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Peterson v. Chemical Bank

29 How. Pr. 240 Court COURT OF APPEALS. English

Delivered by Dentó, J.

Contents

Majority

p. 240
COURT OF APPEALS.
Charles Peterson, respondent agt. The Chemical Bank, appellant.

Headnote

An administrator with the will annexed, has the same rights of property as the executors named in the will would have had if they had qualified.
Neither an executor or administrator appointed in another state can maintain an action in his own name in our courts. ¡Foreign laws have no inherent operation in this state.
If the debtors of a testator voluntarily pay what they owe to the foreign executor, such payments will discharge the debts, and the moneys so collected will be subject to the administration of such foreign executor.
A money demand, whether in the form of negotiable paper or otherwise, may now •be sold arid conveyed {Code, § 111), so as to vest, in the purchaser all the legal as well as the equitable rights of the original creditor.
The title which is vested in an executor or administrator, carries with it the jus disponendi, which generally inheres in the ownership of property, and they have an absolute power of disposal over the whole personal effects of the testator or intestate.
The validity of every transfer, alienation or disposition of personal property, depends upon the law of the owners domicil. In the absence of proof to the contrary, our courts assume the law of another state respecting the alienation of choses in action to be the same as our own.
A. purchaser from a foreign executor or administrator, of a money demand due to the testator or intestate, from a resident of this state, may maintain his action in our courts for the collection of such demand.
March Term, 1865.
Spencer J. ¡Reed recovered a judgment against William E. Moore, before a justice of the peace for $89 damages. Moore appealed to the Broome county court, and stated in his notice of appe'al that the judgment should have been more favorable to him in this—that it should have been for only $75 damages. ¡Reed thereupon served upon Moore and the justice an offer in writing to allow the judgment to be corrected by being reduced to $75. Moore did not accept the offer, and ¡Reed recovered a judgment in the county court for only $70 damages. The clerk allowed Moore (who was the appellant) to recover costs in the county court, on the ground that the judgment of that court was more favorable to him than the offer of ¡Reed, who was the respondent.
According to Barnard agt. Pierce, cited in the text, it was impossible for ¡Reed to place himself in a position to avoid paying costs in the county court, for he could not according to that case, serve an offer to allow the judgment of the justice tobe reduced below $75 damages. But according to the decision in the text, he could have avoided liability for costs in the county court, by offering to allow the judgment of the justice to be reduced to $70 or less.
p. 241
William Bliss, for respondent.
R. B. Roosevelt and B. W. Bonney, for appellant.

This action was brought in the superior court of New York, to recover the sum of $32,321.24, being an amount standing to the credit of Aaron Cohen, as a dealer, on the books of the defendants’ bank in New York. Cohen died at the city of New Haven, in Connecticut, on the 27th day of July, 1862. He left a last will and testament, executed in New York on the 11th of June, 1861, which was duly attested by two witnesses, by which he appointed Daniel McCord and Cohen M. Saria, of New Orleans, executors. The will was proved and admitted to record in the probate court of the district of New Haven, in September, 1862, and the executors not appearing to qualify, and one of them having renounced, administration with the will annexed, was granted to David J. Peck, of New Haven, he giving a bond with sureties in the penalty of $200,000, conditioned to make an inventory, and to account, &c. He demanded of the defendants the above amount standing to the credit of Cohen, presenting an authenticated copy of his appointment, but payment was declined. He then on the 2d December, 1862, made a transfer under his hand and seal of the debit due from the defendants'to the plaintiff in this action. The instrument is expressed to be in consideration of $32,321.24 received to the assignor’s full satisfaction, and it contains proper words of sale and assignment, and a guaranty of the collection of the amount, and a promise to indemnify the plaintiff against loss by reason of the purchase. The plaintiff called at the. bank with the instrument, presenting his oWn check and also that of Peck, and demanded the money. He also exhibited an instrument signed by all the legatees named in the will with the exception of one who resided in an insurgent state, and who was entitled to one-sixth of the residue, requesting that the money might be paid over to Peck, as

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administrator, but the defendants persisted in refusing payment, on the ground apparently that it could not. safely be paid except to an administrator appointed under the laws of this state.

The controverted questions of fact to which the evidence on the trial was directed, related to the domicil of Cohen at the time of his death, and to the circumstances under which the transfers to the plaintiff were made. As to the first, it appeared that the testator was an unmarried man, and that for some years before his death he resided during the summer at New Haven, and in the winter in New York, living at a hotel in both cities. When in New Haven he had a suite of apartments, being the whole of the first floor of one of the houses embraced in the hotel, in which his meals were served at a private table, and keeping his own horses, carriage and servants, but in New York taking his meals at the ordinary. He came from New York to New Haven in April preceding his death. His reasons for coming to New York in the winter he declared to be the coldness of the climate in New Haven, and the fact that his apartments were not well warmed.

In his will he was described as Aaron Cohen, gentleman, of the city, county and state of New York. His estate, amounting so far as was known, to about' one hundred thousand dollars, besides what he possessed in the city of New Orleans, of which no estimate was made, consisted of this money in the defendants’ bank, and an interest in the vessels sailing out of New York. It was proved by several witnesses, and it was not contradicted by any evidence, that some short time before his death he declared that his mind was fully made up never again to reside in New York, or to go there except for a few days. He had just purchased and paid down for a dwelling house for his residence in New Haven, at the cost of $11,500. He had directed his confidential servant to write to a female friend of the latter to engage a cook, chambermaid and house

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keeper for his house so purchased, and the letter was actually written shortly before his death; and he had moreover spoken to the servant about engaging a house carpenter to make some repairs on the house, and about providing coal for the ensuing winter. He had told him that he should have furniture purchased to the amount of $3,000, and mentioned a dealer in New York, of whom he wished the purchase of furniture to be made. He declared expressly that he intended to live and die in New Haven, and wished to be buried there, and that after getting into his house he would never live at a hotel again.

It was very clearly proved that he owed no debts in New York, and only a very few small ones in New Haven. The legatees in his will, besides $15,000 to a friend in New York, and $5,000 to another in New Orleans, and $5,500 to his servants, were his brothers and sisters in New York, New Orleans and Philadelphia.

In regard to the transfer, the evidence was that the plaintiff was one of the sureties of Peck in the administration bond, and had acted as his agent in the settlement of the estate. The consideration did not appear to have been paid absolutely. The amount was-advanced by the plaintiff, and, together with other moneys of the estate, was deposited in a bank in'the name of the plaintiff as trustee, he having, however, by the agreement, no right to claim it except by the direction of Peck, thp intention apparently being that it should be paid out in the course of administration.

The defendants’ counsel moved for the'dismissal of the complaint, on the grounds that an action would not lie by an assignee of a foreign administrator ; that there was no consideration for the transfer, and that it was made to evade the laws in this state, and that the probate court in Connecticut had not jurisdiction; and the counsel also insisted that the question as to the domicil of Cohen should at least be submitted to the jury. The motion was denied,

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and the judge instructed the jury to find for the plaintiff. The defendants’ counsel excepted. It was directed that the exceptions be heard in the first instance at the general term. The verdict was for the plaintiff for the amount claimed, with interest, and judgment for the plaintiff was rendered thereon at the general term, upon which the defendants brought this appeal.

The evidence was quite conclusive that the domicil of Cohen at the time of his death was at New Haven. The purchase o'f an extensive dwelling house for his residence, the measures taken to furnish it with servants, and to repair and supply it with furniture and fuel, and the intention to make it his permanent abode, for the remainder of his life, were shown by positive evidence which was wholly uncontradicted. Upon this evidence there was no question for the jury, and if a verdict had been returned involving a denial of its effect, it would at once have been set aside. If it be conceded that prior to these acts and this manifestation of intention, it was equivocal whether his residence was at New York or New Haven, it was no longer so after he had provided himself with ■ a residence in the latter city, with the absolute determination permanently to occupy it. It follows that the probate court of the district, which embraced the city of New Haven, had jurisdiction. The record of that court admitting the will to probate, and appointing an administrator upon the default of executors named in it to appear and qualify, was by force of the constitution and laws of the United States, entitled to full faith and credit in the courts of this state. A foreign executor or administrator (and one appointed under the laws of a sister state of the union is foreign" in the sense of' the rule), cannot sue in his representative character in the courts of this state. The question whether a party deriving title to a chose in action by transfer from such an executor or administrator, can prosecute the debtor residing here in our courts, has been vari

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ously decided in the cases to which we have been referred. In the supreme' court in the first district, the Merchants’ Bank of New York was sued for refusing to transfer to the plaintiff one hundred shares' of its stock, to which the latter made title by transfers from the executors of one Robert Middlebrook, in whose name the stock stood on the books of the bank. He died at his residence in Connecticut, and his will had been proved, and letters testamentary had been issued by the probate .court of the proper district in the state. The plaintiff was a legatee of a certain amount, of the testator’s stock, and the shares in controversy had been assigned to him in satisfaction of the legacy.- The court held that the executors became vested with the title to the stock, and that the plaintiff, though he derived his title under them, could enforce his right against the bank in our courts, and judgment was accordingly given in his favor. (Middlebrook agt. The Merchants' Bank, 27 How. Pr. 474 ; S. C. at a special term, 24 Id. 267.) A different rule has been established in the courts of New Hampshire and of Maine. (Thompson agt. Nelson, 2 N. H. 291 ; Stearns agt. Burnham, 5 Greenl. 261.) In each of these cases the defendant was sued as the maker of a promissory note by parties claiming as indorsers, under indorsement by the executors of the payees, who were respectively residents of Massachusetts, and whose wills were proved and letters issued thereon in that state. The defendant prevailed in each case, on the objection that the respective plaintiffs were subject to the same disability to sue which would have attached to the executors if they had attempted to prosecute, in another state than that under whose laws their letters testamentary were granted. In the first case the judgment was placed upon the English ecclesiastical law, by which probates of wills and grants of administration are void, when not made by the ordinary of the proper diocese, a doctrine which I do not think applicable to the questions arising between different states, as it makes no allowance for the principles
p. 246
of international comity. In the case in Maine, it was thought that allowing. a recovery would be an indirect mode of -giving operation in Maine to the laws of Massachusetts, and also that the effects of the deceased might thereby be withdrawn from the state, to the prejudice of the creditors residing there. The precise case now before us came before the supreme Court of the United States in Harper agt. Butler (2 Peters, 239). The suit was brought in Mississippi, on a chose in action originally existing in favor of a citizen of Kentucky, who died there, and whose executors having letters testamentary issued in that state, assigned it to the plaintiff. In Mississippi choses in action are assignable, so as to permit the assignee to sue in his own name, as is now the case in this state. The question arose on demurrer to the complaint, and the district court sustained the demurrer. The judgment was reversed upon a short opinion by Chief Justice Marshall, which merely states the point, and contains no general reasonings. No counsel appeared on behalf of the defendants. The case in Maine was made the subject of comment in Story’s Treatise on the Conflict of Laws (§§ 258, 259), and is decidedly disapproved by the learned writer. He says, that upon the reasonings of the case a promissory note would cease to be negotiable after the death of the payee, which, he observes, would not be an admissible proposition. It seems clear to me that there are no precedents touching the question which are binding upon this court, or which can relieve it from the duty of examining the question upon its principle. There are certain legal doctrines, now very well established, which have a strong bearing upon the point. It is very clear, in the first place, that neither an executor or administrator, appointed in a foreign political jurisdiction, can maintain a suit in his own name in our courts. Foreign laws have no inherent operation in this state; but it is not on this account, solely or principally, .that we deny foreign representatives of this class a stand
p. 247
ing in our courts. The comity of nations, which is a part of the common law, allows a certain effect to titles derived under, and powers created by the laws of other countries. Foreign corporations may become parties to contracts in this state, and may sue or be sued in our courts on contracts made here, or within the jurisdiction which created them. The limitation of that right is the inhibition to do anything in its exercise which shall be hostile to our own laws and policy (Bank of Augusta agt. Earle, 13 Pet. 519 ; Bard agt. Pool, 2 Kern. 495,505, and 'cases cited), and nothing can be more clearly the emanation of sovereign political power than the creation of a corporation. Again, the receivers of insolvent foreign corporations, and assignees of .bankrupt and insolvent debtors, under the laws of other states and countries, are allowed to sue in our courts. It is true, their titles are not permitted to overreach the claims of domestic creditors of the same debtors, pursuing their remedies under our laws, but in the absence of such contestants, they fully represent the rights of the foreign debtors. (Story’s Con. of Laws, § 112 ; Hoyt agt. Thompson, 1 Seld. 320; S. C. 19 N. Y. 207 ; Willets agt. Waite, 25 JY. Y. 584.) It is not, therefore, because the executor or administrator has no right to the assets of the deceased existing in another country, that he is refused a standing in the courts of such country, for his title to such assets, though conferred by the law of the domicil of the deceased, is recognized everywhere. Eeasons of form, and a solicitude to protect the rights of creditors and others, resident in the jurisdiction in which the assets are found, have led .to the disability of foreign executors and administrators, which disability, however inconsistent with the principle, is very firmly established. We hold that if the debtors of the deceased will voluntarily pay what they owe to the foreign executor, such payment will discharge the debts, and the moneys so collected will be subject to the administra
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tion of such foreign executors (Parsons agt. Lyman, 20 N. Y. 103 ).

But the principle of law which I think governs this case, is that the succession to the personal estate of a deceased person is governed by the law of the country of his domicil at the time of his death. This is so, whether the succession is claimed under the law providing for intestacy, or for transmissions by last will and testaments (see Parsons agt. Lyman, supra, and authorities cited at p. 112). It is not so held because the foreign legislation or the local institutions have any extra territorial force, but from the comity of nations. Accordingly, it is a necessary supplement to the doctrine that if the law-making power of the state where the property happens to be situated, or the debtor of the deceased resides, to subserve its own policy, has engrafted qualifications or restrictions upon the rights of those who would succeed to the estate by the law of the domicil, they must take their rights subject to such restrictions. One of the most natural as well as most usual of these qualifications is that which is intended to secure the creditors of the deceased residing in the country where the assets exist. It is in part to subserve this policy that the personal representatives are not permitted to prosecute the debtor or parties who withhold his effects in our courts. But the protection to the creditors is further secured by the remedy which is provided by allowing them to take out administration in the jurisdiction where the assets are. If the deceased have any relatives in this state who would be preferably entitled, they can be summoned, and if they elect to take out letters themselves, they will be compellable to give bonds, and the creditors will then be made secure in their rights ; or if the relatives refuse to assume that responsibility, then the creditors may themselves be appointed, and thus qualified to take possession of the assets here upon the same terms (2 R. S. 13, ^ 23 and, 24). If the debtors of the estate elect to pay to the foreign

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representative, or to deliver to him the movable assets before the granting of administration in this state, the domestic executors are put to the inconvenience of asserting their rights in the courts of the country of their debt- or’s domicil, against his representatives appointed under the laws of thaj; country, just as they would have been compelled to do if all his effects had been situated there. Another general principle of law necessary to be adverted to, is that the executor of a testator, as soon at least as he has clothed himself' with the commission of the probate court, is vested with the title to all the movable property and rights of action which the deceased possessed at the instant of his death. The title of the executor, it is true, is fiduciary, and not beneficial. That title is, however, perfect against every person except the creditors and legatees of the deceased. The devolution of ownership is direct to the representative, and the beneficiaries take no title in the specific, or title which the law can recognize. An administrator with the will annexed, has the same rights of property as the executors named in the will would have had if they had qualified (2 JR. S. *12, § 22).

The law of maintenance,, while it existed, prohibited the transfer of the legal property in a- chose in action, so as to give the assignee a right of action in his own name. But this is now abrogated, and such a demand as that which is asserted against the defendant in this suit, may be sold and conveyed so as to vest in the purchaser all the legal as well as the equitable rights of the original creditor (Code, § 111). Though such demands are not negotiable in precisely the same sense as commercial paper, since the assignee is subject to every substantial defence which might have been made against the assignor, yet where, as in this case, no such defence exists, the transfer is absolute and complete. The title which is vested in the executor, carries with it the “jus disponendi ” which generally inheres in the ownership of property. It is a general rule of “ law

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and equity,” says Judge Williams, in his treatise on executors, “ that an executor or administrator has an absolute power of disposal over the whole personal effects of his testator or intestate, and that they cannot be followed by outsiders, much less by legatees, either general or specific, into the hands of the alienee.” (Treatise-p. 796 ; see also Whale agt. Booth, 4 Term R. 625, -in note to Farr agt. Newman; Sutherland agt. Brush, 7 Johns. Ch. 17 ; Rawlison agt. Stone, 3 Wils. 1; Harper agt. Butler, supra.)

■ It follows that the plaintiff presented himself to the superior court as the owner by purchase and assignment of the debt against the defendant, from a person holding the title, and hence having authority to sell. He claimed to recover not as the representative of any other party, but as’ the substituted creditor of the defendants’ bank. He had, it is true, to make title through the- will of Cohen, and the proceedings of the probate court of Connecticut. But the validity of that title depended upon the law of Connecticut, that being the place of the domicil of the former owner of the demand. The validity of every transfer, alienation or disposition of personal property, depends upon the law of the owner’s domicil (Story on Con. of Laws, § 383). In the absence of proof to the contrary, we assume the law of Connecticut respecting the alienation of choses in action to be the same as our own. If Cohen had at his death been a resident of this state, and his administrator with the will annexed, had sold and assigned to the plaintiff his demand against the bank, there is no manner of doubt but that the assignee upon the refusal of the bank to pay the amount, could have maintained this action. Hence there is not, I think, any reason why the plaintiff should be precluded from maintaining his action, on account of his making title through a foreign administrator. The rule is not that our courts do not recognize titles thus acquired. It is simply that foreign executors or administrators can have no standing in our courts. The

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plaintiff does not occupy that position. He sues in his own right and for his own interest, and represents no one. In my opinion, the disability to sue does not attach to the subject of the action, but is confined to the person of the plaintiff. If he is an unexceptional suitor, and there is no rule of form or of policy which repels him from our courts, he is to be received,, and he may make out his own title to the subject claimed, in any manner allowed by law; "and it has been shown that the title acquired through a foreign administrator is universally respected by the comity of nations. It is pretty obvious from the evidence of the circumstances of the transfer by Peck to the plaintiff, that its object was to avoid objections which might be taken if Peck had sued in his own name as administrator, without taking out letters here. There was no other conceivable motive for the plaintiff to purchase the moneyed demand, payable immediately, for its precise amount paid down. If his check on the bank, drawn shortly after the transfer, had been answered, he would have received the precise amount he had parted with, and the transaction at the best, would have been paying with one hand to receiving the same amount back with the other. If he failed to realize the amount, he was to be indemnified by Peck. This circumstance, and the manner in which the assumed consideration was disposed of, would doubtless have led the jury to find that the form adopted was resorted to in order to enable the administrator to avail himself of the balance in the defendants’ bank, without taking out administration here. Still as between the plaintiff and Peck, the interest in the demand passed. Peck would have been estopped by his conveyance under seal, containing an acknowledgment of the payment of the consideration, from setting up that nothing had passed'by the conveyance.

I am of the opinion that the defendant cannot make a question as to the consideration. If all the parties had been residents of this state, a transfer of the demand,

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good as between the' parties to that transfer, would have obliged the defendant to respond to the action of the transferee. Then if we hold, as I think we should, that the objection to the suit of the administrator was in the nature of a personal disability to sue, and not an infirmity inhering in the subject of the suit; the fact that the transfer, was made for' the purpose of getting rid of the objection, should not prejudice the plaintiff. The cases which have been referred to upon this point, have considerable analogy. The constitution and laws of the United States, confer, upon the courts of the union, jurisdiction in suits between citizens of different states, with an exception contained in the act of congress of one suing as the assignee of a chose in action of a party whose residence was such as not to permit him to sue.

In an action by an assignee concerning the title to land which was not within the exception, it was held not to be an objection which the defendant could take, that the assignment was made for the purpose of removing the difficulty as to jurisdiction (Briggs agt. French, 2 Sumner, 251). In a late case in this court against a foreign corporation which could not be prosecuted here except by a resident of this state, unless the cause of action arose here, or the subject of the action was situated here, it was held to be no objection that the assignment of the demand, by one not qualified by his residence to sue, to the plaintiff who was thus qualified, was made for the purpose of avoiding the difficulty, could not be sustained (McBride agt. The Farmers’ Bank, 26 N. Y. 450 ). I have not thus far referred to the. circumstances that Cohen was shown not to have owed any debts. in this • state. That fact was proved as strongly as in the nature of the case such a position could be established. The administrator, whose business it was to ascertain the existence of debts, and the confidential servant of Cohen, who was very familiar with his transactions, affirmed that there are none; and the defendant gave no

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evidence on the subject. The motive of policy for forbidding the withdrawal of assets, to the prejudice of domestic creditors, did not therefore exist in this case. Still, if the rule is that neither the foreign administrator or his assignee can maintain ah action in our courts to collect a debt against a debtor residing here, on account of its tendency to prejudice domestic creditors, the exceptional features of the present case would not change the principle. It would often be more difficult than in this case to disprove the existence of such debts. But I am of opinion that the objection should be regarded as formal, and that it does not exist where the plaintiff is not a foreign executor or administrator, but sues in his own right, though his title may be derived from such a representative.

I am in favor of affirming the judgment of the supreme court.

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