
W e are satisfied that the transfer was a good one, and if good there it is good everywhere, as the law of the situs is the law which must govern the parties in this particular transaction. The agreement between them there and here, and the delivery and acceptance of the property in New York, may well enough be viewed in two aspects—one confined to what took place in New York as the chain of title, and the other taking into account what took place in both states. Either, in my judgment, will lead to a similar conclusion. As to the first, it was agreed that the debt should be paid at the residence of the creditor in New York. The property was there tendered, and there received and applied as agreed, which, in itself, is an unexceptionable transaction, perfectly harmonious with the law of the situs, and, what is more, H ith the duty which the law recognizes in every case of a debt, of making full payment to the creditor.
In this view, I insist, the transaction should be held to be a transfer by delivery in New York, a matter falling [ *40 ] within *the exclusive jurisdiction of the state where the parties were, and where the property was to be received by the creditor, who had a perfect right to come here and to demand the payment of his debt and to insist that it should be made to him at that place. The title was thus complete and perfect in New York by the accord and satisfaction and delivery. The preceding negotiation in Connecticut, even had it been confined to this state, which it was not, is not in my judgment a necessary part of the defendant's title. His title is good without it.
If then the title was acquired in New York, why is it not good everywhere else, according to the well settled doctrine of international law, especially as toa citizen of that state? Would not her courts insist upon as much as this ? We are sure that they would, and, if so, the defendant must be held free from accountability here for using or converting this property there, unless we mean to say that among these states the rule of property does not depend upon the law of the rei situs, but every sovereignty may act upon its own notions, irrespective of titles and rights acquired elsewhere. No such notion can be tolerated for a moment as a general rule of property, for it would introduce endless confusion and conflict into all our courts of justice, and make a man's rights of property depend upon the place he happened to be in at the time, and not upon the law of domicil or rei situs.
Quite too much stress, I must think, has been laid on a supposed violation of our statute law. In my view there is no such violation. The defendant is not chargeable with anything of the nature of an offense. Being a creditor of Sands in Connecticut, he came to him to get payment. His debtor agreed at once to pay him, and to carry the means of doing it to the creditor's bouse in New York. He did so, and thereby paid and cancelled his note as he well might do. Was this rendered fraudulent and utterly void, because the creditor understood that his debtor in Connecticut was in failing circumstances or was insolvent, and atan early day expected to make an assignment ? We think-not. Suppose the creditor had sent a letter to his debtor, instead of coming *in person, and thereby in- [ *41 ] duced his debtor to come to him in New York and pay him, would this have destroyed the payment ? Or if the debtor, being transiently in New York, should pay his creditor in full, both parties knowing all the circumstances, would a future as- ' signment in Connecticut destroy this payment and render the creditor liable to pay the money to the assignee ? We think not. But it would be so, according to the doctrine claimed by the plaintiff's counsel. They insist that a foreign creditor can not be put on a better ground than a domestic creditor, and surely, say they, such a payment or such an accord and satisfaction can not be allowed to a domestic creditor. Certainly not. But our law does not reach a New York transaction, nor does it control a citizen of New York taking property there in payment of his debt. Such a payment ean not be defeated unless our statute is to have an extra-territorial effect, for which no one will contend ; so that the objection is not at all of the character assumed by those who urge its application to this case.
Once more, how is the assignment, made as it was two days after the delivery of the property ip New York, to affect the title by delivery on the 19th, whether we regard the entire negotiation, or the understanding of the parties and corresponding delivery in New York, as conferring title? The sale was not fraudulent and void at the time, even if it was subject tobe avoided by a future assignment, as would only be the case if it was altogether a Connecticut transaction. But it was not such ; and since the title passed on the 19th, and was good on that and the next day, it can not, after that time, be avoided in New York, unless our statute is to operate both retroactively and extra-territorially upon the transaction of the 19th, making void what was valid and legal before.
Let us look at the plaintiff's claim in another point of view.' The defendant is said to have come into this state with full knowledge of all the circumstances, and induced the debtor to carry the property in controversy out of the state and pay his New York creditor in full, which, it is said, works a preference in favor of this particular creditor, which our statute does [ *42 ] *not allow ; and it is said that the defendant can not be allowed therefore to avail himself of it in any manner or to any extent whatever. But wherein is the wrong ? Is it in the creditor's inducing his debtor to come into New York and pay him what he justly owed him there, or, in other words, in his inducing the defendant to keep his promise, which the law of the place pronounced to be just and obligatory ? Johnson v. Hunt, 23 Wend., 87. What then is the crime of the defendant? What has he done that is wicked or wrongful ? The thing done, I must think, is neither malum in se nor malum, prohibitum, though within this state, in a certain contingent event, the title may be taken away by an express provision of the statute in favor of a general assignee. If, before the assignment is made, the property has been sold and delivered out of the state, beyond the jurisdiction of our law, to a foreign creditor, it is not easy to see how it can be taken from the creditor, without giving to the law an extra-territorial effect which can not be admitted, and which certainly will not be allowed in that foreign state.
Our view of the case is summarily expressed in the three following propositions: 1st. The title t' %£ property in question passed to the defendant in New York on the 19th day of October, by its delivery and acceptance in payment of his debt. 2d. The insolvent law of Connecticut can not subsequently divest the creditor of that property ; and 3d. A title legally acquired under the law of the situs of the property, is, as a general rule of law, good elsewhere, and will be maintained. Following these principles, we find that the judge of the superior court was in error in the view which he took of the law upon the tacts found, and that the judgment below is erroneous.
In this opinion the other judges concurred, except Butler, J., who did not sit in the case.
Judgment reversed.