Birdseye v. Underhill

2 L.R.A. 99, 82 Ga. 142

• Court: Supreme Court of Georgia
• Decided: November 5, 1888
• Status: Published

Opinion

Simmons, Justice.

It appears from the record in this case that Baker & Clark, merchants doing business in the State of New York, on the 24th of November, 1886, made an assignment to C. E. Birdseye, of “all and singular their co-partnership and individual estate and property, real and personal, of every kind whatsoever, and wherever situated, held by and in the name of said parties, . . . except such property as exempt by law from levy and sale.” In this deed of assignment, preferences were made of certain creditors. On the 7th of November, 1886, Stephen Underhill, a non-resident of Georgia, instituted his action in this State, against said non-resident assignors, by attachment and garnishment; and summons of garnishment was served upon several of their debtors residing • in this State. The garnishees answered admitting their indebtedness. Birdseye, the assignee, appeared in court and claimed the assets as belonging to him as assignee. The case was submitted to the trial judge without the intervention of a jury, upon the following agreed statement of facts :

“(1) This paper shall be construed as a properly made claim by O. F. Birdseye, assignee, for all assets garnished; (2) the debts of plaintiffs are due and correct; (3) plaintiff (Underhill) resides outside of the State of Georgia; (4) the firm of Baker & Clark, both of whom reside out of Georgia, executed an assignment to C. F. Birdseye, on November 24th, 1886, a copy of which is hereto attached. The assignment was a general assignment executed in New York, and was a legal assignment under the laws of New York. There was no schedule of assets attached to the assignment as provided for in section 1953(d), (e), of the code, nor of creditors as i>rovided for in acts 1884r-5. The assignment covered, amongst other property elsewhere, choses in action in Georgia; and this claim of Birdseye, assignee, only applies to choses in action in Georgia, the attachment not having been levied upon anything else; (5) there is no agreement as to whether notice of the assignment was served on the garnishee before the garnishments were served, and each side reserves the right to suspend the case at any time and have evidence taken on this point.”

On this statement of facts, the trial judge decided that Birdseye, the assignee, was not entitled to the fund in court, and rendered a judgment in favor of Underhill against Baker & Clark for the amount they were indebted to Underhill, and a judgment' against Birdseye, the assignee, for the costs. To this ruling the assignee excepted, and brought the case here for review.

1. The main question before us in this case was, whether this assignment, made in the State of New York, was void under the laws of Georgia. It was insisted by counsel for the defendant in error that it was void under our law, because the assignors did not attach thereto a properly sworn to “ full and complete inventory and schedule of all the assets of every kind, held, claimed or owned by said firm at the time of the execution of the assignment,” and also a “ full and complete inventory and schedule of all indebtedness of every kind of said firm at the time of the execution of the assign-' ment, and the names of, the amounts due to, and the residence of each creditor of said assignors,” properly sworn to, as required by the acts of 1881 and 1885. It was insisted that for this reason the assignment was void, being in violation of the policy of our law. It was admitted that under the laws of New York, it was a legal assignment.

Section 8 of our- code declares, that “the validity, form and effect of all writings or contracts are determined by the laws of the place where executed. "When such writing or contract, is intended to have effect in this State, it must be executed in conformity to the laws of this State, excepting wills of personalty of persons domiciled in another State or country.” Here, then, is an assignment or contract which it is agreed was a valid and legal contract under the laws of the State of New York; and under this section of the code, its validity, form and effect are to be determined by the laws of that State. It is claimed that this assignment or contract was intended to have effect in this State, because it was introduced in the court below as evidence, and under it this fund was claimed ; and that therefore, it must have been executed in accordance with the laws of this State, which require a schedule of assets and of indebtedness to1 be attached to the assignment as part of the execution thereof. We can see nothing in this assignment that shows that it was intended to have effect in this State. It appears from the face of it that it w.as an assignment in the State of New York, and not intended to have effect in this State alone, but to have effect generally wherever the assignors had property. We do not think that the latter part of section 8, supra, applies to contracts of this sort. We think that that part of the section means that if this contract had been made in New York, to be performed in this State, then it must be executed in accordance with the laws of this State. But as we have seen, the contract was intended only to have effect in the State of New York. It may be said, however, that Baker & Clark, the assignors, had debts due them by citizens of this State and those debts were assigned in this instrument, and to that extent it was intended to have effect in this State. We do not think that this is a sound proposition. The debt owed them by the garnishees in this State, had no situs in this State. The rule is, that the situs of a debt follows the creditor, and where the debtor and creditor reside in different States, the law of the domicile of the creditor prevails A debt is not a corpus capable of local position, but purely a jus incorpórale. Story Confl. of Laws, 8 ed. 559. ■■ “ A chose in action cannot surely be said to have any : actual situs in the place where the debtor resides. As . a general principle, it is payable at the residence of the ■ creditor if not expressed or otherwise, and a tender, to ’ be good, must be made to the creditor.” Burrill on As•signments, 471. The situs of the debt being at the ■ domicile of the creditor, the creditor had a right to trans- • fer it to his assignee for the benefit of his creditors. i Story on Confl. of Laws, 558, says : “ The reasoning of Lord Kenyon in a celebrated case (Hunter vs. Potts, 4 ' T. R. 182, 192) would certainly lead to the conclusion '.that an assignment of personal property, whether it were of goods or debts, according to the law of the . owner’s domicile, would pass the title in whatever country it might be, unless there were some prohibitory law in that country.”

2. But it is said that the assignment, not having attached thereto the schedules of assets and of indebtedness as required by our law, contravenes the policy of our law, and is therefore void. That is true if these schedules are a part of the contract. Our law is, that whenever the contract itself violates the policy of our law, it is void and cannot be enforced in the courts of this State. We are referred to the following cases to show that this assigment is void: Herschfeld vs. Dexel & Co., 12 Ga. 582; Stricker & Co. vs. Tinkham, 35 Ga. 176; Mason & Fant vs. Stricker & Co., 37 Ga. 262; Miller vs. Kernaghan, 56 Ga. 155; Princeton Mfg. Co. vs. White, 68 Ga. 96. We have, carefully read the cases referred to, and such of them as are in point establish the principle we have just laid down ; that is, that if the contract itself contravenes the policy of our law, it will be void in this State. In the eases in 12 Ga., 35 Ga. and 37 Ga., supra, the assignments gave a preference to one creditor over another, which at that time made them void, under our law ; and the property, in each of those cases, was situated in this State. We do think that the acts of the legislature requiring schedules to be annexed to the deed of-assignment, make these schedules a part of the contract; nor do we think that these acts apply to contracts or assignments made out of this State. An inspection of the acts relied on will show that it was not the intention of the legislature that they should affect contracts or assignments other than those made in this State. While it is in the power of the legislature to enact laws declaring that all assignments made out of this State and not executed in conformity with our law, shall be void as to property found here, we do not think it has done so. We think these requirements concerning schedules were made for the protection of the creditors of the assignors, and were intended to prevent fraud on the part of the assignors, by throwing greater restrictions around assignments and compelling the assignors to give a correct statement under oath to their creditors of all their assets and of all their indebteelness, and of the persons to whom they were indebted and where those persons reside. We therefore do not think that the schedules are parts of the contract; and as we have seen, it is only when the contract dement violates the policy of our law, that the assignment is void. We are strengthened in this view by the following decisions made in other States, upon questions somewhat similar to the one now under discussion :

In case of Sanderson vs. Bradford, 10 N. H. 260, it was ruled that although the oath of the assignor, made in Massachusetts and sufficient in that State, would have been insufficient in New Hampshire and would have rendered the assignment void if made in New Hampshire, yet the assignment being valid in Massachusetts, the assignment would be held to be valid in New Hampshire. In Vermont the statute required an inventory of all the property assigned to be attached to the assignment; an assignment was made in New York without this inventory; and it was held that a New York assignment without this inventory would be valid, and that the statute of Vermont, requiring the inventory to be attached to the assignment, did not apply to assignments made out of that State. Hanford vs. Paine et al., 32 Vt. 448. See the able and learned opinion of Chief Justice Redfield in that case. See also Atwood vs. Protection Ins. Co., 14 Conn. 555. In Ockerman vs. Cross, 54 N. Y. 29, the court held that the statute law of New York regulating assignments for the benefit of creditors did not apply to foreign assignments, and that such assignments, if valid by the law of the place where made, although not in conformity to the law of New York, would protect the property assigned from attachment. The same principle was held in the case of Beverly vs. Whitmore, 19 N. J. Eq. 462; also in the case of Chaffee vs. Fourth National Bank, 71 Maine, 514. In re Paige & Sexsmith. Lumber Co., 31 Minnesota, 136, it was beld tbat “ tbe statute wbieb declares void assignments not made to residents of tbis State, and sucb as are not filed as prescribed, was intended to apply only to assignments made witbin tbis State. It does not change tbe unwritten law relative to tbe validity of foreign assignments.” In tbe case of "Weider vs. Maddox, 66 Tex. 372, it was beld tbat if a voluntary assignment covering property in more than one State is deemed valid, it would be sufficient under tbe law of tbe domicile of tbe assignor, and under tbe law of tbe State where tbe property is situated, to pass title, notwithstanding local laws regulating tbe administration of tbe trust property be not complied with.

It therefore appearing tbat tbis was a legal and valid assignment in tbe State of New York, where it was made, and tbat it was not intended to take effect in tbis State, tbat no part of tbe contract of assignment contravenes tbe policy of our law, and tbat tbe assignor bad no property in tbis State, and tbe requirement Of our statute as to schedules being no part of tbe contract, it follows tbat tbe judgment of tbe trial judge was erroneous and must be reversed.