Maconchy v. Delehanty

• Decision Date: 27 March 1908
• Docket Number: Civil 1027
• Parties: JOHN ARTHUR MACONCHY and ALEXANDER KNOX McINTIRE, Assignees in Bankruptcy of WALTER DELEHANTY, Plaintiffs and Appellants, v. WALTER DELEHANTY and MARY POWER, Defendants and Appellees
• Court: Arizona Supreme Court

95 P. 109

11 Ariz. 366

JOHN ARTHUR MACONCHY and ALEXANDER KNOX McINTIRE, Assignees in Bankruptcy of WALTER DELEHANTY, Plaintiffs and Appellants, v. WALTER DELEHANTY and MARY POWER, Defendants and Appellees

Civil No. 1027

Supreme Court of Arizona

March 27, 1908

APPEAL from a judgment of the District Court of the Second Judicial District, in and for the County of Cochise. Fletcher M. Doan Judge. Reversed and remanded.

Judicial settlement of the estate of P. J. Delehanty, deceased, in which John A. Maconchy and another, foreign assignees in bankruptcy of Walter Delehanty, one of decedent's heirs at law and next of kin, applied to have his share in such estate set off to them. From a judgment denying such relief and from an order denying petitioners' motion for a new trial, they appeal.

The facts are stated in the opinion.

O Gibson, for Appellants.

Ben Goodrich, for Appellees.

OPINION

CAMPBELL, J.

-- It appears from the petition filed in this case that in July, 1904, P. J. Delehanty died intestate in Cochise county, leaving an estate of real and personal property. His heirs at law and next of kin are a sister, Mary Power, and a brother, Walter Delehanty. The sister was appointed administratrix of the estate. On October 5, 1904, the brother, then a resident of Ireland, was, upon a petition of his creditors, adjudicated a bankrupt by the high court of justice in Ireland, King's Bench division, in bankruptcy. By choice of the creditors John Arthur Maconchy and Alexander Knox McIntire were appointed official assignees in bankruptcy. On October 25, 1904, the bankrupt executed an instrument in writing by which he undertook to assign to the said official assignees in bankruptcy all his share in the real and personal estate of P. J. Delehanty, upon trust to be held by them as such assignees, and to be dealt with by them as a part of the assets of the bankrupt and applied according to the course of the court in such case made and provided. In July, 1906, and after more than one year had elapsed from the issuing of letters of administration upon the estate of P. J. Delehanty, the official assignees filed their petition in the probate court of Cochise county, alleging that they, by reason of the assignment, have become and are entitled to distribution to them of one-half of the entire estate of the deceased after the debts of said deceased have first been paid and the expenses of administration deducted, and prayed that the court ascertain and declare the rights of all persons to the estate and all interest therein, and to whom distribution thereof should be made. This proceeding is provided for in paragraphs 1891, 1892, 1893, and 1894 of the Revised Statutes of 1901. Walter Delehanty and Mary Power, as heirs and next of kin, disputed the rights of the assignees upon the ground that the assignment was a proceeding in foreign involuntary bankruptcy, and did not operate to convey title to property in this country. Upon a hearing had in the probate court the claim of the assignees to the share of Walter Delehanty was rejected. Appeal was thereupon taken to the district court. At the trial before a jury in the district court an objection to the offer in evidence of the assignment was sustained, and a verdict in favor of Walter Delehanty directed. From the judgment entered upon such verdict, and from the order denying a new trial, this appeal is brought.

The trial court sustained the objection to the admission in evidence of the assignment upon the ground that it appeared therefrom that it was an involuntary assignment in bankruptcy, made under the laws of a foreign country, and therefore did not operate to convey title to real and personal property in this territory. While the assignees claim that neither from the instrument itself nor by the pleadings is it made to appear that it was not voluntarily executed, we shall, for the purposes of this opinion, treat it as having been made under an order of the foreign bankruptcy court, and hence involuntary. Therefore the matter for our determination is the effect we will give to a foreign involuntary assignment in bankruptcy upon property in this territory. The question is one that has been before the courts of this country in many cases and from almost the beginning of our national existence. The English rule is to give full effect to such transfers of personal property, but as early as 1809 Chief Justice Marshall, in Harrison v. Sterry, 5 Cranch (U.S.), 289, 3 L.Ed 104, held that the bankrupt law of a foreign country could not operate a legal transfer of property in this country. Chancellor Kent, in Holmes v. Remsen, 4 Johns. Ch. (N.Y.) 460, 8 Am. Dec. 581, followed the English rule, holding the assignment valid, even as against domestic creditors. Holmes v. Remsen was disapproved in Abraham v. Plestoro, 3 Wend. (N.Y.) 538, 20 Am. Dec. 742, and in Willitts v. Waite, 25 N.Y. 577, and it has been the almost universal ...