Doughten v. Browning

The opinion of the court was delivered by Swayze, J. A consideration of the orders of the orphans court shows that what that court actually did was to leave undisturbed the orders it had previously made with reference to the administration of the estate, including the order directing the assignee to file an intermediate account; to refuse to direct a partial distribution ■of the assets, and to leave the assignee free to distribute all the moneys in his hands' under the orders of the Pennsylvania courts, if he chose. The court did not direct a transfer of the .assets to Pennsylvania. The section of the statute authorizing the court to direct a partial distribution is section 8. P. L. 1899 pp. 149, 150. Its express language is that the court “may in its discretion direct such partial distribution.” Since it was discretionary with the court to make the order or not, and the ultimate rights of the [756] creditors and the assignee were not affected, the orders made on the petitions of the assignee and the creditors are not appealable. In re Anderson, 17 N. J. Eq. (2 C. E. Gr.) 536; National Bank of Metropolis v. Sprague, 21 N. J. Eq. (6 C. E. Gr.) 458; Camden and Amboy Railroad Co. v. Stewart, 21 N. J. Eq. (6 C. E. Gr.) 484; Read v. Huff, 40 N. J. Eq. (13 Stew.) 229. This very ease illustrates the importance of the statutory provision making a partial distribution a discretionary matter. Whether this assignment be regarded as a New' Jersey assignment or as a Pennsylvania assignment, there were assets in both states, arid proceedings had been taken in both. The time within which creditors might file claims in Pennsylvania had not expired. It was therefore quite impossible for the orphans court to determine wdiat dividend would secure that equality among the creditors which the statute contemplates, and even if an advantage might be gained by Now Jersey creditors who had filed their claims within the three months, that advantage could not fairly be claimed by the Pennsjdvania creditors, who' constituted the majority. The orphans court was therefore clearly right in refusing to order a partial distribution. Although the order was not appealable, no motion was made to dismiss the appeal, and the prerogative court was right in affirming these two orders. The order on George G. Browning’s petition amounted only to a refusal to take the action prayed for, and as the present appellants opposed such action they are not aggrieved by the court’s denial of this petition. That denial left the matter just where it stood before the petition was filed. In the absence of a motion to dismiss the appeal upon the gound that the appellants were not aggrieved, the prerogative court -was right in affirming this order also. Although we think the decree must be affirmed on the narrow grounds just stated, we have considered the question of jurisdiction, since it is apparent from the argument that what is really complained of by the appellants is not the action actually taken by the orphans court, and set forth in the petitions of appeal, but the reason for that action, stated in the recitals of [757] the orders appealed from, but not referred to in the petitions of appeal; the argument in this court was addressed to the question whether the proper forum in which to distribute this estate is Pennsylvania or New Jersey. The deed of assignment as such is sufficient to pass title in both states. Frazier v. Fredericks, 24 N. J. Law (4. Zab.) 162 Bentley v. Whittemore, 19 N. J. Eq. (4 C. E. Gr.) 462. The controversy which usually arises in cases of this character between those claiming rights under the deed of assignment and those claiming under legal proceedings in another jurisdiction, is not present in this case. All the parties claim their rights under the same deed, and have by their' acts assented thereto. Nor is any question involved as to the jurisdiction of the courts of New Jersey over assets within this state. The case presents the narrower question of the jurisdiction of the Camden orphans court. That jurisdiction is statutory aucl depends upon the act concerning general assignments. P. L. 1899 p. 146. The object of that act is to secure an equal distribution of the estate of the assignor among such of his creditors as may choose, to present their claims, and to release the assignor from further liability to them. To that end it contemplates an administration of the whole estate and a distribution among all the creditors. The assignee is required to exhibit an inventory and valuation of the estate as far as has come to his knowledge; to tile a list of all creditors who have proved their claims; and to render a final account after the determination of all claims; preferences within two months of the general assignment are made void, and creditors who come in and exhibit their demands under the assignment for a dividend are barred from having afterwards any action or suit against the assignor or his representatives. The object of this act cannot be secured by a partial assignment; no one would contend that creditors exhibiting their demands to a New Jersey assignee for a dividend out of the New Jersey assets would be barred from having a dividend out of assets in another jurisdiction. The very scheme of the act makes a single administration necessary. [758] The case differs, also, from a case where- resort must be had to an ancillary administration. For the deed passes title as a common law conveyance subject only to such rights as may be-acquired by creditors in a foreign jurisdiction adversely to the deed of assignment. This court held, in Bentley v. Whittemore, that such a deed, executed under the laws of another state, passed title to real estate in New Jersey, which title was good as-against creditors not resident in New Jersey, even though the deed contained preferences in contravention of our. statute. The supreme court of the United States has adopted the same rule in a case where possession was actually taken by the assigneeuncler the foreign assignment. Barnett v. Kinney, 147 U. S. 476. Security Trust Co. v. Dodd, Mead & Co., 173 U. S. 624 is not applicable-; no claim is here made adversely to the deed,, but all parties claim thereunder. We have, then, a case of a deed of assignment sufficient to-pass title in New Jersey and under which the orphans court, might acquire jurisdiction pursuant to the statute, but a case in which it.is not-necessary to invoke that jurisdiction. We think the jurisdiction of the orphans court in such a case depends upon its ability to administer the whole estate, and to-accomplish the object of the act. That jurisdiction fails in this-case.because when the first proceeding was taken in Newr Jersey the jurisdiction of the Pennsylvania court had already attached. When, the deed was recorded in Philadelphia, on November 19th, it was not acknowledged as required by the second section of our act concerning general assignments, and this- defect ivas not supplied until the following day. Title had already passed to the assignee before the attempt was made to have the deed comply with our lawr, and even that attempt was not successful, for the deed fails to have annexed an inventory and list of creditors. It is true that this failure would not render the deed invalid of exclude it from the operation of the act (section 2), but if willful — and it could hardly be otherwise — the assignors co-uld not receive any of tire benefits of the act. -We ought not to give such an effect to the deed. The deed was not such a deed as required by our act, and the conduct of the assignors and the assignee indicates that they [759] clid not, originally at least, intend that it should he operative as a deed of assignment under the New Jersey act. The principal place of business of the partners was Philadelphia; most of their creditors were Pennsylvania creditors; the deed was executed and delivered in Philadelphia, and the trust -was accepted there by the assignee; the assignee had the deed recorded, first, in Philadelphia; he filed his inventory there two weeks before he filed an inventory in New Jersey; the inventory in Pennsylvania was complete; that in New Jersey was partial and included only the assets in New Jersey, and was not a true inventory, as the statute requires; he gave bond in Pennsylvania for the whole, estate, and in New Jersey for a part only even of the New Jersey assets; he took no further step looking to New Jersey''as the proper forum until May 10th, 1901, six months after the assignment, and he has never treated the Camden orphans court as having jurisdiction over all the assets. We think the assignee cannot in this way divide the administration of the assets to -which he acquired title under a single deed of conveyance. While the assignors and assignee might have had this estate administered by the Camden orphans court, they elected to have it administered by the Philadelphia common pleas, and by that election the parties to this litigation are bound. The decrees of the prerogative court in each case should be affirmed, with costs. For affirmance—The Chief-Justice, Garrison, Fort, Garretson, Swayze, Bogert, Vredenburgh, Green—8. For reversal—Dixon, Vroom—2.