Worden v. Nourse, Mason & Co.

Peck, J. The only question in this case is as to the liability of the trustees. They are not sought to be charged jointly, but each if liable at all is liable in respect to a several indebtedness to the principal debtors. The Merchants’ Bank of Boston appear as claimant and the only question is whether the funds in the hands of the trustees are liable to attachment in this suit, or whether the claimant’s title is paramount to the plaintiff’s right under this attachment. The demands upon which the questions arise consist of promissory notes executed by the trustees severally to the principal debtors. It appears that before the service of the trustee process upon the trustees, the principal defendant had negotiated the notes to the Merchants’ Bank of Boston for a valuable, consideration in good faith. The notes are negotiable and all payable in terms respectively at some particular place in this state, that is, at some bank named in this state, except the note given by Zeno Campbell, in which no place of payment is named. The notes were given on time and negotiated to the claimant before maturity. No notice was given to the trustees of the transfer of the notes till after the service of the writ upon the several trustees. It is claimed however that the facts reported show sufficient notice to Doolittle, ol the transfer of his note to the claimant before the service of this writ upon him. It seems to be conceded,' and so we take the fact to be, that the payees, the principal debtors, resided at the date of the notes, and still reside in Boston, Mass., and the makers in this state. The notes were all executed in this state, although some of them were executed here and sent by mail to the payees at Boston, ’and the others were executed and delivered in this state to agents of the payees. As to the notice to Doolittle of the transfer of the notes, the facts are that just previous to June 18th, 1861, the day when Doolittle’s note fell due, the claimant sent the note in the ordinary course of business to R. G. Cole the cashier of the Burlington [758] Bank at which it was made payable, for collection ; that on said 18th day of June, Cole informed Doolittle that the note had been sent to that Bank by the Merchants’ Bank of Boston for collection ; that Doolittle saw the note on that occasion at the Burlington Bank; that having been previously summoned as the trustee of the defendants in another suit since discontinued, he informed Cole that on that account he could not pay the note. Cole replied that he should be obliged to protest the note if not paid that day. Doolittle then requested Cole to inform the Merchants’ Bank why he could not pay the note. This was four days before the writ in this case was served on Doolittle. We have no doubt that Cole had sufficient authority to give notice to Doolittle that the claimant owned the note. Such authority would be implied from or included in the authority to demand and receive payment of the note ; but the notice by Cole to Doolittle that the note had been sent there by the Merchants’ Bank for collection, was not notice that the note was the property of the Merchants’ Bank. Banks are so much in the practice of acting as the agents of the holders o'f such paper in forwarding it for collection, that something more than what transpired on that occasion was necessary to constitute notice to Doolittle that the claimant was the owner of .the note. It is insisted on the part of the claimant that by the laws of Massachusetts negotiable paper of this character is not subject to trustee process, and that the rights of the plaintiff and the claimant must be determined by the laws of Massachusetts where the payee and endorsee reside, and where the notes were negotiated. We are referred to the statute of Massachusetts for the law of that state. The regular practice is, where a party relies on a foreign law, to prove it in the court below and have it found as a fact in the case. But as this objection has not been relied on, but the counsel have discussed the questions as if the laws of Massachusetts were properly in the case, we so treat it. Our statute provides that such paper is liable to attachment by trustee process until notice of transfer is given to the maker. Assuming the law to be in Massachusetts as the claimant’s counsel claim, the two laws are in conflict. If the law of Mas [759] sachusetts is to govern the case, the trustees are not liable ; but if the law of this state controls it, the trustees áre chargable. It is not necessary to go extensively into the question as to what law shall govern the contract as between the parties to the contract where one party resides in one jurisdiction and the other party in another. This is not a question what law shall govern as to the validity and construction of the contract as between the parties. The question is not what constitutes a complete and valid transfer of these notes as between the parties to the transfer, nor as between them and the maker of the notes. The question is one outside of that. The question is what constitutes a complete and valid transfer as to the creditors of the vendor so as to put the property beyond the reach of attachment by his creditors. Something more is often necessary for the purpose than what is necessary as between the parties. The sale of goods by our law may be complete as between the parties without an actual delivery or change of possession, yet as to the creditors of the vendor a change of possession is necessary to give validity to the transfer. It is analogous to a deed of real estate, which is complete and operative to convey the title as between the parties on execution and delivery, yet as to creditors of the vendor without notice it must be recorded. Yet in relation to creditors difficult questions often arise, where the laws of two jurisdictions conflict, as to which shall govern. These questions relate partly to the right and partly to the remedy. In relation to personal property of a tangible nature, the rule settled in this state is that if the property is situate in another jurisdiction where the vendor may make a sale valid against creditors, without a change of possession, and such sale is made there by citizens of that jurisdiction, it may be brought into this state and not be liable to attachment in the possession of the vendor as his property, the title having become complete in the jurisdiction where the sale was made and where the property was then situated. But if such sale is made in such foreign jurisdiction while the property is in this state, a change of possession is necessary to protect it from attachment by the vendor’s creditors. If this were tangible property situated here at the time of the transfer, it .would clearly be attachable [760] until notice of the transfer was given to the person having it in possession, or something done to change the possession. But in case of choses in action, like promissory notes, the difficulty is in determining the situs of the property. But it is unnecessary to enter into any extended discussion of this question, because we think the decisions already made in this state settle the principies that must control this case. In Emerson v. Partridge, Trustee of Johnson, 27 Vt. 8, it appeared that the trustee who resided in Burlington, Vt., had dealings with the defendant residing in Boston, Mass,, executed his note at Burlington and forwarded it to the defendant at Boston, Mass., payable at the Commercial Bank in Burlington to the defendant or order four months from date. Reynolds & Co., .of Massachusetts appeared as claimants, and showed that the note was endorsed to them before maturity, and that by the laws of Massachusetts the note was not subject to attachment by trustee process or otherwise, and that no notice of such transfer was there necessary. The trustee had no notice of the transfer till after he was served with the trustee process. The court on full examination of the authorities decided that the trustee was chargeable. That case is in principle identical with the present. The facts in that case are so far identical with the present that no distinction can be made between them, that is, so far as relates to all these trustees except Campbell. That case is decisive of this whole case unless the fact that Campbell’s note specifies no place of payment, leads to a different result as to him. It is insisted by the claimant’s counsel that the case of Baylies v. Houghton & Co., and Trustees, 15 Vt. 626, is an authority to show that Campbell is not chargeable. In that case the trustees were citizens of this state, and the principal debtors citizens of Massachusetts. The notes were negotiable and executed and delivered to the principal debtor in Massachusetts, no place of payment being specified. The court held that the notes were not liable to trustee process in this state, it appearing that they were not attachable by the laws of Massachusetts. In that case the court place much stress on the fact that the notes were executed and delivered in Massachusetts, and from thsjt feet mainly, hold that by intendment of law they were [761] payable there. If we apply the same reasoning to this note of Campbell, it would follow that the note having been executed and delivered in this state, was by intendment of law payable here, and if so, it is controlled by the case of Emerson v. Partridge and Trustee, above referred to. But the place of execution alone ought not to be decisive ; it is to be considered in connection with other elements in determining the place of payment which the parties had in contemplation, and which go to show the situs of the debt. In that ease the creditor resided in Massachusetts, the notes were executed and delivered there, and it is evident that the debt for which the notes were given was contracted in Massachusetts. Those three things combined, very properly lead the court to the conclusion that the parties had in contemplation the place of execution as the place of payment, and that that was the situs of the debt. In this case it is manifest from the facts reported, that the debt for which this note was given was contracted in this state. Campbell had in his possession mowing machines of the principal debtors which he was selling for them. At the date of the note in question, Campbell, at Sheldon in this state, settled with the agent of the principal debtors and gave the note for the balance due them, still having machines in his possession unsold, one of which he afterwards sold, and the rest were attached in this suit. Thus the debtor resided here, the dealing took place here, the debt for which the note was given was contracted here and the dealing still continued down to the service of the writ in this case. Every presumption that can legitimately be drawn outside of the note itself as to the place of payment contemplated by the parties, is in favor of this being the place of payment. In view of the principles adopted and the grounds of the decision in both of the cases referred to, we think in the case of Campbell as well as in the case of the other trustees, the situs of the debt is here, and that our law must control in relation tp the remedy of creditors by trustee process. Judgment of the county court affirmed,