Court Opinion

ID: 6540627
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:15:20.77231+00
Date Added: 2024-06-11T15:55:49.084411
License: Public Domain

Harrison, J. Dissenting. I am unable to conftur in the conclusion reached in the opinion of the court, that no other creditors but those residing in this state were entitled to prove their claims in the administration here. For such a distinction there is in my mind no well-grounded or satisfactory reason. Though an ancillary administration is, as it is said, subservient to the rights of creditors, legatees and distributees who are residents within the state or county where it is granted, the rights of all are to be regarded; their protection is not the primary object of such administration. During his lifetime, the law gives no preference to the debtor’s creditors residing within the state, and all may alike sue him in the courts. Why may not all also, upon his death, sue his administrators or prove their claims against his estate? All creditors may prove their claims in the,domiciliary administration, and it is agaiust every principle of equity and justice that the local creditors, or those within the jurisdiction of the ancillary administration, who have equal right in the assets of the former, should exclude the foreign creditors from any participation with them in those of the latter. All that the local creditors may in justice demand, as I understand the rule to be, is that the effects of their deceased debtor shall not be withdrawn from the state until they are paid, if the estate is solvent; or, if insolvent, they have received a joro rata of their claims, according to the law of their state, in the aggregate assets of both the domiciliary and ancillary administrations. Chief Justice Parker, in Goodall v. Marshall, 11 N.H., 94, said : “As the movable property must be administered according to the lex loci rei sites until it comes to the disposition of the balance in the hands of the administrator, is there any sound reason why a distinction should be made between creditors, citizens of that place, and those who reside in other governments? or, in other words, shall the government which administers the property within its jurisdiction, and causes that administration to enure for the benefit of its own citizens, exclude the citizens of other states from a participation in it by refusing to entertain their claims? “The first answer to this question may be drawn from a consideration of the state of the laws relating to the remedies of the creditors preceding the death of their debtor. It would, perhaps, be too much to say, that there is no nation, possessing just claims to be regarded as a civilized government, in which, during a time of peace and friendly relations, the subjects or citizens of a foreign state are excluded from pursuing similar remedies for the collection of debts provided lor its own subjects. It is sufficient- that no such exclusion is known to the common law, nor to the statutes of England, or those of the several United States. So far as regards the relations of the latter to each other, any attempt at such exclusion is prohibited by the clause of the Constitution of the United States, which provides that the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states. If the creditors of the domicile may pursue the property of the debtor in his lifetime, in another government, equally with the citizens of the government where the property is situated, no sound reason suggests itself why they should he debarred of a remedy, and the property be appropriated exclusively, or in the first place to the satisfaction of the creditors in the latter government on his decease. Even if by permitting them to come in, the property may be insufficient to pay all, and the creditors in the government where the property is situated thereby compelled to resort to the principal administration where the debtor had his domicile, or to lose,their debts, or a portion of them; this result is no other than might have been obtained in the lifetime, of the debtor, by his withdrawal of the property from their jurisdiction. “Another answer, and one which seems entitled to weight, is furnished by the considerations to which we have before adverted, showing that the ancillary administration, so far as creditors are concerned, is to be governed by the lex loci. It' no regard is had to the place of residence of the deceased, in the marshaling of the assets, and the payment of the debts, no good reason occurs to us why any regard should be had to the place of residence of the creditors, in the allowance of the claims.” And all the cases I have been able to find, in which the question has been directly passed upon, or adverted to, except the one hereafter mentioned, are in agreement with the case from which I have quoted. Dawes v. Head, 3 Pick., 144; Davis v. Estes, 8 Pick., 475; Harvey v. Richards, 1 Mason, 381; Cummings v. Banks, 2 Barb., 607; DeSobry v. DeLaister, 2 Harris & J., 244; Rosenthal v. Renick, 44 Ill., 202. I find no direct expression in Kent’s Commentaries upon the point in controversy. The passage referred to in the opinion, if not indicating a contrary view, certainly does not admit of a construction favorable to that taken by the majority of the court. The author, after saying, “whether the court here ought to decree distribution, or remit the property abroad, was matter of judicial discretion, and there was no universal or uniform rule on the subject,” proceeds as follows: “The manner and extent of the execution of the rule were well discussed and considered in the supreme court of_Massachusetts. A person was domiciled at Calcutta, and died there insolvent, and his will was proved and acted upon there. Administration was taken out in Massachusetts, on the probate of the will in the East Indies; and assets came to the hands of the administrator at Boston, sufficient to pay a claim due citizens of the United States, and a judgment debt due a British subject in England; but all of the assets were wanted to be applied, in the course of administration, by the executor at Calcutta. It was held that the administrator here was only ancillary to the executor in India; and the assets ought to be remitted, unless he was compelled by law to appropriate them here to pay debts. It was not decided whether he was compelled to pay here; but if it were the case, it would only be the American creditors; and the British creditor was not entitled to come here and disturb the legal course of settlement of the estate in his own country. If there were no legal claimants with us in the character of creditors, legatees, or next of kin, the administrator would be bound to remit the assets to the foreign executor, to be by him administered according to the law of the testator’s domicile; and if any part of the assets were to be retained, it would form an exception to the general rule, growing out of the duty of evei’y government to protect its own citizens in recovery of their debts. The intimation has been strong that such an auxiliary administration, in the case of a solvent estate, was bound to apply the assets found here to pajr debts due here; and that it would be a useless and unreasonable courtesy to send the assets abroad, and the resident claimant after them. But if the estate was insolvent, the question became more difficult. The assets ought not to be sequestered for the exclusive benefit of our own citizens. In all civilized countries, foreigners, in such a case, are entitled to prove their debts and share in the distribution. The court concluded that the proper course, in such a case, would be to retain’ the funds; cause them to be distributed pro rata, according to our own laws, among our own citizens, having regard to all assets and the whole aggregate amount of debt here and abroad, and then to remit the surplus abroad to the principal administrator. Such a course was admitted to be attended with delay and difficulty in the adjustment; but it was thought to be less objectionable than either to send our citizens abroad upon a foidorn hope to seek for payments of an insolvent’s estate, or to pay them the whole of their debts, without regard to the claims of foreign creditors.” 2 Kent's Com., 433, 434. The case alluded to in the above extract is Dawes v. Head, 3 Pick., 128, which was a suit lipón the administrator's bond, for failing to pay the claims mentioned, and the court, in the course of the opinion, say: ‘•Whether citizens of other states claiming payment of their debts of the administration here, are to be put upon the same footing with citizens of Massachusetts, by virtue of the privileges and immunities secured to them by the constitution of the Nnited States, is a point ivhieh we do not now decide. But, without doubt, the courts of the United States, having full equity powers, would enforce payment upon the principles above stated, where there is no suggestion of insolvency of the estate. There would be no doubt, we think, that the payment of debts by the administrator here, after sufficient proof that they were due, and an allowance of his account therefor by the probate court, with proper notice, would be faithful administration, according to the condition of his bond, and would be a proper way of accounting to the principal administrator abroad. _ “In regard to effects thus collected within our jurisdiction, belonging to an insolvent estate of a deceased person having his domicile abroad, the question maybe more difficult. We can not think, however, that in airy civilized country, advantage ought to be taken of the accidental circumstances of property being found within its territory, which may be reduced to possession by the aid of its courts and laws, to sequester the whole for the use of its own subjects, or citizens, where it shall be known that all the estate and effects of the deceased are insufficient to pay his just debts. Such a doctrine would be derogatory to the character of any government. Under the English bankrupt system, foreigners, as well as subjects, may prove their debts, and share in the distribution. Without doubt, in other foreign countries, where there is a cessio honor um, or other process relating to bankrupts’.estates, the same just principle is adopted. It was so under our bankrupt law while that was in force,and no reason can be suggested why so honest a principle should not be applied in the case of insolvent estates of deceased persons. It is always practiced upon in regard to persons dying within our jurisdiction, having had their domicile here; that is, creditors of all countries have the same right as our own citizens to file their claims and share in the distribution. There can not be, then, a right in any one or more of our citizens, who may happen to be creditors, to seize the whole of the effects which may be found here, or claim an appropriation of them to the payment of their debts, in exclusion of foreign creditors.” The precise question here is not considered, nor even stated, in, Story’s Conflict of Laws, and there is to be found in it no intimation of opinion as to it, except such as may be presumed from a very copious extract from the case of Dawes v. Head, in a note to sec. 513. I have not been able to see the case of Barry’s appeal; of the others cited, Hunt v. Fay, 7 Vermont, 170, is the only one directly in point, or which, indeed, has any material bearing, and the decision in that case was by a divided court, Justice Mattock dissenting. Mothland v. Wiseman, 3 Penn., 185, is an authority the other way. The court in that case say : “ But that the effects are to be collected and administered by local authority, is a principle, not only of British, but of American law. In Topham v. Chapman, 3 Rep. Const. Court, S. C., 283, it was much debated whether they should not also be distributed by the same authority, though according to the law of the domicile; but that the collection and payment of the debts might be by any other authority, was never supposed. The same question was debated in Harvey v. Richards, 1 Mason, 485; and in Dawes v. Head, 3 Pickering, 128, it was held that an administrator here, though admitted to be but auxiliary to the administrator at the place where the decedent was domiciled, is bound to remit the assets to be administered there, only in case there are no domestic claimants in the character of creditors, legatees or next of kin; but that when these appear, the assets are to be retained for administration, according to our own laws, permitting the foreign creditors to participate in proportion to their debts, respect being had to the aggregate of the estate and of the debts, whether foreign or domestic. The authorities, it is thus seen, almost without an exception, sustain the doctrine for vTiich I have contended.