Catlin v. The Wilcox Silver-Plate Company
| Citation | 24 N.E. 250,123 Ind. 477 |
| Decision Date | 29 April 1890 |
| Docket Number | 14,263 |
| Parties | Catlin v. The Wilcox Silver-Plate Company |
| Court | Supreme Court of Indiana |
From the La Porte Circuit Court.
Judgment affirmed, with costs.
L. A Cole, for appellant.
F. E Osborn, W. B. Biddle and J. H. Bradley, for appellee.
The question for decision arises upon the following facts:
Clapp & Davies, partners, doing business in the city of Chicago, were indebted to certain judgment creditors residing in that city. They were also indebted to the Wilcox Silver-Plate Company, and others who were residents of the State of Connecticut. At the same time Bagley & Oberreich, partners, residing and doing business at La Porte, Indiana, were indebted in a considerable sum to Clapp & Davies. One of the judgment creditors instituted proceedings in chancery against the latter firm by filing a creditor's bill in the Superior Court of Cook county. In aid of its jurisdiction in the proceeding thus instituted the court appointed the appellant Catlin receiver, and by an order made on the 14th day of April, 1887, required Clapp & Davies to execute a general deed of assignment, transferring all their partnership property and effects to the receiver. Subsequently, in the month of June, the Wilcox Silver-Plate Company instituted a suit in attachment, in the La Porte Circuit Court, against Clapp & Davies, and summoned Bagley & Oberreich to answer as garnishees. The other Connecticut creditors became parties to this last proceeding, under section 943, R. S. 1881. Thereupon Catlin, as receiver of the Superior Court of Cook county, intervened by leave of the La Porte Circuit Court, and asserted the right, in virtue of his appointment as receiver and the assignment made to him, to take and hold the debt due Clapp & Davies from Bagley & Oberreich.
The controversy, as will appear, involves the right to the fund in the hands of the garnishee defendants, and the question presented is, are the rights of the non-resident attaching creditors paramount in the courts of this State to those of the receiver of the superior court of Cook county, whose appointment antedates the issuing of the writ of attachment? The solution of the question depends upon the extent of power which a court of general jurisdiction, sitting in one State, can exert over property whose actual situs is within the jurisdiction of the courts of a foreign State.
A receiver is nothing more than an officer or creature of the court that appoints him. His acts are those of the court, whose jurisdiction may be aided, but in nowise enlarged or extended by his appointment. His power is only coextensive with that of the court which gives him his official character.
While it has been held that a court may appoint a receiver, and authorize him to take possession of property in a foreign jurisdiction, the doctrine is universal that the appointment confers no legal authority which the receiver can exert over the property without the aid of the courts in whose jurisdiction it is found. The appointment, of its own force, gives him the right to take possession of the property, but it confers upon him no power to compel the recognition of that right outside the jurisdiction of the court making the appointment. High Receivers, sections 47, 241. While there are authorities of great weight which seem to hold that a receiver appointed in one jurisdiction will not be permitted to maintain a suit in a foreign State, the generally prevailing doctrine upon which all the decisions seem to be harmonious is, that upon the principles of comity the courts of the jurisdiction in which the property or fund is situate, will recognize the rights of the receiver so far as to aid him in reducing it to possession, unless to do so would in some way violate the local policy or interfere with the rights of resident creditors. Metzner v. Bauer, 98 Ind. 425, and cases cited; Beach Receivers, sections 16, 19, 682; Bank v. McLeod, 38 Ohio St. 174. But the recognition of well-established principles of comity and courtesy between courts of different jurisdictions is one thing, while the rights of resident or other attaching creditors who are seeking to avail themselves of legal proceedings authorized by statutes of the State for the appropriation of a fund belonging to a non-resident debtor, must be determined upon altogether different principles. As has in effect been said, courts are prepared to extend comity where there is no reason to the contrary, especially if there is no interest of their own citizens, or of the citizens of another State who are asking the protection of their laws, injuriously affected by such recognition. Paine v. Lester, 44 Conn. 196; Milne v. Moreton, 6 Binn. 353.
The rule may be considered as established that a receiver may invoke the aid of a foreign court in obtaining possession of property or funds within its jurisdiction to which he is entitled, but aid will only be extended as against those who were parties to, or in some way in privity with, the proceedings in the course of which his appointment was made, or who are in possession of the property or fund to which the receiver has a right, and not against creditors of a non-resident debtor, who are seeking to subject the property or fund to the payment of their debts, by proceedings duly instituted for that purpose.
Accordingly, in Hurd v. City of Elizabeth, 41 N.J.L. 1, the court said: "That the officer of a foreign court should not be permitted, as against the claims of creditors resident here, to remove from this State the assets of the debtor, is a proposition that appears to be asserted by all the decisions." The principle upon which the decisions rest is, that it is the policy of every government to retain within its control the property of a foreign debtor until all domestic claims have been satisfied, and hence the right of the receiver of a foreign court to sue, which is allowed only upon considerations of comity, will be denied when it comes in conflict with the interests of domestic creditors.
"We decline," said the court in Runk v. St. John, 29 Barb. 585, "to extend our wonted courtesy so far as to work detriment to citizens of our own State who had been induced to give credit to the foreign insolvent." Bagby v. Atlantic, etc., R. R. Co., 86 Pa. 291; Insurance Co. v. Wright, 55 Vt. 526; Thurston v. Rosenfield, 42 Mo. 474 (97 Am. Dec. 351); Willitts v. Waite, 25 N.Y. 577; 22 Am. Law Reg. 289.
It follows, hence, that the available legal authority of a receiver is coextensive only with the jurisdiction of the court by which he was appointed when the right of precedence or priority of creditors is asserted in respect to property or funds of a non-resident debtor which the receiver has not yet reduced to possession. Hunt v. Columbian Ins. Co., 55 Me. 290; Warren v. Union Nat'l Bank, 7 Phila. 156; Booth v. Clark, 58 U.S. 322, 17 HOW 322, 15 L.Ed. 164; State v. Jacksonville, etc., R. R. Co., 15 Fla. 201; Farmers, etc., Ins. Co., ex rel., v. Needles, 52 Mo. 17; Taylor v. Columbian Ins. Co., 14 Allen, 353.
It is said, however, that as Clapp & Davies were residents of the State of Illinois at the time the receiver was appointed, the debt due them from Bagley & Oberreich was within the jurisdiction of the superior court of Cook county, upon the principle that the domicile draws to it the personal property and choses in action of the owner, wherever they may be situate. Hence, the contention is that as the appointment of the appellant as receiver was followed by a general deed of assignment, valid in the State of Illinois, it must be regarded as valid here, and as divesting Clapp & Davies of all title or interest in the debt in controversy after the date of the assignment.
It is of course well settled that personal property is transferable according to the law of the owner's domicile, and that a voluntary assignment or transfer, made without compulsion or legal coercion, is to be governed everywhere by that law unless the contract by which the transfer was made is limited or restrained by some policy or positive enactment of the State in which the property is situate or unless it affects citizens of the latter State injuriously. Ames Iron Works v. Warren, 76 Ind. 512; Martin v. Potter, 11 Gray, 37 (71 Am. Dec. 689); Weider v. Maddox, 66 Tex. 372 (59 Am. Rep. 617,...
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