Thurston v. Rosenfield

Wagner, Judge, delivered the opinion of the court. This was a bill in equity to marshal the assets of Isaac Rosenfield, an insolvent, who had assigned and transferred all his prop [479] erty, both personal and real. Having failed in business in New York, he made a voluntary assignment of his effects, including certain real estate situated in the city of St. Louis, in which certain creditors were preferred. The parties were all residents of New York and New Jersey, and the assignment was valid by the laws of New York where it was executed, but would have been void if made in this State under our statute. The plaintiffs here have a judgment against the insolvent debtor, but it has no priority of lien over the title vested in the assignees ; and they insist that the assets arising from the sale of the realty in this State should be distributed pro rata and in accordance with our statute. The deed of assignment is regularly executed and acknowledged, so as to be a good and sufficient conveyance to pass the title to real estate in this State. The only question submitted, therefore, is whether the assignment is to be governed by the laws of Missouri. This proceeding-was commenced under the statutes of 1855 ; and by the thirty-ninth section of the assignment act, as it then existed, it is provided that “ every provision in any assignment hereafter made in this State providing for the payment of one debt ■or liability in preference to another shall be void, and all debts •and liabilities within the provisions of the assignment shall be paid joro rata from the assets thereof.” The general rule seems to be well settled that personal property is transferable according to the law of the country where the owner is domiciled; but immovable or real property must be transferred according to the lex rei sitas. The law of one State cannot, proprio vigore, have any force ■or effect or territorial operation beyond its oym limits ; and whatever vitality it may obtain in another State is owing solely to the principle of comity. Courts of justice are accustomed, on the grounds of comity, to examine into and enforce contracts made in other States, and carry them into effect according to the laws of the place where the trans-action originated — subject, however, to the exception that they will not execute them where it would be against public policy or injurious to their own citizens. In a note to 3 Dallas, 370, Huberus is quoted, where he lays down [480] these maxims : “1. The laws of every empire have force within the limits of that government, and are obligatory upon all within its bounds. 2. All persons within the limits of a government are considered as subjects, whether their residence is permanent or temporary. 3. By the courtesy of nations, whatever law's are carried into execution within the limits of any government are1 considered as having the same effect everywhere, so far as they do not occasion a prejudice to the rights of the other government or its citizens.” Mr. Justice Cowen, in a very full and elaborate note to the case of Andrews v. Herriot, 4 Cowen, 510, deduces the following doctrine: “ That the law of a place where the contract is made or to be performed is to govern as to the nature, validity, construction, and effect of such contract; and, being valid in such place, it is to be considered valid and enforced everywhere, with the exception of cases in which the contract is immoral or unjust, or which the enforcing it in a State would be injurious to the rights, the interest, or convenience of such State or its citizens.” In Bryan v. Brisbin, 26 Mo. 423, an assignment for the benefit of creditors was executed in Minnesota, making preferences in favor of certain designated creditors, and was valid by the laws of that State; it was held that it would not be enforced by the courts of this State in opposition to the claims of a creditor resident here, who had attached the property previous to notice of the assignment. In the very recent case of Guillander v. Howell, in the New York Court of Appeals (35 N. Y. 657), the action was for the detention and conversion of some boilers. It appeared that the firm of Boardman & Co., residing and doing business in the city of New York, failed in December, 1857 ; and then, in that city, made a general assignment to the plaintiff, also a resident of that city, for the benefit of creditors, giving preferences. The assignors, at the time of the assignment, had some steam-boilers in New Jersey, which had been manufactured for them by the defendants, and for which they were then indebted to the defendants. After the assignment, the defendants, residents of New Jersey, sold the steam-boilers, under proceedings commenced by [481] foreign attachment against the assignors in New Jersey, to satisfy the demand. Plaintiff demanded the boilers, and the defendants refused to deliver them. It was shown on the trial that an assignment giving preferences was void in New Jersey by the laws of that State. The court decided that the property, being situated in New Jersey, was subject to the local laws of that State, and •that the assignee could not recover. So, in Zipcey v. Thompson, 1 Grey, 243, it was held that no comity could require the courts of one State to give force to an assignment made in another State, which was not only against their well-settled policy, but against their direct legislation, and the effect of which would be to give preference to' citizens of other States over those of their own. The above cases all proceed on the idea that comity does not require a court to'enforce a contract valid according to the laws of the place where it was made, if such enforcement would result to the manifest injury or detriment of the citizens of the country where the property is situated ■or the claim attempted to he enforced. Every State has the indisputable right to pass laws fixing the status and regulating the disposal of property within her own jurisdiction; and no principle of comity can be allowed to interfere with either her express legislation or what may be deemed sound policy for the protection of her own citizens. But there is no question arising here between those claiming under the assignment and our own citizens. The'parties are all non-residents, and the claimants have no lien,springing out of our own laws for which they seek protection. They do not claim the property in specie, nor set up and assert any prior right; but they ask that assets accruing from the sale of the lands may be marshaled, and that they may be permitted to receive a pro rata share. The case, then, presents the simple question of an assignment made in the State of New York, valid by the laws of that State, where the parties are all within the same jurisdiction, except the assignor; and certain of the creditors come here and attempt to defeat the operation and policy of the assignment by an appeal to our laws. In the case of Einer v. Beste (32 Mo. 240), this [482] court, after a very thorough review of the authorities, decided that where the plaintiffs and defendants were citizens of Louisiana, and the defendants had made an assignment of their property in accordance with the laws of that State, for the benefit of theiicreditors, and an assignee had been appointed to collect and distribute the assets of the insolvents, one of the creditors, a citizen of and residing in the same State, could not secure a preference over the remaining creditors in his own State by process of attachment against the property and assets of the insolvents in this State. Whilst, owing to the peculiarities of the code of Louisiana in respect to proceedings in, insolvency, the case may not be regarded as absolutely in point, the analogy is cogent, and it must be considered as^ a strong authority here. The statute refers to assignments made in this State; but had other rights attached, and the interests of our ¿>wn citizens intervened, I should not be inclined to give it such a narrow construction. The' obvious policy of the law was to deny preferences in this State ; and it never could be endured that a foreign assignment, made directly in opposition to our legislation, should have the effect, of giving an advantage to non-resident creditors to the injury of our own citizens. But as the case presents no such question, we think comity requires and justice willv be subserved by holding the assignment good according to the law of the place where it was executed. The judgment of the court below, therefore, holding this view of the law, will be affirmed. The other judges concur.