Byers v. Tabb

Wood, C. J., delivered the opinion of the court. On the thirty-first day of March, 1898, William H. Byers, a wholesale dealer in millinery in the city of Louisville, Kentucky, executed a general assignment of all his property, real, personal and mixed, wherever situated, to John M. Byers as assignee for the benefit of all his creditors. The conveyance was duly signed and acknowledged by both assignor and assignee, and was filed and recorded on the same day in the office of the clerk of the proper court in said city of Louisville. The assignee immediately took possession of the assigned property and proceeded to execute the trust. Subsequently, in April, 1898, the appellees filed their bill of complaint in the chancery court of Clay county, Mississippi, alleging an indebtedness to them severally, in the amomrts named in their bill by William H.- Byers, the assignor, and had writs of garnishment issued and served upon many persons, who were retail merchants in Mississippi, and who were indebted to said William H. Byers for merchandise bought by them from the wholesale millinery house in Louisville of said William H. Byers. The indebtedness of these various garnishees amounted, in the aggregate, to about eight thousand dollars, and was evidenced by open accounts on the mercantile books of said William H. Byers. These accounts and the books containing them are, and have been since the execution of the assignment, in the possession of John M. Byers, the assignee, in Louisville, Ky. In September, 1898, the said John M. Byers, by leave of the chancery court of Clay county, Mississippi, filed his peti [851] tion asserting, as assignee, his claim to the several sums shown and admitted to be due by the respective garnishees, and praying that the same be paid into the court and turned over to him as assignee in said assignment. At the same time William H. Byers, the assignor, filed his answer to the bill of complaint of, Tabb and others, admitting his indebtedness to complainants, as set up in their bill, and admitting the indebtedness to him, prior to his assignment, of the garnishees, severally, in the sums named in the bill of Tabb and others; but he avers that, on the thirty-first day of March, 1898, he made a deed of general assignment to John M. Byers,, as assignee for the benefit of all his creditors, whereby he conveyed to said assignee all of his .property and assets of every character, wherever situated, whereby all right to and interest in the accounts against the garnishees named in complainant’s bill passed to his said assignee and became due to and collectible only by him, the assignee, and he, the assignor, had no interest in the same when complainants filed their bill. Tabb, Anna Goodwin and Barbara' Schmitt, three of the complainants to the bill in chancery in Clay county, are citizens of Louisville, Kentucky, and the remaining complainant, M. T. Allen, is a citizen of the State of Georgia, and all had knowledge of the assignment and its contents before filing their bill in chancery in Clay county. After filing said bill, and before the decree here appealed from was entered, all the complainants, filed their claims with the proper authority in the court in Ken - tucky under whose direction and order the assigned estate is-being administered and distributed, praying to be allowed to-receive their ratable parts of the dividend there ready in that court for distribution. All their claims have been allowed by the Kentucky court, and Barbara Schmitt has received, by order of said court, $2,000 on her claim; and as to the remainder of her claim, and all the other claims of the three-other complainants, though allowed by that court, the court [852] suspended any order for distribution, to await the result of the litigation in Mississippi. By the assignment statutes of Kentucky, debts due by the assignor in the character of guardian, trustee of an express trust, etc., are made preferred debts. And by those statutes, assignments shall not be invalidated by reason of any interest of the assignor, whether appearing on the face of the deed of assignment or otherwise, unless the assignor be solvent. Where is the situs of the accounts evidencing the several indebtedness of the various garnishees ? The accounts were made by retail merchants doing business in Mississippi in the purchase of goods from a wholesale merchant in Louisville. The open accounts appearing on the books of the wholesale merchant are and have always been kept in Louisville. That city is the domicile of the creditor, and the debts were payable there. The situs of the debts due by the garnishees was clearly in Louisville. Their owner has not dealt with them so as to locate them in Mississippi. It was said by this court, Cooper, C. J., delivering the opinion, in Jahier v. Rascoe, 62 Miss., 699: “It would be an unwarrantable construction to hold that debts due by residents of Mississippi to merchants conducting business in the states of Louisiana and Tennessee, contracted in the course of dealings with such merchants, were situated in this state within the meaning of the statute.....The statute does not, in other cases than those in which the owner has so dealt with the property as to locate it here, abrogate the rule that choses in action have their situs at the domicile of the owner. ’ ’ The same general doctrine was held also in Speed v. Kelly, 59 Miss., 47. In this latter case the court held “that a debt due by a resident of this state to one domiciled in Louisiana, and having in his possession in that state the evidence of debt, was not, in the absence of any other evidence, personal property situated in this state. ’ ’ While these, two cases went upon the proper construction of our statutes governing the [853] administration and distribution of personal property of decedents, we are unable to perceive why the general principles announced in both are not equally applicable to cases involving the administration and distribution of personal property in an assignment proceeding. The assignment before us is valid in Kentucky. This is not questioned. Is it valid in Mississippi, and shall it be upheld here in so far as the rights of the assignee to the personal property in this state are affected ? It will be well to remember here that the question is, whether a voluntary assignment of personal property (choses in action in this instance), made in good faith will be upheld in this state, though the conveyance was made in another state ? This is not a case involving the consideration of the effect to be given an insolvent or bankrupt statute of a foreign state. The distinction between a voluntary conveyance by the owner and an involuntary one, or one made by operation of a statute, is universally recognized. The latter class of conveyances ’ have no extra-territorial effect on property in a state other than that where made. As is well said in Story on Conflict of Laws, sec. All, “this makes a solid distinction between a voluntary conveyance by the owner, and an involuntary legal conveyance by mere authority of law. The former has no relation to place: the latter, on the contrary, has the strictest relation to place.” The well-nigh universal rule, is that a voluntary assignment which is valid where made will be upheld in another state where some of the assigned personal property is found, unless contrary to the positive law or public policy of the state where such property is found. There is nothing on the face of this deed of assignment in conflict with any statute of this State, or of our public policy. There are differences between the Mississippi and Kentucky assignment laws as to details in machinery in carrying into effect an assignment. But mere differences in administration will not produce conflict, necessarily. It is argued, however, that this conveyance in the case in [854] hand must be read as if it contained the provisions of the Kentucky statute, which make trust debts due by the assignor preferred debts, and declare that the intent of the assignor, whether appearing on the face of the deed of assignment or otherwise, shall not invalidate the assignment, unless the assignor be solvent. Now, as we have said, this assignment is not only good in Kentucky, but, on its face, it is good here, and it is the assignment itself which is to be upheld or destroyed by our court, and not the Kentucky assignment laws. However, when we read into this conveyance the provisions of the Kentucky statute which we have referred to, the instrument itself will declare a preference for trust debts, if there be any such, and will declare that the conveyance shall not be invalidated if there be any fraudulent intent on the part of the assignor. Inasmuch as the record does not disclose the existence of any trust debts due by the assignor, the effect to be given the assignment will be exactly that which would have been given it if the Kentucky statute had not been read into the deed. And so, too, as there is no hint even of any intent on the part of the assignor other than that of devoting his entire estate to the payment of his debts, the effect to be given the assignment in our courts will be exactly that which would have been given it if the provisions' of the Kentucky statute had not been read in it. It is thus apparent that looking at the deed alone, or looking at it with the inoperative and ineffectual provisions read into it, that it is not a contravention of the law or public policy of this state. We are not to be understood as holding that the Kentucky assignment law is not essentially similar to ours on the same subject. We have not found it necessary to determine that question in this controversy. We are of opinion that the right to collect and have the sums due from the garnishees is in John M. Byers, the assignee. The decree of the court below will be reversed, and the bill of complainants dismissed.