Court Opinion

ID: 8654452
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:14:28.742625+00
Date Added: 2024-06-11T16:56:38.494701
License: Public Domain

After stating the facts,
Miner, J.,
delivered the opinion of the court.
The record shows that a receiver was appointed for 0. Bunting & Co., bankers, in the State of Idaho, but not in the city of New York, and that such appointment in Utah was not made until long after the warrants had been attached in New York City.
Under the authorities it is clear to our minds that where a receiver has been appointed, or property has been transferred by operation of law, such receiver has no extra territorial jurisdiction over property, except that which is found within the territorial limits of the State wherein he was appointed, and such transfers have no force upon property outside of such State where they are made, and it will be administered for the benefit of creditors and others interested therein by courts of that State where it is found. Osgood v. Maguire, 62 N. Y., 524; Bank v. Lacombe, 84 N. Y., 367; Wood v. Parsons, 27 Mich., 159; Blake v. Williams, 6 Pick., 286; Paine v. Lester, 44, Conn., 196; Pierce v. Obrien, 129 Mass., 53.
The principal question for determination, then, is, Were *358the county warrants issued by, and showing indebtedness of, Bingham and Fremont Counties, Idaho, owned • by C. Bunting & Co., bankers, a corporation, and by it transferred to and actually held by the Chase National Bank of New York City as a pledge to secure the payment of the note of C. Bunting & Co., liable to attachment in the courts of New York, by the creditors of C. Bunting & Co., who also resided in New York, without personal service of summons on the counties issuing the warrants and obligated to pay the same ?
Sec. 618 of the New York Code reads as follows:
“The attachment may also be levied upon a cause of action arising upon contract; including a bond, promissory note or other instrument for the payment of money only, negotiable or otherwise, whether past due, or yet to become due, executed by a foreign or domestic government, State, county, public officer, association, municipal or other corporation, or by a private person either within or without the State which belongs to the defendant and is found within the county. The levy of the attachment thereupon is deemed a levy upon and the seizure and attachment of the debt represented thereby.”
The subject of the attachment was the right of C. Bunting & Co. to compel the Chase National Bank to account to' it for the pledged warrants and to receive that which remained of the proceeds of the warrants after the debt was paid for which the pledge was made. ■ This right is a demand, a chose in action, a debt, and the warrants are evidences of such debt and right to the payment of the money thereon.
It is clear that under this statute the warrants in question were included not only as property, but as a debt, and liable to seizure under attachment proceedings in New York City. They were promises of Bingham and Fremont Counties, Idaho, to pay the bearer the sum specified *359in each warrant at a specified time. The defendant, C. Bunting & Co., owned the warrants subject to the lien of the pledgee. Such warrants were in the possession of the garnishee, the Chase National Bank in New York City, who also had an interest therein so long as the debt for which the warrants were pledged subsisted. While the title may have remained conditionally in C. Bunting & Co., yet the pledgee, the Chase National Bank, had a lien or special property interest therein, with the right of possession thereof against all others until the debt was paid. Under such a pledge the title to the warrants passed to that extent that the pledgee had a right to collect the amount when due and apply the proceeds upon his note. To this extent only the warrants were the property of the pledgee. By the attachment and sale all the right, title, and interest of C. Bunting & Co. in the debt evidenced by the warrants after the note for which they were pledged was paid, was transferred to the American Exchange National Bank. The attachment operated to secure to the bank a lien on the pledged property, subject to the claim of the pledgee, which was thereafter paid by the bank. Being property in which C. Bunting & Co. had an interest, and being in the possession of the bank in New York City, subject to the lien described, the warrants had a situs in New York, and were subject to the same rules as other personal property of like character, and were liable to seizure and sale under the writ issued in this case.
The contention that summons was not personally served on C. Bunting & Co., and the counties named, and that therefore the court obtained no jurisdiction, is untenable. The publication of the summons was had in accordance with the statute of New York, and the property in question was attached and sold.
The judgment of the supreme court of New York re*360covered upon attachment proceedings in which the county municipalities issuing the warrants were non-residents, and were not personally served with process and did not appear, but where the attaching creditor was a resident of New York, is effectual to bind the property of the debtor found within the j urisdiction of the court. It is true that this may form no basis for a personal judgment, and does not affect the property not attached and not found within the jurisdiction of the court where the proceedings were had, but it is as effectual against the property of the debtor attached as if personal service of summons had been made within the jurisdiction. This is the general rule where States like those of New York authorize attachment for debts and choses in action. The attachment process was invented and enacted in most of the States for the purpose of reaching property found in jurisdictions where the owner could not be served.
The warrants are made payable to bearer, and pass from hand to hand like a bank note without indorsement, as shown by their circulation over the country, and are before due as liable to be found in one State as another. Their situs was no more that of the residence of the counties issuing them than would be that of any other species of commercial paper or of bonded securities. The maker is no more liable to be annoyed by a double payment in one case than the other. The county municipalities were in no way concerned in their ownership, or where they were held.
Under the statutes of New York neither the municipalities nor C. Bunting & Co. were required to be personally served with process. It was sufficient under these’ statutes that the warrants or debt represented by them, the res was within the jurisdiction of the court of that State, and that the creditor also resided there.
*361In some jurisdictions having no statute upon the subject, or where no property was found within the jurisdiction of the court, a different rule has been established.
In this case it is clear that if the property had not been found in New York upon which to make the attachment, the court would have had no jurisdiction.
The provision of the New York statute is sufficiently broad and comprehensive to include the warrants in question, and the debt evidenced thereby.
The case of Warner v. Fourth National Bank, 115 N. Y., 251, was where a New York bank having a claim against a Pennsylvania bank brought an action in New York attaching notes and other like securities held in ex: cess of the debt owed, in possession of the American National Bank in New York City, and left with it to secure a loan made by the Pennsylvania bank. The Pennsylvania bank had failed, and it was claimed by the assignee of said bank that the attachment .of the notes and securities was ineffectual to pass title to the pledged property. Upon this subject the court said:
‘ ‘ The American Exchange Bank, as pledgee, was entitled to the possession of the pledged property, so long as the debt subsisted, for the payment of which it was pledged. The title to property may remain in the pledgor, but the pledgee has a lien, or special property in the pledge, which entitles him to its possession against the world. Under a pledge of such property as commercial paper, the title so far passes as to clothe the pledgee with power to collect it as it falls due, and the money thus collected stands in place of the paper. Farwell v. Importers’ , etc., Bank, 90 N. Y., 483. * * * In this case, what was the subject of the attachment was the right of the Pennsylvania bank to compel its pledgee to account to it as to the pledged paper, and to receive the sur*362plus of the proceeds of collection, after satisfying the pledgee’s claim for advances. That right is a chose in action, and, .in the nature of things, is intangible. It is the subject of attachment as a demand against the person, within the spirit of the language of the code. While the debt remains undischarged, the pledge belongs to the pledgee, and, while held by him, the pledgor’s title is subject to the pledgee’s lien and right of possession; but the pledgor’s residuary interest in the pledge constitutes a claim or demand upon the pledgee, which is property, and hence may become the subject of attachment. But such property, being intangible, is, naturally, incapable of manual delivery. * * *
We think the attachment in question here operated to secure to the Fourth National Bank a lien upon the pledged property, to the extent of the interest of the Pennsylvania bank, and that interest was the right to the pledged property, or so much of it, or of its proceeds from any collection, as remained after the satisfaction of the pledgee’s claim for advances. This right, being a demand or chose in action, was personal property, incapable of delivery; but, through the levy of the sheriff, the plaintiff acquired such a lien upon whatever might become due to the Pennsylvania bank from its pledgee, the American Exchange Bank, as to entitle it now to the surplus in the pledgee’s hands.” Ward v. Boyce, 152 N. Y., 191; Storm v. Cautzhausen, 38 Wis,, 139; Waples on Debtor and Creditor, Secs, 15, 25, 50, 54, 56, 83, 97, 244. Ward v. Boyce, 80 Hun. (N. Y.) 494; Osgood v. Maguvre, 61 N. Y., 524; Wood v. Parsons, 27 Mich., 159; Bank v. Lacombe, 84 N. Y., 367; Moore v. Stickney, 5 Minn., 397; 1 Greenleaf on Ev., Sec. 541; Bailey on Jurisdiction, Secs. 212, 220; Storey’s Conflict of Laws (8th ed.), Sec. 592.
*363Under tbe stipulation of tbé attorneys the money collected on the warrants should be considered and held the same as the warrants.
We do not deem it necessary to discuss the findings of the court below. The judgment is correct.
We find no reversible error jin the record. The judgment of the district court is affirmed, with costs.
Bartch, 0, J., and Basein, J., concur.