Smith v. Eaton , 36 Me. 298 ( 1853 )

Appleton, J.—

It was decided" in Lovejoy v. Albee, 33 Maine, 415, that this Court has no jurisdiction where the defendant and trustee both reside without the State, and have Uo property within it. If in the ^original suit in which the defendant was summoned as trustee, objections to its maintenance had been seasonably interposed by plea or by motion it would have been abated. The alleged trustee, instead of taking exception, submitted to the jurisdiction, suffered a default, and an execution issued upon which a demand has been duly made on him.

The general rule of law undoubtedly is, that the defendant in scire facias cannot avail himself of any ground of defence which was open to him in the suit of which that is a continuation. It may be a question, therefore, whether the defendant can take advantage on his disclosure on scire facias of the want of jurisdiction of the Court in rendering the judgment in which he was defaulted, or whether his only remedy is not in reversing it by writ of error. In the view, however, which we have taken, the determination of this question does not become necessary. From the disclosure of the trustees on scire facias, it appears that Albee, the defendant, and the trustees in the suit Smih & al. v. Albee Sf trustees, are now and ever have been residents in the Province of New Brunswick ; that on January 4, 1849, Albee became a bankrupt; that an assignee was appointed, and that on the 17th April, 1849, some days before the service of the trustee writ on the defendants, he obtained a certificate of discharge from the commissioner and certified by the Court of Chancery under the acts, 5 Vict. c. 43, and 6 Vict. c. 4. These facts being set forth in the disclosure and established by documentary proofs, the defendants claim that they should not be considered as having any goods, effects or credits of the principal debtor in their hands or possession, that even if indebted to Albee, which they deny; that such indebtedness has ceased and new relations have arisen between themselves and his assignee binding upon them by the law of the country to which they owe allegiance.

From the answers of the defendants, it appears that previous to his bankruptcy they had large dealings with Albee and received from him various conveyances of real and personal estate, on account of which the plaintiffs claim that they should be charged. To determine this, resort must be had to the law of the domicil of the principal debtor and the trustees, for if no indebtedness exists there, none can arise from merely passing over the line, which divides one government from another. Now by the law of New Brunswick, the bankrupt is divested of all property within its territorial jurisdiction, and the same is transferred to the assignee as effectually by operation of law as it could be by the most solemn contract of the parties. Bradbury v. Stephenson, 1 Allen, 631. For the real estate conveyed, the trustees could not have been charged, had it been situated in this State. The laws regulating the acquisition or the transmission of title to personal estate are those which are in force where the owner is domiciled. The owner of personal property situated in the country where he resides, has a title to it wherever he may be. It is true, that when the property is here at the time of the assignment, the title of the foreign assignee is postponed to the claims of creditors resident in this country, but this principle does not apply, when it was at the time of his bankruptcy in the jurisdiction in which the bankrupt resided, and has since been brought here. In Pastoro v. Abraham, 1 Paige, 237, the controversy was between the bankrupt and his assignees and creditors, all residing in the country under whose laws the assignment was made. In delivering his decision, Walworth, Ch. says, “ even the property itself at the time of the'Assignment was constructively within the jurisdiction of that country, being on the high seas, in the actual possession of a British subject. Under such circumstances the assignment had the effect to change the property, and divest the title of the bankrupt, as effectually as if the same had been sold in England under an execution against him, or he had voluntarily conveyed the same to the assignee for the benefit of his creditors.” The same doctrine was fully affirmed in the opinion of Marcy, J., in the same case, in 3 Wend. 538, and is sanctioned by Story in his Conflict of Laws. A large proportion of the property purchased by the original defendant consisted of logs and lumber. If that purchase was in good faith, the title was vested in the purchaser. If void for any cause, the assignment transferred it to the legally appointed assignee. So too if any contracts were in force between these defendants and Albee, or any equitable relations subsisting between them, they were transferred, and the title to them and the right to enforce them was perfected in the assignee. The bankrupt, his assignee and the defendants were all domiciled in New Brunswick, subject to the laws of that Province, and while they were all thus subjects, all the assets of the bankrupt, whether real or personal, whether equitable or at common law, passed from him as entirely as if his death had intervened. Every State has uncontrolled jurisdiction over all property, real or personal, within its territory. The defendants had ceased to be the debtors of Albee or to hold any property of his; new relations had arisen and become perfected, by which whatever obligations they were under to him, if any, were henceforth due to and were to be enforced by another. By leaving temporarily that government no change in their legal rights or duties was created, and if they- then ceased to have any goods, effects or credits of the principal debtor, there has nothing occurred since, by which they can justly be adjudged to possess them. Whether the lex loci contractus, the lex rei sitae or the lex domicilii is to govern, is immaterial, as in either event the rights of the parties must depend on the law of the Province of New Brunswick, and according to those laws, whether they had had the property of the principal debtor in' their hands or not, or had been indebted to him or not, they must be discharged, as the title to such property, and the right to enforce all subsisting contracts, had become perfected in the assignee of Albee.

These views do not conflict with the principles established in Blake v. Williams, 6 Pick. 286, and in Holmes v. Remsen, 20 Johns. 299, in which it was held that an assignment in bankruptcy in England does not transfer the personal property of the bankrupt here, or his debts due from our citizens as against his creditors resident here. Bat in those cases the property was in this country at the time of the assignment, and consequently amenable to our laws. The debtors of the bankrupt were citizens and subject to our jurisdiction. In this case, the property was in a foreign land, and the defendants were the subjects of a foreign government' and bound by its laws. When they came within our jurisdiction, they brought with them their existing relations to their own citizens, according to the laws of their country. Potter v, Brown, 5 East, 129.

But it has been urged that the assignment of the bankrupt was fraudulent on his part, and that therefore nothing passed to his assignee. Were it so, whatever might be its effect on the bankrupt’s discharge, it would not reinvest him of his former estates. In Morrison v. Albee, 2 Allen, 145, the certificate of discharge of the same Albee, whose trustees the defendants are alleged to be. received the consideration of the Supreme Court of New Brunswick. It was there held that evidence that the bankruptcy was fraudulent and collusive, was inadmissible, in a trial in Nisi Prius, to impeach as bankrupt’s certificate duly obtained from the commissioner and certified by the Court of Chancery, under the acts, 5 Vict. c. 43, and 6 Vict. c. 4. Carter, C. J., in his opinion says, “all our act requires to give validity to the certificate is, 1st, that it should be under the hand and seal of the commissioner with certain requisites as to form and substance; 2d, that the bankrupt should make oath that it was obtained fairly and without fraud, &c., and 3d, the subsequent confirmation by the Court of Chancery, which is not made without affording an opportunity to the creditors to oppose it.”

Indeed it is difficult to perceive upon what principles the trustees could be charged for real or personal estate situated in another government or for contracts to foe there performed, or how they could be required to remove property from another jurisdiction for the purpose of exposing it here to be levied on. Lovejoy v. Albee, 33 Maine, 415; Baxter v. Vincent, 6 Vermont, 615. Defendants discharged.

Shepley, C. J., and Tenney, Rice and Hathaway, J. J., concurred.