Chipman v. Manufacturers' Nat. Bank

• Decision Date: 29 March 1892
• Citation: 156 Mass. 147,30 N.E. 610
• Parties: CHIPMAN et al. v. MANUFACTURERS' NAT. BANK et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

156 Mass. 147

30 N.E. 610

CHIPMAN et al. v. MANUFACTURERS' NAT. BANK et al.

Supreme Judicial Court of Massachusetts, Suffolk.

March 29, 1892

COUNSEL

W.B. French, for plaintiffs.

W.A Gaston and F.E. Snow, for defendants.

OPINION

HOLMES, J.

The plaintiffs are assignees in insolvency of Dudley Hall & Co. The defendant, a national bank, doing business in Boston, is a creditor of Dudley Hall & Co. Hall & Co. were adjudged insolvent on March 23, 1891. The assignment to the plaintiffs was on April 9, 1891. On March 10, 1891, the defendant attached teas in New York in an action there, and it also attached land in Maine in an action there. The teas and the land afterwards were attached by creditors foreign to Massachusetts, and no part of the property or its proceeds will come to the assignees unless the suits are carried on and the defendant's attachments are preserved for their benefit. The object of this suit is to compel the defendant to carry on the suits, or to allow the plaintiffs to carry them on, the defendant, of course being indemnified, and to turn over to the plaintiffs whatever may be collected on execution.

Dehon v. Foster, 4 Allen, 545, goes further than the English cases in form. Ex parte D'Obree, Ex parte Le Mesurier, 8 Ves. 82. But the principle upon which it goes has the same limit as that of the English cases. It is not that the law will prevent a domestic creditor from getting paid in full unless all do. Whatever may be the law where a creditor, who has got an advantage abroad, seeks to prove under an English commission, the "principle does not apply when that creditor obtains by his diligence something which did not and could not form a part of that fund," "which otherwise would have been available for the payment of all the creditors," at least when he takes no part in the English proceedings. Cockerell v. Dickens, 3 Moore, P.C. 98, 132; Banco de Portugal v. Waddell, 5 L.R.App.Cas. 161, 167; Selkrig v. Davies, 2 Dow. 230, 249, 2 Rose, 291.

As the debtor is subject to the jurisdiction of the court, of course it would be possible to make all his property, wherever situated, available for the creditors by compelling him to convey it to the assignees; and a creditor subject to our laws not only might be refused the right to prove unless he surrendered any advantage which he had obtained elsewhere and which otherwise the debtor might haev been compelled to convey, but might be compelled by an independent proceeding to make such surrender. That, however, is not what the principle of Dehon v. Foster means. It only denies to the creditor the right to retain an advantage in respect of property which by force of the insolvent proceedings, or at least according to the manifest theory of the insolvent law, would have passed to the assignee but for the creditor's act. Dehon v. Foster was put on the ground that personal property situated in Pennsylvania, but belonging to a debtor domiciled here, was intended by the statute to pass, and would pass, to his assignee in insolvency, (4 Allen, 552, 554; Selkrig v. Davies, 2 Dow, 230, 249, 2 Rose, 291, 318,) a proposition which, although it has not commanded unqualified assent, (Crapo v. Kelly, 16 Wall. 610, 622; Whart.Confl.Laws, (2d Ed., § 390a,) is law in England, (Dicey, Dom.Rule, 63,) and which would seem to be sound if assignees in insolvency are to be regarded as successors per universitatem, like executors, or husbands, at common law, upon marriage, (Bank v. Cuthbert, 1 Rose, 462, 481; Selkrig v. Davies, 2 Dow, 230, 248, 2 Rose, 291, 317.) See Bank v. Waite, 150 Mass. 234, 235, 22 N.E. 915; Whart.Confl.Laws, (2d...