Page:The Green Bag (1889–1914), Volume 06.pdf/196

 Foreign Receivers and Judicial Assignees. which are protected by this principle, consist chiefly .in the right to get a preference over other creditors of the insolvent, by seizing, under attachments, any property of the in solvent which may be found within the state of the domicile of such creditors. The rule of comity under consideration is, therefore, never allowed to operate, as a national bank ruptcy law would operate, to secure a ratable distribution of all the assets of the insolvent, among all his creditors, without reference to their domicile, provided there are in any state local creditors and local "assets. The insolvents whose assets pass into judicial administration are now, in most cases, incor porated companies. It is a doctrine con stantly reiterated by American judges, and seldom dissented from, that the assets of a bankruptcy, made in England, was good to pass personal property situated in New York, as against the bankrupt himself ami his ereditors residing in England" (Plestoro v. Abraham, I Paige [X. Y.] 236). And such is the generally conceded law. In 1835 the Court of Appeals of New York, in a learned and laborious opinion by Karl, J., went over the decisions in that state relating to this ques tion, analyzed them with care, and announced the following doctrine : " I. The statutes of foreign states can, in no case, have any force or effect in this state, e.r propria vigore, and hence the statutory title of foreign assignees in bank ruptcy can have no recognition here solely by virtue of the foreign statute. 2. But the comity of nations, which, Judge Denio said in Petersen v. Chemical Hank, 32 N. Y. 21, is a part of the common law, — allows a certain effect here to titles derived under, and power created by the laws of other countries, and from such comity the titles of foreign statutory assignees are recognised and enforced here, when they can be without injustice to our own citizens, and without prejudice to the rights of creditors pursuing their remedies here, under our statutes; provided also, that such titles are not in conflict with the laws or the public policy of our state. 3. Such foreign assignees can appear, and, subject to the conditions above mentioned, maintain suits in our courts against debtors of the bankrupt whom they represent, and against others who have interfered with or withhold the property of the bankrupt." Re Waite, 99 N. Y. 433, 448. The court regarded these propositions as a legitimate deduction from the following decisions: Petersen v. Chemical Hank, 32 X. Y. 21; Kelly v. Crapo, 45 X. Y. 86; Osgood v. Maguire, 61 X. Y. 524; Hibernia National Bank v. Lacombe, 84 X. Y. 367; Re Bristol, 16 Abb. Pr. (N.Y.) 184; Runk v. St. John, 29 Barb. (X. Y.) 585; Barclay v. Quicksilver Mining Co., 6 Lans. (X. Y.) 25; Hooper v. Tuckerman, 3 Sandf. (X. Y.) 311; Olyphant v. Atwood, 4 Bosw. (X. Y.) 459; Hunt v. Jackson, 5 Blatch. (U. S.) 349.

171

corporation are a trust fund for its cred itors. This necessarily means that they are a trust fund for all its creditors, and not for particular creditors who may chance to get preferences over the others. But the rule which allows ravenous local creditors to pounce upon and appropriate all the assets of a non-resident corporation which may be found within the state of the resi dence of such creditors, turns this trust fund doctrine into a mere mockery. But where the right of the domestic creditor to secure a preference out of the assets of the so-called foreign insolvent is not involved, the decisions of the most enlightened Am erican courts, in dealing with this subject, proceed on lines of comity and justice. The liberal genius of the courts of New York has conceded the principle that a judicial trans fer, in invitnm, of the property of an insol vent debtor, such as will estop the debtor in the jurisdiction where the proceeding takes place, will estop him everywhere.1 It is also to be noted that, contrary to the doctrine recently held by the Supreme Court of Indiana in the decision already referred to, several of the courts hold that, as be tween a foreign receiver, assignee, or other representative of creditors, suing in his repre sentative character, and a particular cred 1 Thus, an assignment under the English bankrupt law was held to estop the bankrupt in respect of personal prop erty situated in New York, though emphasis was laid on the fact that the bankrupt appeared in England and volun tarily assented to the proceeding. Matter of Waite, 99 X. Y. 433. So, it has been held by the chancery court of Xew Jersey, that that court will, on principles [of comity, extend its aid to a receiver of a foreign corporation, seek ing to obtain the possession of the property of the corpo ration situated in New Jersey, as against the officers of the corporation, who are endeavoring, by fraud or subterfuge, to withhold the possession of such property from the re ceiver, — no claims of domestic creditors being involved; and that, to that end, it will set aside a judgment at law, rendered in a court of Xew Jersey, fraudulently and collusively concocted by such officers, for the purpose of pro tecting them in the possession of the property as against the receiver, the creditors and the stockholders of the corporation. Bidlack v. Mason, 36 X.J. Eq. 230; cited with approval in National Trust Co. v. Miller, n X. J. Eq. 155- «59-