Train v. Kendall

Field, J. The claimant excepts to the ruling, that the facts stated by him are insufficient in law to enable him to maintain his claim. The law of the State of New York is a fact; and the claim states that, by this law, the assignment is valid. If we assume, as the plaintiffs contend, that, as the Franklin Paper Company is a Massachusetts corporation, the validity of the assignment of a debt due from it to an inhabitant of New York, as against his Massachusetts creditor, must be determined by the law of Massachusetts, the objection is taken that this assignment is invalid by the law of Massachusetts, because it provides that two creditors of Kendall Brothers shall be paid in full before their other creditors are paid anything. Such preferences are valid by the common law of Massachusetts, and by our statutes are only voidable by an assignee in insolvency. Pub. Sts. c. 157, § 96. If Kendall Brothers were domiciled in Massachusetts, this assignment, having been assented to by creditors who hold claims exceeding in amount the value of the property assigned, would be good as against an attaching creditor, and there is nothing in the policy of our laws that invalidates the assignment because Kendall Brothers are domiciled in New York, if the assignment is also valid by the laws of that State. Kendall Brothers cannot, under our statutes, be adjudged insolvent debtors, and it therefore becomes impossible to avoid this assignment by proceedings instituted by an assignee in insolvency; but, in the absence of any statute making this assignment void or voidable by Massachusetts creditors, the common law prevails in actions at law, for it is the common law which the plaintiff invokes, and not any process, if there be any, for the equitable distribution of the assets of Kendall Brothers found in Massachusetts. In so deciding, we do not give effect to a foreign law prejudicial to our own citizens; we give effect to an assignment which is good against the plaintiff in this action by our own law. The Legislature has not undertaken to enact [368] that, in cases in which the assignor is not subject to our insolvency law, an assignment of property found here, if it creates preferences, may be avoided by any Massachusetts creditor by attachment, and the common law sanctions preferences. Mechanics’ Traders’ National Bank v. Eagle Sugar Refinery, 109 Mass. 38. May v. Wannemacher, 111 Mass. 202. Exceptions sustained.