A bill in equity in one state to set aside a conveyance of
property made in fraud of creditors, and to charge it with the
payment of a judgment since recovered by the plaintiff against the
debtor in another state upon his liability as an officer in a
corporation under a statute of that state, set forth the judgment
and the cause of action on which it was recovered and also
asserted, independently of the judgment, an original liability of
the defendant as a stockholder and officer in that corporation
before the conveyance. The highest court of the state declined to
entertain the bill by virtue of the judgment, because it had been
recovered in another state in an action for a penalty, or to
maintain the bill on the original liability, for various
reasons.
Held that the question whether due faith and credit
were thereby denied to the judgment was a federal question, of
which this Court had jurisdiction on writ of error.
The question whether a statute of one state which in some
aspects may be called penal is a penal law in the international
sense, so that it cannot be enforced in the courts of another
state, depends upon the question whether its purpose is to punish
an offense against the public justice of the state or to afford a
private remedy to a person injured by the wrongful act.
A statute making the officers of a corporation who sign and
record a false
Page 146 U. S. 658
certificate of the amount of its capital stock liable for all
its debts is not a penal law in the international sense.
Whether a statute of one state is a penal law which cannot be
enforced in another state is to be determined by the court which is
called upon to enforce it.
If the highest court of a state declines to give full faith and
credit to a judgment of another state because in its opinion that
judgment was for a penalty, this Court, in determining whether full
faith and credit have been given to that judgment, must decide for
itself whether the original cause of action was penal in the
international sense.
If a judgment for a fixed sum of money, recovered in one state
by a creditor of a corporation against one of its officers upon a
liability for all its debts imposed by a statute of that state for
making and recording a false certificate of the amount of its
capital stock, is sued on in a court of another state, and that
court declines to enforce the judgment because of its opinion that
the original liability was a penalty, the judgment is thereby
denied the full faith, credit and effect to which it is entitled
under the Constitution and laws of the United States.
In equity. The bill was dismissed by the Court of Appeals of
Maryland, to which judgment this writ of error was sued out.
Page 146 U. S. 660
MR. JUSTICE GRAY delivered the opinion of the Court.
This was a bill in equity, filed March 21, 1888, in the Circuit
Court of Baltimore City by Collis P. Huntington, a resident of New
York, against the Equitable Gaslight Company of Baltimore, a
corporation of Maryland, and against Henry Y. Attrill, his wife and
three daughters, all residents of Canada, to set aside a transfer
of stock in that company made by him for their benefit and in fraud
of his creditors, and to charge that stock with the payment of a
judgment recovered by the plaintiff against him in the State of New
York upon his liability as a director in a New York corporation
under the statute of New York of 1875, c. 611, the material
provisions of which are copied in the margin.
*
The bill alleged that on June 15, 1886, the plaintiff recovered,
in the Supreme Court of the State of New York, in an action brought
by him against Attrill on March 21, 1883, a
Page 146 U. S. 661
judgment for the sum of $100,240, which had not been paid,
secured, or satisfied, and that the cause of action on which that
judgment was recovered was as follows: on February 29, 1880, the
Rockaway Beach Improvement Company, Limited, of which Attrill was
an incorporator and a director, became a corporation under the law
of New York, with a capital stock of $700,000. On June 15, 1880,
the plaintiff lent that company the sum of $100,000, to be repaid
on demand. On February 26, 1880, Attrill was elected one of the
directors of the company, and accepted the office, and continued to
act as a director until after January 29, 1881. On June 30, 1880,
Attrill, as a director of the company, signed and made oath to, and
caused to be recorded, as required by the law of New York, a
certificate, which he knew to be false, stating that the whole of
the capital stock of the corporation had been paid in, whereas in
truth no part had been paid in, and by making such false
certificate became liable, by the law of New York, for all the
debts of the company contracted before January 29, 1881, including
its debt to the plaintiff. On March 8, 1882, by proceedings in a
court of New York, the corporation was declared to be insolvent,
and to have been so since July, 1880, and was dissolved. A duly
exemplified copy of the record of that judgment was annexed to and
made part of the bill.
The bill also alleged that
"at the time of its dissolution, as aforesaid, the said company
was indebted to the plaintiff and to other creditors to an amount
far in excess of its assets; that by the law of the State of New
York, all the stockholders of the company were liable to pay all
its debts, each to the amount of the stock held by him, and the
defendant, Henry Y. Attrill, was liable at said date, and on April
14, 1882, as such stockholder, to the amount of $340,000, the
amount of stock held by him, and was on both said dates also
severally and directly liable as a director, having signed the
false report above mentioned, for all the debts of said company
contracted between February 26, 1880, and January 29, 1881, which
debts aggregate more than the whole value of the property owned by
said Attrill. "
Page 146 U. S. 662
The bill further alleged that Attrill was in March, 1882, and
had ever since remained, individually liable in a large amount over
and above the debts for which he was liable as a stockholder and
director in the company, and that he was insolvent, and had
secreted and concealed all his property for the purpose of
defrauding his creditors.
The bill then alleged that in April, 1882, Attrill acquired a
large amount of stock in the Equitable Gaslight Company of
Baltimore, and forthwith transferred into his own name, as trustee
for his wife, 1,000 shares of such stock, and as trustee for each
of his three daughters, 250 shares of the same, without valuable
consideration, and with intent to delay, hinder, and defraud his
creditors, and especially with the intent to delay, hinder, and
defraud this plaintiff of his lawful suits, damages, debts, and
demands against Attrill arising out of the cause of action on which
the aforesaid judgment was recovered and out of the plaintiff's
claim against him as a stockholder; that the plaintiff in June,
1880, and ever since was domiciled and resident in the State of New
York, and that from February, 1880, to December 6, 1884, Attrill
was domiciled and resident in that state, and that his transfers of
stock in the gas company were made in the City of New York, where
the principal office of the company then was and where all its
transfers of stock were made, and that those transfers were, by the
laws of New York as well as by those of Maryland, fraudulent and
void as against the creditors of Attrill, including the creditors
of the Rockaway Company, and were fraudulent and void as against
the plaintiff.
The bill further, by distinct allegations, averred that those
transfers, unless set aside and annulled by a court of equity,
would deprive the plaintiff of all his rights and interests of
every sort therein to which he was entitled as a creditor of
Attrill at the time when those fraudulent transfers were made, and
"that the said fraudulent transfers were wholly without legal
consideration, were fraudulent and void, and should be set aside by
a court of equity."
The bill prayed that the transfer of shares in the gas company
be declared fraudulent and void and executed for the
Page 146 U. S. 663
purpose of defrauding the plaintiff out of his claim as existing
creditor; that the certificates of those shares in the name of
Attrill as trustee be ordered to be brought into court and
cancelled, and that the shares "be decreed to be subject to the
claim of this plaintiff on the judgment aforesaid," and to be sold
by a trustee appointed by the court, and new certificates issued by
the gas company to the purchasers, and for further relief.
One of the daughters demurred to the bill because it showed that
the plaintiff's claim was for the recovery of a penalty against
Attrill arising under a statute of the State of New York, and
because it did not state a case which entitled the plaintiff to any
relief in a court of equity in the State of Maryland.
By a stipulation of counsel filed in the cause, it was agreed
that for the purposes of the demurrer, the bill should be treated
as embodying the New York statute of June 21, 1875, and that the
Rockaway Beach Improvement Company, Limited, was incorporated under
the provisions of that statute.
The Circuit Court of Baltimore City overruled the demurrer. On
appeal to the Court of Appeals of the State of Maryland, the order
was reversed and the bill dismissed. 70 Md. 191.
The ground most prominently brought forward and most fully
discussed in the opinion of the majority of the court, delivered by
Judge Bryan, was that the liability imposed by section 21 of the
statute of New York upon officers of a corporation making a false
certificate of its condition was for all its debts, without
inquiring whether a creditor had been deceived and induced by
deception to lend his money or to give credit or whether he had
incurred loss to any extent by the inability of the corporation to
pay, and without limiting the recovery to the amount of loss
sustained, and was intended as a punishment for doing any of the
forbidden acts, and was therefore in view of the decisions in that
state and in Maryland, a penalty which could not be enforced in the
State of Maryland, and that the judgment obtained in New York for
this penalty, while it "merged the original cause of action so that
a suit cannot be again maintained upon it," and "is also
Page 146 U. S. 664
conclusive evidence of its existence in the form and under the
circumstances stated in the pleadings," yet did not change the
nature of the transaction, but, within the decision of this Court
in
Wisconsin v. Pelican Ins. Co., 127 U.
S. 265, was in its "essential nature and real
foundation" the same as the original cause of action, and therefore
a suit could not be maintained upon such a judgment beyond the
limits of the state in which it was rendered. Pp. 193-198.
The court then took up the clause of the bill, above quoted, in
which it was sought to charge Attrill as originally liable under
the statute of New York, both as a stockholder and as a director,
and, observing that "this liability is asserted to exist
independently of the judgment," summarily disposed of it upon the
grounds that it could not attach to him as a stockholder, because
he had not been sued, as required by the New York statute, within
two years after the plaintiff's debt became due, nor as a director,
because "the judgment against Attrill for having made the false
report certainly merges all right of action against him on this
account," but that, if he was liable at the times and on the
grounds "mentioned in this clause of the bill," this liability was
barred by the statute of limitations of Maryland. Pp. 198-199.
Having thus decided against the plaintiff's claim under his
judgment upon the single ground that it was for a penalty under the
statute of New York, and therefore could not be enforced in
Maryland, and against any original liability under the statute, for
various reasons, the opinion concluded: "Upon the whole, it appears
to us that the complainant has no cause of action which he can
maintain in this state." P. 199.
Judge Stone, with whom Judge McSherry concurred, dissented from
the opinion of the majority of the court upon the ground that it
did not give due effect to the act of Congress passed in pursuance
of the Constitution of the United States, and providing that the
records of judgments rendered by a court of any state 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 whence they are taken. Act May 26, 1790, c. 11, 1 Stat. 122;
Rev.Stat.
Page 146 U. S. 665
§ 905. He began his opinion by saying:
"I look upon the principal point as a federal question, and an
governed in my views more by my understanding of the decisions of
the Supreme Court of the United States than by the decisions of the
state courts."
And he concluded thus:
"I think the supreme court, in 127 U.S., meant to confine the
operation of the rule that no country will execute the penal laws
of another to such laws as are properly classed as criminal. It is
not very easy to give any brief definition of a criminal law. It
may perhaps be enough to say that in general, all breaches of duty
that confer no rights upon an individual or person, and which the
state alone can take cognizance of, are in their nature criminal,
and that all such come within the rule. But laws which, while
imposing a duty, at the same time confer a right upon the citizens
to claim damages for its nonperformance are not criminal. If all
the laws of the latter description are held penal in the sense of
criminal, that clause in the Constitution which relates to records
and judgments is of comparatively little value. There is a large
and constantly increasing number of cases that may in one sense be
termed penal, but can in no sense be classed as criminal. Examples
of these may be found in suits for damages for negligence in
causing death, for double damages for the injury to stock where
railroads have neglected the state laws for fencing in their
tracks, and the liability of officers of corporations for the debts
of the company by reason of their neglect of a plain duty imposed
by statute. I cannot think that judgments on such claims are not
within the protection given by the Constitution of the United
States. I therefore think the order in this case should be
affirmed."
Pp. 200-205.
A writ of error was sued out by the plaintiff, and allowed by
the Chief Justice of the Court of Appeals of Maryland, upon the
ground
"that the said Court of Appeals is the highest court of law or
equity in the State of Maryland in which a decision in the said
suit could be had; that in said suit, a right and privilege are
claimed under the Constitution and statutes of the United States,
and the decision is against the right and privilege set up and
claimed by your petitioner
Page 146 U. S. 666
under said Constitution and statutes, and that in said suit
there is drawn in question the validity of a statute of, and an
authority exercised under, the United States, and the decision is
against the validity of such statute and of such authority."
It thus appears that the judgment recovered in New York was made
the foremost ground of the bill, was fully discussed and distinctly
passed upon by the majority of the Court of Appeals of Maryland,
and was the only subject of the dissenting opinion, and that the
court, without considering whether the validity of the transfers
impeached as fraudulent was to be governed by the law of New York
or by the law of Maryland, and without a suggestion that those
transfers alleged to have been made by Attrill with intent to
delay, hinder, and defraud all his creditors were not voidable by
subsequent as well as by existing creditors, or that they could not
be avoided by the plaintiff, claiming under the judgment recovered
by him against Attrill after those transfers were made, declined to
maintain his right to do so by virtue of that judgment, simply
because the judgment had, as the court held, been recovered in
another state in an action for a penalty.
The question whether due faith and credit were thereby denied to
the judgment rendered in another state is a federal question of
which this Court has jurisdiction on this writ of error.
Green v. Van
Buskirk, 5 Wall. 307,
72 U. S. 311;
Crapo v.
Kelly, 16 Wall. 610,
83 U. S. 619;
Dupasseur v.
Rochereau, 21 Wall. 130,
88 U. S. 134;
Crescent City Co. v. Butchers' Union, 120 U.
S. 141,
120 U. S.
146-147;
Cole v. Cunningham, 133 U.
S. 107;
Carpenter v. Strange, 141 U. S.
87,
141 U. S.
103.
In order to determine this question, it will be necessary in the
first place to consider the true scope and meaning of the
fundamental maxim of international law stated by Chief Justice
Marshall in the fewest possible words: "The courts of no country
execute the penal laws of another."
The
Antelope, 10 Wheat. 66,
23 U. S. 123. In
interpreting this maxim, there is danger of being misled by the
different shades of meaning allowed to the word "penal" in our
language.
In the municipal law of England and America, the words
Page 146 U. S. 667
"penal" and "penalty" have been used in various senses. Strictly
and primarily, they denote punishment, whether corporal or
pecuniary, imposed and enforced by the state for a crime or offense
against its laws.
United States v. Reisinger, 128 U.
S. 398,
128 U. S. 402;
United States v. Chouteau, 102 U.
S. 603,
102 U. S. 611.
But they are also commonly used as including any extraordinary
liability to which the law subjects a wrongdoer in favor of the
person wronged, not limited to the damages suffered. They are so
elastic in meaning as even to be familiarly applied to cases of
private contracts, wholly independent of statutes, as when we speak
of the "penal sum" or "penalty" of a bond. In the words of Chief
Justice Marshall:
"In general, a sum of money in gross, to be paid for the
nonperformance of an agreement, is considered as a penalty, the
legal operation of which is to cover the damages which the party in
whose favor the stipulation is made may have sustained from the
breach of contract by the opposite party."
Tayloe v.
Sandiford, 7 Wheat. 13,
20 U. S. 17.
Penal laws, strictly and properly, are those imposing punishment
for an offense committed against the state, and which, by the
English and American constitutions, the executive of the state has
the power to pardon. Statutes giving a private action against the
wrongdoer are sometimes spoken of as penal in their nature, but in
such cases it has been pointed out that neither the liability
imposed nor the remedy given is strictly penal.
The action of an owner of property against the hundred to
recover damages caused by a mob was said by Justices Willes and
Buller to be "penal against the hundred, but certainly remedial as
to the sufferer."
Hyde v. Cogan, 2 Doug. 699, 705-706. A
statute giving the right to recover back money lost at gaming and,
if the loser does not sue within a certain time, authorizing a
qui tam action to be brought by any other person for
threefold the amount, has been held to be remedial as to the loser,
though penal as regards the suit by a common informer.
Bones v.
Booth, 2 W.Bl. 1226;
Brandon v. Pate, 2 H.Bl. 308;
Grace v. McElroy, 1 Allen 563;
Read v. Stewart,
129 Mass. 407, 410;
Cole v. Groves, 134 Mass. 471. As
said
Page 146 U. S. 668
by Mr. Justice Ashhurst in the King's Bench and repeated by Mr.
Justice Wilde in the Supreme Judicial Court of Massachusetts, "it
has been held in many instances that, where a statute gives
accumulative damages to the party grieved, it is not a penal
action."
Woodgate v. Knatchbull, 2 T.R. 148, 154;
Read
v. Chelmsford, 16 Pick. 128, 132. Thus a statute giving to a
tenant, ousted without notice, double the yearly value of the
premises against the landlord has been held to be "not like a penal
law, where a punishment is imposed for a crime," but "rather as a
remedial than a penal law," because "the act indeed does give a
penalty, but it is to the party grieved."
Lake v. Smith, 1
Bos. & Pul. (N.R.) 174, 179, 180-181;
Wilkinson v.
Colley, 5 Burrows 2694, 2698. So in an action given by statute
to a traveler injured through a defect in a highway for double
damages against the town, it was held unnecessary to aver that the
facts constituted an offense, or to conclude against the form of
the statute, because, as Chief Justice Shaw said:
"The action is purely remedial, and has done of the
characteristics of a penal prosecution. All damages for neglect or
breach of duty operate to a certain extent as punishment; but the
distinction is that it is prosecuted for the purpose of punishment,
and to deter others from offending in like manner. Here, the
plaintiff sets out the liability of the town to repair, and an
injury to himself from a failure to perform that duty. The law
gives him enhanced damages, but still they are recoverable to his
own use, and in form and substance the suit calls for
indemnity."
Reed v. Northfield, 13 Pick. 94, 100-101.
The test whether a law is penal, in the strict and primary
sense, is whether the wrong sought to be redressed is a wrong to
the public or a wrong to the individual, according to the familiar
classification of Blackstone:
"Wrongs are divisible into two sorts or species:
private
wrongs and
public wrongs. The former are an
infringement or privation of the private or civil rights belonging
to individuals, considered as individuals, and are thereupon
frequently termed
'civil injuries;' the latter are a
breach and violation of public rights and duties, which affect the
whole community, considered as a community, and
Page 146 U. S. 669
are distinguished by the harsher appellation of '
crimes
and
misdemeanors.'"
3 Bl.Com. 2.
Laws have no force of themselves beyond the jurisdiction of the
state which enacts them, and can have extraterritorial effect only
by the comity of other states. The general rules of international
comity upon this subject were well summed up, before the American
Revolution, by Chief Justice De Grey, as reported by Sir William
Blackstone:
"Crimes are in their nature local, and the jurisdiction of
crimes is local. And so as to the rights of real property, the
subject being fixed and immovable. But personal injuries are of a
transitory nature, and
sequuntur forum rei."
Rafael v. Verelst, 2 W.Bl. 1055, 1058.
Crimes and offenses against the laws of any state can only be
defined, prosecuted, and pardoned by the sovereign authority of
that state, and the authorities, legislative, executive, or
judicial, of other states take no action with regard to them except
by way of extradition to surrender offenders to the state whose
laws they have violated and whose peace they have broken.
Proceedings
in rem to determine the title to land must
necessarily be brought in the state within whose borders the land
is situated and whose courts and officers alone can put the party
in possession. Whether actions to recover pecuniary damages for
trespasses to real estate, "of which the causes," as observed by
Mr. Westlake, Private International Law, 3d ed., p. 213, "could not
have occurred elsewhere than where they did occur," are purely
local, or may be brought abroad, depends upon the question whether
they are viewed as relating to the real estate, or only as
affording a personal remedy. By the common law of England, adopted
in most of the states of the union, such actions are regarded as
local, and can be brought only where the land is situated.
Doulson v. Matthews, 4 T.R. 503;
McKenna v.
Fisk, 1 How. 241,
42 U. S. 248.
But in some states and countries, they are regarded as transitory,
like other personal actions, and whether an action for trespass to
land in one state can be brought in another state depends on the
view which the latter state takes of the
Page 146 U. S. 670
nature of the action. For instance, Chief Justice Marshall held
that an action could not be maintained in Virginia, by whose law it
was local, for a trespass to land in New Orleans.
Livingston v.
Jefferson, 1 Brock. 203. On the other hand, an action for a
trespass to land in Illinois, where the rule of the common law
prevailed, was maintained in Louisiana; Chief Justice Eustis
saying:
"The present action is, under our laws, a personal action, and
is not distinguished from any ordinary civil action as to the place
or tribunal in which it may be brought."
Holmes v. Barclay, 4 La.Ann. 63. And in a very recent
English case, in which the judges differed in opinion upon the
question whether, since local venue has been abolished in England,
an action can be maintained there for a trespass to land in a
foreign country, all agreed that this question depended on the law
of England.
Companhia de Mocambique v. British South Africa
Co., [1892] 2 Q.B. 358.
See also Cragin v. Lovell, 88
N.Y. 258;
Allin v. Connecticut River Lumber Co., 150 Mass.
560.
In order to maintain an action for an injury to the person or to
movable property, some courts have held that the wrong must be one
which would be actionable by the law of the place where the redress
is sought, as well as by the law of the place where the wrong was
done.
See, for example, The Halley, L.R. 2 P.C. 193, 204;
Phillips v. Eyre, L.R. 6 Q.B. 1, 28-29;
The M.
Moxham, 1 P.D. 107, 111;
Wooden v. Western New York &
Pennsylvania Railroad, 126 N.Y. 10;
Ash v. Baltimore &
Ohio Railroad, 72 Md. 144. But such is not the law of this
Court. By our law, a private action may be maintained in one state,
if not contrary to its own policy, for such a wrong done in
another, and actionable there although a like wrong would not be
actionable in the state where the suit is brought.
Smith v.
Condry, 1 How. 28;
The
China, 7 Wall. 53,
74 U. S. 64;
The Scotland, 105 U. S. 24,
105 U. S. 29;
Dennick v. Railroad Co., 103 U. S. 11;
Texas & Pacific Railway v. Cox, 145 U.
S. 593.
Upon the question what are to be considered penal laws of one
country within the international rule which forbids such laws to be
enforced in any other country, so much reliance
Page 146 U. S. 671
was placed by each party in argument upon the opinion of this
Court in
Wisconsin v. Pelican Ins. Co., 127 U.
S. 265, that it will be convenient to quote from that
opinion the principal propositions there affirmed:
"The rule that the courts of no country execute the penal laws
of another applies not only to prosecutions and sentences for
crimes and misdemeanors, but to all suits in favor of the state for
the recovery of pecuniary penalties for any violation of statutes
for the protection of its revenue, or other municipal laws, and to
all judgments for such penalties."
P.
127 U. S.
290.
"The application of the rule to the courts of the several states
and of the United States is not affected by the provisions of the
Constitution and of the act of Congress, by which the judgments of
the courts of any state are to have such faith and credit given to
them in every court within the United States as they have by law or
usage in the state in which they were rendered."
P.
127 U. S.
291.
"The essential nature and real foundation of a cause of action
are not changed by recovering judgment upon it, and the technical
rules which regard the original claim as merged in the judgment and
the judgment as implying a promise by the defendant to pay it do
not preclude a court, to which a judgment is presented for
affirmative action, while it cannot go behind the judgment for the
purpose of examining into the validity of the claim, from
ascertaining whether the claim is really one of such a nature that
the court is authorized to enforce it."
Pp.
127 U. S.
292-293.
"The statute of Wisconsin under which the state recovered in one
of her own courts the judgment now and here sued on was in the
strictest sense a penal statute, imposing a penalty upon any
insurance company of another state doing business in the State of
Wisconsin without having deposited with the proper officer of the
state a full statement of its property and business during the
previous year. The cause of action was not any private injury, but
solely the offense committed against the state by violating her
law. The prosecution was in the name of the state, and the whole
penalty, when recovered, would accrue to the state."
P.
127 U. S.
299.
Page 146 U. S. 672
Such were the grounds upon which it was adjudged in that case
that this Court, under the provision of the Constitution giving it
original jurisdiction of actions between a state and citizens of
another state, had no jurisdiction of an action by a state upon a
judgment recovered by it in one of its own courts against a citizen
or a corporation of another state for a pecuniary penalty for a
violation of its municipal law.
Upon similar grounds, the courts of a state cannot be compelled
to take jurisdiction of a suit to recover a like penalty for a
violation of a law of the United States.
Martin v.
Hunter, 1 Wheat. 304,
14 U. S. 330,
14 U. S. 337;
United States v. Lathrop, 17 Johns. 4, 265;
Delafield
v. Illinois, 2 Hill 159, 169;
Jackson v. Rose, 2
Va.Cas. 34;
Ely v. Peck, 7 Conn. 239;
Davison v.
Champlin, 7 Conn. 244;
Haney v. Sharp, 1 Dana 442;
State v. Pike, 15 N.H. 83, 85;
Ward v. Jenkins,
10 Met. 583, 587; 1 Kent Com. 402-404. The only ground ever
suggested for maintaining such suits in a state court is that the
laws of the United States are, in effect, laws of each state.
Claflin v. Houseman, 93 U. S. 130,
93 U. S. 137;
Platt, J., in
United States v. Lathrop, 17 Johns. 22;
Ordway v. Central Bank, 47 Md. 217. But in
Claflin v.
Houseman, the point adjudged was that an assignee under the
bankrupt law of the United States could assert in a state court the
title vested in him by the assignment in bankruptcy, and Mr.
Justice Bradley, who delivered the opinion in that case, said the
year before, when sitting in the circuit court, and speaking of a
prosecution in a court of the State of Georgia for perjury
committed in that state in testifying before a commissioner of the
circuit court of the United States: "It would be a manifest
incongruity for one sovereignty to punish a person for an offense
committed against the laws of another sovereignty."
Ex Parte
Bridges, 2 Woods 428, 430.
See also Loney's Case,
134 U. S. 372.
Beyond doubt (except in cases removed from a state court in
obedience to an express act of Congress in order to protect rights
under the Constitution and laws of the United States), a circuit
court of the United States cannot entertain jurisdiction of a suit
in behalf of the state, or of the people thereof,
Page 146 U. S. 673
to recover a penalty imposed by way of punishment for a
violation of a statute of the state; "the courts of the United
States," as observed by Mr. Justice Catron, delivering a judgment
of this Court, "having no power to execute the penal laws of the
individual states."
Gwin v.
Breedlove, 2 How. 29,
43 U. S. 36-37;
Gwin v. Barton,
6 How. 7;
Iowa v. Chicago &c. Railway, 37 F. 497;
Ferguson v. Ross, 38 F. 161;
Texas v. Day Land &
Cattle Co., 41 F. 228;
Dey v. Chicago &c.
Railway, 45 F. 82.
For the purposes of extraterritorial jurisdiction, it may well
be that actions by a common informer, called, as Blackstone says,
"popular actions" because they are given to the people in general
to recover a penalty imposed by statute for an offense against the
law, and which may be barred by a pardon granted before action
brought, may stand on the same ground as suits brought for such a
penalty in the name of the state or of its officers, because they
are equally brought to enforce the criminal law of the state. 3
Bl.Com. 161-162; 2 Bl.Com. 437-438;
Adams v.
Woods, 2 Cranch 336;
Gwin v. Breedlove,
above cited;
United States v. Connor, 138 U. S.
61,
138 U. S. 66;
Bryant v. Ela, Smith (N.H.) 396. And personal disabilities
imposed by the law of a state as an incident or consequence of a
judicial sentence or decree by way of punishment of an offender,
and not for the benefit of any other person, such as attainder, or
infamy, or incompetency of a convict to testify, or
disqualification of the guilty party to a cause of divorce for
adultery to marry again, are doubtless strictly penal, and
therefore have no extraterritorial operation. Story on Conflict of
Law, §§ 91, 92; Dicey on Domicil 162;
Folliott v. Ogden, 1
H.Bl. 123 and 3 T.R. 726;
Logan v. United States,
144 U. S. 263,
144 U. S. 303;
Dickson v. Dickson, 1 Yerger 110;
Ponsford v.
Johnson, 2 Blatchford 51;
Commonwealth v. Lane, 113
Mass. 458, 471;
Van Voorhis v. Brintnall, 86 N.Y. 18,
28-29.
The question whether a statute of one state which in some
aspects may be called penal is a penal law in the international
sense, so that it cannot be enforced in the courts of another
state, depends upon the question whether its purpose is to
Page 146 U. S. 674
punish an offense against the public justice of the state, or to
afford a private remedy to a person injured by the wrongful act.
There could be no better illustration of this than the decision of
this Court in
Dennick v. Railroad Co., 103 U. S.
11.
In that case, it was held that, by virtue of a statute of New
Jersey making a person or corporation whose wrongful act, neglect,
or default should cause the death of any person liable to an action
by his administrator, for the benefit of his widow and next of kin,
to recover damages for the pecuniary injury resulting to them from
his death, such an action, where the neglect and the death took
place in New Jersey, might, upon general principles of law, be
maintained in a circuit court of the United States held in the
State of New York by an administrator of the deceased appointed in
that state.
Mr. Justice Miller, in delivering judgment, said:
"It can scarcely be contended that the act belongs to the class
of criminal laws which can only be enforced by the courts of the
state where the offense was committed, for it is, though a
statutory remedy, a civil action to recover damages for a civil
injury. It is indeed a right dependent solely on the statute of the
state, but when the act is done for which the law says the person
shall be liable, and the action by which the remedy is to be
enforced is a personal and not a real action and is of that
character which the law recognizes as transitory and not local, we
cannot see why the defendant may not be held liable in any court to
whose jurisdiction he can be subjected by personal process or by
voluntary appearance, as was the case here. It is difficult to
understand how the nature of the remedy or the jurisdiction of the
courts to enforce it is in any manner dependent on the question
whether it is a statutory right or a common law right. Wherever, by
either the common law or the statute law of a state, a right of
action has become fixed, and a legal liability incurred, that
liability may be enforced, and the right of action pursued, in any
court which has jurisdiction of such matters and can obtain
jurisdiction of the parties."
103 U.S.
103 U. S.
17-18.
That decision is important as establishing two points: (1) the
court considered "criminal laws" -- that is to say, laws
Page 146 U. S. 675
punishing crimes -- as constituting the whole class of penal
laws which cannot be enforced extraterritorially; (2) a statute of
a state, manifestly intended to protect life, and to impose a new
and extraordinary civil liability upon those causing death by
subjecting them to a private action for the pecuniary damages
thereby resulting to the family of the deceased, might be enforced
in a circuit court of the United States held in another state
without regard to the question whether a similar liability would
have attached for a similar cause in that state. The decision was
approved and followed at the last term in
Texas & Pacific
Railway v. Cox, 145 U. S. 593,
145 U. S. 605,
where THE CHIEF JUSTICE, speaking for the whole Court, after
alluding to cases recognizing the rule where the laws of both
jurisdictions are similar, said: "The question, however, is one of
general law, and we regard it as settled in
Dennick v. Railroad
Co."
That decision has been also followed in the courts of several
states.
Herrick v. Minneapolis & St. Louis Railway, 31
Minn. 11;
Chicago &c. Railroad v. Doyle, 60 Miss. 977;
Knight v. West Jersey Railroad, 108 Penn.St. 250;
Morris v. Chicago &c. Railway, 65 Ia. 727;
Missouri Pacific Railway v. Lewis, 24 Neb. 848;
Higgins v. Central New England Railroad, 155 Mass.
176.
In the case last cited, a statute of Connecticut having provided
that all actions for injuries to the person, including those
resulting instantaneously or otherwise in death, should survive,
and that for an injury resulting in death from negligence the
executor or administrator of the deceased might maintain an action
to recover damages not exceeding $5,000, to be distributed among
his widow and heirs in certain proportions, it was held that such
an action was not a penal action, and might be maintained under
that statute in Massachusetts by an administrator, appointed there,
of a citizen thereof, who had been instantly killed in Connecticut
by the negligence of a railroad corporation, and the general
principles applicable to the case were carefully stated as
follows:
"These principles require that in cases of other than penal
actions, the foreign law, if not contrary to our public policy or
to abstract justice or pure morals, or calculated to injure the
state or its citizens, shall
Page 146 U. S. 676
be recognized and enforced here if we have jurisdiction of all
necessary parties and if we can see that, consistently with our own
forms of procedure and law of trials, we can do substantial justice
between the parties. If the foreign law is a penal statute, or if
it offends our own policy or is repugnant to justice or to good
morals or is calculated to injure this state or its citizens, or if
we have not jurisdiction of parties who must be brought in to
enable us to give a satisfactory remedy, or if, under our forms of
procedure, an action here cannot give a substantial remedy, we are
at liberty to decline jurisdiction."
155 Mass. 180.
The provision of the statute of New York now in question, making
the officers of a corporation who sign and record a false
certificate of the amount of its capital stock, liable for all its
debts, is in no sense a criminal or
quasi-criminal law.
The statute, while it enables persons complying with its provisions
to do business as a corporation, without being subject to the
liability of general partners, takes pains to secure and maintain a
proper corporate fund for the payment of the corporate debts. With
this aim, it makes the stockholders individually liable for the
debts of the corporation until the capital stock is paid in, and a
certificate of the payment made by the officers, and makes the
officers liable for any false and material representation in that
certificate. The individual liability of the stockholders takes the
place of a corporate fund until that fund has been duly created,
and the individual liability of the officers takes the place of the
fund in case their statement that it has been duly created is
false. If the officers do not truly state and record the facts
which exempt them from liability, they are made liable directly to
every creditor of the company who by reason of their wrongful acts
has not the security for the payment of his debt out of the
corporate property on which he had a right to rely. As the statute
imposes a burdensome liability on the officers for their wrongful
act, it may well be considered penal in the sense that it should be
strictly construed. But as it gives a civil remedy at the private
suit of the creditor only, and measured by the amount of his debt,
it is as to him clearly remedial. To maintain such a suit is not to
administer a punishment imposed upon an offender against
Page 146 U. S. 677
the state, but simply to enforce a private right secured under
its laws to an individual. We can see no just ground, on principle,
for holding such a statute to be a penal law in the sense that it
cannot be enforced in a foreign state or country.
The decisions of the Court of Appeals of New York, so far as
they have been brought to our notice, fall short of holding that
the liability imposed upon the officers of the corporation by such
statutes is a punishment or penalty which cannot be enforced in
another state.
In
Garrison v. Howe, the court held that the statute
was so far penal that it must be construed strictly, and therefore
the officers could not be charged with a debt of the corporation,
which was neither contracted nor existing during a default in
making the report required by the statute, and Chief Justice Denio,
in delivering judgment, said:
"If the statute were simply a remedial one, it might be said
that the plaintiff's case was within its equity; for the general
object of the law doubtless was, beside enforcing the duty of
making reports for the benefit of all concerned, to enable parties
proposing to deal with the corporation to see whether they could
safely do so. . . . But the provision is highly penal, and the
rules of law do not permit us to extend it by construction to cases
not fairly within the language."
17 N.Y. 458, 465-466.
In
Jones v. Barlow, it was accordingly held that
officers were only liable for debts actually due, and for which a
present right of action exists against the corporation, and the
court said:
"Although the obligation is wholly statutory and adjudged to be
a penalty, it is in substance, as it is in form, a remedy for the
collection of the corporate debts. The act is penal as against the
defaulting trustees, but is remedial in favor of creditors. The
liability of defaulting trustees is measured by the obligation of
the company, and a discharge of the obligations of the company, or
a release of the debt, bars the action against the trustees."
62 N.Y. 202, 205-206.
The other cases in that court, cited in the Court of Appeals of
Maryland in the present case, adjudged only the following points:
within the meaning of a statute of limitations applicable to
private actions only, the action against an
Page 146 U. S. 678
officer is not "upon a liability created by statute, other than
a penalty or forfeiture," which would be barred in six years, but
is barred in three years as "an action upon a statute for a penalty
or forfeiture where action is given to the party aggrieved,"
because the provisions in question, said the court, "impose a
penalty, or a liability in that nature."
merchants' Bank v.
Bliss, 35 N.Y. 412, 417. A count against a person as an
officer for not filing a report cannot be joined with one against
him as a stockholder for debts contracted before a report is filed,
that being "an action on contract."
Wiles v. Suydam, 64
N.Y. 173, 176. The action against an officer is an action
ex
delicto, and therefore does not survive against his personal
representatives.
Stokes v. Stickney, 96 N.Y. 323.
In a later case than any of these, the court, in affirming the
very judgment now sued on, and adjudging the statute of 1875 to be
constitutional and valid, said that
"while liability, within the provision in question, is in some
sense penal in its character, it may have been intended for the
protection of creditors of corporations created pursuant to that
statute."
Huntington v. Attrill, 118 N.Y. 365, 378. And where
such an action against an officer went to judgment before the death
of either party, it was decided that "the original wrong was merged
in the judgment, and that then became property, with all the
attributes of a judgment in an action ex contractu," and that if,
after a reversal of judgment for the plaintiff, both parties died,
the plaintiff's representatives might maintain an appeal from the
judgment of reversal, and have the defendant's representatives
summoned in.
Carr v. Rischer, 119 N.Y. 117, 124.
We do not refer to these decisions as evidence in this case of
the law of New York, because in the courts of Maryland, that law
could only be proved as a fact, and was hardly open to proof on the
demurrer, and, if not proved in those courts, could not be taken
judicial notice of by this Court on this writ of error.
Hanley
v. Donoghue, 116 U. S. 1;
Chicago & Alton Railroad v. Wiggins Ferry Co.,
119 U. S. 615;
Wernwag v. Pawling, 5 Gill & Johns. 500, 508;
Coates v. Mackey, 56
Page 146 U. S. 679
Md. 416, 419. Nor, for reasons to be stated presently, could
those decisions in any view be regarded as concluding the courts of
Maryland, or this Court, upon the question whether this statute is
a penal law in the international sense. But they are entitled to
great consideration, because made by a court of high authority,
construing the terms of a statute with which it was peculiarly
familiar, and it is satisfactory to find no adjudication of that
court inconsistent with the view which we take of the liability in
question.
That court and some others, indeed, have held that the liability
of officers under such a statute is so far in the nature of a
penalty that the creditors of the corporation have no vested right
therein, which cannot be taken away by a repeal of the statute
before judgment in an action brought thereon.
Victory Co. v.
Beecher, 97 N.Y. 651, 26 Hun. 48;
Union Iron Co. v.
Pierce, 4 Bissell 327;
Breitung v. Lindauer, 37 Mich.
217, 230;
Gregory v. German Bank, 3 Colo. 332. But whether
that is so, or whether, within the decision of this Court in
Hawthorne v.
Calef, 2 Wall. 10,
69 U. S. 23, such
a repeal so affects the security which the creditor had when his
debt was contracted as to impair the obligation of his contract
with the corporation, is aside from the question now before us.
It is true that the courts of some states, including Maryland,
have declined to enforce a similar liability imposed by the statute
of another state. But in each of those cases it appears to have
been assumed to be a sufficient ground for that conclusion that the
liability was not founded in contract, but was in the nature of a
penalty imposed by statute, and no reasons were given for
considering the statute a penal law, in the strict, primary, and
international sense.
Derrickson v. Smith, 27 N.J.Law 166;
Halsey v. McLean, 12 Allen 438;
First National Bank v.
Price, 33 Md. 487.
It is also true that in
Steam Engine Co. v. Hubbard,
101 U. S. 188,
101 U. S. 192,
Mr. Justice Clifford referred to those cases by way of argument.
But in that case, as well as in
Chase v. Curtis,
113 U. S. 452, the
only point adjudged was that such statutes were so far penal that
they must be construed
Page 146 U. S. 680
strictly, and in both cases jurisdiction was assumed by the
circuit court of the United States, and not doubted by this Court,
which could hardly have been if the statute had been deemed penal
within the maxim of international law. In
Flash v. Conn,
109 U. S. 371, the
liability sought to be enforced under the statute of New York was
the liability of a stockholder arising upon contract, and no
question was presented as to the nature of the liability of
officers.
But in
Hornor v. Henning, 93 U. S.
228, this Court declined to consider a similar liability
of officers of a corporation in the District of Columbia as a
penalty.
See also Neal v. Moultrie, 12 Ga. 104;
Cady
v. Sanford, 53 Vt. 632, 639-640;
Nickerson v.
Wheeler, 118 Mass. 295, 298;
Post v. Toledo &c.
Railroad, 144 Mass. 341, 345;
Woolverton v. Taylor,
132 Ill. 197; Morawetz on Corporations (2d ed.) § 908.
The case of
Missouri Pacific Railway v. Humes,
115 U. S. 513,
on which the defendant much relied, related only to the authority
of the legislature of a state to compel railroad corporations
neglecting to provide fences and cattle guards on the lines of
their roads to pay double damages to the owners of cattle injured
by reason of the neglect, and no question of the jurisdiction of
the courts of another state to maintain an action for such damages
was involved in the case, suggested by counsel, or in the mind of
the Court.
The true limits of the international rule are well stated in the
decision of the Judicial Committee of the Privy Council of England
upon an appeal from Canada in an action brought by the present
plaintiff against Attrill in the Province of Ontario upon the
judgment to enforce which the present suit was brought. The
Canadian judges, having in evidence before them some of the cases
in the Court of Appeals of New York above referred to, as well as
the testimony of a well known lawyer of New York that such statutes
were, and had been held by that court to be, strictly penal and
punitive, differed in opinion upon the question whether the statute
of New York was a penal law which could not be enforced in another
country, as well as upon the question whether the view taken by
Page 146 U. S. 681
the courts of New York should be conclusive upon foreign courts,
and finally gave judgment for the defendant.
Huntington v.
Attrill, 17 Ont. 245, and 18 Ont.App. 136.
In the Privy Council, Lord Watson, speaking for Lord Chancellor
Halsbury and other judges as well as for himself, delivered an
opinion in favor of reversing the judgment below, and entering a
decree for the appellant, upon the ground that the action
"was not, in the sense of international law, penal, or, in other
words, an action on behalf of the government or community of the
State of New York for punishment of an offense against their
municipal law."
The fact that that opinion has not been found in any series of
reports readily accessible in this country, but only in 8 Times Law
Reports 341, affords special reasons for quoting some passages.
"The rule" of international law, said Lord Watson,
"had its foundation in the well recognized principle that
crimes, including in that term all breaches of public law
punishable by pecuniary mulct or otherwise at the instance of the
state government, or of some one representing the public, were
local in this sense that they were only cognizable and punishable
in the country where they were committed. Accordingly, no
proceeding, even in the shape of a civil suit, which had for its
object the enforcement by the state, whether directly or
indirectly, of punishment imposed for such breaches by the
lex
loci ought to be admitted in the courts of any other country.
In its ordinary acceptation, the word 'penal' might embrace
penalties for infractions of general law which did not constitute
offenses against the state; it might, for many legal purposes, be
applied with perfect propriety to penalties created by contract,
and it therefore, when taken by itself, failed to mark that
distinction between civil rights and criminal wrongs which was the
very essence of the international rule."
After observing that, in the opinion of the Judicial Committee,
the first passage above quoted from
Wisconsin v. Pelican Ins.
Co., 127 U. S. 265,
127 U. S. 290,
"disclosed the proper test for ascertaining whether an action was
penal, within the meaning of the rule," he added:
"A proceeding, in order to come within the scope of the rule,
must be in the nature of a suit in
Page 146 U. S. 682
favor of the state whose law had been infringed. All the
provisions of municipal statutes for the regulation of trade and
trading companies were presumably enacted in the interest and for
the benefit of the community at large, and persons who violated
those provisions were, in a certain sense, offenders against the
state law, as well as against individuals who might be injured by
their misconduct. But foreign tribunals did not regard those
violations of statute law as offenses against the state unless
their vindication rested with the state itself or with the
community which it represented. Penalties might be attached to
them, but that circumstance would not bring them within the rule
except in cases where those penalties were recoverable at the
instance of the state, or of an official duly authorized to
prosecute on its behalf, or of a member of the public in the
character of a common informer. An action by the latter was
regarded as an
actio popularis, pursued, not in his
individual interest, but in the interest of the whole
community."
He had already, in an earlier part of the opinion, observed:
"Their lordships could not assent to the proposition that, in
considering whether the present action was penal in such sense as
to oust their jurisdiction, the courts of Ontario were bound to pay
absolute deference to any interpretation which might have been put
upon the statute of 1875 in the State of New York. They had to
construe and apply an international rule, which was a matter of law
entirely within the cognizance of the foreign court whose
jurisdiction was invoked. Judicial decisions in the state where the
cause of action arose were not precedents which must be followed,
although the reasoning upon which they were founded must always
receive careful consideration and might be conclusive. The court
appealed to must determine for itself, in the first place, the
substance of the right sought to be enforced; and, in the second
place, whether its enforcement would, either directly or
indirectly, involve the execution of the penal law of another
state. Were any other principle to guide its decision, a court
might find itself in the position of giving effect in one case, and
denying effect in another, to suits of the same character, in
consequence
Page 146 U. S. 683
of the causes of action having arisen in different countries, or
in the predicament of being constrained to give effect to laws
which were, in its own judgment, strictly penal."
In this view, that the question is not one of local, but of
international, law, we fully concur. The test is not by what name
the statute is called by the legislature or the courts of the state
in which it was passed, but whether it appears to the tribunal
which is called upon to enforce it to be in its essential character
and effect a punishment of an offense against the public or a grant
of a civil right to a private person.
In this country, the question of international law must be
determined in the first instance by the court, state or national,
in which the suit is brought. If the suit is brought in a circuit
court of the United States, it is one of those questions of general
jurisprudence which that court must decide for itself, uncontrolled
by local decisions.
Burgess v. Seligman, 107 U. S.
20,
107 U. S. 330;
Texas & Pacific Railway v. Cox, 145 U.
S. 593,
145 U. S. 605,
above cited. If a suit on the original liability under the statute
of one state is brought in a court of another state, the
Constitution and laws of the United States have not authorized its
decision upon such a question to be reviewed by this Court.
New
York Ins. Co. v. Hendren, 92 U. S. 286;
Roth v. Ehman, 107 U. S. 319. But
if the original liability has passed into judgment in one state,
the courts of another state, when asked to enforce it, are bound by
the Constitution and laws of the United States to give full faith
and credit to that judgment, and if they do not, their decision, as
said at the outset of this opinion, may be reviewed and reversed by
this Court on writ of error. The essential nature and real
foundation of a cause of action, indeed, are not changed by
recovering judgment upon it. This was directly adjudged in
Wisconsin v. Pelican Ins. Co., above cited. The difference
is only in the appellate jurisdiction of this Court in the one case
or in the other.
If a suit to enforce a judgment rendered in one state, and which
has not changed the essential nature of the liability, is brought
in the courts of another state, this Court, in order to determine,
on writ of error, whether the highest court of the latter state has
given full faith and credit to the judgment,
Page 146 U. S. 684
must determine for itself whether the original cause of action
is penal in the international sense. The case in this regard is
analogous to one arising under the clause of the Constitution which
forbids a state to pass any law impairing the obligation of
contracts, in which, if the highest court of a state decides
nothing but the original construction and obligation of a contract,
this Court has no jurisdiction to review its decision, but if the
state court gives effect to a subsequent law, which is impugned as
impairing the obligation of a contract, this Court has power, in
order to determine whether any contract has been impaired, to
decide for itself what the true construction of the contract is.
New Orleans Waterworks Co. v. Louisiana Sugar Co.,
125 U. S. 18,
125 U. S. 38. So
if the state court, in an action to enforce the original liability
under the law of another state, passes upon the nature of that
liability and nothing else, this Court cannot review its decision;
but if the state court declines to give full faith and credit to a
judgment of another state because of its opinion as to the nature
of the cause of action on which the judgment was recovered, this
Court, in determining whether full faith and credit have been given
to that judgment, must decide for itself the nature of the original
liability.
Whether the Court of Appeals of Maryland gave full faith and
credit to the judgment recovered by this plaintiff in New York
depends upon the true construction of the provisions of the
Constitution of the act of Congress upon that subject.
The provision of the Constitution is as follows:
"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."
Article IV, Section 1.
This clause of the Constitution, like the less perfect provision
on the subject in the Articles of Confederation, as observed by Mr.
Justice Story, "was intended to give the same conclusive effect to
judgments of all the states, so as to promote uniformity, as well
as certainty, in the rule among them," and had three distinct
objects: first, to declare, and
Page 146 U. S. 685
by its own force establish, that full faith and credit should be
given to the judgments of every other state; second, to authorize
Congress to prescribe the manner of authenticating them; and,
third, to authorize Congress to prescribe their effect when so
authenticated. Story on the Constitution §§ 1307-1308.
Congress, in the exercise of the power so conferred, besides
prescribing the manner in which the records and judicial
proceedings of any state may be authenticated, has defined the
effect thereof, by enacting that
"the said records and judicial proceedings, so authenticated,
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 which they are taken."
Rev.Stat. § 905, reenacting Act of May 26, 1790, c. 11, 1 Stat.
122.
These provisions of the Constitution and laws of the United
States are necessarily to be read in the light of some established
principles, which they were not intended to overthrow. They give no
effect to judgments of a court which had no jurisdiction of the
subject matter or of the parties.
D'Arcy v.
Ketchum, 11 How. 165;
Thompson
v. Whitman, 18 Wall. 457. And they confer no new
jurisdiction on the courts of any state, and therefore do not
authorize them to take jurisdiction of a suit or prosecution of
such a penal nature that it cannot, on settled rules of public and
international law, be entertained by the judiciary of any other
state than that in which the penalty was incurred.
Wisconsin v.
Pelican Ins. Co., above cited.
Nor do these provisions put the judgments of other states upon
the footing of domestic judgments to be enforced by execution; but
they leave the manner in which they may be enforced to the law of
the state in which they are sued on, pleaded, or offered in
evidence.
McElmoyle v.
Cohen, 13 Pet. 312,
38 U. S. 325.
But when duly pleaded and proved in a court of that state, they
have the effect of being not merely
prima facie evidence,
but conclusive proof of the rights thereby adjudicated, and a
refusal to give them the force and effect in this respect which
they had in the state in which they
Page 146 U. S. 686
were rendered denies to the party a right secured to him by the
Constitution and laws of the United States.
Christmas
v. Russell, 5 Wall. 290;
Green v.
Van Buskirk, 5 Wall. 307, and
74 U. S. 7 Wall.
139;
Insurance Co. v. Harris, 97 U. S.
331,
97 U. S. 336;
Crescent City Co. v. Butchers' Union, 120 U.
S. 141,
120 U. S.
146-147;
Carpenter v. Strange, 141 U. S.
87.
The judgment rendered by a court of the State of New York now in
question is not impugned for any want of jurisdiction in that
court. The statute under which that judgment was recovered was not,
for the reasons already stated at length, a penal law in the
international sense. The faith and credit, force and effect which
that judgment had by law and usage in New York was to be conclusive
evidence of a direct civil liability from the individual defendant
to the individual plaintiff for a certain sum of money, and a debt
of record on which an action would lie as on any other civil
judgment
inter partes. The Court of Appeals of Maryland,
therefore, in deciding this case against the plaintiff upon the
ground that the judgment was not one which it was bound in any
manner to enforce, denied to the judgment the full faith, credit,
and effect to which it was entitled under the Constitution and laws
of the United States.
Judgment reversed and case remanded to the Court of Appeals
of the State of Maryland for further proceedings not inconsistent
with the opinion of this Court.
*
"SEC. 21. If any certificate or report made or public notice
given by the officers of any such corporation shall be false in any
material representation, all the officers who shall have signed the
same shall be jointly and severally liable for all the debts of the
corporation contracted while they are officers thereof."
"SEC. 37. In limited liability companies, all the stockholders
shall be severally individually liable to the creditors of the
company in which they are stockholders, to an amount equal to the
amount of stock held by them, respectively, for all debts and
contracts made by such company, until the whole amount of capital
stock fixed and limited by such company has been paid in and a
certificate thereof has been made and recorded as hereinafter
prescribed. . . . The capital stock of every such limited liability
company shall be paid in one-half thereof within one year and the
other half thereof within two years from the incorporation of said
company, or such corporation shall be dissolved. The directors of
every such company, within thirty days after the payment of the
last installment of the capital stock, shall make a certificate
stating the amount of the capital so paid in, which certificate
shall be signed and sworn to by the president and a majority of the
directors, and they shall, within in the said thirty days, record
the same in the office of the Secretary of State, and of the county
in which the principal business office of such corporation is
situated."
"SEC. 38. The dissolution, for any cause whatever, of any
corporation created as aforesaid shall not take away or impair any
remedy given against such corporation, its stockholders or
officers, for any liabilities incurred previous to its
dissolution."
MR. CHIEF JUSTICE FULLER, dissenting.
This suit was not an action at law to recover judgment in
Maryland upon the judgment in New York, nor was it an ordinary
creditors' bill brought by a creditor to reach equitable assets.
The judgment and execution had no extraterritorial force, and
Huntington was a judgment creditor in New York only. It was the
bill of a creditor at large to set aside an alleged fraudulent
transfer, judgment not being essential under the statute of
Maryland in that behalf. It could not have been sustained at all
but for that act, and it did not assume to proceed upon the theory
that the transfer was invalid because
Page 146 U. S. 687
made with intent to defeat the collection of the judgment as
such. The judgment of another state could not be made executory in
Maryland either at law or in equity.
The ground of relief in this case was the charge that Attrill
and transferred certain stock in April, 1882, with intent to
hinder, delay, and defraud the plaintiff of his lawful suits,
debts, and demands in respect of a liability of Attrill to him as a
stockholder and as a director of the Rockaway Company, which
accrued in 1880 upon the statute of New York under which that
company was organized. An action upon this liability, either as
stockholder or director, was barred by the statute of limitations
of Maryland, and so the Maryland court held. The judgment recovered
in New York in 1886 by Huntington against Attrill upon the alleged
liability as a director was, however, referred to and made part of
the bill, and in this judgment that cause of action had been
merged, and it was averred that the transfer was fraudulent as to
the indebtedness arising "out of the cause of action on which the
judgment hereinbefore recited has been recovered," which was set
forth in detail.
The New York statute was made part of the pleading, and admitted
as a fact by the demurrer, and, while the Maryland court held that
the judgment was conclusive evidence of its existence in the form
and under the circumstances stated in the pleadings, it regarded it
as not changing the character of the liability upon which it was
based. The record established the relation of debtor and creditor
at the time stated and the amount and fact of the indebtedness, but
nothing further.
As plaintiff had no judgment in Maryland, and had not sought to
recover one, the pleader, in order to make out the alleged fraud as
perpetrated in 1882, went into the original cause of action at
large and invited the attention of the court to its nature. The
question at once arose whether the courts of Maryland were
constrained to enforce such a cause of action, although record
evidence of its maintenance in New York existed in the form of a
judgment there. The court held that the liability was not one
arising upon contract, but one imposed
Page 146 U. S. 688
upon Attrill as a wrongdoer; that under the statute, no inquiry
was to be made whether the creditor had been deceived and induced
by deception to lend his money or to give credit, or whether he had
incurred loss to any extent by the inability of the corporation to
pay, nor was the recovery limited to the amount of the loss
sustained; that all that it was necessary to show was that the act
had been committed, and thereupon any creditor was entitled to
recover the full amount of his debt.
See Torbett v. Eaton,
113 N.Y. 623;
s.c., 49 Hun. 209;
Huntington v.
Attrill, 118 N.Y. 365. Hence, the court concluded that the
liability was in the nature of a penalty within the rule
theretofore laid down by the courts of New York,
Merchants'
Bank v. Bliss, 35 N.Y. 412;
Wiles v. Suydam, 64 N.Y.
173;
Stokes v. Stickney, 96 N.Y. 323;
Chase v.
Curtis, 113 U. S. 452;
Flash v. Conn, 109 U. S. 371, and
by the courts of Maryland:
Bank v. Price, 33 Md. 487;
Norris v. Wrenschall, 34 Md. 492. Its enforcement was
therefore declined, and the bill dismissed.
It was for the Maryland court to determine whether such
enforcement would either directly or indirectly involve the
execution of the penal laws of another state, and although it might
have been mistaken in the conclusion arrived at, such error does
not give this Court jurisdiction to review its judgment. State
courts do not adjudicate in the matter of the enforceability of
statutory delicts at their peril.
In my opinion, the Maryland court gave all the force and effect
to the judgment in question to which it was entitled. The pleadings
were necessarily confined to the equities arising out of the
original cause of action, and full faith and credit were accorded
to the judgment as matter of evidence. Its effect as such could not
render it incompetent for the state court to decide for itself the
question which was raised upon the record. As there presented, it
was for that court to say whether the obligation on Attrill to pay
the sum for which the judgment was given was an obligation which
the Maryland court was bound to recognize as proper foundation for
relief in equity in respect of the transfer of April, 1882.
Page 146 U. S. 689
I think that no federal question was involved, and that the writ
of error ought to be dismissed.
MR. JUSTICE LAMAR and MR. JUSTICE SHIRAS, not having heard the
argument, took no part in the decision of this case.