O'Neill v. Nagle — 10 N.Y. St. Rep. 706

Majority

p. 706

Charles A. O’Neill, as Assignee, Pl’ff, v. Samuel Nagle, Def't.

(City Court of New York, Trial Term,

Filed October 8, 1887.)

Headnote

Foreign attachment—Conflict—State comity.

While a transfer of property in invitum by operation of law will generally have effect only in the state where the law which works the transfer

p. 707

has force, voluntary transfers, valid under the laws of the "state where the debtor resides, will (with certain stated qualifications) operate to tranfer the property wherever situated. A general assignment with preferences, valid under the laws of New Y ork, but void under the laws of New Jersey, will not pass real estate or movable personal property having a situs there, but will pass a debt contracted and payable here, though the debter resides there, and an attachment has, since the making of the assignment, been placed on the debt by the New Jersey courts, on the application of creditors residing there.

Trial by the court without a jury.

The defendant sold goods for Patrick Haley, and the sales, less the commissions, aggregate $616.55. The action is brought to recover this amount.

The defendant pleads in defense that on July 8, 1887, Morris K. Everitt and another, residents of New Jersey and creditors of Haley, brought an action against him in the Hudson circuit, a court of record in New Jersey, to recover $1,256.66, and procured an attachment therein, which was duly served upon the defendant, by virtue of which the defendant claims the debt in suit was attached according to the laws of that state. Haley, it appears, failed in business, and on the 7th of July, 1887 (the day before the attachment was issued), made a general assignment for the benefit of creditors to Charles A. O’Neill, the plaintiff.

The assignment contains preferences, was executed in New York and is conceded to be valid under the laws of that state. The assignment was delivered on July 7, 1887, and was duly recorded on the same day.

According to the laws of New Jersey, an assignment for the benefit of creditors, containing preferences, is void; hence it is claimed that the attachment served in that state lawfully impounded the debt, and that it, therefore, constitutes a complete defense to the present action by Haley’s assignee.

In determining the contention, the following fact must not be overlooked: The contract between Haley and the defendant was made in New York, the goods were delivered in that city and were to be sold there. It was essentially a New York contract. Haley resided in New York at the time and still resides there. The plaintiff (the assignee) is also a resident of New York. The defendant resides in New Jersey and resided there when the transactions were had. The attaching creditors also reside in that state.

Jeroloman & Arrowsmith, for pl’ff; Charles D. Ridgway, for def’t.

—It is settled law that transfers of property in invitum by operation of law, will generally have effect only in the state where the law, which works the transfer, has force (Osgood v. Maguire, 61 N. Y., 529 ; Willitts v. Waite, 25 id., 577 ; Hibernian National Bank v. Lacombe,

p. 708

84 id., 384), but voluntary transfers, valid under the laws of the state where the owner resides, will (subject to the qualifications hereafter mentioned) operate to transfer the property wherever situated (Burrill on Assignments, section 302; Kelly v. Crapo, 45 N. Y., 86 , reversed but upon other grounds; 16 Wall., 610 ; Kelstadt v. Reilly, 55 How. Pr., 373 ). Transfers voluntarily made, such as the one under which the plaintiff claims, are, in respect to property in foreign states, valid and enforceable there on principles of comity, provided the transfers do not impair the remedies which the laws of such foreign states have enacted for their own citizens, and do not conflict with their own established law and policy. 2 Kent’s Com., 406, 407; Story on Conflict of Laws, section 344).

The general assignment, under which the plaintiff claims, contains preferences, and is, on that account, repugnant to the established law and policy of the state of New Jersey, which declare such transfers void. Varnum v. Camp, 13 N. J. L. R., 326; Brown v. Holcomb, 1 Stockton R., 297; Fairchild v. Hunt, 1 McCarter, 367; R. S. of N. J., act of March 27, 1874. If the property attached had. consisted of real estate or movable" property situated in New Jersey, it is clear that the title thereto would have been unaffected by the transfer made in New York to the plaintiff (Warren v. Jaffray, 96 N. Y., 248 ; Eastern Nat. Bank v. Hulshizer, 2 N. Y. State Rep., 93), and the attachment pleaded would have presented a valid defense, equal as a means of protection to the defendant as a judgment. Embree v. Hanna, 5 Johns. R., 101; Holmes v. Remsen, 4 Johns. Ch., 460 ; Warren v. Jaffray, 96 N. Y., 259 .

This is upon the just principle that a person who has been compelled by a foreign jurisdiction to pay a debt once, should not be compelled to pay it over again. The reason for the rule rests on the ground that every state has the right to regulate the transfer of property within its limits; and that whosoever sends property to it impliedly submits to the regulations concerning its transfer in force there, although a different rule of transfer prevails in the jurisdiction where he resides. The owner has no absolute right to have the transfer of property, lawful in the jurisdiction of his domicil, respected in the courts of the state where the property is located, and it is only on principle of comity that it is ever allowed. Hervey v. Rhode Island Locomotive Co., 3 Otto, 664.

The property attached in the present instance, being a mere chose iri action—to wit, the debt in suit—incapable of actual situs in New Jersey, the place where the debtor resides, the question arises whether it falls within the rule which regulates the transfer of real and movable personal

p. 709

property located in the foreign jurisdiction or forms an exception to it regulated by circumstances. Under the laws of most—if not all—the states, an attachment may be issued against a non-resident debtor, and any debt or credit found within the jurisdiction belonging to such defendant may be impounded by attachment, and ultimately applied to the payment of any judgment that may be recovered in the action. Although the debt attached is payable to the creditor, and is generally to be rendered to him at his domicil, yet as this is a legal fiction it yields whenever the. actual situs is to be regarded for the attainment of justice. Cochran v. Fitch, 1 Sandf. Oh., 142.

In this instance a conflict of title arises between the claim made by the resident assignee and that presented by the foreign attaching creditors, and the question of situs cannot be regarded as one of fiction merely, nor can it yield to convenience or be bent to uphold a particular remedy. It is a theorism established as a principle of law that becomes the controlling feature in determining the rights of the respective parties to this record. The debt in suit was contracted in the city of New York, was payable there, and the creditor had his domicil in that city, and a tender of the debt, to be good, must be made to the creditor. In other words, the debtor was bound to produce the money and exhibit it to the creditor in order to legally tender or discharge the obligation. This was the defendant’s legal duty, and it is no defense to the action to plead that the laws of a foreign state excuse him from its performance.

The debt in suit is a mere incorporeal right, did not lie within the jurisdiction of the state of New Jersey, is unaffected by its laws, follows the person of the owner, and was legally transferred to the plaintiff by the general assignment made in New York, the place where the owner resided. Guillander v. Howell, 35 N. Y., 662 ; Howard National Bank v. King, 10 Abb. N. C., 346 .

The attachment subsequently obtained and attempted to be levied upon it in the state of New Jersey created no charge whatever thereon, as the defendant in the attachment suit had parted with all his interest in the claim before the attachment proceedings were commenced.

It follows that the plaintiff is entitled to judgment for $625.19, the amount claimed, with interest and costs.