Frazier v. Fredericks

The Chief Justice delivered the opinion of the court. The general principle is fully and unequivocally settled, that personal property is transferable according to the law of the country where the owner is domiciled. A transfer of personal property, therefore, good by the law of the owner’s domicil, or by the law of the place where it is made, is valid wherever the property may be situate. Story on Conf. of Laws, § 383, 384; 2 Kent’s Com. 454; Varnum v. Camp, 1 Green 329. The general principle is not universally true, but is subject to several exceptions. The necessary intercourse of mankind requires, to use the language of Chancellor Kent, that the acts of parties, valid where made, should be recognised in other countries, provided they be not contrary to good morals nor repugnant to the policy and positive institutions of the state. 2 Kent’s Com. 455. The principle applies to a voluntary conveyance of property by the owner, not to a conveyance by operation of law. An assignment by law has no legal operation out of the territory of the law maker. Such, at least, is conceded to be the decided weight of American authority. Milne v. Morton, 6 Binney 361; Blake v. Williams, 6 Pick. 307; Holmes v. Remsen, 20 J. R. 266; Story on Conf. § 410; 2 Kent’s Com. 406. The assignment under which the plaintiff claims is not an involuntary legal conveyance, or statutory transfer of property, made in case of bankruptcy or insolvency. It is a voluntary assignment, made by a debtor residing in Pennsylvania, for the benefit of his creditors. Such an assignment all the authorities (even those which most strenuously deny the operation of a statutory transfer upon extra-territorial property) concur in holding valid and effectual to vest extra-territorial property in the assignee, as against a subsequent attaching — 167 — creditor of the state where the property is situate. “ I do not mean,” said Justice Platt, while denying the prior right of an assignee under the English bankrupt act over an attaching creditor in the state of New York, “to suggest a doubt that, independent of the statutory transfer, a bona fide assignment for valuable consideration, or for payment of debts, fully made by such foreign creditor himself, would be valid against a subsequent attachment here.” Holmes v. Remsen 20, J. R. 260. And Chief Justice Tilghman, while maintaining the same views against the efficacy of an involuntary assignment under the bankrupt law, said, “ We have no laws prohibiting foreigners from a free disposal of their personal property situate here; therefore, if Topham (the bankrupt) had made an assignment of his property in the hands of the garnishee, the case would not have admitted of a moment’s speculation.” Milne v. Morton, 6 Binney 361. . And the Supreme Court of Massachusetts distinguish, in like manner, between a statutory and a voluntary trausfer for the benefit of creditors, even where preferences are given to particular creditors. The latter, they say, would be consistent with our laws and our practice. Admitting their validity is merely acknowledging the personal right of the proprietor to dispose of his effects for honest purposes. Blake v. Williams, 6 Pick. 314. See Green v. Mowry, 2 Bailey 163; Speed v. May, 5 Har. 93; 6 Ib. 185. A voluntary assignment, made by a debtor for the benefit of his creditor, would seem, upon principle, to stand upon the same ground, so far as the present inquiry is concerned, with any other transfer of personal property by the owner. If, then, a sale by the owner of property lying in a foreign state be effectual for the absolute transfer of the property to the vendee, an assignment of the same property for the benefit of creditors must be equally valid and effectual. Admitting the assignment to be valid by the laws of Pennsylvania, where the assignment was executed, there is nothing in its terms repugnant to the provisions of our statutes or to the policy of our laws. The terms of the trust are, that tho trustee shall convert the property assigned, as speedily as may be, — 168 — into cash, and, as the proceeds are from time to time realized, to pay all the creditors of the assignor their respective demands, indiscriminately and without preference. It is said that there is no provision in the trust for the payment of the creditors in the ratio of their respective claims, and that the assignee may, at his discretion, pay one creditor in preference to another. But this construction is plainly inadmissible, and is in fact in direct conflict with the express terms of the trust, which requires that the trustee shall pay all the creditors their respective demands indiscriminately and without preference. The terms of the trust are in fact in strict accordance with the provisions of our statute, which forbids all preferences of one creditor over another. It may be added, moreover, that it is in accordance with the dictates of justice and with sound morality. The case, therefore, does not fall within the objection which prevailed in Varnum v. Camp, being that the contract was in violation of a statute of this state, and in contravention of its obvious policy. If the contract was valid and effectual for the transfer of the property of the assignor in Pennsylvania, it is, upon the principles already stated, equally effectual for the transfer of his property in this state. Independent of any peculiar provision of the laws of Pennsylvania, the assignment is clearly a valid contract at common law, made for a lawful purpose and upon a valuable consideration. It is proven moreover, upon the trial, that the assignment is valid by the laws of Pennsylvania. It is in no wise material that the assignment was not recorded in this state, or that the particular directions prescribed by our statute have not been pursued, unless, indeed, the broad ground be assumed, that no assignment for the benefit of creditors made in another state can prevail in this state against the claim of an attaching creditor. But no such objection is adverted to in Varnum v. Camp. That case, indeed, proceeds upon the ground, that the assignment made in New York, if not made in contravention of law, would have been effectual to transfer the property in this state. It is objected that the assignment cannot operate as a valid transfer of the vessel, because there was no delivery of the — 169 — property to the vendee. The assignment bears date on the 9th of August, 1851. The trust was accepted, and the deed recorded on the 11th of August. At the date of the assignment, the vessel in question was lying at the wharf in Camden, and so continued until the 16th of August, when it was attached by the sheriff, at the suit of a New Jersey creditor, as the property of the assignor, being then in charge of his watchman. The boat was sold by the auditors in attachment, under an order of the court, on the 15th of October, and purchased by the defendant in this suit, no possession having in the mean time been taken, or attempted to be taken, of the vessel by the plaintiff. By the common law, as understood in England and in this state, delivery is not necessary upon a sale of a chattel to vest the title in the vendee. A bargain and sale without delivery, by the English law, transfers the legal property in goods; and although they be subsequently sold to a second purchaser, or seized by the vendor’s creditors, the vested property of the first purchaser, in the absence of fraud, will prevail. Blackburn on Sale 187-8; Chit. on Con. (5th Am. ed.) 274; Lanfear v. Sumner, 17 Mass. 115, note 9. I am aware that a more stringent rule, perhaps a safer one, has been adopted in many of the states, including Pennsylvania, viz. that a sale of chattels unaccompanied by delivery is fraudulent and void, as against bona fide purchasers and creditors of the vendor. 5 Serg. & Rawle 275; 10 Ib. 202; 17 Ib. 251. But in Mitchell v. Willock, 2 Watts & Serg. 253, the Supreme Court of Pennsylvania held that this principle does not apply to a voluntary assignment for the benefit of creditors; that, by the statute of that state, the assignee is allowed thirty days, within which he is to file an inventory of the estate assigned, to file an appraisement and to give security, and that in the mean time the property passes so as to exempt it from execution. In such case it is not necessary that actual possession be taken by the assignee, the goods being suffered to remain in the possession of the assignor, who, for the purposes of the trust, is the agent of the assignee. The possession of — 170 — the goods by the assignor is in such case consistent -with the deed and with the object and intention of the assignment. Under this decision, which is clearly in accordance with the rule adopted in this state and with sound principles, the «vessel in question passed by the assignment, so as to be exempt from execution, although no actual delivery was made. Within five days after the assignment, the goods were attached and taken into the custody of the sheriff. At the time of the service of the attachment, the vessel was not subject to seizure at the suit of the creditors of the assignor, the property having passed by the assignment. It is objected that there is no evidence that the plaintiff made demand of the sheriff, or attempted to take possession of the goods, at any time within thirty days. But the material inquiry is whether, at the time of serving the writ, the property was liable to be seized as the property of the defendant in attachment; and if it was not his property, as it clearly was not, the service of the attachment was illegal, and, being illegal, it could not be rendered valid and effectual by the owner of the property failing subsequently to demand the possession. At the common law, where the plaintiff in replevin complains that the defendant still detains the goods, if the plaintiff recover, he shall have judgment in damages as well for the value of the goods, as for taking and detaining them. Fitzh. N. B. 69 L; Gilbert on Rep. 160; Wilkinson on Rep. 20, 90; Morris on Rep. 24, 139, 142; 6 Vin. Ab. 333, Costs (a) 5; Easton v. Worthington, 5 Serg. & R. 131; Moore v. Shank, 3 Barr. 20. The remedy by replevin is coextensive with trespass, the only difference being that in replevin, where the plaintiff recovers the specified chattel, he has damages for the taking only. Where the chattel is not returned damages must cover the value of the thing, as well as the injury done by taking it. Bruen v. Ogden, 6 Halst. 370. Where the defendant claimed property in the goods sought to be reple.vied, that question must, at the common law, have been tried and decided before the sheriff could proceed to execute the writ of replevin. The statute (Rev. Laws 117, § 7, — 171 — 8,) was designed to remove that difficulty by leaving the property in the hands of the defendant, upon his giving the security for its forthcoming, and directing the suit to proceed as if the claim had not been made. The provision of the eighth section is, that the suit shall be proceeded in and determined in the same manner, in all respects, as if the claim of property had not been made. It does not require, nor can its meaning be, that the same judgment shall be rendered as if the property had been restored to the plaintiff. The bond for the return of the properly was designed as a security, and affords a cumulative remedy. There is nothing in the statute to give countenance to the idea that the legislature designed to turn the plaintiff round to a new action by depriving him of his common law remedy. This view of the effect and operation of the bond has been taken by the courts of other states. Morris on Rep. 142. Upon the case stated, the plaintiff is entitled to judgment. The judgment should be entered in damages, as well for the value of the goods as for the taking, with costs.