Noble v. Thompson Oil Co. ex rel. Brown ( 1875 )

Mr. Justice Mbrcub,

delivered the opinion of the court, January 6th 1876.

This suit was on a recognisance. It was entered into on the suing out of a writ of error to a judgment of the Court of Common Pleas of Erie county. That judgment was affirmed by this court. After it was recovered in the court below, and before it was affirmed here, it was assigned to Brown et al., the use parties of defendant in error. About two months after that assignment, the defendants in the judgment were attached in the state of New York, as garnishees of the original plaintiff in the judgment. The plaintiffs in error pleaded the judgment in that attachment suit against the garnishees and their payment thereof, in bar of a recovery on the recognisance. The defendants in error demurred to the plea, and the court entered judgment in their favor.

The first assignment of error is to the court ordering the production of the record averred in the plea. It is now conceded that oyer of thé record is not demandable: 1 Tr. & Haley’s Prac. 421: but it does not appear that any exception was taken to the action of the court at the time, nor that the plaintiffs in error were injured by its production. About a month after a copy of the record was filed, in pursuance of the order of court, the parties by written agreement filed, waived informality in the certificate of record. The next day thereafter, on leave granted, the plaintiffs in error filed a supplemental record. Having thus voluntarily exhibited the record, the complaint of its former production cannot now be regarded.

The second assignment is to the entry of judgment in favor of the defendants in error, on the demurrer. This involves a consideration of the effect of the assignment of the judgment to the defendants in error, and also of the effect of the attachment and proceedings thereon.

First. The Thompson Oil Company was a corporation formed under the laws of this Commonwealth and doing business therein. The assignees were citizens and residents of Pennsylvania. The judgment assigned was of record in a court of this state. When the assignment was made, the assignor, the assignees, and the property assigned, were all within this Commonwealth and governed by its laws. That the assignment was for a full consideration and in good faith are unquestioned. It was a purchase, by persons having a right to buy from a party having a right to sell, of property, of which no rule or policy of law forbids the sale. It was not fraudulent, either in law or fact. It was not a statutory transfer of the judgment, but a voluntary sale and assignment of it. It was then beyond all doubt a valid transfer here. Being a valid assignment when and where made, it is valid everywhere: Story on Conflict of Laws, §§ 398, 399 ; Speed v. May, 5 Harris 91: Kelly v. Craft et al., 45 N. Y. 86. It is true the assignees took the judgment subject to tbe equities existing between tbe parties thereto at the time of the assignment, and they also held it subject to any payments that might be made by the defendants therein to the ’assignor before notice of .the assignment. By this transfer the whole property of the Thompson Oil Company in the judgment passed to the assignees. Thenceforth the oil company had no attachable interest in the judgment, but held it as a mere naked legal trustee of their assignees. The defendants in that judgment no longer owed or were indebted to the original plaintiff therein, but they owed it to the assignees.

Secondly. It is contended that insomuch as the foreign attachment was served on the garnishees before they had notice of the assignment, the claim of the assignees is postponed to that of the attaching creditors. This conclusion is not sustained by the authorities in this country; among others may be cited: Wakefield v. Marvin, 3 Mass. 558; Dix v. Cobb, 4 Id. 512; Van Buskirk v. Warren, 24 Barb. 457; United States v. Vaughan et al., 3 Binn. 394; Stevens v. Stevens, 1 Ash. 190; Pellman et al. v. Hart et al., 1 Barr 263; Patton v. Wilson, 10 Casey 229; Speed v. May, 5 Harris 91; 5 Wallace 307. The reason on which these authorities rest, is that the plaintiff in a foreign attachment stands on no better footing as to the thing attached than his debtor, the defendant, whose property is sought to be seized. All that can be seized by virtue of the attachment, is the property of the debtor. The original plaintiff in this judgment having disposed of it in good faith and for a valuable consideration to the defendants in error, no creditor of the assignor could set aside the assignment by proceedings in foreign attachment.

It is argued, however, that as the effect of the attachment on the assignment has been otherwise decided by the court in New York, and the garnishees have paid the debt to the attaching creditors, it establishes a good defence here for the plaintiffs in error. Art. iv, sect. 1, of the Constitution of the United States, declares “full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state, and Congress may by general laws prescribe the manner in which such acts, records and proceedings shall be proved and the effect thereof.” By the Act of 26th May 1790, 2 Purd. Dig. 1484, pi. 1, Congress prescribed the manner of authentication, and further declared “the said records and judicial proceedings authenticated as aforesaid, shall have such faith and credit given to them in every court within the United States as they have by law or usages in the courts of the state from whence the said records are or shall be taken.” The judgment of the court of another state is thus put on the same footing as a domestic judgment, with this qualification, that it does not prevent an inquiry into the jurisdiction of the court in which the judgment was given to pronounce it, or the right of the state itself to exercise authority over the persons or subject-matter: Story’s Com. 483 and 1307; Bissell v. Briggs, 9 Mass. 462; Shumway v. Stittman, 4 Cowen 292; Borden v. Fitch, 16 Johns. 121 ; Benton v. Burgot, 10 S. & R. 240; Steel v. Smith, 7 W. & S. 447; Campbell v. Steele, 1 Jones 394; Baxley v. Linab, 4 Harris 241.

We have already showed that the judgment as well as the parties to the assignment were within this state at the time of the transaction. They so continued at the time of the issuing of the writ of foreign attachment, and during the pendency of all the proceedings thereon. Neither the defendants in error, nor the judgment which they purchased, was within the state of New York. The court then had no jurisdiction of the persons or property of the defendants in error.

The writ of foreign attachment rests on the assumption that the debtor is beyond the limits of the state, but his property is within the reach of process. A judgment in personam is invalid unless procured after service of summons or after appearance. Without one of these the court would have no jurisdiction of the person. So if the judgment be in a proceeding in rem it is void if the court has no jurisdiction of the property : Pennsylvania Railroad Co. v. Pennock, 1 P. F. Smith 244. Nor does the fact that the garnishees in the attachment after judgment has been recovered against the assignor, notified the assignor and the assignee, by letter, of the pendency of the'proceedings, change the result. The notice was insufficient in substance and unreasonable in time: Erie Bank v. Gibson, 1 Watts 143; Paul v. Witman, 3 W. & S. 409; Shinier et al. v. Jones et al., 11 Wright 268. The assignees were not bound to appear on such a notice and contest the case. If they had done so, and had been admitted as parties to the suit, the case of Moore v. Spackman, 12 S. & R. 287, would bind them to acquiescence in the judgment. On the contrary, they waived none of their rights. They were neither parties nor privies to the suit. We give full effect to the Constitution of the United States and to the law of Congress enforcing the same. We assent to the conclusiveness of the judgment of a court of a sister state, when that court has jurisdiction, yet we cannot concede that a person resident within this state, and owning property situated therein, shall involuntarily and by such a proceeding be constructively brought within the jurisdiction of the court of another state, so as to divest his rights in that property.

The law requires us to give such faith and credit only to this record as it has by law or usage in the courts of the state of New York. As we understand the laws of that state, the judgment, so far as it is attempted to affect the defendants in error, is void there. Yoorhees U. S. Code, 10th ed., page 114, sect. 122, declares, “the court may determine any controversy between the parties before it when it can be done without prejudice to the rights of others, or by saving their rights; but when a complete determination of the controversy cannot be had without the presence of other parties the court must cause them to be brought in.” It further declares, “ when it appears that any person not a party to the action claims the same debt or property in controversy, such claimant shall he substituted of record.” ' •

This case presented the precise facts suited to the application of the code. It was the duty of the garnishees to invoke its protection. If he chose to waive this privilege, which the law gave him for his protection, he cannot thereby throw the loss an an innocent assignee: McMahon v. Allen, 2 How. 39. If the garnishees had properly averred the claim of the assignees, which the record shows was known to them, the plaintiffs in the attachment would have been compelled to amend their summons and complaint so as to have made the assignees a party to the action. Nor is it a valid objection to such a course that the assignees are residents of another state: 17 How. 571. The rights of third persons can be brought into litigation only in a regular way by suit: Rodman v. Henry, 17 N. Y. 482. If not brought in upon’service of process the court will not permit the trial to proceed to affect them: 2 Duer 663; 5 Id. 666. The judgment pleaded shows on its face that it was obtained in disregard of the laws of New York and of the rights of the assignees. No property was seized. No appearance of the defendants in error was procured. No effort was made to bring them in on process. They were not substituted of record. They were not in any sense a party to the action. Their rights as assignees were, therefore, not affected: Roy v. Baracus, 43 Barb. 310. The judgment rendered against one not a party to the action, before it is pronounced, does not bind him, nor is it any evidence against him: Shuver v. Blaidard et al., 29 Barb. 25. Want of jurisdiction may always be set up against a judgment when sought to be enforced, or when any benefit is claimed under it. The want of jurisdiction makes it utterly void and unavailable for any purpose: Borden v. Fitch, 15 Johns. 121; Page v. Hill, 43 Barb. 44; Bank v. Judson, 4 Selden 254.

The assumed hardship of paying the debt twice might readily have been avoided. The code gave the garnishees clear and specific directions for their full protection. They studiously avoided following them. They agreed to submit the cause and all the issues therein to a referee. To his finding they filed no exceptions. This manner prevented the numerous errors in the case from being, presented to the consideration of the court.

Our great respect for the learning of the judges of that court impresses us with the conviction that it was under these circumstances they permitted this judgment to be recovered-, and that they would hold it of no effect against the assignees, whenever properly presented for their consideration.

Hence we hold that the judgment in the attachment suit did not divest the right of property acquired by the defendants in error to the judgment in this state. That it must be so held in the state in which the judgment on the attachment was recovered as well as in this state where it was pleaded.

It follows, therefore, the learned judge was correct in entering judgment in favor of the defendant in error on the demurrer.

Judgment affirmed.