Martin v. Central Vermont Railroad — 20 N.Y. St. Rep. 375

Majority

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John Martin, App’lt, v. Central Vermont Railroad Company, Resp’t.

(Supreme Court, General Term, Third Department,

Filed November 20, 1888.)

Headnote

.1. Constitutional law—United States Constitution, fourteenth amendment—Jurisdiction—Due process of law—Sufficiency of NOTICE OF ACTION.

Under the fourteenth amendment to the constitution of the United States, prohibiting a state from depriving any person of property without due process of law, no jurisdiction of a defendant is acquired by a court in an action in which no attempt to give him notice is made, except by the service upon liis debtor of an attachment of the debt.

3. Same—Judgments of other states.

The constitutional provision requiring full faith, and credit to be given to judgments of other states does not apply to a judgment in a proceeding in which no jurisdiction is acquired.

S. Attachment of debt due defendant—Service of process.

Such service is not authorized by the Revised Statutes of Vermont, 1881. page 257, § 1081, which provides that when the principal debtor is not a resident of the state, the writ may be served on him by leaving a copy in the hands of the trustee, and that such service shall be as effectual as if made by attachment of the goods and chattels of such principal debtor found within the state; it is modified by section 1402, which provides for a notice to the absent defendant residing or being out of the state, by delivering to him out of the state a copy of the process and pleading, and a copy of the order for such delivery, and section 1404, which provides that on such delivery, twenty days befóre the time to appear, the same proceeding maybe had, so far as to affect lands, chattels and credits, as if the defendant had been served in the state.

4. Same—Judgment—Validity of.

Although the attachment of the debt may have been valid, a judgment against the defendant is void and the attachment and judgment, and payment of the debt attached by the railroad company to the plaintiff therein, are no defense to an action afterwards brought by the defendant against the debtor.

h. Same—Property exempt from seizure—When exception effectual in another state.

The contract of hiring was made in this state, the work was to be done in this state by a citizen of this state, and it was to be paid in this state and the money due would have been exempt under Code Givi Pro., §§ 1869 and 2463. Reid, that this exemption, as long as the creditor remained in the state, was effectual, and rendered the attachment in another state a nullity.

The complaint alleges that defendant is a corporation under the Laws of Vermont; that about the 1st day of September, 1887,-defendant, at this state, hired plaintiff to do work in this state; that between September 29 and December 1, 1887, plaintiff did work in this state for defendant under that hiring, for wffrich defendants owes plaintiff $67.90.

The answer does not deny the complaint, but avers a partial payment of $32.97 under circumstances hereafter to be stated. This action was commenced December 17, 1887.

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On the trial it appeared that plaintiff had previously been paid one month’s wages in this state, and that on. the 2d of November, 1887, the defendants were owing him $45.50.

The partial payment is claimed to have been made as-follows: On the 2d day of November, 1887,one John Kelly, of this state, commenced an action in a j ustice’s court of the state-of Vermont against this plaintiff on the common counts of" assumpsit. In that action an attachment was issued directing the officer to attach the goods of this plaintiff, Martin, and to notify Martin to appear the 21st of November. The officer returned that Martin was not in that-state, and -had no known agent or attorney, and that he-had served the writ by delivering it to the treasurer of the-Central Vermont Railroad Company, and that that company had admitted service of the writ by endorsement, dated November 2, 1887, and signed by their paymaster.

Accordingly, as it appeared to the justice that the said Martin was out of the state, the action was adjourned to-November 23, 1887, at which day the defendant Martin did not appear, but the plaintiff Kelly did appear, and the said Central Vermont Railroad Company did appear by the same attorney who appeared for Kelly and made disclosures. “Thereupon judgment was rendered for Kelly against Martin for $29.14, and for $3.83 costs—total $32.97; and against said company for the same amount. That-amount was paid by the company to the said attorneys of Kelly November 23, 1887.

It was proved on the part of the plaintiff, on the trial of the present action, that on the 2d day of November the-wages he had earned, and which were due to him from the defendant were necessary for the support of his family; and that the wages earned after that date were also necessary for the support of himself and his family; that he was a resident and voter in this state, and that he had no notice of the proceedings in Vermont. He offered to prove that at the time of the commencement of the action in Vermont-by Kelly he was not indebted to Kelly in any amount.. This "was excluded and exception taken;"the court remarking that Martin could sue Kelly and recover back the-money by showing that the amount was not' due, and that, the Vermont judgment would not be a bar.

The court directed a judgment for .the balance, $35.63, allowing that partial payment and the plaintiff appeals.

Jolm P. Kellas, for app’lt; Louis HasbroucJc, for resp’L

The fourteenth amendment of the constitution of the United States, section 1, says: “Nor shall

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any state deprive any person of life, liberty or property without due process of law.” What constitutes due pro•cess of law is a question that has been frequently discussed. It “requires an orderly proceeding, adapted to the nature of the case, in which the citizen has an opportunity to be heard and to defend, enforce and protect his rights. A hearing or an opportunity to be heard is absolutely essential. We cannot conceive of due process of law without this.” Stuart v. Palmer, 74 N. Y., 184 ; Chicago Life Ins. Company v. Needles, 113 U. S., 576 ; Ferguson v. Crawford, 70 N. Y., at 256; Starbuck v. Murray, 5 Wend., 157 .

In Davidson v. New Orleans (96 U. S., at 105), in describing due process of law, the court says: “Due advertisement made as to those (owners) who were unknown or could not be found.” It seems hardly necessary to argue that a judgment which deprives a man of his property cannot lawfully be recovered without notice to him. We do not mean that against absent debtors the law may not authorize an attachment of the alleged debtor’s property. It may thereby acquire jurisdiction of the thing. But in order to make that jurisdiction perfect it must give due notice to the owner before it attempts to divest his title. The attachment of the property is only one step. Another and equally important step is the notice to the owner. Cooley on Constitutional Limitation, p. 403; Buchanan v. Rucker, 9 East., 192; Fenton v. Garlick, 8 Johnson, 194. Such is the rule in proceedings strictly in rem, to which what is known as foreign attachment is analogous.

Xow while it is true that this notice to the owner need not be personal, as he is out of the state, yet it must be, as said in the quotation above, “adapted to the nature of the case.” If it be said that it rests with the legislature of the state in which the attachment is issued to declare what shall be a sufficient notice, the answer is that that may be so, provided there be a reasonable and bona fide provision for giving notice. But certainly a legislature cannot enact that no notice need be given, or make that a notice which is no notice at all. To do that would be a fraud on the constitution.

Now in the present case there was no notice whatever to Martin, and no attempt to give him notice. Process was issued and served on the railroad company, his debtor, and on no one else. To serve a notice on a man’s debtor is no notice to the man of a claim against him. The debtor is in no sense his agent.

■ And if there were a statute of Vermont declaring it to be unnecessary to give any notice to the alleged debtor, whose

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property is to be taken, such a statute could not be valid against this constitutional provision., A state cannot make that due process of law which is not .such. If a state can declare that service on a man’s debtor is due process of law under which his property can he taken away, then it can dispense with any service of any kind whatever. The constitutional amendment aims, among other things, to guard all the citizens of all the'states from any such injustice.

Nor is this view in conflict with the other constitutional' provision, that full faith and credit shall be given to the-judgments of other states. Where a judicial proceeding shows a want of jurisdiction, such want is not cured by this-constitutional provision and when there is no notice to the debtor whatever, we may rightfully say - that his property could not be. taken away. A judicial proceeding which violates the fifteenth amendment can have no faith or credit-to affect the rights of parties. If it be urged that it rests-solely with the legislature of the state in which the attachment is issued to prescribe what notice shall be given, the further answer is that it does not appear that the legislature of Vermont has directed that notice to the debtor shall, be given in the manner done in this action.

The Revised Statutes of that state published in 1881, section 1081, page 257, provide that, when the principal debtor is not a resident of the state, the writ may be served on him by leaving a copy in the hands of the trustee; and such service shall be as effectual as if made by attachment of the goods and chattels of such principal debtor, found within the state. Thus the effect of such service on the trustee is specified. It is to be equivalent to an attachment, of goods and chattels.

Section 881, page 223, provides for the service of an attachment. Thus the levy or attachment, on goods and chattels, and also on debts is provided for.

Section 1406, page 307, provides for a continuance of the . case by the justice, unless the plaintiff satisfies him that-the defendant had sufficient notice of the suit to enable him to appear. Here is a recognition of the necessity of notice-before judgment can be given.

Section 1402 provides for notice to an absent defendant, residing or being out of the state, by delivering to him out of the state, a copy of the process and pleading and a copy of the order for such delivery. And section 1404 provides; that on such delivery twenty days before the time to appear,, the same proceedings may be had, so far as to affect lands, chattels and credits, as if the defendant had been served in the state. This implies that without such delivery, lands, chattels and credits cannot be affected. The service of process on the trustee is said to be as effectual as an attachment of goods and chattels, but beyond that the statute provides for an order for delivery of the process and pleading-

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out of the state, and requires such delivery to be made twenty days before the time to appear. That is the proceeding to notify the party. Had that been done in this case, there would probably have been due process of law. This is analogous to our own practice. We have an attachment of the property of a foreign debtor (Code, § 636), and then the order for the service of a summons out of the .state (§ 438). No judgment could be had without the latter proceeding.

It is with hesitation that we construe the statute of another state, but it seems to us that here is a plain recognition of the principle that only by giving notice, and an opportunity to be heard, can any court take from a person his property. Why such notice was not given in this case, when the defendant lived in Malone, N. Y., and the suit was in St. Albans, Vt., we cannot tell, unless it was for the very purpose of preventing the defendant from asserting his defense.

Even in proceedings strictly in rem it is necessary, as above said, that the parties in interest have notice, “for the common justice of all nations requires that no condemnation should be pronounced before the party has an opportunity to be heard.” Story Conf. Laws, § 592.

It seems to us, then, that the Vermont Statutes required notice to the debtor, in order that the court should have jurisdiction over the attached property ; and further, that even if it did 'not, such notice, not necessarily personal, was necessary under the constitution of the United States. The attachment of the debt may have been valid, but the subsequent adjudication against Martin was without jurisdiction, and the mere attachment is not a defense in this .action. Williams v. Ingersoll, 89 N. Y., 508 .

There is another very serious question : The contract of hiring was made in this state; the work was done in this •state by a citizen of this state, and it was to be paid in this state, at least there was evidence to show that it was to be be paid here. The debt, therefore, was subject to the laws of this state, and the plaintiff had all the rights relative thereto given by the laws of this state. One of these rights was, that these earnings for his personal services, rendered within sixty days, and necessary for the use of his family, should not be taken from him, by legal proceedings against him, or his debtor. Code Civ. Pro., §§ 2463, 1869.

Although these sections refer to proceedings taken in our own courts, yet they practically exempt such earnings from seizure by a creditor. And certainly, as long as the person who has earned those moneys remains in this state, he is entitled to have the benefit of this exemption. If the owner of tangible exempt property were to carry it into another

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state, it might be no longer protected by our laws. And so if a person to whom were due moneys for services which were exempt by our laws, should go into another state, he-might lose the benefit of this exemption. But Martin remained here, and his claim for earnings was protected by our laws. We see no reason why the railroad company might not, if they had chosen so to do, have insisted on this-exemption as a ground why the attachment in Vermont reached nothing. Story says that the nature of the contract must be determined by the law of the county where it was entered into. Conft. Laws, sections 568, 569. In Williams v. Ingersoll, 89 N Y., 508 , a debt, claimed to be attached in Connecticut, had previously been assigned in this state by the person against whom the attachment was issued. The-court, at page 525, say he had nothing to be attached, and the attachment was a nullity. That is to say, the court held that the transaction here of the person to whom the debt was due, would be regarded by our courts, and should have been regarded by the court in Connecticut. By analogy, the exemption from any claim of creditors which Martin enjoyed here, will be regarded by our courts. We may believe that it would have been regarded by the Vermont-court if the railroad company had asserted it, as they should have done; for they should have known, and are chargeable with knowledge of, the law of the state where their contract with Martin was made, and where it was to be performed. In fact it appears by the case that the attorneys for Kelly in the justice’s court were also attorneys for the railroad company. And it is easy therefore to understand why they did not assert this defense. It is difficult to have justice done when the same attorneys appear for both parties in the litigation, and thus enable both parties to combine to take property from a third person who has not notice of the proceeding. Let us suppose that before the proceedings in Vermont, Martin had assigned the claim to some third person, and that the railroad company had had notice of the assignment, would the proceeding in Vermont have deprived that third person of his claim? We suppose not, under the? case last cited. Story Conft. Laws 592, a, note 2. And. when our laws impose on a debt of this kind, an exemption for the claim of any creditor which exemption is known to the party who owes the debt, that exemption must be as-effectual as an assignment would be to make an attachment in another state a nullity. As was said in Osgood v. Maguire, 61 N. Y., at page 529, it would be carrying the rulé of comity to an absurd length for our courts to give foreign creditors a better position in this respect than they do domestic creditors.

The judgment should be reversed, a new trial granted,, costs to abide the event.,

Ingalls, J., concurs.

Gray v. Delaware and Hudson Canal Co, ( 5 Abb. N. C., 131 ) was, in every respect, like the present case, except that the Delaware and Hudson Canal Company was a New York corporation, doing business in Vermont as well as in this state, and having, as required by the Vermont law, an agent in that state, upon whom legal process could be there served, whereas this defendant is a Vermont corporation, doing business in this state as well as in Vermont, and having agents hereupon whom legal process can. be served. This distinction, however, is not material.

In the case cited full faith and credit were given to the-judgment of the Vermont justice’s court. Assuming that, the justice’s court of Vermont had made the proper service of its process so as to acquire jurisdiction of the rein against the New York owner of it, it followed then, as it follows, now, that the courts of this state must give the same faith and credit, that is, the same effect, to the Vermont judgment, that the courts of that state would give it.

But it appears that the case of Towle v. Wilder and Delaware and Hudson Canal Company, reported in 57 Vt., 622 , came before the supreme court of that state in 1878-upon appeal by the Delaware and Hudson Canal Company, in a case precisely like Gray's Case, cited above, except that the New York creditor of the company appeared in the justice’s court on the return day of the writ. The supreme court reversed the judgment of the court below. No opinion is reported.

The report states : “This case is published in this volume (eight years after the decision), as it appears that similar suits are being brought. It was sent to the reporter by Royce, Ch. J., on the request of Veazy, J.’'

We thus have the opinion of the highest court of Vermont, .that such judgments, upon trustee process rendered-in the inferior courts of that state in favor of New York creditors, who have no cause or excuse to leave their own forum except the single one that the Vermont laws give a right and remedy to creditors which the New York laws do-not, will be reversed if appealed by the party charged as a trustee. This defendant, therefore, did not pay the judgment in Vermont because it could not escape payment, but because it did not choose to resort to the means open to it-to escape it.

In this case the subject-matter and the parties were all within this state, and it was fitting that their rights should be adjudged by our courts under our laws. One of the-parties went to Vermont and procured from an inferior court a judgment against the others, which apparently gave him a right unknown to our laws.

We have every reason to believe that the highest court of"

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that state would, upon appeal, declare the judgment unauthorized. In such a case we do not think we are required, to the prejudice of our citizens under our laws, to give any effect to the Vermont judgment.

Concurring with the presiding justice, except that no ■opinion is expressed respecting the requirements of the Vermont statutes as to service of trustee process upon non.residents of that state, I advise a reversal.