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Orient Insurance Co. v. Rudolph.

69 Eq.

non-resident debtor, a debt was due from a corporation of New York, doing business in Massachusetts and suable there. The debtor in the attachment suit was a resident of New York, and the plaintiff in the attachment suit was not a resident of New York. After the attachment the debtor in that suit sued the New York corporation in New York for the debt, and it was held that the attachment of the debt in Massachusetts was no defence. The decision was put mainly upon the ground that in contemplation of law the corporation debtor and the debt, as belonging to the New York creditor, were in contemplation of law, both in the State of New York, at the time of issuing the attachment, and not in the State of Massachusetts. The legal theory of situs was applied to a debt under the attachment laws. In the Chambers Case, supra, Vice-Chancellor Pitney discussed this decision exhaustively and repudiated its doctrine. of applying the theory of situs to debts and other choses in action under attachment and garnishment laws. His decision has never been questioned in this state, and the view that a debt is attachable wherever it can be sued on, and that the strict theory of situs is not applicable, has since been approved by the supreme court of the United States, not only on principle, but on the authority of the best-considered cases. Chicago, &c., Railway Co. v. Sturm, 174 U. S. 710 (1899), and cases cited at p. 717. In this situation of the authorities there can be no question that the decision in the Douglass Case should not be followed in New Jersey, even if it were certainly applicable. But on examining the decision in the Douglass Case it will appear, I think, that the circumstance that the Massachusetts courts had no jurisdiction of the person of the debtor in attachment was relied on. In the present case the judgment was rendered after personal service of process, and the supplementary proceedings are merely continuations of that suit for the purpose of realizing the judg ment. I have not been referred to any decision in New York which holds that garnishment or attachment proceedings taken in a foreign state to realize on a judgment obtained there upon a cause of action which arose in New York are void as without jurisdiction. The only other New York decision relied on which relates to the title of a receiver in supplementary pro

3 Robbins.

Orient Insurance Co. v. Rudolph.

ceedings was O'Callaghan v. Fraser, 37 Hun 483 (1885), but in this case the question related to tangible property, actually located in another state at the time of the appointment of the receiver in New York, and manifestly, as to such property, the recognized theory and rules as to situs prevail.

And if the New York decisions do in these cases in fact establish a rule different from our own, and a rule which, according to our view, is contrary to the principles of justice and sound legal theory, then the New York rule should not be followed by our courts merely because the protection of our rule is invoked by a citizen of a state which would not or might not give a like protection to citizens of our own state in their courts. Each state by its courts settles for itself, in cases like the present, the principles upon which it bases its comity toward those who claim rights arising in other states and settles them for itself upon what it considers fundamental principles of justice and right, not upon the basis of retaliation or compensation, as if the proceeding was in the nature of a purely political action. The application of these principles, therefore, cannot vary with the residence of the suitor invoking them, nor should the suitor from another state be held responsible or punishable in his individual person or property for the establishment of what we consider an erroneous rule by the courts of his own state. Our own laws and rules in cases of this kind, and not the laws of other states, should be administered, and they should be applied evenly for the protection of suitors from any state, without distinction.

Third. It is claimed that the appointment of the receiver was void under the statutes and decisions of New York for two reasons: (1) Because the order for examination or discovery directed the appearance of Temple for examination, and did not direct the appearance of the company itself. (2) Because Temple was not an officer of the company, such as was indicated by the statutes, for service of the third-party order, and service upon him of the order was ineffective.

The statutes of New York concerning the appointment of a receiver in supplementary proceedings, the vesting of his title and the time to which it relates, so far as material to the facts

Orient Insurance Co. v. Rudolph.

69 Eq.

in this case, are as follows: [Here follows a statement of the statutes of New York relating to supplementary proceedings and of these proceedings in detail (see 61 Atl. Rep. 29-31), and the opinion proceeds.]

Upon the entire record in the supplementary proceedings I think it appears that the questions now raised against the valid ity of the order, viz., whether the order directing Temple to appear for examination was an order for the examination of the company, and whether an agent such as Temple was sworn to be was an officer of the company within the meaning of this statute, were both questions which the court or judge making the order had jurisdiction to decide upon the facts presented, and further, that both of these questions were decided affirmatively, as well by an order of March 3d, 1903, directing payment of the debt to the sheriff, as by the order appointing the receiver.

If the objections reach only to the regularity of the procedure, under the New York law, they certainly cannot prevail on this collateral attack. And if the New York court has jurisdiction over the rem, i. e., the debt recoverable in that state by the judgment debtor, and notice of the proceedings was actually given to some agent of the company in the state, who was, upon general principles, a proper agent for that purpose, the decision of the New York court, as a court of general jurisdiction, upon the question that the agent actually served was the officer designated within the New York statutes, cannot be subject to collateral attack elsewhere, even if the character of the agent or officer to be served be considered a jurisdictional fact. In Fairchild v. Fairchild, 53 N. J. Eq. (8 Dick.) 678 (Court of Errors and Appeals, 1895), and Magowan v. Magowan, 57 N. J. Eq. (12 Dick.) 322 (Court of Errors and Appeals, 1898), this rule as to the finality of the decision of the courts of a state upon the jurisdictional facts necessary to make a decree was applied to decrees of divorce, settling marital status. As to proceedings strictly in rem, such as seizure for breach of municipal regulation, "the mode of procedure is regulated solely by the sovereign power of the state, and no foreign court can question its correctness, unless the court passing sentence loses jurisdic

3 Robbins.

Orient Insurance Co. v. Rudolph.

tion by some circumstance which the law of nations can notice." Chief-Justice Marshall, in Hudson v. Guestier, 4 Cranch 293 (1808). And this does not extend to an inquiry whether, after acquiring jurisdiction, judgment is rendered according to the proper forms of procedure of the foreign state. 2 Black Judg. §§ 818, 819, citing, inter alia, Bradstreet v. Neptune Insurance Co., 3 Sumn. 600 (Justice Story, 1839). In cases analogous to proceedings in rem, such as the present case, jurisdiction, so far as the third party or garnishee is concerned, is obtained by notice to the third party of the attachment or garnishment, and if the notice actually given was a sufficient and reasonable notice for the purpose of the judicial proceedings in question, and was in fact directed in the proceedings to be given as the notice required by the forms of procedure, then, manifestly, the decision of the foreign court, that the notice was according to its forms of procedure, should not be reviewed in another court. It is quite clear, I think, that an agent of the company, such as Temple on the records was shown to be, was one upon whom notice could reasonably be served, as sufficiently representative of the company in this matter, to give the court jurisdiction over the company in the proceedings by a notice to him, and, if so, the final order or judgment made thereon is valid everywhere, as made upon due process of law. Connecticut Mutual Life Insurance Co. v. Spratley, 172 U. S. 602, 610. As to judgments or decrees in personam, their operation and effect in foreign jurisdictions depend upon the further question whether the foreign corporation was doing business within the state. Ib. 610.

It must therefore be held that the decision of the New York court upon the objections now made to the validity, under the New York laws, of the order appointing the receiver, is the law of this case, as between the parties to the supplementary proceedings and those claiming under them, until reversed by direct proceedings. I conclude that the title of the receiver, under the order of appointment, is valid, and must relate back, under the New York code, to the time of the service of the third-party order. This time must be fixed as the date of the actual appearance for examination, February 11th, 1903, inas

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much as the actual date of service does not appear on the record, but is admitted to have been made before the appearance. The assignee's title is therefore subject to that of the receiver.

The title of the receiver, however, is only for the purpose of paying the judgment he represents, and the decree directing. payment to him of the fund in court should not go beyond this amount, and such costs as he is entitled to, which will be settled upon hearing parties on this point, if they desire.

GERTRUDE N. BOICE et al.

V.

CORNELIUS N. CONOVER et al.

[Filed June 13th, 1905.]

1. The assignee of a judgment is chargeable with the knowledge of his attorney, concerning litigation affecting the judgment, where his attorney negotiated the assignment.

2. A chattel mortgage was held invalid against a judgment creditor under the Registry acts, and the proceeds of sale of the chattels, which proceeds were in court, were directed to be paid first to the judgment creditor. The judgment debtor then paid the judgment by his mortgage on his own lands, and had the judgment assigned for his benefit to the mortgagee of the lands, who (through their common attorney) received, for the benefit of the debtor, the money paid out of court to him as assignee of the judgment. On an appeal subsequently taken the chattel mortgagee was held to be subrogated to the judgment.-Held, (1) this payment of the judgment by the debtor himself discharged the lien of the judgment from the lands of the parties to this suit (other than the judgment debtor), who claimed title under a partition made pendente lite, but before decree for subrogation to the judgment, subsequently made in favor of the chattel mortgagee.-Held, (2) the chattel mortgagee, by reason of this payment of the judgment by the debtor, was entitled to the proceeds of sale of the mortgaged chattels paid out of court to the assignee of the judgment for the benefit of the debtor, and as this payment was not disclosed to the court at the hearing upon which decree for

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