Pond v. Cooke

Park, C. J.

The defendant was appointed a receiver of the insolvent Watson Manufacturing Company by the court in the state of New Jersey where the company was incorporated and its assets were located. The defendant under his appointment took possession of the property and assets of the company, and as receiver purchased the iron in question in this case, and had it prepared for the construction of a bridge between the towns of New Haven and Orange in this state. The iron was thus prepared in the state of New Jersey, whence he had it shipped to New Haven to his address as receiver. The Watson Manufacturing Company had previously made a contract with the towns of New Haven and Orange for the construction of the bridge, and what the defendant did was done to carry out and complete the contract, for the benefit of the creditors of the company,

Thus it appears that the property was in the possession of the defendant as receiver when it came into this state. He w;as invested with it, and was legitimately performing the duties of his appointment in completing the contract by its use when it was attached by the plaintiff. In these circumstances comity among the states requires that the case should be regarded by our courts precisely as it would have been by *131 the courts of New Jersey if the controversy had arisen there. | In the case of Wales v. Alden, 22 Pick., 245 , an inhabitant of Boston being in New York, an assignment of goods and dioses in action was made to him in trust for the benefit of the creditors of the assignors, who were inhabitants of New York. The trustee took possession of the property in New York, but did not remove it out of the state. On his return to Boston he was served with process of garnishment by a creditor of the assignors living in Massachusetts. The claim of the creditor was based upon the assignment in New York. He insisted that by the maxim of law personal property follows the person, and that consequently the property assigned was with the trustee in Massachusetts; and that inasmuch as the assignment was made under the laws of New York, which had no effect in Massachusetts, he had obtained the prior right by his attachment. The court, in commenting upon this claim of the creditor, said — “ The trustee took the goods for a lawful purpose, and by a title indefeasible where the transaction took place, and under the laws of New York, to which he was amenable. He was bound, as well in conscience as by law, to execute the trust according to the terms of the conveyance under which he took the property. His coming into this commonwealth ought not to defeat such a conveyance, and discharge him from his legal and conscientious obligations, even though it should be held that, if such an assignment had been made here, it could not hold against attaching creditors.” In the case of Clark v. The Connecticut Peat Company, 35 Conn., 303 , a debt was attached in this state which was owed to creditors in Massachusetts, but which had previously been assigned in that state to a party residing there, and it was held .that the assignment, being good by the law of Massachusetts, was good against the attaching creditor. Judge Hinman, in giving the opinion of the court, said — “If by the law of Massachusetts the plaintiff acquired a valid title as assignee of this debt by the assignment before the attachment here, how can that attachment in any way affect that title ? When a legal title is once vested by a sale valid in the place where made, its validity should be recognized *132 everywhere.” See also Mead v. Dayton, 28 Conn., 33 , and Koster v. Merritt, 32 Conn., 246 .

But it is said that in the case at bar the receiver was appointed by the court in New Jersey, in conformity with the local law of the state, which had no authority beyond the limits of the state, and that consequently when the property came here it came free from all the right and title'whioh the receiver had to it while it remained in the state of New Jersey. There would be force in this claim if the property- was here when the receiver was appointed in New Jersey, and the receiver had never taken possession of it previous to theattachment by the plaintiff. In that case the local law of New Jersey could not vest property in the receiver which was located here. Upton v. Hubbard, 28 Conn., 274 ; Paine v. Lester, 44 Conn., 196 ; Taylor v. Columbian Ins. Co., 14 Allen, 353 ; Willitts v. Waite, 25 New York, 577. And many other cases might be cited to the same effect. But when property has once vested in a trustee, assignee, or receiver, by the law of the state where the property is situ- ' ated, it makes no difference whether it is done under the local law of the state or under the common law. The law of another state will not divest the trustee, assignee or receiver of his right to the property, should he take it into such state in the performance of his duty. The courts ,of such state will inquire whether he has such right to the property when it comes into the state as between himself and their own citizens, but when the fact that he has such right is ascertained they will not regard it as important by what mode the right was acquired. In the case of Crapo v. Kelly, 16 Wallace, 610, where personal property located in Massachusetts was transferred to an assignee by proceedings in insolvency under } the local laws of that state, and the property afterwards being in New York was attached by a creditor of the insolvent residing there, it. was held that the assignee had the prior right to the property. The case had been previously decided by the Court of Appeals in the state of New York. 45 New York, 86. Although the court came to a different result from the decision in Wallace, still the two courts harmonized, so *133 far as the law under consideration is concerned. The only difference between that case and the one at bar consists in the fact that an assignee was appointed in that case and a receiver in this. The case cited from the 22 Pickering scarcely differs from the present in any other respect. The court would not allow the fiction of law, everywhere established, and in no state more than in Massachusetts, that personal property follows the person, to give a preference to the attaching creditor. But the object to be accomplished by the appointment of an assignee in those cases, and a receiver in this, was the same. Each was appointed to settle the estate and divide the property among the creditors of the insolvent. Calling the administrator of the estate in such cases by different names does not alter his character or the nature of his duties. A receiver, appointed under the statute of New York directing proceedings .against insolvent corporations, is a standing assignee, vested with nearly all the powers and authority of the assignee of an insolvent debtor. 4 Paige, 224 . One of the modes in the state of New Jersey to settle the insolvent estate of a corporation, under their statute, is by the appointment of a receiver. And whether the title to the property in such case passes to the receiver, or remains technically with the corporation, is a matter of no importance, so long as the property is taken from the corporation, and placed in the hands of the receiver, with full power, under the direction of the court, to settle the estate of the corporation. The plaintiff refers us to High on Receivers, and insists that a receiver has only the custody of the property committed to his keeping. But the author, in the references cited, is merely treating of receivers appointed pendente lite, under the ordinary powers of a court of chancery. Such references throw no light upon the pending question.

The statute of New Jersey under which this receiver was appointed authorizes proceedings against insolvent corporations, like the Watson Manufacturing Company, to settle their estates by dividing their property among their creditors in a similar manner to other insolvent statutes in other states where trustees are appointed. Obviously, in the state of New *134 i Jersey the property in question could not have been taken from the receiver by a creditor of the corporation; and we think it should not be done here. We think the case should be treated here precisely as it would have been by the courts of New Jersey if the controversy had arisen there.

The only remaining question to be considered is, whether the defendants have made full defence in the pending case. We think the cases of Clark v. Gaylord, 24 Conn., 484 , Fitch v. Chapman, 28 Conn., 257 , and Dayton v. Merritt, 33 Conn., 184 , are decisive of this question in favor of the defendants* and further comment in regard to it is unnecessary.

We advise judgment in favor of the defendants.

In this opinion the other judges concurred.