Court Opinion

ID: 6574679
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:33:07.654437+00
Date Added: 2024-06-11T15:57:02.576503
License: Public Domain

The opinion of the court was delivered by
Royce, Ch. J.
The note in suit was neither executed nor payable in Massachusetts, nor did the plaintiff or his factors, .Jewell, Harrison & Co., reside there. And from these facts, it follows, *21that upon principles long settled and universally acknowledged, the insolvent laws of Massachusetts could have no operation upon the rights of the plaintiff or his factors, without their express or implied consent.
We proceed to inquire, then, whether such consent was given to the proceedings in Massachusetts, as will bar a subsequent action on the note. And the question may first be considered in reference to Jewell, Harrison & Co. It is claimed by the plaintiff, that the proof of the note under the commission of insolvency, was not alone sufficient to produce this effect; but that the further act of accepting a dividend would be necessary. I am not aware that any case of a foreign creditor has been made to turn upon the necessity of this latter fact, although the fact appeared in Clay v. Smith, 5 Pet. 411, where such a creditor was adjudged to be barred. In Kimberly v. Ely, 6 Pick. 440, the creditor had proved his debt, and received a dividend, but the statute under which the proceedings were had, was held to be unconstitutional in reference to his debt; so that the dividend only operated as payment protanto. Chancellor Kent lays down the proposition, citing many authorities to support it, that “ The discharge under a State law will not discharge a debt due to a citizen of another State, who does not make himself a party to a proceeding under this law.” 2 Kent 393. But every one who presents and proves his debts, under a commission of this kind, does become such a party; and, in a way, moreover, which carries the strongest implication of his full consent and intended acquiescence. And since Jewell, Harrison & Co., not only caused this note to be presented and proved in their name, but have suffered the proof to remain uncancelled; we are disposed to consider the participation of those persons in the proceedings, as being sufficient to bar them of all other and independent remedies in respect of the note. And it only remains to be determined, whether the plaintiff is also concluded by their act.
The case shows that, at the time of making the purchase of Jewell, Harrison & Co., the defendant knew he was dealing with commission merchants, or factors. He had reason to conclude, therefore, that they were not the owners of the property which he purchased, though he was not informed to whom it belonged. And this may have suggested the peculiar form in which the note was drawn, — being made payable to the order of the signers; so that *22by means of an endorsement in blank, the legal property of the note might rest in the real vender, instead of the factors. The endorsement was simultaneous with the signing of the note, and was essential to render the instrument operative as a contract. Under such circumstances, I regard it in effect, as a note to the plaintiff. His property furnished the consideration of the note, and he could, by indisputable right, have filled up the indorsement to himself. Had Jewell, Harrison & Co. become bankrupts or insolvents, this note could not have been treated as a part of their assets. Scott et al., v. Surman et al. Willes 400. 2 Kent, 623, and cases there cited. It was the plaintiff’s property on which the factors had, at most, but a trifling lien for their commission. And hence, the question arises whether they could in virtue of that lien, or in their character of mere agents, deprive the plaintiff, without his consent or knowledge, of his extra-territorial immunity from the operation of the insolvent laws of Massachusetts, and subject his demand to a species of composition, wMch might well be expected to prove little better than a sacrifice of the debt. Such an act is certainly not within the ordinary powers of a commercial agent. On the contrary, the general rule is, that without special authority, he cannot even compound a debt. Paley Ag. 291. The powers properly appertaining to their employment as factors, would have enabled Jewell, Harrison & Co. to use all available means for enforcing payment of the debt. They might have- commenced and prosecuted a suit for its collection, even in Massachusetts, if found to be necessary. And perhaps their lien for commission may have given them a paramount right to control the demand. But even that could not entitle them to put the plaintiff’s interest in manifest jeopardy, by resorting without necessity to an unusual course, at least, until they had given him notice of the lien, and an opportunity to discharge it. In view of all the facts disclosed by the case, we consider that the right of the plaintiff to sustain the present action is not affected by the proceedings in Massachusetts.
Judgment affirmed.