Bank of the Valley v. Gettinger

1. The question of the jurisdiction of the circuit court can only he raised by plea in abatement. Code 1860, chap. 171, sec. 19. % A voluntary assignment, made in another State, of a debt due from a citizen and resident of this State, to a resident of such other State, passes the debt to the assignee at the time of the assignment so as to defeat a subsequent attaching creditor of the assignor in this State, whose attachment was issued and served on the debtor of the assignor after the assignment and before such debtor had' notice of it; But otherwise as to involuntary or coercive assignments.

This ease arose in Berkeley county. The summons was issued on the 30th of March, 18(56. The questions which were determined by this court,, and through which the judgment below was affirmed, were upon the pleadings and are stated in the opinion of the judge. The court, however, by consent and desire of the parties, considered the questions that would arise in the circuit court on the hearing of the petition of the assignee of the plaintiff in error, which renders necessary a further statement of the facts on one point involved, as to whether the assignment of the plaintiff in error was voluntary. That assignment was made in pursuance of an order of the board of directors of the Bank of the Valley, made on the 10th of March, 1866. The resolution of the board, which was passed unanimously, provided for the sale of the effects of the bank and collection of all sums due it, to be applied to the payment of debts, under certain restrictions and in a manner specified therein, The deed of assignment was made on the same day of the passage of the order and made Henry M. Brent, the former cashier, the trustee. 2.A corporate body as well as a private individual, when In failing circumstances, and unable to redeem its paper, may without any statute provision, and upon general principles of equity, assign its property to a trustee, in trust to collect its debts, and make distribution among its creditors. 8 Barb., chapter 219, 224, affirmed on appeal; 8 Comstock, 233; 6 Conn., 233; 3 Wendell, 13; 2 Kent’s Com. 315. 2. In this ease the assignment of the Bank of the Yalley, although altogether voluntary, was under the authority of an act of the legislature of Virginia passed on the 22th of February, 1866, and in conformity to the provisions of that act. 3. This assignment to a trustee to- collect the debts and to make distribution of its assets was executed on the 10th day of March, 1865, and promptly thereafter placed upon the registry of those counties in this State, in which the bank was, at the time, the owner of real estate. 4. The summons and attachment sued out by the appel-lee against the assets of the Yalley Bank bears date the 30th of March, 1866, some twenty days subsequent to said assignment. If this assignment was valid, and operated a transfer to the trustee for the purposes of the trust, of the assets- of the bank within the limits of West Virginia, then there was no fund in this State subject to- attachment, and the summons and attachment should he dismissed. Much diversity of opinion has existed amongst jurists as to the effect of eompulsory assignments beyond the limits of the territorial jurisdiction in which they are made. It has been-argued that these compulsory conveyances — such as in cases of bankruptcy — being made in invitum — and deriving their authority from the force of a foreign statute, cannot operate upon any property except that which is within its own territory. The English doctrine is well established and gives full effect to assignments bj1' operation of law, even when brought in conflict with- the rights of its own creditors, and Chancellor Kent, in a most luminous and learned opinion in the case of Holmes vs. Remson, 4 Johns. Ohy. Rep., 460, has maintained the same doctrine as founded upon authority, justice and the comity of nations. But it is conceded that the weight of American authority is decidedly adverse to this view, and that an assignment abroad by act of law, has no legal operation extra ierritorium as against the claims of our own citizens. But such is not the received doctrine as to voluntary assignments. The law says, Story (conflicts'of law, sec. 411) makes a,solid distinction between the voluntary Conveyance of the owner and an involuntary legal conveyance by mere authority of the law. The former has no relation to place; the latter on the contrary has the strictest relation to place. It may, therefore, be considered settled, that a voluntary assignment by a party according to the law of his domicil, will pass his personal estate, whatever may be its locality, abroad as well as at home, p. 551. Black vs. Zacharie £ Go., 3flow., 514; Speed vs. May, 5 Harris, 91; Law vs. Mills, 6 Harris, 185; Means vs. Hapgood-, 19 Pick., 105; 1 Robinson’s New Practice, p. 153 to 156. The question for the consideration of this court is, whether the property attached by the defendant in error was liable to attachment as the property of the plaintiff in error, or whether it had passed by the assignment of the bank to its assignee so as to exempt it from attachment as the property of the bank. "We maintain first, that whatever may be the opinion of the court as to the validity of the attachment the judgment cannot be reversed. The motion to dismiss, made June 5th, 1867, was upon the ground that the bank was not a foreign corporation, and, therefore, was not liable to an attachment as a non-resident debtor. The assignment now set up was not then claimed or insisted on. This makes the same question that is made in the Bank of the Valley vs. Ihe Bank of Berkeley, now in the hands of the court. Assuming that that point was not well taken, and that the motion to dismiss was properly overruled, the action is right whatever may be the result as to the ownership of the property attached. The court was not then informed of the existence of the assignment, and, therefore, the judgment of the court refusing to dismiss the attachment cannot be reversed on account of the assignment. On the 26th of August, 1867, the bank appeared and filed a plea, setting up, the assignment in bar of ihe action. By filing a plea in bar the bank appeared and submitted itself to the jurisdiction of the court, and hence the attachment became wholly unimportant so far as the maintenance of the action and the judgment of the court are concerned. Whether the attachment appropriated the property attached or created a lien upon it was a question which could not arise until after judgment. This is a question that can only arise upon the judgments against the garnishees in attachment, and no such judgments have yet been rendered. No question can arise, therefore, upon this record as to the validity or effect of the' assignment. At present we are only dealing with the judgment of the oourt against the bank. The indebtedness of the bank is found by the jury, and is not controverted. A defence is set up in bar of the action, denying the plaintiff’s right to recovery, which only goes to the validity of the attachment. Hence whatever may be the opinion of the court as to the effect of the assignment or the validity of the attachment the judgment of the circuit court must be affirmed. As the circuit court will doubtless desire to know the opinion of this court as to the effect of the assignment and the validity of the attachment to enable it to dispose intelligently of the property attached, we propose now to consider that question. The 5th section of chapter 110, p. 566, of the Code of Virginia, provides that every deed or mortgage of real estate, or goods and chattels, shall be void as to creditors and subsequent purchasers until it is recorded in the county where the real estate or goods and chattels may be.' By. the agreed statement of facts, it is agreed that “the fund attached was in this (Berkeley) county, and that the parties in whose hands the same was attached, as well as the plaintiff, were residents of this county.” The replication alleged that the deed of assignment was never recorded in Berkeley county, and that neither the plaintiff nor the garnishees in attachment had any notice of its execution. The copy offered in evidence is taken from the records of Jefferson county. No issue is taken on the plaintiff’s replication. The record, therefore, shows that the deed was never recorded in Berkeley county. It is, therefore, void as against the plaintiff) who was a creditor of the assignee. It is well settled that every government has power and jurisdiction over all property within its limits without regard to the domicil of the owner. Story on Conflict of Laws, sec. 387, 390; Green vs. Van Buskirk, 5 Wallace, 307; Lanfrau vs. Sumner, 17 Mass. Bep., 110’; McNeil vs. Glass, 13 Martin’s Rep., 261; Lamb vs. Durant, 12 Mass. Rep., 54. Stautable assignments cannot operate beyond the territory of the sovereign by virtue of whose laws the assignment is made; to the prejudice of creditors in other countries. Story on Conflict of Laws, sec. 414, 416; Ingraham vs. Gegre, 13 Mass., 146; Harrison vs. Sperry, 5 Cranch; Blake vs. Williams, 6 Pick., 285. ■* An attachment of a debt, made before notice of its assignment, will prevail against the assignment, though notice ■ be given to the-debtor before judgment against him as garnishee. Judah vs, Judd, 5 Day, 534, (Conn!); Bishop vs. Holcombe, 10 Conn., 444; Van Buskirk vs. Hartford, F. I. Co., 14 Conn., 141; Ward vs. Morrison, 25 Vermont, 593; Gillairdet vs. Howell, 6 Am. Law Register, N. S., No. 9, p, 522, July, 1867.