The lien upon a crop of cotton created by a statute of Arkansas
which gives a lien to a landlord upon the crop grown on demised
premises to secure accruing rent, is, when the cotton comes into
the hands of a broker in New Orleans under consignment from the
lessee and without knowledge of the lien on the consignee's part,
subordinated to the consignee's lien for advances, arising under
the laws of Louisiana.
Page 129 U. S. 356
The Court stated the case in its opinion as follows:
Sarah Walworth, the appellant in the present case, and John B.
Walworth, who died pending the suit, said Sarah being now his
executrix, with many other persons, are complainants in a bill in
chancery brought in the Circuit Court of the United States for the
Eastern District of Arkansas against Joseph L. Harris, John M.
Parker, Z. T. Carlton, Sarah E. Bryan, and others.
The object of the bill was to enjoin Carlton from proceeding to
sell property conveyed to him by a deed of trust to secure certain
debts due by the Bryans to J. L. Harris & Co. Lemuel C. Bryan
and Joel E. Bryan were in business at Point Chicot, in Chicot
County, Arkansas, under the partnership designation of L. C. Bryan
& Bro. The main occupation was selling goods and buying cotton,
but they also had several cotton plantations under their control.
Among others, they had leased from the heirs of Horace F. Walworth
a farm at Point Chicot for five years at a rent of $5,500 a year,
running from January 1, 1879, to January 1, 1884. Although the
lease was executed in the name of Lemuel C. Bryan alone, it was for
the benefit of the firm of Bryan & Bro., and it went into the
general partnership business.
Joseph L. Harris and John M. Parker, trading as partners under
the firm name of J. L. Harris & Co., cotton brokers in the City
of New Orleans, were the correspondents of Bryan & Bro., and to
them the latter firm transmitted the cotton raised and purchased by
them in Arkansas.
During the pendency of this lease, towit, on December 9, 1881,
Bryan & Bro., being indebted to Harris & Co. and desiring
further accommodations and advancements from them, made a deed of
trust to Z. T. Carlton, of the County of Chicot, in Arkansas, in
which they conveyed to him as trustee substantially all their
property in the State of Arkansas, and all the cotton or other
products raised or gathered during the year 1881 on the plantations
and tracts of land described, with about 250 bales of cotton, in
seed, lint, and bales, on the Point Chicot plantation, leased from
the heirs of Walworth. The
Page 129 U. S. 357
purpose of this conveyance was declared to be to secure the
payment of a debt of $35,000, evidenced by notes of Bryan &
Bro., dated at New Orleans, Louisiana, December 9, 1881, drawn to
the order of J. L. Harris & Co., and payable at their office in
that city; also any advance in addition to said notes which Harris
& Co. might make to Bryan & Bro., with various other
agreements not material to be mentioned here.
The bill of the complainants, except the heirs of Walworth,
consists of allegations that Harris & Co. had undertaken that
out of the proceeds of the property conveyed by this deed of trust
to Carlton these creditors should be paid various sums due to them.
The heirs of Walworth, in addition to this, set up that by virtue
of the lease made between them and Bryan & Bro., they had a
lien on the cotton raised each year on the Point Chicot plantation
for the amount of the rent, $5,500 per annum, and further that by
virtue of the laws of Arkansas, they had the landlord's lien for
rent for the same sum on the cotton raised on the plantation. They
also alleged that this cotton -- the rent being unpaid -- came to
the hands of J. L. Harris & Co., who disposed of it, but that
they were aware of the existence of such lien, and were bound by
it.
The circuit court, after a hearing on the bill, answer,
replication, and evidence, dismissed it, and from that decree only
the heirs of Walworth take this appeal, and they only as to the
question of their right to recover the rent for one year by virtue
of a lien on the cotton which came to the hands of Harris & Co.
from the Bryans. All the other questions, therefore, which were
raised in the case as it was originally heard and tried are
eliminated from its consideration in this court.
The lien here asserted seems to be founded upon expressions
contained in the contract of lease and upon the statute of Arkansas
concerning the lien of a landlord. The only clause in the lease
referring to a lien is the following: "And it is further understood
that the lessor shall have his lien on the crop for the security
and payment of his rent, as set forth in this lease." This
reference to what is set forth in the lease, means the amount of
the rent and the time of its payment, and the language that "the
lessor shall have his lien on the
Page 129 U. S. 358
crop" evidently refers to the lien which the statute gives. So
that, after all, it is the lien given by the statute of Arkansas
which is the one sought to be enforced here.
Page 129 U. S. 360
MR. JUSTICE MILLER delivered the opinion of the Court.
There is no question that under the laws of Arkansas, there
existed a lien on some of the cotton transmitted by Bryan &
Bro. to the defendants Harris & Co., while that property
remained in the state of Arkansas, and it is attempted to aid the
argument in this case, which holds Harris & Co. liable for that
lien on the cotton received by them, by the allegation that they
knew that it came from the Point Chicot plantation, and knew the
rent was unpaid, and therefore had knowledge of the existence of
the lien. This knowledge, however, or even notice, is not sustained
by the evidence.
The plaintiffs, in their bill, allege that Harris & Co. must
have known of this lien for two reasons: first because they had
paid the rent for two previous years to the heirs of Walworth, and
second because the lease between the heirs of Walworth and Bryan
& Bro. had been in their hands for a short time, so that they
must be held to have known its contents. The bill is sworn to and
the answer is sworn to with no waiver of an answer under oath, and
according to chancery practice, the answer of Joseph L. Harris, of
the firm of J. L. Harris & Co., so far as it is responsive to
these allegations, must be taken as evidence. In regard to the
payment of the rent for the two years mentioned, he says that he
simply paid it upon the order of Bryan & Bro. out of funds of
theirs in his hands, as he would have paid any other order of
theirs, and without any knowledge as to the nature, character,
or
Page 129 U. S. 361
extent of the lien, or that the rent was a lien on cotton in his
hands. As regards the possession of the lease referred to, he says
that they (Harris & Co.) did, at one time, in the year 1880,
which is over a year previous to the crop on which the lien is now
claimed, have this lease in their possession; that it was deposited
with them by one Whitaker, who claimed to have an interest in the
lease, as collateral security for a loan of $600; and that,
Whitaker having soon thereafter paid the same, it was returned to
him without any further attention on their part.
This statement is confirmed by the answer, which is also under
oath, of Joel E. Bryan, the surviving partner of Bryan & Bro.,
the other brother, Lemuel, having died before the trial. He says
that L. C. Bryan & Bro. shipped of the cotton grown on the
Point Chicot plantation in the year 1881, 467 bales, all of which
was shipped to their own account to J. L. Harris & Co., to be
by them sold as cotton factors and the proceeds applied to the
payment of advances made to their firm by Harris & Co., and
(referring evidently to the question of the lien stated in the bill
to be impressed on said cotton) says that if it was impressed with
anything beside the shipping brand of his firm, he did not see it;
that the whole of said cotton belonged to the firm of Bryan &
Bro., taken in the regular course of business, and that the last
shipment, made on the 19th day of December, 1881, was sold a few
days thereafter, and an account of sales rendered by Harris &
Co. There is no evidence from any quarter contradicting these sworn
answers of J. L. Harris and Joel E. Bryan, and we therefore think
that it is not established that Harris & Co. knew or had notice
of any lien in favor of the Walworth heirs for the rent upon the
cotton received by them in the last days of these transactions.
It is also apparent from all this testimony that the cotton was
shipped by Bryan & Bro. to Harris & Co., at New Orleans, as
the property of the former, and was received and for the first time
came under the control of the latter on landing at that place; and
that they received it without any other obligation to account for
the rent of the Point Chicot plantation, or
Page 129 U. S. 362
any other lien upon it, except such as would arise from the fact
that such a lien existed in Arkansas as between Bryan & Bro.
and the Walworth heirs. The laws of the two states differ from each
other on this subject. The statute of Arkansas is found in the
Revised Statutes of that state of 1884, in the following words:
"SEC. 4453. Every landlord shall have a lien upon the crop grown
upon the demised premises in any year for rent that shall accrue
for such year, and such lien shall continue for six months after
such rent shall become due and payable."
This was in force when these transactions took place. There are
also other provisions for the enforcement of this lien which it is
not necessary to embody here.
The Revised Code of Louisiana, arts. 2705, 2709, limits the
right of pledge of the lessor or real estate to the "movable
effects of the lessee, which are found on the property leased,"
and
"in the exercise of this right, the lessor may seize the objects
which are subject to it before the lessee takes them away or within
fifteen days after they are taken away if they continue to be the
property of the lessee and can be identified."
By the session act of 1874, p. 114, it is enacted as
follows:
"SEC. 2. That when any merchant, factor, or other person has
advanced money, property, or supplies on cotton, sugar, or other
agricultural products, and the same has been consigned to him by
ship, steamboat, vessel, railroad, or other carrier, the said
agricultural products shall be pledged to the consignee thereof
from the time the bill of lading thereof shall be put in the mail,
or put into the possession of the carrier for its transmission to
the consignee."
It is not necessary to hold that the right of Harris & Co.
to this cotton was vested in them on the giving of the bill of
lading or putting on board of a railroad or steamboat, but it is
sufficient to hold that when they received it in New Orleans, they
received it under such rights and limitations as the laws of
Louisiana conferred upon them in that regard.
The question here presented of the conflicting rights of
Page 129 U. S. 363
parties claiming property under the laws of two different
states, each of which sustains the claims of the party residing in
it, is not a new one in this Court. The case of
Green v.
Van Buskirk, 5 Wall. 307, seems to decide the
present one by the principles which it lays down, and the analogy
of the two cases in regard to the facts. That case was twice before
this Court for consideration.
It appeared that Bates, a citizen of the state of New York, was
the owner of certain safes, which he sent from that state to the
City of Chicago, in the State of Illinois. On the 3d day of
November, 1857, Bates executed and delivered in the City of New
York to Van Buskirk and others a chattel mortgage on these safes to
secure an existing debt. On the 5th day of the same month, Green,
also a creditor of Bates, sued out a writ of attachment in the
proper court of Illinois and caused it to be levied upon these
safes in Chicago as the property of Bates. No record had been made
at this time of the mortgage in the State of Illinois, nor had the
possession of the property been delivered under it. Green recovered
a judgment in the attachment suit, and had the safes sold in
satisfaction of his debt. He was afterwards found in New York, of
which state all three of the parties named were citizens, and was
there sued by Van Buskirk for the value of the safes. Green pleaded
the proceedings in the Illinois courts in bar of the action, but
this plea was overruled. The decision was affirmed by the Court of
Appeals of New York, from which judgment Green took a writ of error
to this Court. It first came under consideration here on a motion
to dismiss for want of jurisdiction, but it was held that the
question of the right of Green to seize the property under his
attachment must be determined by the law of Illinois, where the
property was when so seized, and not by the law of New York, and
that the Court of Appeals had refused to give to the judgment of
the Illinois court the full faith and credit to which it was
entitled as a judicial proceeding of the courts of that state. 3
Wall.
70 U. S. 448. The
inquiry, of course, involved more or less the question of the
effect of those proceedings, but as the case was only before the
court on a motion to dismiss for want of jurisdiction, it
Page 129 U. S. 364
had to come up afterwards to be heard on its merits. On the
motion, the court considered very fully the muchcontroverted
principle as to the extraterritorial effect of laws affecting the
title or liens upon the property in one state when that property
was carried away or became the subject of litigation in another
state, and, while it was seen that in many cases it had been held
that a court of one state would give effect to the law of domicile
of another state, it was said:
"But, after all, this is a mere principle of comity between the
courts, which must give way when the statutes of the country where
property is situated, or the established policy of its laws,
prescribe to its courts a different rule. The learned commentator
already referred to [Story, Conflict of Laws, § 390], in speaking
of the law in Louisiana, which gives paramount title to an
attaching creditor over a transfer made in another state which is
the domicile of the owner of the property, says:"
"No one can seriously doubt that it is competent for any state
to adopt such a rule in its own legislation, since it has perfect
jurisdiction over all property, personal, as well as real, within
its territorial limits. Nor can such a rule, made for the benefit
of innocent purchasers and creditors, be deemed justly open to the
reproach of being founded in a narrow or selfish policy."
"Again, he says:"
"Every nation, having a right to dispose of all the property
actually situated within it, has (as has been often said) a right
to protect itself and its citizens against the inequalities of
foreign laws, which are injurious to their interests."
The court also cited with approval the following language (§
388) from the same authority:
"The municipal laws of a country have no force beyond its
territorial limits, and when another government permits these to be
carried into effect within her jurisdiction, she does so upon a
principle of comity. In doing so, care must be taken that no injury
is inflicted on her own citizens; otherwise justice would be
sacrificed to comity. . . . If a person sends his property within a
jurisdiction different from that where he resides, he impliedly
submits it to the rules and regulations in force in the country
where he places it."
See also Olivier v. Townes, 2 Mart. (N.S.) 93;
Denny v. Bennett, 128 U. S. 489
Page 129 U. S. 365
When the case of
Green v. Van Buskirk again came before
this Court on its merits,
74 U. S. 7 Wall.
139, Mr. Justice Davis, in delivering the opinion, said in
reference to this question of the conflict of rights under the laws
of different states which were themselves in conflict:
"It is a vexed question on which learned courts have differed,
but after all, there is no absolute right to have such transfer
respected, and it is only on a principle of comity that it is ever
allowed. And this principle of comity always yields when the laws
and policy of the state where the property is located has
prescribed a different rule of transfer with that of the state
where the owner lives."
The same principle is reasserted in
Hervey v. Rhode Island
Locomotive Works, 93 U. S. 664. That
was a case where the Rhode Island company had delivered to Conant
& Co., who were contractors on a railroad in Illinois, a
locomotive engine under an instrument in writing which this Court
construed to be a lease. By the laws of Illinois, to which this
engine was carried, such lease or title, whatever it may have been,
which the locomotive company insisted that they had retained in the
property was of no avail as against subsequent creditors when the
property was found in that state, unless it was properly recorded
there. No such record being made of the instrument under which
Conant & Co. held it, the engine was seized by attachment
against that firm, and sold to Hervey, the plaintiff in error in
this Court. In the following language, taken from the opinion in
that case, the doctrine is reiterated that the question must be
determined by the laws of Illinois, where the property was found
and sold, and not by the laws of Rhode Island, where the lease or
instrument of conveyance was made:
"It was decided by this Court in
Green v. Van
Buskirk, 5 Wall. 307,
74 U. S.
7 Wall. 139, that the liability of property to be sold
under legal process issuing from the courts of the state where it
is situated must be determined by the law there, rather than that
of the jurisdiction where the owner lives. These decisions rest on
the ground that every state has the right to regulate the transfer
of property within its limits, and that whoever sends property to
it impliedly submits to the regulations
Page 129 U. S. 366
concerning its transfer in force there, although a different
rule of transfer prevails in the jurisdiction where he resides. He
has no absolute right to have the transfer of property, lawful in
that jurisdiction, respected in the courts of the state where it is
found, and it is only on a principle of comity that it is ever
allowed. But this principle yields when the laws and policy of the
latter state conflict with those of the former."
The principle here asserted, which is clearly applicable to the
case before us, is supported by reference to authorities in those
opinions which we think are conclusive. At all events, the cases
themselves are conclusive upon this Court and upon the rights of
the parties to this suit.
The decree of the circuit court dismissing the bill is
therefore
Affirmed.