Corn Exchange Bank v. Rockwell

Mr. Justice Shepard delivered the opinion of the Court. We have heretofore held that the State owes a duty to its citizens to protect them against the removal from our jurisdiction of the property here located of insolvent foreign corporations, by foreign receivers thereof, until the just claims of its own citizens have been satisfied. Hunt v. Gilbert, 54 Ill. App. 491. It was said in Heyer v. Alexander, 108 Ill. 385: “ It is not just or fair that creditors in this State should be compelled to go to a foreign State to receive a pro rata share of the debtor’s property, when they, perhaps, extended credit upon the faith of the debtor’s property in this State and to which they looked for payment.” See, also, Holbrook v. Ford, 153 Ill. 633. We discern no difference in principle between a case where a foreign receiver claims against a domestic creditor, and one where the receiver is appointed in this State ancillary to or in aid of the foreign receivership. The case of Holbrook v. Ford, supra, certainly does not lay down any such distinction. There, it is true, the judgment creditor and complainant in the creditor’s bill under which the receiver was appointed, was “ a resident of Hew York, but he brought suit and obtained judgment in Illinois, and filed his bill and procured the appointment of a receiver here.” (See opinion of the court.) And in such a case our courts are open to afford the same remedies to non-resident as to resident creditors. In this case there was a Hew York corporation with its principal office and business in Hew York, a branch office and business and assets and creditors here, a receivership in Hew York, of that corporation, obtained upon the application there of the president of the corporation, who was also the complainant, in the bill for a receiver here, and three of his associate managers of the corporation; a taking possession here by the foreign receiver of all the property in Illinois belonging to the corporation, a dispossession of such receiver by the sheriff of this county under an attachment by a creditor citizen of this State, a bill filed here by the same president of the corporation, not upon a judgment obtained here, nor upon any allegation even of being a creditor of the corporation, but solely upon allegations of the insolvency of the corporation, the appointment of a receiver in Hew York, the taking possession of the property here by such receiver, his dispossession by the sheriff by an attaching creditor here, the threats of other suits by other creditors here, and the disability of protecting creditors generally and stockholders, and praying that such receiver when appointed shall account to and act in conjunction with the Hew York receiver to the end that the corporation’s affairs maybe finally wound up and settled by the Hew York court. The receiver appointed here, upon the bill so filed here,, was limited by the order of appointment to assets in Illinois, and, as shown by the report of the receiver, such assets consisted of over $22,000 in property seized by a domestic attaching creditor and turned over by the sheriff, besides accounts receivable from which were realized over $1,000. After realizing upon all assets here and paying expenses allowed by the court, the receiver here will have but about 87.000 to distribute. A little over $1,000 of that balance will go to the domestic creditor who attached in the interest of the appellant bank before the receiver was appointed here, and the balance will be distributed, according to the decree, among ISTew York creditors whose claims for over 8125.000 have been proved up here, and the two other domestic creditors, one for $1,200, and the other, the attaching creditor, Gary, for the use of the appellant bank for $8,108, whose claims were proved up. That such a receivership as that under the bill in this case was merely ancillary or auxiliary to the Hew York receivership, is what was said in Holbrook v. Ford, supra. And that it was a mere device to attain indirectly what could not be attained directly, by swallowing up the assets here which had furnished the reliance upon which the corporation had obtained credit here, in favor of the Hew York receiver, seems very plain from the mere statement of facts. We do not think it can be done successfully. The decree was erroneous in requiring the appellants, Gary and the bank, to prorate with the foreign creditors. What is left is insufficient to pay their claims in full, and it should have been given to them. It is not necessary to discuss any of the other questions argued, except to say that it is immaterial whether the Gary judgment was regularly rendered or not. It is not disputed but the correct amount Avas included in the judgment, and it Avas properly allowable as a claim against the estate in the hands of the receiAmr, whether reduced to judgment or not. The court had jurisdiction under the bill that was filed to adjudicate claims and distribute assets. The decree of the Superior Court Avill therefore be reversed with directions to order the receiver, after satisfying the Foote judgment, to distribute the assets remaining in its hands pro rata among the domestic creditors whose claims Avere allowed, in preference to the foreign creditors. If anything remains over, which we suppose will not be the case, then to distribute such residue yw rata among the foreign creditors, or direct it to be accounted for to the Hew York receiver as may seem proper. Reversed with directions. Opinion by Mb. Presiding Justice Waterman. We are presented in this case, not with an application by a foreign receiver to take assets of an insolvent out of this State, but with the simple question of whether citizens of the State of Hew York, when they come into the courts of this State and appeal to them for relief, are entitled to all the remedies and rights of citizens of this State, or whether our courts will discriminate against foreign creditors in favor of citizens of this State. Time was when a “ stranger in a strange land,” the foreigner, the alien, was looked upon as a dangerous creature, to be watched and plundered. At the common law an alien could not acquire title to real estate by descent or by mere operation of law; an alien had no inheritable blood through which title could be deduced. By the statutes of Henry the Eighth, alien artificers were prohibited from working for themselves in the kingdom of England, and all leases of houses and shops to them in England were declared void. They were allowed to trade, but at the custom house had to pay higher duties than other people. In these “ good old times” the courts discriminated against the foreign creditor. It was then believed that wealth could be acquired by prohibiting the export of gold and silver, and that food could be made abundant and cheap by limiting the price at which grain should be sold. In more enlightened days in civilized countries, most if not all of these laws, the product of ignorance and barbarism, have been swept away, and the foreigner—the alien— is a being no longer either feared or discriminated against. The Supreme Court of this State, in Rhawn v. Pierce et al., 110 Ill. 350, speaking of the case of Hibernian National Bank v. Lacomber et al., 84 N. Y. 387, said that in that case “ the attaching creditors, regardless of their residence had the right to enforce the collection of a debt in the State of New York upon an equal footing with persons resident in the State of New York.” We regard this as the correct doctrine. Under our laws, the courts of this State are open alike to the citizens of every State for the enforcement of legal rights, and when a non-resident invokes the aid of our courts to enforce a legal right, interstate comity does not demand that our courts should give the laws of another State extra-territorial effect here, and adopt their laws in the administration of justice. And in Holbrook v. Ford, 39 N. E. 1091, the court said: “ But non-resident creditors have the same right to pursue the remedies prescribed by our laws for the collection of debts as resident creditors. Once properly in court and accepted as a suitor, neither the law, nor court administering the law, will admit any distinction between the citizen of its own State and another.” See, also, Chaffee v. Fourth National Bank, 71 Me. 514; Sturtevant v. Armsby Co., New Hampshire, 1891; Reynolds v. Alden, 136 U. S. 350; Wilcox v. Silver Plate Co., 123 Ind. 477; Sheldon v. Blauvelt, 29 S. C. 453; Strieker v. Tingham, 35 Ga. 176. If the Superior Court has any doubt—it would seem there can be none—that the Illinois creditors will be permitted to have and share in the proceeding in New York equally, pro rata, with New York creditors, it might retain the fund until such question is determined; but otherwise all creditors, foreign and domestic, should share pro rata in the fund to be distributed here.