Emerson v. Patridge , 27 Vt. 8 ( 1854 )

The opinion of the court was delivered by

Isham, J.

The trustee acknowledges the execution of the note mentioned in his disclosure, and his indebtedness upon it, in the sum of three hundred dollars. The plaintiff claims the amount due thereon under this attachment. The claimants insist that the note belongs to them, as it was indorsed to them by the payee at Boston in Massachusetts, where they, as well as the payee and the principal defendant, reside. It appears from the case that the note was executed in this state; that it was payable here at the Commercial Bank in Burlington, and'that it was indorsed at Boston to the claimants before its maturity ; but that no notice was given to the trustee, until after the service of this trustee process.

If this note is subject to the laws of this state, it is quite obvious that the plaintiff is entitled to a judgment against the trustee. The fact that no notice of the transfer was given to the trustee before the service of this process, subjects the claim to this attachment, the same as if no transfer had been made. The Comp. Stat. 262, § 45, and the decisions in this state on that subject, are express and specific to that effect. Barney v. Douglas, 19 Vt. 98. Britton v. Preston, 9 Vt. 257. Chase v. Haughton, 16 Vt. 594. Ward & Co. v. Morrison, 25 Vt. 593. By the laws of Massachusetts, where this note was endorsed, all negotiable notes are excepted from the operation of the trustee process, and no person can be adjudged trustee for having made or indorsed any negotiable bill, note, draft, or other security, Rev. Stat. of Mass. 647, § 30. If the rights of these parties are to be determined 'by the laws of that state, the note cannot be held by the plaintiff under this attachment. Whether this note is subject to, and the rights of these parties are to be determined by the law of this state, or that of Massachusetts, is the question arising in the case.

If this note had been executed in Massachusetts, though no place of payment had been specified in the note, yet as the payee resided there, it would have been subject to the laws of that state, and the maker could not have been charged as trustee of the payee in this state. Baylies v. Haughton, 15 Vt. 626. The rule would be the same, if the note had been made payable in that state, though executed in this state and by a person resident here. The same principle applies to debts not negotiable. They are treated as debts of the state where the creditor resides, and as subject to its laws. Such was the case of Van Buskirk v. Hartford Ins. Co. 14 Conn. 583. The debt in that case was contracted in New York, and the claimant having perfected his title to it, by an assignment valid under the laws of that state, it was held that the claim could not be attached by a trustee process in Connecticut, where the trustee resided. The case of Ward & Co. v. Morrison, 25 Vt. 593 is of the same character. As a general rule “ debts have no locality or situs.” 2 Kent’s Com. 628, 570. Story’s Conf. of Laws, 362, 383, 399. Yet, the doctrine is well established, that they so far follow the person of the owner, that they are payable where he resides, and are governed by the laws of that place. When the debts are transferred, the law of the transfer is the law of the place -where the debts are payable. The liability of the maker, and the person to whom he is liable, whether the payee, indorsee, or creditor under an attachment by a trustee process, is to be determined by the laws of the state, which determines the obligation of the contract. This rule, we think, must determine the case under consideration.

This note was executed and made payable in this state. The parties, by making the note payable here, have by their express stipulation subjected the note and their rights under it, to the laws of this state. The trustee is indebted on the note, and is obligated to pay it to the payee, or his indorsee, provided it is not attached by some creditor of the payee before lie has notice of the transfer. If it is so attached, he is bound by law to pay it to that creditor. That is as much a part of his obligation, as if it had been specified in the body of the note itself. The indorsement of the note, in the language of Justice Story, Confl. of Laws § 317, 344, “ does not create a new contract between the maker “ and the indorsee in the place of the indorsement. It is but a “ substitution of the indorsee for the payee, and transfersthe “ old liability.” This claimant when he took the note is presumed to have known, and is chargeable with the knowledge, that such was the character of • the claim, and of the maker’s liability. The note is rendered negotiable, subject to that qualification. In whatever state or country the indorsee may prosecute the note, his title to it, as against the creditors of the payee whose claim rests on an attachment by this process, is to be determined by the laws of this state. In Chitty on Bills, 218, it is said, “ that if a biE or note is “ drawn or transferred, or is payable in a foreign country, it is “ essential for the holder to be well informed of the laws of that “ country relating to the transfer of biEs.” That information would -not be essential, if the right of the indorsee to the note was to be determined by the laws of the place where the indorsement was made; but as it is to be perfected, and his claim held subject to the law of the place where the note was made and is payable, that information becomes essential, as he derives no title or claim to the note, but such as is given by the law of that place.

This doctrine has been recognized in Massachusetts. In the case of Hull v. Blake 13 Mass. 153, the defendant executed his notes at Augusta in Georgia. The maker and payee resided in that state. The notes being payable generally were treated as payable there. Before the maturity of the notes, they were attached in that state under the process of foreign attachment at the suit of one Fisk; and before that period also, they had been indorsed to the plaintiff at Providence in Rhode Island. In that case, the plaintiff, who stood in the same position as the claimant in this case, claimed the note as being an indorsee in a state where such notes are exempt from such attachments. The claim was resisted on the ground, that the creditor had pefected his claim to it under the law of the state where the notes were given and were made payable, and where by the laws of that state, the creditor had recovered his judgment. Ch. J. Parker observed: “ that the “ notes were dated at Augusta in the state of Georgia; and that “ the plaintiff when taking them as his property, must be presumed to “ have known that they were made with reference to the laws of that “place; and a law, providing that any creditor of the promisee “ may compel the promisor to pay the debt to him notwithstanding “ the evidence of its negotiable quality, would have the effect to “ protect him from a second payment. Such a provision would be “ contrary to the effect generally given to negotiable securities in “ any mercantile country, but if the law be so, it must have its “ operation upon the contract, wherever it may be sued; because “ the laws of the place where the contract is made, necessarily make “ a part of the contract, and are understood as its governing principle.” No stress whatever was placed upon the fact, that a judgment had been recovered against the trustee, except that it afforded conclusive evidence that such was the law of Georgia, as applicable to the notes. The same doctrine was held by Kent Ch. J. in the case of Embree et al. v. Hanna 5 Johns, 101, and was recognized in this state in the case of Baylies v. Haughton, 15 Vt. 630. We think, therefore, that this claim can be held by the creditor under this attachment, as against the claimant; and that the judgment of the county court must be reversed, and judgment rendered that the trustee is chargeable.