The Constitution of the United States, in proper cases, permits
equity courts of one state to control persons within their
jurisdiction from prosecuting suits in another state.
It is no violation of that provision of the Constitution of the
United States which requires that full faith and credit shall be
given in each state to the judicial proceedings of every other
state if a court in one state (in which proceedings have been
begun, under a general insolvent law of the state, to distribute
the estate of an insolvent debtor among his creditors), enjoins a
creditor of the insolvent (who is a citizen of the same state, and
subject to the jurisdiction of the court) from proceeding to
judgment and execution in a suit against the insolvent in another
state begun by an attachment of his property there after knowledge
of his embarrassment and actual insolvency, which property the
insolvent law of the debtor's residence requires him to convey to
his assignee in insolvency, for distribution with his other assets,
there being nothing in the law or policy of the state in which the
attachment is made opposed to those of the creditor and of the
insolvent debtor.
The case, as stated by the court, was as follows:
Daniel C. Bird, a citizen and inhabitant of Massachusetts,
unable to meet his bills at maturity, suspended payment March 2,
1885, being at the time indebted to Butler, Hayden & Co., a
co-partnership composed of Charles S. Butler and N. F. T. Hayden,
citizens and residents bf Massachusetts, doing business in that
state. On the night of the 4th or 5th of March, 1885, Butler,
Hayden & Co. were informed by Bird that he had stopped payment,
and that the firm of Aaron Claflin & Co., of New York, were
indebted to him in a considerable sum for goods consigned by him to
that firm to be sold on his account, and upon which Claflin &
Co. had made advances but not to their full value. March 6th,
Butler, Hayden & Co. executed an assignment of their claims
against Bird to one Fayerweather, a resident of the State of New
York, which assignment was made without consideration and without
previous communication with Fayerweather. March 11th and March
25th, two
Page 133 U. S. 108
actions were commenced in New York in the name of Fayerweather
on the claims of Butler, Hayden & Co. against Bird as
defendant, and the firm of Claflin & Co. were summoned as
garnishees. March 13, 1885, a meeting of Bird's creditors was held
and a committee appointed to investigate his affairs and make a
report. On the 20th of March, a second meeting of Bird's creditors
was held at which a report was submitted by the committee. April
23, 1885, a proposal for composition under the statutes of
Massachusetts in that behalf was filed by Bird, returnable May 4th.
May 20th, the composition proposal having been withdrawn, regular
proceedings in insolvency were continued therein, and June 1, 1885,
Richard Cunningham and Henry Tolman, Jr., were duly appointed
assignees in insolvency of the estate of said Bird by the Court of
Insolvency for the County of Plymouth, Massachusetts. Hayden, of
Butler, Hayden & Co., was present at one of these creditors'
meetings. The suits in New York were brought in a court of
competent jurisdiction, and the attachments and proceedings were
regular and in conformity with the laws of brew York; they are
still pending, and no judgment has yet been obtained therein.
On the 19th of June the assignees in insolvency brought a bill
in equity in the Supreme Judicial Court for the County of Suffolk,
in the State of Massachusetts, against Butler and Hayden,
co-partners as Butler, Hayden & Co., praying that Butler,
Hayden & Co., their agents, servants, attorneys, and
solicitors, might be enjoined and restrained from proceeding to
further continue the suits against Bird, begun by them in the name
of Fayerweather, and from attempting to collect by suit or
otherwise, in the name of Fayerweather or any other person, for
their own benefit, from Claflin & Co., any money or other thing
on account of the claim against Bird; that they be ordered to
refrain from further prosecuting the suits in New York, in which
Claflin & Co. were summoned as garnishees, or that they be
ordered to transfer to the assignees all their right, title and
interest by, or under, or on account of their claim pretended to
have been assigned to Fayerweather, so that the assignees may have,
as the effect of said order, full
Page 133 U. S. 109
right to receive all money due from Claflin & Co. without
any hindrance or interference upon the part of Butler, Hayden &
Co. therewith, and a prayer for general relief.
Butler, Hayden & Co. answered the bill, denying any
knowledge of Bird's insolvency and claiming that the assignment to
Fayerweather was made in good faith and that the rights of
Fayerweather as a citizen of New York under said assignment cannot
be in any way affected by the insolvency of Bird, and afterwards
amended the answer and claimed that even if the assignment to
Fayerweather was invalid, the attachment proceedings in New York
were regular, and gave a valid lien on the property attached, and
that, by the Constitution of the United States, the rights and
interests gained by the attachments in New York cannot be taken
away by the courts of Massachusetts without violating the provision
that full faith and credit must be given in each state to the
judicial proceedings of every other state.
The case was heard by a single judge upon certain agreed facts
and additional evidence, and reserved by him for the consideration
of the full court. It was stipulated
"that either party may refer to the statutes of the United
States, the statutes of the New York, and the several decisions of
the New York with the same effect as if the same were regularly
introduced in evidence."
The Supreme Judicial Court found, in addition to the matters
hereinbefore stated, that it was fairly proven from the
evidence
"that the defendants, with full knowledge that Bird was
insolvent, anticipating that there might be proceedings in
insolvency in this state and intending to secure to themselves, to
the exclusion of other creditors, the avails of the debt owing to
Bird by Claflin & Co., made the transfer of their claims to
Fayerweather, and that the suits in New York now carried on in his
name are subject to their control and conducted for their benefit.
The attachments made in New York by process of garnishment are to
be treated, so far as the defendants are concerned, as made by
them."
The court concluded its opinion, which is certified as a part of
this record, and is reported in 142 Mass. 47, thus:
Page 133 U. S. 110
"In the case at bar, it is true that the defendants had made
their attachment through Fayerweather in New York before there had
been an assignment in insolvency in this state actually executed,
but this was done with full knowledge on their part that the
debtor, Bird, was embarrassed and had suspended payment, and
necessarily with intent to avoid the effect of the assignment, so
far as the property attached was concerned. As residents of this
state, they cannot be allowed to this extent to defeat the
operation of the assignment, and thus to obtain a preference over
other creditors resident here. They are within the limits of the
jurisdiction of this court and amenable to its process, and should
be enjoined from prosecuting a suit the effect of which, if
successful, will be to work a wrong and injury to other residents
of the state."
The court thereupon entered a decree for the injunction prayed
for, and Butler, Hayden & Co. sued out a writ of error from
this Court.
Page 133 U. S. 111
MR. CHIEF JUSTICE FULLER, after stating the facts as above,
delivered the opinion of the Court.
The question to be determined is whether a decree of the Supreme
Judicial Court of Massachusetts, restraining citizens of that
commonwealth from the prosecution of attachment suits in New York,
brought by them for the purpose of evading the laws of their
domicile, should be reversed upon the ground that such judicial
action in Massachusetts was in violation of Article 4, Sections 1,
2, of the Constitution of the United States, which reads as
follows:
"SEC. 1. Full faith and credit shall be given in each state to
the public acts, records, and judicial proceedings of every other
state. And the Congress may by general laws prescribe the manner in
which such acts, records, and proceedings shall be proved, and the
effect thereof."
"SEC. 2. The citizens of each state shall be entitled to all
privileges and immunities of citizens in the several states."
The Act of May 26, 1790, 1 Stat. 122, now embodied in § 905 of
the Revised Statutes, after providing the mode of authenticating
the acts, records, and judicial proceedings of the states,
declares:
Page 133 U. S. 112
"And 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 usage in the
courts of the state from whence the said records are or shall be
taken."
This does not prevent as inquiry into the jurisdiction of the
court in which a judgment is rendered to pronounce the judgment,
nor into the right of the state to exercise authority over the
parties or the subject matter, nor whether the judgment is founded
in and impeachable for a manifest fraud. The Constitution did not
mean to confer any new power on the states, but simply to regulate
the effect of their acknowledged jurisdiction over persons and
things within their territory. It did not make the judgments of the
states domestic judgments to all intents and purposes, but only
gave a general validity, faith, and credit to them as evidence. No
execution can be issued upon such judgments without a new suit in
the tribunals of other states, and they enjoy not the right of
priority or privilege or lien which they have in the state where
they are pronounced, but that only which the
lex fori
gives to them by its own laws in their character of foreign
judgments.
McElmoyle v.
Cohen, 13 Pet. 312,
38 U. S.
328-329;
D'Arcy v.
Ketchum, 11 How. 165;
Thompson
v. Whitman, 18 Wall. 457;
Pennoyer v.
Neff, 95 U. S. 714;
Wisconsin v. Pelican Ins. Co., 127 U.
S. 265,
127 U. S. 292;
Christmas v.
Russell, 5 Wall. 290; Story, Constitution §§ 1303
et seq., and Story, Conflict of Laws § 609. And other
judicial proceedings can rest on no higher ground.
These well settled principles find pertinent illustration in the
decisions of the highest tribunal of the State of New York, to one
of which we refer, as the contention is that the decree under
review was in some way an unconstitutional invasion of the
jurisdiction of that state.
In
Dobson v. Pearce, 12 N.Y. 156, the plaintiff in a
judgment recovered in New York brought an action upon it in the
Superior Court of Connecticut, whereupon the defendant in the
judgment filed a bill against the plaintiff on the equity side of
the same court, alleging that the judgment
Page 133 U. S. 113
was procured by fraud and praying relief. The plaintiff in the
judgment appeared in and litigated the equity suit, and the court
adjudged that the allegations of fraud in obtaining the judgment
were true, and enjoined him from prosecuting an action upon it. He
assigned the judgment, and it was held in a suit in New York,
brought thereon by the assignee, that a duly authenticated copy of
the record of the decree in the Connecticut court was conclusive
evidence that the judgment was obtained by fraud. The Court of
Appeals held that while a judgment rendered by a court of competent
jurisdiction could not be impeached collaterally for error or
irregularity, yet it could be attacked upon the ground of want of
jurisdiction or of fraud or imposition; that the right of the
plaintiff in the judgment was a personal right, and followed his
person; that when the courts of Connecticut obtained jurisdiction
of his person by the due service of process within the state, these
courts had full power to pronounce upon the rights of the parties
in respect to the judgment, and to decree concerning it; that the
jurisdiction of a court of equity anywhere to restrain suit upon a
judgment at law upon sufficient grounds was one of the firmly
established parts of the authority of courts of equity, and that it
could not be held that a court of equity in one state had no
jurisdiction to restrain such a suit upon a judgment of a court of
law of another state. If the objection to so doing was founded upon
an assumed violation of the comity existing between the several
states of the United States, that did not reach to the jurisdiction
of the court, a rule of comity being a self-imposed restraint upon
an authority actually possessed; and, as to the objection that the
Constitution of the United States, and the laws made in pursuance
of it, inhibited the action of the Connecticut courts, this could
not prevail, since full faith and credit are given to the judgment
of a state court when, in the courts of another state, it receives
the same faith and credit to which it was entitled in the state
where it was pronounced.
Pearce v. Olney, 20 Conn. 544;
Engel v. Scheuerman, 40 Ga. 206;
Cage v.
Cassidy, 23 How. 109.
The intention of Section 2, Article IV, was to confer on the
Page 133 U. S. 114
citizens of the several states a general citizenship, and to
communicate all the privileges and immunities which the citizens of
the same state would be entitled to under the like circumstances,
and this includes the right to institute actions. The fact of the
citizenship of Butler and Hayden did not affect their privilege to
sue in New York, and have the full use and benefit of the courts of
that state in the assertion of their legal rights; but, as that
fact might affect the right of action as between them and the
citizens of their own state, the courts of New York might have held
that its existence put an end to the seizure of their debtor's
property by Butler and Hayden in New York. If, however, those
courts declined to take that view, it would not follow that the
courts of Massachusetts violated any privilege or immunity of
Massachusetts' own citizens in exercising their undoubted
jurisdiction over them.
Discharges under state insolvent laws exemplify the principle.
Where the effect of the insolvent law is to relieve the debtor from
liability on his contracts, such discharge, if the creditor and
debtor have a common domicile, or the creditor, though nonresident,
has voluntarily become a party to the proceedings, avails the
defendant in all courts and places.
It was decided in
Sturges v.
Crowninshield, 4 Wheat. 122, that state
legislatures have authority to pass a bankrupt or insolvent law,
provided there be no act of Congress in force, establishing a
uniform system of bankruptcy, conflicting with such laws, and
provided the law itself be so framed that it does not impair the
obligation of contracts. Eight years later, in
Ogden v.
Saunders, 12 Wheat. 213, the Court held that the
power of Congress to establish uniform laws on the subject of
bankruptcies throughout the United States did not exclude the right
of the states to legislate on the same subject except when the
power had actually been exercised by Congress and the state laws
conflicted with those of Congress; that a bankrupt or insolvent law
of any state which discharged both the person of the debtor and his
future acquisitions of property was not a law impairing the
obligation of contracts so far as respected debts contracted
subsequent to the passage of the law; that a certificate of
discharge under such law
Page 133 U. S. 115
could not be pleaded in bar of an action brought by a citizen of
another state in the courts of the United States or of any other
state than that where the discharge was obtained. The insolvent law
could have no extraterritorial operation, and the tribunal
administering it would have no jurisdiction over citizens of other
states. But this objection would not lie where such citizens had
become parties to the proceedings. Hence, in
Clay v.
Smith, 3 Pet. 411, it was held, where a citizen of
Kentucky sued a citizen of Louisiana and the defendant pleaded his
discharge by the bankrupt law of Louisiana, that the plaintiff, who
had received a dividend on his debt declared by the assignees of
the defendant in Louisiana, had voluntarily made himself a party to
those proceedings, abandoned his extraterritorial immunity from the
bankrupt law of Louisiana, and was bound by that law to the same
extent to which the citizens of Louisiana were bound. And it may be
considered as settled that state insolvent laws are not only
binding upon such persons as were citizens of the state at the time
the debt was contracted, but also upon foreign creditors, if they
make themselves parties to proceedings under these insolvent laws
by accepting dividends, becoming petitioning creditors, or in some
other way appearing and assenting to the jurisdiction.
Baldwin v.
Hale, 1 Wall. 223;
Gilman v.
Lockwood, 4 Wall. 409.
In New York, an attachment is obtained on application to a judge
of the supreme court, or a county judge, affidavit being made as to
the validity of the claim and the grounds of the attachment, and a
bond furnished, with sufficient sureties. The judge, in his
discretion, makes an order that a warrant of attachment be granted.
The warrant is directed to the sheriff, and is subscribed by the
judge, and requires the sheriff to attach and safely keep so much
of the property as will satisfy the plaintiff's demand, with costs
and expenses. This is served by the sheriff taking the property
into his actual custody, or, in the case of a demand trust deed, by
leaving a copy with the trustee or garnishee. The sheriff, under
the direction of the court, must collect any debt or chose in
action attached by him, and, if necessary, may bring an action in
his own name, or in
Page 133 U. S. 116
that of the defendant, against the garnishee. Code of Civil
Procedure, Title 3, 1 Bliss' New York Annotated Code, 545
et
seq.
An attachment is in the nature of, but not, strictly speaking, a
proceeding
in rem, since that only is a proceeding
in
rem in which the process is to be served on the thing itself.
If, in an attachment suit,
"the defendant appears, the cause becomes mainly a suit
in
personam, with the added incident that the property attached
remains liable, under the control of the court, to answer to any
demand which may be established against the defendant by the final
judgment of the court. But if there is no appearance of the
defendant and no service of process on him, the case becomes, in
its essential nature, a proceeding
in rem, the only effect
of which is to subject the property attached to the payment of the
demand which the court may find to be due to the plaintiff."
Cooper v.
Reynolds, 10 Wall. 308,
77 U. S. 318.
The lien is inchoate, and the property attached held to await the
result of the suit. If a judgment for the plaintiff is obtained,
the lien becomes perfected, and the property is applied to satisfy
the judgment. If plaintiff fails in his action, the lien falls with
it, and he may so fail by reason of the discharge of the defendant
in insolvency, when he is a citizen of the same state, or has made
himself a party to the proceedings in insolvency, or by the action
of other courts of the state where the suit is pending, or
elsewhere, if jurisdiction
in personam be obtained. So
that, after all, the inquiry is whether, in a proper case, the
equity courts of one state can control persons within their
jurisdiction from the prosecution of suits in another. If they can,
in accordance with the principles of equity jurisprudence and
practice, no reason is perceived for contending that the
Constitution of the United States prescribes any different rule,
and the determination of what is a proper case for equity
interposition would seem to be reposed in the court whose authority
is invoked, though some remarks in that regard may not improperly
be made.
The jurisdiction of the English Court of Chancery to restrain
persons within its territorial limits and under its jurisdiction
from doing anything abroad, whether the thing forbidden be
Page 133 U. S. 117
a conveyance or other act
in pais or the institution or
the prosecution of an action in a foreign court is well
settled.
In
Penn v. Lord Baltimore, 1 Ves.Sen. 444, Lord
Hardwicke recognized the principle that equity, as it acts
primarily
in personam, and not merely
in rem,
may, where a person against whom relief is sought is within the
jurisdiction, make a decree, upon the ground of a contract, or any
equity subsisting between the parties, respecting property situated
out of the jurisdiction. 2 Lead.Cas. in Eq. (4th American ed.)
1806, and cases.
In
McIntosh v. Ogilvie, 4 T.R. 193, n., 3 Swanston 365,
note, Lord Hardwicke lays down the same doctrine as to restraining
prosecution of suit. This case bears so close an analogy to that at
bar that we give it in full, as follows:
"The plaintiff was the assignee of a bankrupt, the defendant a
creditor, who, before the bankruptcy, went into Scotland and made
arrestments on debts due to the bankrupt from persons there. Upon
an affidavit of the defendant's having got this money into his
hands, a
ne exeat was granted, and a motion was now made
on the behalf of the defendant to discharge it, upon a supposition
that he had a right to the goods, as creditor, by his
arrestments."
The Lord Chancellor asked whether he had sentence before the
bankruptcy, and, being answered in the negative, he said:
"Then it is like a foreign attachment, by which this court will
not suffer a creditor to gain priority if no sentence were
pronounced before the bankruptcy. I cannot grant a prohibition to
the court of sessions; but I will certainly make an order on the
party here to restrain him from getting a priority, and evading the
laws of bankruptcy here. If the gentleman were not going abroad, I
would do nothing; but as he is, I will not discharge the writ
without his giving security to abide the event of the cause."
Penn v. Lord Baltimore is cited with approval by Chief
Justice Marshall in
Massie v.
Watts, 6 Cranch 148, where a suit was instituted in
the Circuit Court of Kentucky to compel the conveyance by the
defendant of the legal title of land
Page 133 U. S. 118
in Ohio on the ground that he had notice, when it was purchased,
of the prior equity of the complainant. The defense was that the
land was beyond the jurisdiction of the court, and within the State
of Ohio. This defense was overruled by the court below, and its
decision affirmed by this Court. "This Court is of opinion," said
the Chief Justice,
"that in a case of fraud, of trust, or of contract, the
jurisdiction of a court of chancery is sustainable wherever the
person be found, although lands not within the jurisdiction of that
court may be affected by the decree."
And in
Pennoyer v. Neff, 95 U. S.
714,
95 U. S. 723,
it is said in the opinion of the Court, by MR. JUSTICE FIELD:
"The state, through its tribunals, may compel persons domiciled
within its limits to execute, in pursuance of their contracts
respecting property elsewhere situated, instruments in such form
and with such solemnities as to transfer the title, so far as such
formalities can be complied with, and the exercise of this
jurisdiction in no manner interferes with the supreme control over
the property by the state within which it is situated.
Penn v.
Lord Baltimore, 1 Ves.Sen. 444;
Massie v.
Watts, 6 Cranch 148;
Watkins v.
Holman, 16 Pet. 25;
Corbett v.
Nutt, 10 Wall. 464."
In Lord
Portarlington v. Soulby, 3 Mylne & K. 104,
108, Lord Chancellor Brougham reviews the history of the
jurisdiction to restrain parties from commencing or prosecuting
actions in foreign countries, and concludes:
"Nothing can be more unfounded than the doubts of the
jurisdiction. That is grounded, like all other jurisdiction of the
court, not upon any pretension to the exercise of judicial and
administrative rights abroad, but on the circumstance of the person
of the party on whom this order is made being within the power of
the court."
Earl of Oxford's Case, 1 Ch.Rep. 1, 2 Lead.Cas. in Eq.
1316.
Mr. Justice Story states the principle thus:
"But, although the courts of one country have no authority to
stay proceedings in the courts of another, they have an undoubted
authority to control all persons and things within their own
territorial limits. When, therefore, both parties to a suit in a
foreign country are resident within the territorial
Page 133 U. S. 119
limits of another country, the courts of equity in the latter
may act
in personam upon those parties and direct them, by
injunction, to proceed no further in such suit. In such a case,
these courts act upon acknowledged principles of public law in
regard to jurisdiction. They do not pretend to direct or control
the foreign court, but, without regard to the situation of the
subject matter of the dispute, they consider the equities between
the parties and decree
in personam according to those
equities, and enforce obedience to their decrees by process
in
personam. . . . It is now held that whenever the parties are
resident within a country, the courts of that country have full
authority to act upon them personally with respect to the subject
of suits in a foreign country as the ends of justice may require,
and with that view to order them to take or to omit to take any
steps and proceedings in any other court of justice, whether in the
same country or in any foreign country."
Story, Eq. Jur. §§ 899, 900.
In
Phelps v. McDonald, 99 U. S.
298,
99 U. S. 308,
Mr. Justice Swayne uses this language:
"Where the necessary parties are before a court of equity, it is
immaterial that the
res of the controversy, whether it be
real or personal property, is beyond the territorial jurisdiction
of the tribunal. It has the power to compel the defendant to do all
things necessary, according to the
lex loci rei sitae,
which he could do voluntarily to give full effect to the decree
against him. Without regard to the situation of the subject matter,
such courts consider the equities between the parties and decree
in personam according to those equities, and enforce
obedience to their decrees by process
in personam."
Such is undoubtedly the result of the clear weight of authority,
and the rule has been often applied by the courts of the domicile
against the attempts of some of its citizens to defeat the
operation of its laws, to the wrong and injury of others. Thus it
was held by the Supreme Court of Ohio,
Snook v. Snetzer,
25 Ohio St. 516, that where the statutes of that state exempted the
earnings for personal service of a debtor who was the head of a
family and a citizen of the state, the
Page 133 U. S. 120
Ohio courts had authority to restrain a citizen of the county in
which the equity action was commenced from proceeding in another
state to attach the earnings of such head of a family, with a view
to evade the exemption laws of Ohio, and to prevent him from
availing himself of the benefit of such law.
To the same effect is
Keyser v. Rice, 47 Md. 203. The
Court of Appeals of Maryland declared the power of the state to
compel its own citizens to respect its laws, even beyond its own
territorial limits, to be supported by the great preponderance of
precedent and authority, and sustained an injunction to restrain
the further prosecution in another State of an attachment, by which
the defendant sought to recover wages due the complainant in
Maryland, and there exempt from attachment.
So, in
Burlington & Missouri Railroad v. Thompson,
31 Kan. 180, though it was held that a foreign corporation doing
business in Kansas might be garnished for a debt due to a
nonresident employee, contracted outside of the state and exempt
from garnishment in the state where the defendant and garnishee
resided, yet it was conceded by Judge Brewer in delivering the
opinion
"that in the courts of a state, any citizen of that state may be
enjoined from resorting to the courts of any other state for the
purpose of evading the exemption laws of his own state,"
and this was so decided in
Zimmerman v. Franke, 34 Kan.
650.
In
Wilson v. Joseph, 107 Ind. 490, the Supreme Court of
Indiana ruled that an injunction would lie to restrain a resident
of Indiana from prosecuting an attachment proceeding against
another resident in the courts of another state in violation of a
statute which made it an offense to send a claim against a debtor
out of the state for collection in order to evade the exemption
law.
And see Chafee v. Quidnick Co., 13 R.I. 442, 449;
Great Falls Manufacturing Co. v. Worster, 23 N.H. 462;
Pickett v. Ferguson, 45 Ark. 177.
The rule is not otherwise in New York. It is true that in
Mead v. Merritt, 2 Paige 402, the chancellor said:
"I am not aware that any court of equity in the union has
deliberately decided that it will exercise the power by process of
injunction
Page 133 U. S. 121
to restrain proceedings which have been previously commenced in
the courts of another state."
And the reason urged against the exercise of the power was that
if the courts of one state should see fit to enjoin proceedings in
another, the latter might retaliate in like manner, in enjoining
proceedings in the first, and thus give rise to an endless conflict
of jurisdiction. But this reasoning has not commended itself to the
judicial mind, for the injunction is not directed to the courts of
the other state, but simply to the parties litigant, and although
the power should be exercised with care and with a just regard to
the comity which ought to prevail among coordinate sovereignties,
yet its existence cannot at this day be denied.
In
Vail v. Knapp, 49 Barb. 299, 305, an injunction was
continued against citizens of New York, plaintiffs in attachment
suits in Vermont, upon the ground that they were proceeding in
Vermont in evasion of the laws of New York, and the court points
out that though as a general rule the courts of New York decline to
interfere by injunction to restrain its citizens from proceeding in
an action which has been commenced in a sister state, citing
Mead v. Merritt, 2 Paige 402;
Burgess v. Smith, 2
Barb.Ch. 276, and others cases, yet
"there are exceptions to this rule, and, when a case is
presented fairly constituting such exception, extreme delicacy
should not deter the court from controlling the conduct of a party
within its jurisdiction, to prevent oppression or fraud. No rule of
comity or policy forbids it."
The same result was announced in
Dinsmore v.
Neresheimer, 32 Hun. 204, where the supreme court of New York
held that an express company could maintain an action in New York
to restrain the defendant, a resident of the State of New York,
from prosecuting actions against the company in the District of
Columbia, brought to avoid a decision of the Court of Appeals of
New York differing from the rule upon the same subject in the
District of Columbia.
In
Erie Railroad Co. v. Ramsey, 45 N.Y. 637, the Court
of Appeals, speaking through Folger, J., treats the general
question as not admitting of doubt.
Page 133 U. S. 122
At the time of these proceedings, as for many years before, the
Commonwealth of Massachusetts had an elaborate system of insolvent
laws, designed to secure the equal distribution of the property of
its debtors among their creditors. Under these insolvent laws, all
preferences were avoided and all attachments in favor of particular
creditors dissolved. The transfer of the debtor's property to his
assignees in insolvency extended to all his property and assets,
wherever situated. This was expressly provided as to such as might
be outside the state. By one of the sections of the chapter of the
Public Statutes of Massachusetts treating of this subject, the
debtor was required to do all acts necessary to give the assignees
power to "demand, recover, and receive all the estate and effects
so assigned, especially any part thereof which is without this
state." Mass.Pub.Stat., 1882, c. 157, § 74. Whenever the debtor had
made, to the satisfaction of the judge in insolvency, a full
transfer and delivery of all his estate, and conformed to the
directions and requirements of the law, he was entitled to be
absolutely and wholly discharged from his debts, with certain
exceptions; but it was provided that a discharge should not be
granted to a debtor whose assets did not pay fifty percent of the
claims proved against his estate unless upon the assent in writing
of a majority in number and value of his creditors who had proved
their claims. §§ 80, 86.
Nothing can be plainer than that the act of Butler, Hayden &
Co. in causing the property of the insolvent debtors to be attached
in a foreign jurisdiction tended directly to defeat the operation
of the insolvent law in its most essential features, and it is not
easy to understand why such acts could not be restrained within the
practice to which we have referred.
But for the attachment suits, the assignees in insolvency could
have collected the claim of Bird against Claflin & Co., but
could not have intervened in those suits and asked of the courts of
New York the enforcement of their title. The rule in that state is
that by the comity of nations, the statutory title of foreign
assignees in bankruptcy is recognized and enforced when it can be
done without injustice to the citizens of the state and without
prejudice to creditors pursuing their remedies
Page 133 U. S. 123
under the New York statutes, provided, also, that such title is
not in conflict with the laws or public policy of the state, and
that the foreign court had jurisdiction of the bankrupt.
In re
Waite, 99 N.Y. 433.
Under such a rule, it is evident that the remedy of the
assignees was in equity and in the courts of their domicile. This
is the conclusion reached in
Kidder v. Tufts, 48 N.H. 121,
126, referred to by counsel for appellant. That was a case where
citizens of Massachusetts commenced in New Hampshire an attachment
against certain other citizens of the former state. Proceedings in
insolvency against the defendants were afterwards instituted in
Massachusetts, and, subsequently to this, certain New Hampshire
creditors attached the same property and then moved for a
continuance to await the proceedings in insolvency for the purpose
of pleading the insolvent's discharge in bar of the first
attachment. But the court denied the motion, holding that the
Massachusetts creditors had availed themselves of their strict
legal rights as established and allowed by the statute law of New
Hampshire, and, for the purpose of an attachment, might properly be
considered subjects of that state government; but the court
added:
"If the subsequent attaching creditors have a remedy, and can in
any way prevent the plaintiffs from obtaining a preference, their
appeal should be made, as creditors of the defendant, to the
Massachusetts courts, which may exercise their jurisdiction over
their own citizens if they have violated any of their laws by their
experiment here."
Hibernia Nat. Bank v. Lacombe, 84 N.Y. 367, 386.
So, in the case of
Paine v. Lester, 44 Conn. 196, where
a citizen of Rhode Island attached in Connecticut a debt due from a
citizen of Connecticut to a corporation of Pennsylvania which had
made an assignment for the benefit of creditors, the lien of the
attachment was held valid against the claim of the trustee in the
assignment because the right of the trustee in insolvency in
Connecticut rested only on the comity which the court there could
exercise or refuse to exercise at its discretion, while the
plaintiff had a legal right, under the laws of Connecticut, to
prosecute his suit.
Page 133 U. S. 124
In
Rhawn v. Pearce, 110 Ill. 350, the Supreme Court of
Illinois declined to recognize at law the insolvent laws of
Pennsylvania by giving effect to a statutory assignment in that
state even as against an attaching creditor of the same state with
the debtor. But the same tribunal found no difficulty in holding,
in
Sercomb v. Catlin, 128 Ill. 556, that the courts of
Illinois, on the application of a receiver appointed by them, could
enjoin a person within the jurisdiction of the court from
interfering in respect to property belonging to an insolvent
co-partnership for which the receiver had been appointed, although
that property was outside of the jurisdiction, and
Chafee v.
Quidnick Co., 13 R.I. 442;
Dehon v. Foster, 4 Allen
545, and
Vermont & Canada Railroad Co. v. Vermont Central
Railroad Co., 46 Vt. 792, were cited.
Dehon v. Foster, 4 Allen 545, is the leading case upon
the subject, argued by eminent counsel on both sides and decided
upon great consideration. The Supreme Judicial Court of
Massachusetts, speaking through Bigelow, C.J., points out that the
jurisdiction of a court, as a court of chancery, to restrain
persons within its jurisdiction from prosecuting suits, upon a
proper case made either in the courts of Massachusetts or in other
states or foreign countries, rests on the clear authority vested in
courts of equity over persons within the limits of their
jurisdiction and amenable to process to stay acts contrary to
equity and good conscience, and that, as the decree of the court in
such cases is directed solely at the party, it is wholly immaterial
that such party is prosecuting his action in the courts of another
state or country.
The action was a bill in equity to enjoin a citizen of
Massachusetts from availing himself of an attachment of personal
property in Pennsylvania, as against a debtor put into insolvency
under the laws of Massachusetts, and thus preventing the same from
coming to the hands of the assignee. The court held that it was
obvious that the controversy was simply as to the relative rights
of citizens of Massachusetts to personal property belonging to
insolvent debtors domiciled in that state, and raised no question
involving a conflict of rights
Page 133 U. S. 125
between citizens of Massachusetts and another state, nor as to
the validity of a foreign law, or of liens acquired under it. On
the contrary, the case rested on the ground that the defendants, if
allowed to proceed with their action, would perfect a lien then
only inchoate under their attachment, and might thereby establish a
valid title to the property of the insolvent debtors under the laws
of Pennsylvania.
"Looking, then at our own laws," said the court,
"to ascertain which of the two parties to this suit has a
paramount right or superior equity to the debts due to the
insolvents from persons residing out of the state, there would seem
to be but little if any room open for doubt or controversy."
The fundamental principle of the insolvent laws of the
commonwealth that all the property of the debtor should be taken
and equally distributed among his creditors was remarked on, and
the provisions of the statute intended to secure that end
recapitulated. The inevitable conclusion was announced that, as the
act of the defendants in causing the property of the insolvent
debtors to be attached in a foreign jurisdiction tended directly to
defeat the operation of the law by preventing a portion of the
property of the debtors from coming to their assignees, to be
equally distributed among their creditors, and giving a preference
to certain of their creditors so that they would obtain payment of
their debt in full, it was therefore an attempt by those creditors,
citizens of Massachusetts, to defeat the operation of their own
laws to the injury of other creditors of the insolvents. And the
court proceeded:
"This is manifestly contrary to equity. The defendants, being
citizens of this state, are bound by its laws. They cannot be
permitted to do any acts to evade or counteract their operation the
effect of which is to deprive other citizens of rights which those
laws are intended to secure. Certain it is that they could not in
any manner of by any process take from the assignees of an
insolvent debtor property belonging to him within this state, and
appropriate it to the payment of their debt in full. To prevent
such appropriation, if the law furnished no adequate and complete
remedy, this Court would interfere by suitable process in equity.
We are unable to see
Page 133 U. S. 126
any reason for withholding such interference merely because our
citizens seek to accomplish the same purpose by resorting to a
foreign jurisdiction, and with the aid of the laws of another state
or country. An act which is unlawful and contrary to equity gains
no sanction or validity by the mere form or manner in which it is
done. It is nonetheless a violation of our laws because it is
effected through the instrumentality of a process which is lawful
in a foreign tribunal. By interposing to prevent it, we do not
interfere with the jurisdiction of courts in other states, or
control the operation of foreign laws. We only assert and enforce
our own authority over persons within our jurisdiction to prevent
them from making use of means by which they seek to countervail and
escape the operation of our own laws in derogation of the rights
and to the wrong and injury of our own citizens."
To the argument that the bill could not be maintained because
the statutes of Massachusetts regulating the assignment and
distribution of insolvent estates could have no extraterritorial
effect or operation, the court answered that while it was true that
the statutes of Massachusetts,
ex proprio vigore, had no
effect or operation in other states, it was also true that by the
comity of states and nations, the laws of one country are allowed,
to a certain extent, to control the rights of persons and property
in other countries, though not allowed to have any effect to the
injury of the citizens of such other country. From this principle
it followed as a necessary consequence that personal property of a
Massachusetts insolvent debtor situated in Pennsylvania would vest
in the Massachusetts insolvent's assignees, with power to take
possession of and collect them, either in their own names or in the
name of the insolvent, if they were not held or attached by virtue
of a process or lien in favor of a creditor which would be valid
under the laws of Pennsylvania. Hence if the attachment in
Pennsylvania were valid and binding, the Massachusetts creditors
would obtain a right superior to that conferred under the
Massachusetts laws on the assignees in insolvency, by the act of
such creditors, in defeat of the operation of the laws of their own
state, so that a proceeding in equity might properly be resorted to
to compel
Page 133 U. S. 127
the defendants to desist from the prosecution of a suit which
would have such an effect. Nor did the court regard the fact as
controlling to the contrary that the attachment was made prior to
the institution of the proceedings in insolvency, because the
attachment tended to contravene the clear intent of the statutes,
which aim to vest in the assignee all the property of the debtor
which could have been assigned by him or taken on execution against
him at the time of the commencement of the insolvent proceedings,
"although the same is then attached on mesne process as the
property of the debtor," and because, aside from that, it appeared
that the defendants, when they instituted process in Pennsylvania
and made their attachment, knew that the debtors were insolvent and
had reason to believe that proceedings in insolvency were about to
be instituted against them, and caused the attachment to be made
with an intent to obtain a preference over other creditors and to
avoid the operation of the insolvent laws of the commonwealth.
Under such circumstances, priority gave no equity to the
defendants. The purpose to interfere with and prevent the proper
distribution of the insolvent's estate took away all claim to
equitable consideration which might exist when priority was
obtained in good faith. The decree accordingly went, enjoining the
defendants from prosecuting their attachments.
The objection was urged that the effect of the restraint might
be to enable all nonresident creditors to appropriate property by
attachment to the payment of their debts, and thereby to gain a
preference over attaching creditors residing in Massachusetts, as
well as to prevent the property from passing to the assignees. This
was, of course, a matter to be considered by the court in arriving
at a conclusion as to granting the relief prayed. It may be
remarked, however, that while, as between citizens of the state of
the forum and the assignee appointed under the laws of another
state, the claim of the former will be held superior to that of the
latter by the courts of the former, yet this has not been so ruled
in many of the states as between an assignee appointed in another
state and citizens of other states than that of his appointment and
of
Page 133 U. S. 128
the forum. Undoubtedly the fiction of law that the domicile
draws to it the personal estate of the owner, wherever it may
happen to be, yields whenever it is necessary for the purposes of
justice that the actual situs of the thing should be examined, and
always yields when the laws and policy of the state where the
property is located invalidate a transfer, even though valid by the
law of the assignor's domicile, in which state it was made, subject
to the qualifications that property once vested in the assignee and
in his possession will not be disturbed, and that, in some
jurisdictions, when the attaching creditor is domiciled in the same
state with the assignor, he may be precluded from disputing the
assignment in a foreign court.
Whether the law of the common domicile of two or more litigants
determines their title to property in another territory, so that an
attaching creditor whose domicile is the same as that of the
assignor, cannot set up against an assignment the law of a foreign
country where the property is actually situated has been much
discussed. It is certain that the law of the common domicile cannot
overcome such registry and other positive laws of the other country
as are distinctly politic and coercive. Wharton on Confl.Laws §§
369, 371. If a state provides that no title shall pass to property
within its borders except on certain conditions, such provision
cannot be overridden by the law of any other state which parties
domiciled there may be held to have adopted. It was in this view
that MR. JUSTICE MILLER, referring to a voluntary conveyance, in
Green v. Van
Buskirk, 5 Wall. 307,
72 U. S.
311-312, said:
"There is no little conflict of authority on the general
question as to how far the transfer of personal property by
assignment or sale, made in the country of the domicile of the
owner, will be held to be valid in the courts of the country where
the property is situated, when these are in different
sovereignties. The learned author of the Commentaries on the
Conflict of Laws has discussed the subject with his usual
exhaustive research, and it may be conceded that, as a question of
comity, the weight of his authority is in favor of the proposition
that such transfers will generally be respected
Page 133 U. S. 129
by the courts of the country where the property is located,
although the mode of transfer may be different from that prescribed
by the local law. . . ."
"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."
Great contrariety of state decision exists upon this general
topic, and it may be fairly stated that as between citizens of the
state of the forum and the assignee appointed under the laws of
another state, the claim of the former will be held superior to
that of the latter by the courts of the former, while, as between
the assignee and citizens of his own state and the state of the
debtor, the laws of such state will ordinarily be applied in the
state of the litigation unless forbidden by or inconsistent with
the laws or policy of the latter. Again, although in some of the
states the fact that the assignee claims under a decree of a court
or by virtue of the law of the state of the domicile of the debtor
and the attaching creditor, and not under a conveyance by the
insolvent, is regarded as immaterial, yet in most the distinction
between involuntary transfers of property, such as work by
operation of law, as foreign bankrupt and insolvent laws, and a
voluntary conveyance is recognized. The reason for the distinction
is that a voluntary transfer, if valid where made, ought generally
to be valid everywhere, being the exercise of the personal right of
the owner to dispose of his own, while an assignment by operation
of law has no legal operation out of the state in which the law was
passed. This is a reason which applies to citizens of the actual
situs of the property when that is elsewhere than at the domicile
of the insolvent, and the controversy has chiefly been as to
whether property so situated can pass even by a voluntary
conveyance.
In
Warner v. Jaffray, 96 N.Y. 248, the debtor, residing
in New York, made a general assignment for the benefit of creditors
to the plaintiff. He owned personal property situated in
Pennsylvania which was attached by New York creditors, having no
actual notice of the assignment, before the assignment
Page 133 U. S. 130
had been recorded in Pennsylvania. A statute of that state
provided that assignments of property situated there, made by a
person not a resident therein, might be recorded in any county
where the property was, and would take effect from its date,
"provided that no
bona fide purchaser, mortgagee, or
creditor, having a lien thereon before the recording in the same
county, and not having previous actual notice thereof, shall e
affected or prejudiced."
It was held that an injunction should not be granted against the
New York creditors from prosecuting their attachment suits in
Pennsylvania. The assignment, said the court, was a mere voluntary
conveyance, and
"did not operate upon the creditors of the assignor nor place
them under any obligations. It left them entirely free to act. They
could utterly refuse to have anything to do with it, and retain
their claims, and enforce them in their own time, as best they
could, against their debtor. The assignee became a trustee for such
creditors of the assignor only as chose to accept him as such, and
without their assent the assignment did not bring the creditors
into any relation with the assignee, or with each other. The law
did not take this insolvent's property for distribution among his
creditors, but its distribution was his own act. Any one of his
creditors could, notwithstanding the assignment, enforce his claim
against any property of the assignor not conveyed by the assignment
without violating any rights or equities of the other
creditors."
The law of Pennsylvania was then referred to, and it was shown,
as the fact was, that such an assignment was recognized in
Pennsylvania, but that to give it effect before it had been
recorded where the property was would have been in contravention of
the law of the state. Upon this ground, the court distinguished
Ockerman v. Cross, 54 N.Y. 29, where
"it was held that a voluntary assignment by a debtor residing in
Canada, valid by the laws of his domicile, and not invalidated by
any law of this state, was valid here, and operated to transfer the
assignor's property situated here. That the decision would have
been different if the assignment had been in contravention of our
laws or policy is fully recognized in the opinion of the
court."
And so also, the court distinguished
Page 133 U. S. 131
the case of
Bagby v. Railroad Co., 86 Penn.St. 291.
There, a receiver had been appointed in the State of Virginia of
the property of the railroad company, and at the time of such
appointment there was due to it, from a debtor in Pennsylvania, a
certain sum of money, which the receiver claimed. But after his
appointment, a creditor residing in Virginia went to the State of
Pennsylvania and there commenced suit against the railroad company
and attached the debt due it, and it was held that the receiver was
entitled to the debt. And the Court of Appeals said:
"The transfer of the title to the receiver was not in
contravention of any law of Pennsylvania, and hence it was held
that, as against a citizen of Virginia, bound by its laws, the
appointment of a receiver, binding upon him there, would by comity
be held to be binding upon him in Pennsylvania."
In the case in hand, the Supreme Judicial Court of Massachusetts
thought it proper to grant the injunction, since it was a case of
the taking by the law of the insolvent's property for distribution
among his creditors, who, so far as resident in the State of
Massachusetts, were brought into relations with the assignee and
with each other which precluded them from enforcing their claim
against the property of the assignor conveyed by the assignment,
and rendered the effort to do so a violation of the rights and
equities of the other creditors, and an absolute infraction of the
law of their own domicile. Nor was there any law or policy of the
State of New York contravened by the insolvent proceedings in
question, or in itself inimical to the title of the assignees.
In
Lawrence v. Batcheller, 131 Mass. 504, the
defendant, Batcheller, a citizen of Massachusetts, had brought
suits by attachment in other states against one Paige, also a
citizen of Massachusetts, indebted to defendant and in embarrassed
circumstances, and garnished and ultimately collected various
amounts due to Paige. Paige subsequently went into insolvency, and
his assignees sued Batcheller at law to recover the money. The
Supreme Judicial Court of Massachusetts held that the assignees
could not recover, because, as the attachments were made prior to
the time when the assignment in insolvency took
Page 133 U. S. 132
effect, and, having been made in other states, were not
dissolved by the proceedings in insolvency, and were valid by the
laws of the states where they were instituted, they prevailed over
the insolvency assignment, the statutes of Massachusetts not making
a title so acquired void or voidable at the election of the
assignees in insolvency. And the court, holding that courts of law
will not always afford a remedy in damages for all wrongs which
courts of equity might prevent, said:
"Courts of equity recognize and enforce rights which courts of
law do not recognize at all, and it is often on this ground that
defendants in equity are enjoined from prosecuting actions at
law."
The distinction between the action as brought and
Dehon v.
Foster was treated as obvious.
What has been said is in harmony with the rule announced in
Green v. Van
Buskirk, 5 Wall. 307, and
74 U. S. 7
Wall. 139. In that case, Bates, who lived in New York, executed and
delivered to Van Buskirk, who lived in the same state, a chattel
mortgage on certain iron safes which were then in the City of
Chicago. Two days after this, Green, who was also a citizen of New
York, being ignorant of the existence of the mortgage, sued out a
writ of attachment in the courts of Illinois, levied on the safes,
and subsequently had them sold in satisfaction of the judgment
obtained in the attachment suit. There was no appearance or contest
in this attachment suit, and Van Buskirk was not a party to it,
although he could have made himself such party, and contested the
right of Green to levy on the safes, being expressly authorized by
the laws of Illinois so to do. It was conceded that by the law of
Illinois, mortgages of personal property, until acknowledged and
recorded, were void as against third persons. Subsequently, Van
Buskirk sued Green in New York for the value of the safes mortgaged
to him by Bates, of which Green had thus received the proceeds. The
courts of New York gave judgment in favor of Van Buskirk, holding
that the law of New York was to govern, and not the law of
Illinois, although the property was situated in the latter state,
and that the title passed to Van Buskirk by the execution of the
mortgage. The cause was then brought to this Court, and first
considered upon a motion to
Page 133 U. S. 133
dismiss for want of jurisdiction. MR. JUSTICE MILLER delivered
the opinion overruling that motion. The cause then came on to be
heard upon the merits, and the judgment of the Court of Appeals of
New York was reversed. This Court held that as by the laws of
Illinois an attachment on personal property would take precedence
of an unrecorded mortgage executed in another state where recording
was not necessary, the judgment in attachment would be binding
though the owner of the chattels, the attaching creditor, and the
mortgage creditor might all be residents of such other state, and
Mr. Justice Davis, speaking for the Court, said:
"It should be borne in mind, in the discussion of this case,
that the record in the attachment suit was not used as the
foundation of an action, but for purposes of defense. Of course
Green could not sue Bates on it, because the court had no
jurisdiction of his person; nor could it operate on any other
property belonging to Bates than that which was attached. But as,
by the law of Illinois, Bates was the owner of the iron safes when
the writ of attachment was levied, and as Green could and did
lawfully attach them to satisfy his debt in a court which had
jurisdiction to render the judgment, and as the safes were lawfully
sold to satisfy that judgment, it follows that when thus sold the
right of property in them was changed, and the title to them became
vested in the purchasers at the sale. And as the effect of the
levy, judgment, and sale is to protect Green if sued in the courts
of Illinois, and these proceedings are produced for his own
justification, it ought to require no argument to show that when
sued in the court of another state for the same transaction, and he
justifies in the same manner, he is also protected. Any other rule
would destroy all safety in derivative titles and deny to a state
the power to regulate the transfer of personal property within its
limits, and to subject such property to legal proceedings."
It will be perceived that it was manifestly inadmissible to hold
that after Van Buskirk had permitted Green to go to judgment in a
proceeding
in rem, which appropriated the property as
belonging to Bates, he could then get judgment
Page 133 U. S. 134
against Green for the conversion of what had so been adjudged to
him, an adjudication which Van Buskirk had voluntarily declined to
litigate in the proper forum, and had not sought in his own state
to prevent. It was a contest between two individuals claiming the
same property, and that property capable of an actual situs, and
actually situated in Illinois. The attachment was not only levied
in accordance with the laws of Illinois, but the laws of that state
affirmatively invalidated the instrument under which Van Buskirk
claimed. Clearly then, the law of the domicile of Van Buskirk,
Green, and Bates could not overcome such registry and other
positive laws of Illinois as were distinctively coercive.
Hervey v. Rhode Island Locomotive Works, 93 U. S.
664;
Walworth v. Harris, 129 U.
S. 355.
In the case at bar, the attachment suits have not gone to
judgment, and the assignees in insolvency have proceeded with due
diligence as against these creditors, citizens of Massachusetts,
who are seeking to evade the laws of their own state; nor is there
anything in the law or policy of New York opposed to the law or
policy of Massachusetts in the premises.
We find no infringement of the Constitution in the rendition of
the decree, and it is accordingly
Affirmed.
MR. JUSTICE BREWER, not having been a member of the court when
this case was considered, took no part in its decision.
MR. JUSTICE MILLER, with whom concurred MR. JUSTICE FIELD and
MR. JUSTICE HARLAN, dissenting.
I dissent from the judgment and opinion of the court in this
case. I am of opinion that the proceedings in the state court of
New York, whether they be considered as the
bona fide
action of Fayerweather for his own benefit or as merely
representing the interests of Butler, Hayden & Co., were
efficient in establishing a lien on the indebtedness of Aaron
Claflin & Co., of New York, which, by the laws of that state,
was superior to any right then held, or which could be acquired
afterwards, by the assignees in insolvency of Daniel C. Bird.
Indeed, it is not questioned in the very learned opinion of the
Court in this case that if Butler, Hayden & Co. had been
permitted to go on with their proceeding in New York, they
Page 133 U. S. 135
would have secured an order in the court in which the
proceedings were pending, that the garnishees, Aaron Claflin &
Co., should pay the amount of their indebtedness to the plaintiff
in that action. But the whole argument of the Court is that because
Butler, Hayden & Co. were citizens of Massachusetts, they were
under some superior obligation to the law of Massachusetts, and to
be governed by the rights that law conferred, which prevented them
from availing themselves of the law of New York that gave them this
superior right.
I do not deny the general principle that a party found within
the jurisdiction of a court, and subject to its process, may be
restrained and enjoined from doing certain things in some other
jurisdiction because the thing which he might attempt to do is
opposed to the principles of equity, or to the law of the place
where he is found, and such might be the law in this case but for
the provision of the Constitution of the United States and the act
of Congress, both of which are recited in the opinion of the Court,
which require that the
"records and judicial proceedings of a state, authenticated as
aforesaid, shall have such faith and credit given to them in every
court in the United States as they would have by law or usage in
the courts of the state from whence such records are or shall be
taken."
The record introduced from the court of New York in this case
had the effect in that state to give Butler, Hayden & Co. a
lien on the indebtedness of Aaron Claflin & Co. to their
creditor, Bird, which in that court would have ripened into a
judgment, and been enforced. That was the faith and credit which
the laws of New York gave to that proceeding. It initiated a right.
It established a lien, and there was no power in the courts of
Massachusetts to interrupt the course of these proceedings to the
final result. That is to say there was no power to do this
directly. Had it the right to do it by seizing the persons of
Butler, Hayden & Co. in Massachusetts, and compelling them
there to forego the advantage which they had secured in the state
courts of New York? When, therefore, Butler, Hayden & Co. were
sued in equity in the courts of Massachusetts, and there was
produced the record of these proceedings in the court of New York,
the
Page 133 U. S. 136
question was presented to the courts of Massachusetts what
effect they would give to those proceedings. Now they did not give
the effect which the laws of New York gave to them. Neither the law
nor the usage in the courts of New York admitted of such proceeding
as that taken in the courts of Massachusetts.
If there was any error in the proceedings in the court of New
York, that error was subject to correction in due course of law in
courts of justice of the State of New York, and Butler, Hayden
& Co. had a right to insist on the validity of their
proceedings being tested by the courts, and governed by the laws,
of the State of New York, and not by those of Massachusetts.
It is no answer to this to say that Butler, Hayden & Co.
were citizens of Massachusetts and were found within its
jurisdiction. The higher law of the Constitution of the United
States places this restraint upon the courts of Massachusetts in
dealing even with her own citizens, and if her citizens have
obtained rights in the courts of New York which have become a part
of the records and judicial proceedings of those courts, no
difference how the law under which those rights are established may
be opposed to the law of the State of Massachusetts, they are to be
respected by the courts of Massachusetts, because they are
effectual over the parties and subject matter in New York, and
because the Constitution of the United States and the Act of
Congress of May 26, 1790, assert the principle that the courts of
Massachusetts must give full credit, by which is meant the same
effect, to the proceedings in New York which that state gives to
them. The constitutional provision which makes this declaration is
part of Article IV, and it is in immediate connection with its
second section, which declares that "the citizens of each state
shall be entitled to all the privileges and immunities of citizens
in the several states." The meaning of this is to prevent conflicts
between courts of the different states over the same matters by
establishing the rule that whatever is done or decided in one state
shall be respected in every other state when properly proved before
it. It is one feature of the general idea which is found all
through the Constitution.
Page 133 U. S. 137
These are the principles established after a most vigorous
contest by the case of
Green v. Van Buskirk, twice before
this Court, and reported in
72 U. S. 5 Wall.
307 and
74 U. S. 7 Wall.
139. In that case, both the contesting parties lived in the State
of New York and were citizens of that state. Each asserted a
paramount title to certain safes which were in the City of Chicago.
Green, although a citizen of New York, with Van Buskirk, levied in
the State of Illinois an attachment on these safes, on which Van
Buskirk had a chattel mortgage executed in the State of New York
but not recorded in Illinois. Green proceeded with his attachment,
and bought the safes under it, which he converted to his own use in
Illinois. Afterwards he was sued by Van Buskirk in the State of New
York for this conversion, and he set up and relied on the
proceedings in the attachment suit in Illinois as a defense. The
supreme court of New York held that as between its own citizens,
its law upon the subject of chattel mortgages, which was the claim
Van Buskirk had on the safes, should prevail, while Green insisted
that the law of Illinois, where the proceedings in the attachment
took place and where the safes were, should govern. In the case as
it first presented itself in this Court, a motion to dismiss for
want of jurisdiction was made which the court overruled on the
ground that the case was to be governed by the law of Illinois,
under the Constitution of the United States and the act of Congress
already referred to. The case afterwards came on in 7 Wall. upon
the further question whether the laws of Illinois were such as to
give Green a right to that proceeding, and the Court held that they
were; that the attachment, judgment, and sale in Illinois were
valid, and that the state courts of New York were bound to give
them effect in the proceeding of
Green v. Van Buskirk. The
only difference between that case and the one now under
consideration is that at the time the court in Massachusetts
intervened and undertook to prevent Butler, Hayden & Co. from
pursuing their case in the courts of New York, there had been no
judgment in favor of that company. But I am at a loss to see why
the right established by Butler, Hayden & Co. in the courts of
New York is not as much to be respected, and
Page 133 U. S. 138
the same effect given to it according to its nature, as if the
judicial proceeding had ripened into a judgment. It is very clear
that, but for the injunction against Butler, Hayden & Co., they
would have got such a judgment and would have obtained their money,
and if they had been sued in Massachusetts for violating the laws
of Massachusetts on that subject, it is equally clear, according to
Green v. Van Buskirk, that the proceedings in the New York
court would have been a good defense. I think, therefore, that the
judgment of the Court, and the principles of the opinion, are
erroneous and are opposed to the former decisions of this
Court.
MR. JUSTICE BREWER, not having been a member of the Court when
this case was considered, took no part in its decision.