Helme v. Buckelew

191 A.D. 59, 181 N.Y.S. 104, 1920 N.Y. App. Div. LEXIS 4659

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: March 5, 1920
• Status: Published

Opinions

Page, J.:

Section 1836-a of the Code of Civil Procedure provides: “An executor or administrator duly appointed in any other State, Territory or district of the United States or in any foreign country may sue or be sued in any court in this State in his capacity of executor or administrator in like manner and under like restrictions as a nonresident may sue or be sued,” if there shall be filed within the times and in the manner therein provided a duly authenticated copy of his letters.

I cannot accept the conclusion of Mr. Justice Latjghlin that this section in so far as it relates to actions against foreign executors is to be limited to the same classes of actions that are authorized by section 1780 of the Code of Civil Procedure to be brought against foreign corporations. If such had been the intention of the Legislature, it would have provided in section 1836-a “ in like manner and under like restrictions as a foreign corporation may sue or be sued.” We are not to presume that the members of the Legislature are ignorant of the law and did not know the difference between the manner and restrictions of bringing an action against a non-resident of the State and against a foreign corporation. A non-resident may be sued upon any cause of action, the subject-matter of which is within tfie jurisdiction of the court, if the summons is personally served upon him within the State, and may be served by substituted service where property situated within the State is the subject of the action (Code Civ. Proc. § 438, subd. 5) or property is attached therein; in which case the judgment is conclusive only as to such property. On the other hand, a foreign corporation can maintain any action in the courts of this State of which the court has jurisdiction, except that it cannot maintain an action upon a contract made by it within the State unless before entering into such contract it has complied with sections 15 and 16 of the General Corporation Law. (Bradford Co. v. Dunn, 188 App. Div. 454.) Having complied with those sections the foreign corporation may be served with a summons by service thereof upon the agent designated to receive service upon any cause of action within the court’s jurisdiction. (Sukosky v. Philadelphia & Reading Coal & Iron Co., 189 App. Div. 689.) If the foreign corporation is doing business within the State it is likewise subject to the service of process as provided in section 432 of the Code of Civil Procedure (Tauza v. Susquehanna Coal Co., 220 N. Y. 259), while if it is not doing business in this State jurisdiction is not obtained by service of process on the officers and persons specified in said Code section. (Dollar Co. v. Canadian C. & F. Co., 220 N. Y. 270.) The reason of these limitations on the right of foreign corporations to maintain actions upon contracts made within the State and of subjecting them to our process if they are transacting business within the State, is primarily to regulate and control, the business of foreign corporations in this State, for the protection of the citizens against any unlawful business of a foreign stock corporation, and if they come into the State and do business here to render them equally accessible to process with domestic corporations. (Emmerich Co. v. Sloane, 108 App. Div. 330; Bradford Co. v. Dunn, supra.) No such reason obtains with respect to a foreign representative of a decedent. These representatives are appointed to administer and distribute the estate in accordance with the provisions of the will of the testator or in accordance with the Statute of Distribution in case of intestacy. Executors are rarely authorized to carry on the business of the testator, and if they do, for contracts made by them or indebtedness incurred they are liable personally and not in their representative capacity. (Stedman v. Feidler, 20 N. Y. 437,446; Austin v. Munro, 47 id. 360, 366.) To hold, therefore, that the Legislature only intended to permit foreign representatives to be sued as such, when they were carrying on business for the benefit of the estate within this State, is to say that the legislative amendment is futile, and can serve no purpose. Until the enactment of section 1836-a of the Code of Civil Procedure (Laws of 1911, chap. 631) it was the settled law of this State that a foreign executor or administrator could not sue or be sued in the courts of this State. The reason of the rule in so far as it prohibited suits by foreign executors and administrators prosecuting actions in this State is clearly set forth in Petersen v. Chemical Bank (32 N. Y. 21, 42): “ Foreign laws have no inherent operation in this State; but it is not on this account solely or principally that we deny foreign representatives of this class a standing in our courts. The comity of nations, which is a part of the common law, allows a certain effect to titles derived under and powers created by the laws of other countries.” The opinion then refers to the fact that foreign corporations, receivers of foreign corporations, assignees of bankrupt and insolvent debtors, under the laws of other States and countries are allowed to sue in our courts, and resumes: “It is true their titles are not permitted to overreach the claims of domestic creditors of the same debtor, pursuing their remedies under our laws; but in the absence of such contestants they fully represent the rights of the foreign debtors * * *. It is not therefore because the executor or administrator has no right to the assets of the deceased, existing in another country, that he is refused a standing in the courts of such country, for his title to süch assets, though conferred by the law of the domicile of the deceased, is recognized everywhere. Reasons of form, and a solicitude to protect the rights of creditors and others, resident in the jurisdiction in which the assets are found, have led to the disability of foreign executors and administrators, which disability, however inconsistent with principle, is very firmly established.” Later the same court said: “ The rule still remains that a foreign executor or administrator cannot sue as such in this State, although in cases where there are no creditors of the decedent within the State, the reason of the rule has little force.” (Taylor v. Syme, 162 N. Y. 513, 518. See, also, Wilkins v. Ellett, 108 U. S. 256, 258.) The disability of the foreign representatives to sue is not a want of title, but.a personal incapacity to sue, imposed as a matter of public policy for the protection of resident creditors of the estate. Because of the expense and inconvenience of ancillary administration, especially when there were no domestic creditors of the estate, in order that the assets might be collected or reduced to possession and transmitted to the domiciliary jurisdiction, many .States removed the ban against the maintenance of actions by foreign executors and administrators. Among these States is New Jersey. (Hayes v. Pratt, 147 U. S. 557, 569.)

Before the enactment of section 1836-a of the Code of Civil Procedure it was the rule in this State, in harmony with that which generally obtained, that an action at law could not be maintained against a foreign executor or administrator, but suits in equity were often sustained. (De Coppet v. Cone, 199 N. Y. 56, 60; McNamara v. Dwyer, 7 Paige, 239; Doolittle v. Lewis, 7 Johns. Ch. 45.)

The decision of the case of Thorburn v. Gates (184 App. Div. 443, affg. 103 Misc. Rep. 292) did not rest upon the fact that the action was in equity to reach real and personal property of the decedent in this State, and, therefore, this court decided that jurisdiction was conferred by section 1836-a. There is no discussion of this proposition either in the opinion of Mr. Justice Bijtjr at Special Term or in the opinion of this court. The reason for this omission is obvious. The courts of this State had sustained such actions in equity against foreign representatives prior to the enactment of section 1836-a. The learned judge of the United States District Court in Thorburn v. Gates (225 Fed. Rep. 613; 230 id. 922) had limited the effect of section 1836-a to cases not only where assets of the decedent were in this State, but further where the law of the State of decedent’s domicile authorized such suits to be brought against representatives appointed therein, thus holding that a statute of this State which conferred jurisdiction upon our courts depended for its validity upon statutes of foreign States. It is_ well settled that statutes of foreign States have no binding force or effect beyond the territorial limits of that State, and yet it was held that such statutes limited our Legislature in its power to confer jurisdiction upon our courts. We referred to this decision of the United States District Court and expressly repudiated it. (184 App. Div. 445.) We, therefore, considered the effect of section 1836-a generally and not with reference to the particular cause of action alleged. A similar contention is made, on this appeal, by the appellant that inasmuch as the laws of the State of New Jersey do not permit actions to be brought in that State against foreign representatives, no other State can authorize an action to be brought within its jurisdiction against a New Jersey executor. Babbitt v. Fidelity Trust Co. (70 N. J. Eq. 651) is cited as an authority sustaining this contention. That was an action in the courts of New Jersey against a Pennsylvania executor. The court stated: “ The general rule is well settled that an executor or administrator cannot in his representative capacity, maintain any action, suit or proceeding, either at law or in equity, in the courts of any sovereignty other than those under whose laws he was appointed or qualified, without obtaining an ancillary grant of probate or letters from the court of probate of such other sovereignty, unless power to sue in the foreign jurisdiction has been conferred upon him by statute * * *. And similarly the rule is that an executor or administrator cannot be sued in his representative character, unless he is made liable by statute, either at law or in equity, in the courts of any State or country other than that in which he received his appointment.” The court held that inasmuch as the laws of New Jersey had not authorized such an action against foreign representatives the action could not be maintained. No reference is made to the laws of Pennsylvania. All the cases cited in the opinion are New Jersey cases. There can be no question but that the jurisdiction of the courts of a State is fixed and determined by the Constitution or laws of the State, and cannot be extended or limited by the laws of any other State. The jurisdiction of courts is part and parcel of the sovereign power of the State. The jurisdiction of the State within its own territory is necessarily exclusive and absolute; it is susceptible of no limitation not imposed by itself. Any restriction upon it deriving validity from an external source would imply a diminution of its sovereignty, to the extent of the restriction, and an investment to the same extent in that power which could impose such restriction. (The Exchange, 7 Cranch, 116, 135.)

In the present case we are not advised of the cause of action. The action was commenced by the personal service upon the defendant within this State of a summons, with a notice that in default of appearance oi answer judgment would be taken for $25,000. The action is, therefore, an action at law. The defendant appearing specially upon affidavits alleging that she was and is a resident of Washington, District of Columbia, and that letters testamentary were issued to her by a probate court of New Jersey, and that there are no assets of the estate within the State of New York, moved for an order directing the service of the summons and the summons be vacated and set aside and decreeing that the Supreme Court of the State of New York obtained no jurisdiction over the defendant. The grounds of the motion were: (1) That service was not made on any person authorized to act as executrix of the decedent’s estate within the State of New York. (2) That the attempted service does not constitute due process of law. (3) That the service of the summons can have no force or effect to confer jurisdiction upon the court over the executrix of the estate, or any part thereof. (4) That a judgment herein would deprive the executrix and the said estate and the persons entitled to any portion thereof, of their property without due process of law, in violation of section 1 of the Fourteenth Amendment to the Constitution of the United States. (5) That no judgment in this action would be entitled to full faith and credit or to any faith and credit under the provisions of section 1 of article 4 of the Constitution of the United States. We will consider these objections to the jurisdiction seriatim. It is unfortunate that there are no pleadings in the case so that the facts of this particular cause of action are not before us admitted by a demurrer if the alleged jurisdictional defect appeared upon the face of the complaint or the facts relied upon to show the lack of jurisdiction set forth in an answer. Considered generally the first three objections have no merit. (1) As we have heretofore stated, a foreign executor is authorized to act as such in the State of New York, not to administer the estate, but to collect the assets, the sole disqualification that formerly existed being that he could not maintain an action, but he could collect from a resident debtor or receive property, provided the same was voluntarily paid or given, and his receipt therefor would be good as against a subsequent claim by a domestic creditor or an ancillary administrator. (Wilkins v. Ellett, supra.) He could assign choses in action, and although plainly made for the purposes of suit in his behalf which he could not bring, the assignee could prosecute the action in our courts. (Petersen v. Chemical Bank, supra.) He could exercise a power of sale of mortgaged lands situate within this State. (Doolittle v. Lewis, supra.) As a matter of comity the courts of this State have recognized the grant of foreign letters by courts of other States. As a matter of public policy, a personal disqualification was imposed against their suing or being sued in our State. The Legislature has now removed this disqualification and by filing copies of the foreign letters the capacity to sue and be sued in their representative capacity is given. How far foreign laws, appointment of foreign receivers, insolvency assignees and personal representatives of a decedent are to be recognized and given effect in this State is a matter of comity and public policy. The Legislature is the proper authority to declare the public policy of the State. By the enactment of section 1836-a of the Code of Civil Procedure, the public policy that had theretofore prohibited foreign representatives being litigants in our courts was declared no longer existent. Therefore, service of the summons was made upon a person, authorized in that behalf, to act as executrix of the decedent’s estate, within the State of New York. (2) That the service of a summons issued from a court of general original jurisdiction, affording the party an opportunity to appear, answer and be heard in his defense, according to the settled law and practice, is due process of law, is too evident to require demonstration. (3) We have shown under (1) that the service of the summons confers jurisdiction upon the court over the executrix, and not only now, but always gave jurisdiction in equity actions over any portion of the estate situated in this State. (4) Section 1836-a of the Code of Civil Procedure does not violate section 1 of the Fourteenth Amendment of the Constitution of the United States. The Code section applies to all persons similarly situated, and makes applicable to foreign executors and administrators the law and procedure which had from time immemorial obtained with respect to non-residents of the State. There can- be no arbitrary or unjust deprivation of any one of property thereunder. The summons is the usual process for the institution of judicial action. There is no difference in the method of trial or procedure from the ordinary modes prescribed by law. It secures to the parties an opportunity to be heard respecting the justice of the judgment sought, and the proceedings are governed by the general rules established in our system of jurisprudence for the securing of private rights. (Hogar v. Reclamation District No. 108, 111 U. S. 701, 708.) If any property is taken as a result of this action it will be because, according to the settled principles of jurisprudence, such a taking is authorized by a judgment of a court of competent jurisdiction, after a trial of the issues, or a full opportunity to meet the issues of which the defendant has failed to take advantage. (5) If a judgment is entered in this action it would be entitled to full faith and credit in all other States. By the Constitution of the United States and the acts of Congress supplemental thereto (U. S. Const, art. 4, § 1; 1 U. S. Stat. at Large, 122, chap. 11; now U. S. R. S. § 905), full faith and credit must be given in each State to the judgments of the courts of other States. It is recognized as a well-settled principle of law that the State of the forum may by law recognize foreign letters testamentary or of administration and may allow the foreign representative to sue, or to be sued in the courts of the State. .Ah of the statements of the general rule holding otherwise expressly state that such rule obtains only in the absence of such enabling acts. An action against a foreign executor or administrator as such (like an action against a domestic executor or administrator) is an action in personam. The Supreme Court of the United States in cases that will be considered more in detail later, said: The argument seems to be “ that the judgment against the administrator is against the estate of the intestate, and that his estate, wheresoever situate, is hable to pay his debts. * * * This argument assumes * * * that the estate has a sort of corporate entity and unity. But this is not true, either in fact or in legal construction. The judgment is against the person of the administrator, that he shall pay the debt of the intestate out of the funds committed to his care.” (Stacy v. Thrasher, 6 How. [U. S.]44, 60; Johnson v. Powers, 139 U. S. 156, 161.) The action being against the person of the executrix and personal service having been made within this State, and such service authorized by the laws of this State, the court acquired jurisdiction of the person of the defendant and could enter a valid judgment in the action. We must assume that the subject-matter of the action will be such as to be within the jurisdiction of the court, for otherwise we cannot consider it possible that the courts of this State would give judgment in plaintiff’s favor and the defendant will have full opportunity to present that question should it arise before any judgment could be entered. The two cases last above cited are urged for the proposition that a judgment granted against an administrator in another State does not bind the administrator in the State of the domicile. In those cases, however, the question arose upon judgments granted against ancillary administrators, and it was held that there was no privity between the two administrators, for they derived their authority from different sovereignties, and were distinct persons in their representative capacity, although the same person was appointed both domiciliary and ancillary administrator. Where, however, the action is against the foreign representative as such there are not different persons appointed in different jurisdictions. The foreign representative is the party to the action and as to him the judgment will be conclusive and entitled to full faith and credit in other States. This decision does not run counter to the case of Pennoyer v. Neff (95 U. S. 714), for there a judgment in personam was granted upon substituted service without the State, nor to the case of Riverside Mills v. Menefee (237 U. S. 189) which rests upon the same ground. It was therein held that unless the foreign corporation was doing business within the State, service of a process upon an officer of said corporation temporarily within. the State was not personal service, but an attempt to make substituted service which would not authorize a personal judgment.

The order should be affirmed, with ten dollars costs and disbursements.

Clarke, P. J., Dowling and Merrell, JJ., concur; Laughlin, J., dissents.