1. Every State has jurisdiction to determine for itself the
liability of property within its territorial limits to seizure and
sale under the process of its courts. P.
294 U. S.
213.
2. A State may provide that the local assets of foreign and
domestic corporations shall remain subject to be attached by
creditors after the corporation have become insolvent and have been
dissolved. P.
294 U. S.
213.
3. This policy does not offend the full faith and credit clause
of the Constitution though it permit local creditor to secure and
enforce liens on the local assets of a foreign corporation after
the laws of its home State have dissolved it and transferred all of
its property to a statutory liquidator for the purpose of making
equal distribution among all of its creditors.
Converse v.
Hamilton, 224 U. S. 243,
distinguished. Pp.
294 U. S.
214-215.
4. A point not made in the court below nor in the petition for
certiorari will not be considered a a ground for reversal. P.
294 U. S. 216.
97 Mont. 503, 34 P.2d 982, affirmed.
Certiorari, 293 U.S. 546, to review a judgment entered by the
Supreme Court of Montana after an earlier hearing and remand of the
case by this Court.
See 292 U. S. 292 U.S.
112.
Page 294 U. S. 212
MR. JUSTICE CARDOZO delivered the opinion of the Court.
What is before us is another chapter of a controversy that was
here at the last term.
Clark v. Williard, 292 U.
S. 112.
The controversy is the outcome of conflicting claims to the
Montana assets of an Iowa corporation. On the one side is the
petitioner, the Insurance Commissioner of Iowa, claiming as
official liquidator. On the other side are the respondents,
judgment creditors of the corporation, armed with an execution
which they insist upon the right to levy. If the petitioner
prevails, there is equal distribution; if the respondents prevail,
the race is to the swift.
When the case was here before, the Supreme Court of Montana had
given priority to the judgment creditors, placing its ruling upon
the ground that the petitioner, the foreign liquidator, was not a
successor to the corporation, but a chancery receiver, with a
title, if any, created by the Iowa decree. 94 Mont. 508, 23 P.2d
959. We held that, under the statutes of Iowa, the liquidator was
the successor to the corporation, and not a mere custodian, and
that, in ruling to the contrary, the Supreme Court of Montana had
denied full faith and credit to the statutes of a sister state.
292 U. S. 292 U.S.
112,
292 U. S. 121.
The question was then an open one whether there was any local
policy, expressed in statute or decision, whereby the title of a
statutory successor was to be subordinated to later executions at
the suit of local creditors. As to that question, the Supreme Court
of Montana would speak the final word.
292 U. S. 292 U.S.
112,
292 U. S. 123.
The decree was accordingly
Page 294 U. S. 213
vacated and the cause remitted to the state court to the end
that the local policy might be made known through the one voice
that could declare it with ultimate authority.
The Supreme Court of Montana has reconsidered the conflicting
claims of liquidator and creditors in the light of that decision.
It has held (the Chief Justice and an Associate Justice dissenting)
that the local policy of the state permits attachments and
executions against insolvent corporations, foreign and domestic;
that the writs will not be halted though the effect of the levy may
be waste or inequality, and that this rule will prevail against a
statutory successor, clothed with title to the assets, just as much
as against the corporation itself or the trustees upon dissolution
or a chancery receiver.
Mieyr v. Federal Surety Co., 34
P.2d 982. A writ of certiorari brings the case to us again.
Every state has jurisdiction to determine for itself the
liability of property within its territorial limits to seizure and
sale under the process of its courts.
Green v.
Van Buskirk, 5 Wall. 307,
72 U. S. 312;
74 U. S. 7 Wall.
139;
Hervey v. Rhode Island Locomotive Works, 93 U. S.
664,
93 U. S. 671;
Security Trust Co. v. Dodd, Mead & Co., 173 U.
S. 624,
173 U. S. 628.
Montana does not challenge the standing of this foreign liquidator
as successor to the dissolved corporation or as owner of its
assets. On the contrary, his standing and ownership are now
explicitly conceded. All that Montana does by the decree under
review is to impose upon such ownership the lien of judgments and
executions in conformity with local law. In this there is no denial
to the statutes of Iowa or to its judicial proceedings of the faith
and credit owing to them under the Constitution of the United
States. United States Constitution, Article IV, § 1.
If the corporation were still in being, and still the owner of
the assets, its ownership would be subordinate
Page 294 U. S. 214
to the process of the local courts. So much would be conceded
everywhere. If title had been conveyed to an assignee for the
benefit of creditors by a common law assignment or by insolvency
proceedings, claimants in Montana might pursue their suits and
remedies in derogation of the assignment when the law or policy of
the locality ordained that this result should follow. So much,
again, is settled by unimpeachable authority.
Security Trust
Co. v. Dodd, Mead & Co., supra; Disconto Gesellschaft v.
Umbreit, 208 U. S. 570,
208 U. S.
579-580;
Cole v. Cunningham, 133 U.
S. 107;
Oakey v.
Bennett, 11 How. 33,
52 U. S. 44;
Ockerman v. Cross, 54 N.Y. 29;
Warner v. Jaffray,
96 N.Y. 248, 255;
Barth v. Backus, 140 N.Y. 230, 35 N.E.
425;
Ward v. Conn. Pipe Mfg. Co., 71 Conn. 345, 41 A.
1057;
Gilbert v. Hewetson, 79 Minn. 326, 82 N.W. 655. The
principle of these decisions applies with undiminished force to a
statutory successor. In respect of his subjection to the power of
the local law, his position is no better than that of the dissolved
corporation to whose title he has succeeded, or of its voluntary
assignee upon a trust for all the creditors. He must submit, as
must they, to the mandate of the sovereignty that has the physical
control of what he would reduce to his possession.
Cf. Disconto
Gesellschaft v. Umbreit, supra; City Bank Farmers Trust Co. v.
Schnader, 293 U. S. 112;
Cooper v. Philadelphia Worsted Co., 68 N.J.Eq. 622, at p.
629, 60 A. 352.
This is not to say that any uniform policy prevails among the
states when liquidators and creditors thus compete with one
another. The diversity of practice was pointed out, with citation
of the precedents, when the case was here before.
292 U. S. 292 U.S.
112, at
292 U. S. 122.
Some states prefer a rule of equal distribution, and compel the
local suitor to yield to the statutory successor (
Martyne v.
American Union Fire Ins. Co., 216 N.Y. 183, 110 N.E. 502),
though at times with precautionary conditions
Page 294 U. S. 215
(
292 U. S. 292 U.S.
112, at
292 U. S. 129;
People v. Granite State Provident Association, 161 N.Y.
492, 55 N.E. 1053). Other states give the local creditor a free
hand, with the result that he may seize what he can find, though
the assets of the debtor are dismembered in the process.
Lackmann v. Supreme Council, 142 Cal. 22, 75 P. 583;
Shloss v. Surety Co., 149 Iowa, 382, 128 N.W. 384;
Zacher v. Fidelity Trust & Safety-Vault Co., 109 Ky.
441, 59 S.W. 493. Choice is uncontrolled as between one policy and
the other so far as the Constitution of the Nation has any voice
upon the subject. Iowa may say that one who is a liquidator with
title, appointed by her statutes, shall be so recognized in Montana
with whatever rights and privileges accompany such recognition
according to Montana law. For failure to give adherence to that
principle, we reversed and remanded when the case was last before
us. Iowa may not say, however, that a liquidator with title who
goes into Montana may set at naught Montana law as to the
distribution of Montana assets, and carry over into another state
the rule of distribution prescribed by the statutes of the
domicile.
Converse v. Hamilton, 224 U. S. 243,
holds nothing to the contrary. A statutory liquidator of a
Minnesota corporation brought suit in Wisconsin against defendants
there residing to enforce their personal liability as stockholders
in accordance with a Minnesota statute. The only question was
whether the liquidator so appointed had capacity to sue. In the
view of the court, capacity and title were established by the laws
of Minnesota. United States Constitution, Article IV, § 1. The
ruling did not affect the power of Wisconsin to subject the
proceeds of the cause of action or any other assets to the claims
of local creditors. Nothing in the case suggests that creditors of
the Minnesota corporation were suing in Wisconsin, or that there
was threat of suit thereafter. The problem now here was left
untouched and unconsidered.
Page 294 U. S. 216
The petitioner makes a point that the property or part of it
subjected to the levy was not of such a nature as to have a situs
in Montana or to be amenable to process issuing from her courts. No
such point was made in the record of the proceedings in the court
below. No such point was made in this Court in the petition for
certiorari to bring the case here for review. It will not be
considered now.
Gunning v. Cooley, 281 U. S.
90,
281 U. S. 98;
Zellerbach Paper Co. v. Helvering, 293 U.
S. 172,
293 U. S. 182;
Helvering v. Taylor, 293 U. S. 507.
The decree should be affirmed, and it is so ordered.
Affirmed.