Proctor v. National Bank of the Republic

• Decision Date: 05 September 1890
• Citation: 25 N.E. 81,152 Mass. 223
• Parties: PROCTOR et al. v. NATIONAL BANK OF THE REPUBLIC OF BOSTON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

152 Mass. 223

25 N.E. 81

PROCTOR et al. v. NATIONAL BANK OF THE REPUBLIC OF BOSTON.

Supreme Judicial Court of Massachusetts, Suffolk.

September 5, 1890

COUNSEL

John Lowell, M.F. Dickinson, and Hollis R. Bailey for plaintiffs.

L.L Schaife and Bancroft G. Davis, for defendant.

OPINION

FIELD J.

We think it appears that the notes were actually sold and delivered by the defendant to the Continental National Bank of New York; that the intention of the defendant in making the sale was to obtain an advantage over the other creditors of E. & A.H. Batcheller & Co.; that this intention was known to the Continental National Bank at the time it purchased the notes, and that it bought them for the purpose, among others of enabling the defendant to carry this intention into effect. The defendant knew that Batcheller & Co. were insolvent in fact, and might be adjudged insolvent debtors in this commonwealth, and that if this were done before it obtained judgment in Ohio it might be enjoined from prosecuting the action in Ohio to judgment; and, in order to avoid this, it sold the notes to the Continental National Bank. This sale included all the rights which the defendant had to prosecute the action then pending in Ohio. The agreement of the defendant with the Continental National Bank to pay to it any deficit if it should not recover the full amount of the notes, and also to pay to it a sum equal to all its costs, charges, and expenses, is an agreement collateral to the sale, and does not affect the title of the Continental National Bank to the notes, or the absolute right of control, which, after the sale, it had over the action pending in Ohio. When, therefore, this bill was brought, an injunction against the defendant's prosecuting the action in Ohio would have been ineffectual, because the defendant had no control over the action. It has been held, in Lawrence v. Batcheller, 131 Mass. 504, that if the defendant had prosecuted the suit in Ohio to judgment, and the judgment had been satisfied out of the funds there garnished, the plaintiffs could not recover of the defendant the amount of the judgment. It is also settled that if the defendant, after Batcheller & Co. had been adjudged insolvent debtors, had retained control of the suit, the plaintiffs could have obtained an injunction against the further prosecution of it by the defendant. Dehon v. Foster, 4 Allen, 545, 7 Allen, 47; Cunningham v. Butler, 142 Mass. 57, 6 N.E. 782; Cole v. Cunningham, 133 U.S. 107, 10 S.Ct. 269. If there seems to be any inconsistency in principle between these two classes of cases, it arises, in part, at least, from the limitations imposed by the constitution of the United States upon the power of the commonwealth to pass laws relating to bankruptcies and laws which shall impair the obligation of contracts, and from a want of jurisdiction over citizens of other states.

It also has been contended that, as by article 4, § 1, of the constitution of the United States, full faith and credit must be given to the judicial proceedings of other states, it is beyond the power of the commonwealth to declare void an attachment of property made in another state pursuant to its laws, or...