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Franzen v. Zimmer

70 N.Y. St. Rep. 407 Court N.Y. Gen. Term Decision date 1895-10-16 English

Delivered by Davy, J.

Contents

Majority

p. 407
Jacob F. Franzen, as Assignee, etc., Resp’t, v. Frederick Zimmer, App’lt.
(Supreme Court, General Term, Fifth Department,
Filed October 16, 1895.)

Headnote

1. Evidence—Common law.
Where a party relies upon the fact that some general rule of the common law is in force in another state, he need not give any proof of that fact, for the reason that the court will presume the law of a sister state to be the same as its own law, and to be in its main outlines the common law.
2. Corporation—Foreign—Assignment for creditors.
An insolvent corporation could at common law make a general assignment in trust to an assignee for the benefit of its creditors.
p. 408
3. Same.
A voluntary assignment by a debtor residing in another state or country, valid by the laws of his domicile and not invalidated by any law of this state, operates as an assignment of the debtor’s property situate in this state.
4. Same—Comity between states.
Courts of justice in one state will, out of comity, enforce the law of another state, when by such enforcement they will not violate their own laws or inflict an injury on some one of their own citizens.
5. Same—Presumption.
Where an agent of a foreign insurance company makes contracts and issues policies of insurance without any objection on the part of the state authorities, the court will presume that the company has complied with the requirements of our laws as to its authority to transact business in this state.
6. Same—Estoppel.
In such case, the agent, by his own conduct, is estopped from claiming that his acts are illegal, and he cannot raise such objection for the purpose of shielding himself from his contract obligations.
. 7. Same—Revocation op agency..
The principal, in whose behalf an act is done, must be in existence at the time the act is performed.
8. Same.
The agent of an insurance company, whose authority has been revoked by the company’s executing an assignment for the benefit of creditor’s, has no authority thereafter to cancel policies and pay rebates on premiums, and cannot set off rebates so paid against a claim by the assignee for premiums collected.
Appeal from a judgment of the county court, reversing a judgment of the municipal court of the city of Rochester in favor of defendant.
H. B. Hallock, for app’lt; John M. Murphy, for resp’t.

— The plaintiff, as assignee of the St. Paul German Insurance Company, of St. Paul, Minn., brings this action to recover $399 from the defendant, which he, as agent of the assignor, has collected on policies of insurance issued by the company. It appears from the evidence that in 1890 the defendant was appointed agent of said insurance company, and continued to act in that capacity until April, 1892, when the company made a general assignment to the plaintiff for the benefit of its creditors. The defendant, during the'months of December, 1891, and January and February, 1892, issued policies of insurance for said company to various persons in the vicinity of Rochester, N. Y., amounting to over $100,000, and received $873.50 as premiums on said policies, out of which sum he was entitled to retain twenty per cent, for commissions, and a small sum which'he had advanced for the company, leaving in his hands at the time of the assignment $399 due the insolvent corporation. The action was tried in the municipal court of the city of Rochester before a jury, who rendered a verdict for the defendant. An appeal was taken to the county 'court, and the judgment of the lower court was reversed.

p. 409
The learned counsel for the appellant contends that the plaintiff cannot maintain this action, for the reason that there was no proof given upon the trial of the statute laws of Minnesota under which the assignment was made, and for that reason alone the j ury was justified in finding a verdict for the defendant. He also contends that, even if the action could be maintained, the amounts which the defendant paid out for rebates were properly allowed by the courts as an offset to the plaintiff’s claim. The defendant, in his answer, admits the incorporation of the insurance company, and that he acted as its agent and issued policies and received the sum of $873.50 for premiums, and he also admits that he received a notice of the assignment before he canceled the policies and paid the rebates for the unearned premiums. He contends, however, that he had no knowledge or information sufficient to form a belief as to whether the insurance company had made an assignment to the plaintiff, as alleged in the complaint. He also sets up a counterclaim of $800.74, for the unearned premiums assigned to him by the holders of said policies. Hnder the admissions in the answer, the plaintiff was only required to show upon the trial that the insolvent corporation had made a general assignment to him for the benefit of its creditors. That was done by the introduction of an exemplified copy of the deed of assignment, duly authenticated, as required by section 947 and 952 of the Code of Civil Procedure. The plaintiff, not willing to rest his case upon this evidence and the admissions in the answer, called the defendant as a witness, who testified that, shortly after he received notice of the assignment, he proceeded to call in all outstanding policies which he had issued for °the company, and canceled them, and allowed rebates for the unearned premiums, for which he took assignments, and filed them with the assignee as claim against the insolvent corporation.

We have a right to assume, in the absence of proof to the contrary, that the common law prevails in the state of Minnesota. It has been held that, where a party relies upon the fact that some general rule of the common law is in force in another state he, need not give any proof of that fact, for the reason that the court will presume the law of a sister state to be the same as- its own law, and to be in its main outlines the common law. Holmes v. Broughton, 10 Wend. 75 ; Savage v. O'Neil, 44 N. Y. 298 . Judge Peckham, in Vanderpoel v. Gorman, 140 N. Y. 568 ; 56 St. Rep. 503 , says: “ There can be no doubt that an insolvent corporation could at common law make a general assignment in trust to an assignee for the benefit of his creditors.” The learned judge says: “We cannot presume that the common law in another state has been altered without some proof to that effect.” The defendant offered no evidence upon the trial showing that the common-law rule pertaining to voluntary assignment for the benefit of creditors did not prevail in the state of Minnesota. As the common law permits such an assignment, and it is not in conflict with any law of this state or against public policy, we must therefore recognize its validity. In the case of Ockerman v. Cross, 54

p. 410
N. Y. 29 , the court held that “ a voluntary assignment by a debtor residing in another state or country, valid by the laws of his domicile, and not invalidated by any law of this state, operates as an assignment of the debtor's property situate in this state.” Warner v. Jaffray, 96 N. Y. 248 .

This is not an assignment that comes in conflict with the claims of domestic creditors. It is a question between the defendant, who, as agent, has funds in his possession belonging to the assignee, which he refuses to turn over to him because, as he contends, there is no law authorizing the assignee to maintain this action. I am not aware of any rule of public policy that requires the courts of this state to protect him in his unlawful effort to retain that which does not belong to him. The Minnesota assignment vested in the plaintiff all the personal property belonging to the assignor located in this state; just as effectually as if it was located in the state of Minnesota; and, for the purpose of obtaining possession of it, he is entitled, under the rule of comity between the states, to prosecute such legal proceedings and suits as may be necessary to collect the debts and recover the trust property. The term “ comity,” as defined in Bouvier’s Law Dictionary, is “ courtesy ; a disposition to accommodate. Courts of justice in one state will, out of comity, enforce the law of another state, when by such enforcement they will not violate their own laws or inflict an injury on some one of their own citizens.” Thi s rule contributes largely to produce friendly intercouse between the states and individuals. It permits them to sue in each other’s courts, and to travel and transact all kinds of business in each other’s territory, ' when they are not prevented by some positive law of the state.

Judge Dentó, in Petersen v. Bank, 32 N. Y. 21 , in discussing the rules of comity between the states, says:

“The titles of foreign statutory assignees are recognized and enforced here when they can be without injustice to our own citizens, and without prejudice to the rights of creditors pursuing their remedies here under our statutes; provided, also, that such titles are not in conflict with the laws of public policy of our state.”

The learned counsel for the appellant also contends that this action cannot be maintained for the reason that no proof was given upon the trial that the company had a right to transact business in this state. It appears that the defendant, as agent of the corporation, made contracts and issued policies of insurance without any objection on the part of the state authorities. We must, therefore, assume that the corporation has complied with the requirements of our laws as to its authority to transact business in this state. The defendant, by his own conduct, is estopped from claiming that his acts are illegal. It would be contrary to the rules of equity and justice to permit him to raise that objection for the purpose of shielding himself from his contract obligations.

The appellant’s counterclaim, in my judgment, is not available. His agency was not coupled with any interest. He was in no respect personally obligated to cancel the policies and pay the holders thereof the unearned premiums. His authority to act as agent ceased when the assignment took effect. He knew when

p. 411
he canceled the policies and paid the rebates that the corporation had ceased to exist for the transaction of business. The rule is well settled that the principal in whose behalf the act was done must be in existence at the time the act was performed. The assignment, therefore, which was for the benefit of creditors, operated as a revocation of the agency.

In the case of Fera v. Wickham, 135 N. Y. 229 ; 47 St. Rep. 866 , Judge Gray says:

“ The right of set-off must attach at the time of the making of the assignment. It cannot arise afterwards, for the reason that the claim in favor of the estate has passed to the assignee, and to allow a set-off would be to the prejudice of other creditors.”

The judgment, therefore, of the county court, reversing the judgment of the municipal court, must be affirmed, with costs against the appellant.

Judgment affirmed, with costs.

All concur.

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