Clark-Wilcox Co. v. Northwest Engineering Co.
| Decision Date | 01 July 1943 |
| Citation | 314 Mass. 402,50 N.E.2d 53 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Parties | CLARK-WILCOX CO. v. NORTHWEST ENGINEERING COMPANY& others. |
May 12, 13, 1943.
Present: FIELD, C.
J., DONAHUE, QUA DOLAN, & COX, JJ.
Equity Jurisdiction, To reach and apply. Jurisdiction, Property of nonresident. Sale, Conditional. Neither the right of a nonresident, not served with process in
Massachusetts, as vendor under a contract of conditional sale of machinery located here to a vendee resident and served with process here, to an unpaid balance of the purchase price represented by an unmatured negotiable promissory note in the ordinary form, given by the vendee to the vendor "as evidence of indebtedness only," containing no mention of the contract of conditional sale, and held by the vendor outside Massachusetts, nor the vendor's security title in the machinery, was subject to the jurisdiction of the Massachusetts courts or could be reached and applied in a suit in equity here to payment of a claim of the plaintiff, a resident here, against the vendor.
BILL IN EQUITY filed in the Superior Court on April 24, 1942. The defendant Northwest Engineering Company appeared specially and filed a plea to the jurisdiction. The plea was sustained by Collins, J., who thereupon reported the suit.
F. T. Leahy, for the plaintiff. E. N. Jones, for the defendant Northwest Engineering Company.
In this bill to reach and apply brought under G. L. (Ter. Ed.) c 214, Section 3 (7), the trial judge sustained a plea of the principal defendant, Northwest Engineering Company, to the jurisdiction of the court and reported the case.
The plaintiff, a Massachusetts corporation, seeks to recover from the engineering company a substantial sum for commissions on sales of machinery of types used by contractors. The engineering company is a Delaware corporation doing business in Illinois, but it has no place of business in this Commonwealth. It has not been served and has appeared only specially. The property of the engineering company which the plaintiff seeks to reach and apply in payment of the engineering company's alleged debt to the plaintiff consists of the rights of the engineering company in various contracts of conditional sale of contractors' machinery by it to the other defendants, all of whom are residents of this Commonwealth and have been duly served. Those rights consist of the unpaid balances of the purchase prices for the machinery, represented by unmatured negotiable promissory notes, and of the property rights of the conditional vendor in the machinery itself. When the bill was filed all the machinery was in this Commonwealth, but the notes were and have ever since been held by the engineering company outside the Commonwealth. They contain no mention of the conditional sales contracts.
It is settled that the interest of a nonresident not served here in negotiable notes held outside this jurisdiction cannot be reached by a bill to reach and apply, although the makers reside and are served here. Pond v. Simpson, 251 Mass. 325 . The reason is that under these circumstances the court cannot protect the makers against a possible negotiation of the notes, which cannot be regarded as property within the jurisdiction of the court. See G. L. (Ter. Ed.) c. 246, Section 32, First; Jones v.
Gorham, 2 Mass. 375 , 379; Cushman v. Haynes, 20 Pick. 132, 133; American Trust Co. v. Holtsinger, 226 Mass. 30 , 35; Bliss v. Bliss, 221 Mass. 201; Am. Law Inst. Restatement: Conflict of Laws, Sections 52, 103, comment c. Compare Silloway v. Columbia Ins. Co. 8 Gray, 199, and Davis v. Werden, 13 Gray, 305, where the notes were within the Commonwealth, and Moody v. Gay, 15 Gray, 457, where the true owner of the note was a resident amenable to the suit here.
Since the notes cannot be reached, the engineering company's interest as conditional vendor in the machinery within this Commonwealth cannot be reached. Its title to the machinery is a security title good only to secure payment of the unpaid balances of the purchase prices represented by the notes. Package Confectionery Co. Inc. v. Perkit, 281 Mass. 554 , 556. Lehan v. North Main Street Garage, Inc. 312 Mass 547 , 550. Williston on Contracts (Rev....
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