Court Opinion

ID: 8047316
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:00:49.478238+00
Date Added: 2024-06-11T16:37:33.134472
License: Public Domain

Sargent, J.
In Le Chevalier, assignee of Dormer, a Bankrupt, v. Lynch & al., Doug. 162, it was said by Lord Mansfield, that if a bankrupt has money owing to him out of England, as in St. Christophers, Gibralter, &c., the assignment under the bankrupt law so far vests the right to the money in the assignees that the debtor shall be answerable to them, and shall not turn them round by saying he is only accountable to the bankrupt. In Scotland they permit assignees of a bankrupt in England to sue for money owing to the bankrupt in Scotland, and it has been determined at the cockpit, upon solemn consideration, that bills by English assignees may be maintained in the plantations upon demands due to the bankrupt’s estate.”
But he also held "that if, in the meantime, after the bankruptcy and before payment to the assignees, money owing to the bankrupt out of England is attached bona fide, by regular process, according to the law of the place, the assignee in such case cannot recover the debt.”
So in Potter v. Brown, 5 East. 124 — 131, Lord Ellenborough, C. J., says, "it is every day’s experience to recognize the laws of foreign countries as binding upon personal property, as in the sale of ships, condemned as prize by the sentences of foreign courts, the succession to personal property by will or intestacy of the subjects of foreign countries. We always import together with these persons the existing relations of foreigners as between themselves, according to the laws of their respective countries; except, indeed, where these laws clash with the rights of our own subjects here, and one or the other of the laws must necessarily give way, in which case our own is entitled to the preference. This having been long settled in principle and laid up amongst our acknowledged rules of jurisprudence, it is needless to discuss it further.”
The English cases subsequent to this have been somewhat conflicting. These decisions are reviewed and commented on by Story in. his Conflict of 'Laws, secs. 404 to 409 inclusive. His conclusion upon such review, is, that the courts of England maintain the doctrine of the universal operation of assignments in bankruptcy upon all movable property wherever it may be locally situated at the time of the assignment. The process of reasoning by which this conclusion is reached is substantially as follows : The general principle is that personal property has no locality, but as to its disposition, it is subject to the law which governs the person of the owner, that is to say, it is subject to the law of his domicil. There can be no doubt that the owner may, by a voluntary assignment, or sale, made according to the law of his domicil, transfer the title to any person wherever the property may be locally situated. Now an assignment under the bankrupt laws of his domicil is by operation of law a valid transfer of all t’he bankrupt’s property as valid as if made personally by him. The law, upon his bankruptcy, transfers his whole *287property to the assignees, who thus become, lege loci, the lawful owners of it, and are entitled to administer it for the benefit of all his creditors. The mode of transfer is entirely immaterial. The only proper question is whether it is good according to the law of his domicil. This rule is applied in the succession to movable property in cases of intestacy, where the property passes by mere operation of law in the same manner as by a voluntary act of sale, or where it passes by will. Chancellor Kent came to the same conclusion, upon a review of the English and early American authorities, in the court of chancery in New York, in 1820, in case of Holmes v. Remsen, 4 Johns. Ch. 460 — 487, in which it was held that by the English law, and by the general international law of Europe, the proceeding which was prior in point of time, was prior in point of right, and attached to itself the right to take and distribute the estate.
But whatever weight the English or the early New York authorities might otherwise have been entitled to, the great weight of American authorities is now the other way, and it may now be considered as a 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 domicil, with regard to the rule of preferences in the case of insolvents’ estates. The law's of other governments have no force beyond their territorial limits, and if permitted to operate in other States, it is upon a principle of comity, and only when neither the State nor its citizens would suffer any inconvenience from the application of the foreign law'. 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, and our courts will not subject our citizens to the inconvenience of seeking their dividends abroad when they have the means to satisfy them under their own control. 2 Kent’s Com. 406; Story’s Conflict of Laws, secs. 410 to 421 inclusive: Harrison v. Sterry, 5 Cranch 289-302; Ogden v. Saunders, 12 Wheaton 61 — 362; Saunders v. Williams, 5 N. H. 213; Sanderson v. Bradford, 10 N. H. 260; Blake v. Williams, 6 Pick. 286. And the same rule applies as between the different State, Ingraham v. Geyer, 13 Mass. 146; Fox v. Adams, 5 Greenl. 245.
Upon the principle of comity or courtesy of nations and of States, it is usual everywhere to allow the assignees of the bankrupt, duly appointed pursuant to the laws where the bankrupt dwells, to maintain actions in that character in another State. And it has generally been held, where questions arose in this country between the bankrupt under a foreign law and his assignees under the same law, they both being citizens and subjects of the country enacting the law, where no rights of creditors, citizens of this country, intervened, that effect should be given here to the foreign law. Plestero v. Abraham, 1 Paige 236; Abraham v. Plestero, 3 Wend. 540; Hall v. Boardman, 14 N. H. 38; Hoag v. Hunt, 21 N. H. 106; Smith v. Brown, 43 N. H. 44.
It is said by Yeates, J., in Milne v. Moreton, 6 Bin. 353, that "it is one thing to assert that assignees of bankrupts under foreign institutions should be allowed by the courtesy of nations to support suits,, as-*288representatives of such bankrupts for debts due to them, and it is another thing to give efficacy to those institutions to cut out attaching creditors although posterior in point of time, who have commenced their proceedings under the known laws of the government to which they owe allegiance, and from which they are entitled to protection. The right of such assignees thus to sue in a foreign country does not result from the force or effect of the law, but from long used and well established comity.”
In Hall v. Boardman, supra, it was said that the assignment in Massachusetts, if regular, was sufficient to pass the property in the hands of the trustee in this State to the assignees in Massachusetts, so that the debt due from the trustee in this State to the bankrupt in Massachusetts would be due and payable to the assignees of the bankrupt there, unless the creditor here had acquired some right under our law paramount to such right in the assignees; and it was held in that case that inasmuch as the debt sued here, was one upon which the statute of Massachusetts would act directly, and that a discharge of the bankrupt in Massachusetts would discharge the plaintiff’s debt, therefore an attachment here upon such a debt would not give the plaintiff any rights against the operation of a law to which his own debt would be subject.
Hoag v. Hunt, 21 N. H. 106, was a case similar in principle to Hall v. Boardman, and was decided the same way and upon the same grounds ; it being held that the plaintiff’s debt was one that would be discharged by the force and operation of the insolvent law of Massachusetts, if the defendant obtained his discharge there. So in Smith v. Brown, 43 N. H. 44, we held that the debt, being made and payable by its terms in Massachusetts, was subject to the laws of that State, and would be discharged by the defendant’s discharge in insolvency there; and hence that no attachment made on that debt of the insolvent’s estate here, should avail against the operation of the assignment in that State. This holding was in accordance with the then recent decisions in this State and in Massachusetts. Brown v. Collins, 41 N. H. 405; Whitney v. Whiting, 35 N. H. 471; Scribner v. Fisher, 2 Gray 43.
But since the decision in the Supreme Court of the United States, in Baldwin v. Hall, 1 Wallace 223, and of Bank v. Butler, by this court, 45 N. H. 236, we should, of course, now hold differently, not only in Brown v. Collins, which is expressly overruled in Bank v. Butler, but also in Whitney v. Whiting, and in Smith v. Brown, as the court in Massachusetts have also overruled Scribner v. Fisher, and other cases holding the same doctrine, in Kelley v. Drury, 9 Allen 27. In these cases the general principle is established that the insolvent law of one State can have no effect whatever in any other State, as against citizens of the latter State, holding claims that follow the person of the creditor, no matter where the debt was contracted, or where it was made payable, unless such citizens of such other State voluntarily prove their claims in the State where the law was enacted, and thereby place themselves under the jurisdiction of the law.
And while we should not object, on the principle of comity, as between different States, to allow the assignee of an insolvent in Massachusetts *289or any other State, to sue in our courts, in recovering debts due to the insolvent, or in any other way recognize the existence or effect of such a law where the rights of our citizens were not involved, yet when a citizen of this State has a claim against an insolvent of another State, and seeks to enforce the collection of such claim under the laws of this State, upon the property of such insolvent found in this jurisdiction, where such claim would not be discharged or affected by such foreign law, and the creditor has not proved his claim under such law, we should not allow the local law of such other State to have any effect whatever to defeat the claim of our own citizens, under such circumstances.
In the case before us the debt of this plaintiff is not by its terms payable in any particular place, so that it would not come within the principle of Smith v. Brown, and Brown v. Collins, and Whitney v. Whiting, supra, if those decisions had not on that point been overruled. The plaintiff was a citizen of this State where Ms debt was contracted, and still is. His claim is for money, due for the price of goods wMch plaintiff consigned to defendant, and wloich he sold for cash. If the claimants had not appeared, a notice might be necessary under sec. 18, ch. 208, Rev. Statutes, but as the claimants appear, all parties will be bound by the judgment.

Trustee charged.