Coflin v. Kelling

83 Ky. 649, 1886 Ky. LEXIS 21
CourtCourt of Appeals of Kentucky
DecidedFebruary 27, 1886
StatusPublished
Cited by5 cases

This text of 83 Ky. 649 (Coflin v. Kelling) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Coflin v. Kelling, 83 Ky. 649, 1886 Ky. LEXIS 21 (Ky. Ct. App. 1886).

Opinion

JUDGE PRYOR

delivered the opinion of the court.

Tlie appellants, Samnel Coffin and others, citizens •of Kentucky, holding claims against the appellee, Kelling, who was a citizen of Ohio, attached certain ■coke and barges as the property of Kelling, with a view of subjecting it to the payment of their debts.

Wolfe, another appellee, and also a resident of ■Ohio, claimed the property by virtue of a deed of assignment made to him by Kelling for the benefit of creditors prior in date to the attachment levied by the appellants.

As assignee of Kelling, Wolfe was permitted to intervene, and upon the hearing in the court below it was adjudged that the assignee for creditors was entitled to the property as against the attaching ■creditors, and of that judgment the latter complains.

The position assumed by counsel for the appellant is, that as the attaching creditors were citizens of [651]*651Kentucky, no assignment made in the State of Ohio .•should affect the ciaims of creditors who had seized the personal estate of the debtor in Kentucky for the payment of their debts. In other words, that where the creditor is a citizen of this State, and the. property of the debtor is within its territorial limits, the right of the creditor here is not to be affected by the assignment of the insolvent debtor in another State for the benefit of creditors. The case of Johnson v. Parker, 4 Bush, 149, is relied on as sustaining this view of the question.

In that case this court seems to have been reluctant to pass on the question, because, as is plainly intimated, no direct judicial decision had been referred to on the subject, and proceeded to deny pri•ority to the appellant (the assignee), because there was nothing in the record showing that any security .had been given by the assignee for the just and ■proper distribution of the debtor’s estate or its proceeds between creditors, holding that “comity re- quires reciprocity.” Local bankrupt laws, as said in that case, have proprio mgore no extra territorial ■ operation, the principle of international comity not requiring the courts of one government to enforce such a law to the prejudice of the domestic creditors. The .court in that case, however, recognized the difference between an assignment by law, which is local, and an assignment by contract; and while it must be conceded that the reasoning in Johnson v. Parker conduces to sustain the claim of the attaching creditor, the question here made was not deter- ■ mined, but the cáse decided adverse to the assignee ::for other reasons.

[652]*652While there is much contrariety of opinion with, both elementary writers and in judicial decisions as-to the effect to be given assignments of personal property, it is certain, that an assignment made in one State contrary to the settled policy of another-State will not be enforced by the latter so as to prejudice the rights of its own citizens who are creditors ; but where such an assignment is in harmony with or in the line of policy with reference to the-rights of creditors residing in the State where the assignee is asserting his claim, we perceive no reason why the assignee in a voluntary assignment made in another State, should not be aided by the courts of this State in securing the property of the debtor that it may be distributed pro rata between all the creditors, whether citizens of this State or beyond its jurisdiction.

Such an assignment as.was made in this case would have been valid here, and the. rights of creditors are secured by the bond of the assignee, which seems-to have been the principal objection in the case of' Johnson v. Parker.

In Guillander v. Howell, 35 N. Y., 657, where the assignment preferring a creditor was made in New York, and at the time personal property embraced in the assignment was in the State of New Jersey, and was seized by a resident of the latter State under an attachment, the New Jersey creditor was allowed to subject it, because by the law of that State such preferences were invalid; and when such questions arise the right of the assignee to claim personal property located in another State than that [653]*653in which the assignment is made as against domestic •creditors must depend upon the character of the assignment, for if against the policy of the State law where the claim is asserted, it will not be enforced .as against its own citizens. (Burrill on Assignments, sections 302, 307, 4th ed.)

If such an assignment, voluntary in its character, made by the debtor for his creditors is valid 'where made, it should be upheld everywhere, unless the policy of the State where it is sought to be enforced forbids it. Chancellor Kent says:

“The acts of parties valid where made, shall "be recognized in other countries, provided they be not contrary to good morals, nor repugnant to the policy and positive institutions of the State.”

The authorities relied on by counsel for the appellant apply to assignments made by- operation of law, or to the assignment of choses in action where such assignments are not allowed, or to the action of courts in placing property in the hands of a receiver or to foreign bankrupt laws, and where the transfer •of the property of the debtor is involuntary. “An ■assignment by law has no legal operation out' of the •State in which the act was passed, while a voluntary assignment, it being by the owner, is a personal-right of the proprietor to dispose of his effects for honest purposes.” (Burrill on Assignments, section 303, 4th edition, and a number of cases there cited.)

In the one case the owner disposes of his. own property for a consideration that is valuable and to be commended, and in the other the foreign tribunal, without the consent of the owner, takes [654]*654charge of his estate, appoints the trustee, and disposes of the trust property. The transfer to the assignee is not only against the will of the owner, but would be void but for the law of the State that determines the insolvency, and passes the estate of the debtor into other hands without his consent.. This seems to be the reason given by the. text-books, and the decisions on the subject, for the distinction between voluntary and involuntary assignments.

The courts of this State will recognize the right, of the owner to dispose of his property by contract,, and will uphold such right although made in another jurisdiction, when not against the policy of our law, or plainly injurious to the rights of the resident creditor.

In the case of May v. Wannemacher, 111 Massachusetts, 202, it was held, in discussing a similar question, that an assignment made in Pennsylvania was entitled to preference over the attaching creditor in Massachusetts; that the assignment in no respect contravened the policy of the law as established in Massachusetts, and, therefore, was effectual to pass the rights of the debtor even to property not subject to the local laws of Pennsylvania.

In the case of Moore and others v. Willett, 35 Barbour, 663, the transfer was made in North Carolina, and the property afterwards seized under execution in the State of New York; it was held that the assignment must prevail as against the execution creditor.

In Law v. Mills, 18 Pa. State, 185, the debtors executed an assignment in the State of New York [655]

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83 Ky. 649, 1886 Ky. LEXIS 21, Counsel Stack Legal Research, https://law.counselstack.com/opinion/coflin-v-kelling-kyctapp-1886.