Weider v. Maddox

• Decision Date: 11 June 1886
• Citation: 1 S.W. 168
• Parties: WEIDER v. MADDOX and others.
• Court: Texas Supreme Court

1 S.W. 168

WEIDER v. MADDOX and others.

Supreme Court of Texas.

June 11, 1886.

Appeal from Tarrant county.

Action to recover the value of certain goods, plaintiff claiming them under a voluntary assignment for the benefit of creditors, executed to him in the state of Missouri, and defendant, as sheriff, claiming them under attachments sued out by the assignor's creditors.

Hyde Jennings and Carter & Wynne, for appellant, Moses L. Weider. Hogsett & Greene, for appellees, W. T. Maddox and others.

STAYTON, J.

On April 27, 1882, M. Spino, who was an insolvent person residing in the state of Missouri, in accordance with the laws of that state, made a voluntary assignment of all of his property for the benefit of his creditors, except such as by the laws of the state in which he resided was exempted from forced sale. The assignment was such as, under the laws of this state regulating assignments by insolvent debtors, would be held valid if made by a person here resident, unless vitiated by the fact that the exempt property must be ascertained by the laws of the state of Missouri. The assignment expressly covered a stock of goods situated in Fort Worth, Texas, at which place, as well as at the city of St. Louis, in the state of Missouri, Spino was doing a mercantile business at the time the assignment was made. The goods in Fort Worth were seized by the appellee Maddox, who was the sheriff of Tarrant county, on the next day after the assignment was made, under attachments issued in suits instituted against Spino by some of his creditors. This action is brought by the assignee appointed by the deed of assignment against Maddox, and the sureties on his official bond as sheriff, to recover the value of the property.

The laws of the state of Missouri regulating voluntary assignments by insolvent debtors for the benefit of their creditors is fully pleaded in the petition, and the assignment seems to have been made in conformity thereto. The petition alleges that the assignee qualified, by giving bond, and doing such things as were required by the laws of Missouri to authorize him to administer the estate, and that he had so qualified, and was in possession of the goods, through agents, at the time the sheriff made the seizure. It is also alleged that the sheriff was notified of the right of the assignee at the time he made the seizure, and, further, that Spino did not owe, and was not indebted to, any citizen of Texas. The defendants filed general demurrers to the plaintiff's petition, which were sustained, and the cause dismissed.

The grounds on which the court based its judgment do not appear in the record, but the brief of counsel for appellees submits propositions in support of the ruling which we may regard as the grounds upon which the court below acted. These propositions are as follows: "(1) An assignment, to be valid in Texas, must be filed and recorded as other instruments. (2) The assignee, before taking possession of the property, shall give bond, payable to the state of Texas, which shall be deposited with the county clerk. (3) The laws of a state have no force beyond its territorial limits, and if permitted to operate in another state it is only when neither the state, nor any citizen thereof, would suffer an inconvenience from the application and enforcement of such law. (4) The rule that the law of the domicile of the person making a transfer of personal property will control is subject to many exceptions, and the law of the place where the property is situated will be looked to and control when the ends of justice require it. (5) It would only be on a principle of comity that the courts in Texas would enforce an assignment made in Missouri under the laws of said state, and not when it would thereby prejudice any citizen of this state. (6) An assignment of property for the benefit of creditors, made under an insolvent debtor's law of a particular state, which law also makes provision for the administration of the estate assigned according to its own law, and in one of its own courts, and places the assignee under the control of said court, is inoperative to vest in the assignee the title to property situated beyond the limits of the state in whose courts said estate is to be administered. In such a case the assignee is virtually a receiver, and cannot act beyond the jurisdiction of the court under the control of which he acts."

The assignment in question is what is properly termed a "voluntary assignment." It was not made in obedience to a law which compelled the assignor to make it, or which exacted from the creditor a surrender of any demand against the debtor in consequence of it, or as a condition to be allowed to take benefits under it. The right to make such assignments, if made bona fide, is not derived from statutes, but existed at common law, and now, in most of the states of this Union, laws have been enacted to regulate, control and secure the faithful execution of the trust by the named assignee. The assignee acquires title and authority through the assignor, whose act is in the nature of a contract, and the acceptance of it by the assignee imposes upon him a relation of trust and confidence as to creditors and the assignor. Such assignments are termed "voluntary assignments," from the fact that they are the products of a will acting without legal compulsion, and to distinguish them from such transfers as are made solely by operation of law, or by an assignor under legal compulsion. The one has effect as other contracts, while the other has effect solely by force of the law which makes or compels the assignor to make the assignment. This difference it is important to observe when considering the effect to be given an assignment in a state other than that in which it is made. If it be an assignment under a compulsory statute, it exists alone by force of the law, which cannot operate extraterritorially. The law is compulsory if it requires the assignment to be made even at the request of creditors, or if it provides for the discharge of the claims of creditors, without their consent upon the voluntary surrender by the debtor, under the terms of the law of all his property for the benefit of creditors. State insolvent laws which compel the insolvent debtor to surrender his property to an assignee, to be administered, under the direction of a court, for the benefit of creditors, and which compel the creditor to release the debtor on such full surrender, are instances of these classes. In America such assignments are held inoperative upon property, real or personal, not situated within the territory over which the laws that make, or compel the debtor to make, them have dominion, as are discharges of the debtor, attempted to be made under them, inoperative as to persons not resident of the state under whose laws they are made. Whart. Confl. Laws, 390, 390a; Story, Confl. Laws, 410-416; Burrill, Assignm. 303; U. S. v. Bank, 8 Rob. (La.) 414; Hutcheson v. Peshine, 16 N. J. Eq. 167; Felch v. Bugbee, 48 Me. 9; Walters v. Whitlock, 9 Fla. 95; Ogden v. Saunders, 12 Wheat. 213; Harrison v. Sterry, 5 Cranch, 302; Willitts v. Waite, 25 N. Y. 583; Holmes v. Remsen, 20 Johns. 265; Abraham v. Plestoro, 3 Wend. 538; Dalton v. Currier, 40 N. H. 247; Saunders v. Williams, 5 N. H. 214; Blake v. Williams, 6 Pick. 285.

It seems, however, to be everywhere admitted that a general voluntary assignment, for the benefit of creditors, made by an insolvent debtor in accordance with the laws of the place of his domicile, will pass all his personal property, wherever situated, unless the operation of such assignments is limited or restrained by some law of the state in which the property is situated. Hanford v. Paine, 32 Vt. 442; U. S. v. Bank, 8 Rob. (La.) 323; Law v. Mills, 18 Pa. St. 185; Whipple v. Thayer, 16 Pick. 25; Black v. Zacharie, 3 How. 514; Green v. Van Buskirk, 7 Wall. 150; Story, Confl. Laws, 383-390, 410-416; Burrill, Assignm. 301, 302, 306, 307; Walters v. Whitlock, 9 Fla. 86; Holmes v. Remsen, 20 Johns. 265; Saunders v. Williams, 5 N. H. 214.

That a voluntary conveyance of personal property, made in accordance with the law of the domicile of the assignor, is valid elsewhere, is the general rule, cannot be denied; and when it is claimed not to be so in a given case, the law of situs must be looked to; for it is the right of every sovereignty to determine what shall be requisite to the transfer of property, real or personal situated within its territory, and what remedial rights in reference to it shall exist. The laws of a state which will control such questions are ordinarily those made for the government of its own citizens in making contracts and asserting rights. This is well illustrated in cases in which a controlling effect was given to the law of the place where the property was situated. The following are cases of that character: Green v. Van Buskirk, 5 Wali. 307; S. C. 7 Wall. 141; Guillander v. Howell, 35 N. Y. 657; Olivier v. Townes, 2 Mart. (N. S.) 93; Rice v. Courtis, 32 Vt. 460.

There are expressions to be found in many opinions from which the inference may be drawn that effect is to be given to such voluntary assignments, by courts in states other than that in which they...