GRAY v. DELAWARE AND HUDSON CANAL COMPANY

GRAY v. DELAWARE AND HUDSON CANAL COMPANY. N. Y. Supreme Court, Third Department; Circuit, 1878. Trustee Process. — Exemption prom Execution. — Foreign Judgment. Judgment in a regular trustee process in another State is satisfaction when set up in this State against the claim of the person whose claim was thus trusteed, although, by the law of this State, his claim was exempt from such process at the suit of creditors. Action, for wages. Trial by the court. This action was brought by Henry Gray against The Delaware and Hudson Canal Company for wages earned by himself and others, his assignors. During all the time from August 1, 1876, until the commencement of this action, Henry Gray, A. Simmonds, Mitchell Garrant and Robert Mercer, were residents of the county of Clinton, in the State of New York, and were each and every one of them householders, and each of them had a family dependent on him. for support, and his earnings were necessary for the support of such family. The defendant, during the time aforesaid, was a corporation duly organized under and by virtue of the laws of the State of New York, and was, during said time, the lessee of, and operating the New York and Canada Railroad, running from Whitehall to Rouse’s Point, in the State of New York, and was also the lessee of, and operating the Rutland Division of the Rensselaer and Saratoga Railroad, running from Whitehall, in New York State, to Rutland, in the State of Vermont. The plaintiff, and the said A. Simmonds, Mitchell Garrant and Robert Mercer, as day laborers, performed labor and services for defendant in operating the New York and Canada Railroad during certain months of 1876 and 1877. After the performance of such labor, proceedings were commenced against each of them, in a justice’s court in the State of Vermont, in favor of creditors residing in the State of New York, under the laws of Vermont, upon contracts made in the State of New York, and the defendant herein was summoned in each of said actions as trustee of the party defendant in such actions respectively, which proceedings were regular in form according to the statutes of the State of Vermont. In each of said actions, the writ therein was served upon each of the defendant debtors therein respectively by leaving a true and attested copy thereof in the hands of the defendant herein, as trustee, for each of said defendant debtors, in the manner and as required by section 10, chapter 34 of the laws of Vermont. The return of the writ in each action showed that the defendant debtor therein had no residence, agent or attorney in the State of Vermont, and that a personal service of said writ on said defendant debtor could not be had. None of said defendant debtors appeared in said action in person or by attorney. Each of said actions in Vermont was brought, and the wages of each of said parties so trusteed within sixty days after such wages had been earned by said parties respectively, and judgment was entered in each of said actions and executions issued thereon against the defendant herein as trustee (except in the case of Robert Mercer). And it paid in said several executions to the plaintiff in each of said several actions, the said several sums due to said parties respectively from the defendant, except in the case of said Mercer, in which case the money was not paid, but the defendant herein still holds the same. Such judgments were so obtained and the said amounts so paid by defendant herein on such executions without the consent of this plaintiff or his assignors. Beckwith & Reilly, for plaintiff. I. The wages trusteed in Vermont, having been earned within sixty days before proceedings were commenced, and having been necessary for the support of the family of each of the principal defendants in such proceedings, were exempt, and could not be taken on executions issued from a justice’s court in the State of Vermont (Code of Pro. § 297). II. The Vermont court, by service upon the trustee, acquired no jurisdiction over the person of the defendant, as there was no personal service upon defendants, and no appearance by him (Howard v. Smith, 35 Super. Ct. [J. & S.] 131; Hill v. Hill, 28 Barb. 23; Pawling v. Bird’s Executors, 13 Johns. 192; Sheriff v. Smith, 47 How. Pr. 470; Gibbs v. Queen Ins. Co., 63 N. Y. 114, 24, 25; Kerr v. Kerr, 41 Id. 272; Holmes v. Holmes, 4 Lans. 388; Robinson v. Ward, 8 Johns. 86; McGiffert V. McGiffert, 31 Barb. 69; Vischer v. Vischer, 12 Id. 640). III. The question of jurisdiction may always be inquired into (35 Super. Ct. [J. & S.] 131; Hoffman v. Hoffman, 46 N. Y. 32; Borden v. Fitch, 15 Johns. 121-39; Shumway v. Stillman, 6 Wend. 447; Dobson v. Pearce, 12 N. Y. 156, 165; Bradshaw v. Heath, 13 Wend. 407; McGiffert v. McGiffert, 31 Barb 69). IV. The Vermont court having no jurisdiction of the parties, the several judgments are void (Mills v. Duryee, 7 Cranch, 481; Shumway v. Stillman, 6 Wend. 447; Gibbs v. Queen Ins. Co., 63 N. Y. 109, 124-5; Borden v. Fitch, 15 Johns. 121, 139). V. The judgments rendered in Vermont courts were in conflict with the rights of our citizens, and hence should not be recognized (Sherwood v. Judd, 3 Bradf. 419). Smith M. Weed, for defendant. I. The court had jurisdiction over the goods, chattels and credits of the plaintiff, and his assignors, being in the State of Vermont, including the amount due to each of them by the Delaware and Hudson Canal Company. II. The trustee process is a proceeding in rem, binding the goods and chattels and credits attached in the State of Vermont (See General Statutes, p. 307, § 12). The rule is uniform in this country that the process of State courts extends to all property within its territorial limits. The rule is thus stated in note to Andrews v. Herriot, 4 Cow. 521. III. The judgment in Vermont was not in conflict . with the rights of our citizens. The exemption of wages earned within sixty days only applies when the creditor seeks the order of the judge under section 297 of the Code in proceedings supplemental to execution. Such wages are liable to attachment under the Code in all cases where an attachment can issue. IV. The authorities cited by the plaintiff on the question of want of jurisdiction, do not apply to the present case, which is a proceeding in rem, and not in personam. 28 Barb. 23; 41 N. Y. 272; 4 Lans. 388; 31 Barb. 69, and 12 Id. 640, were cases of divorce. 13 Johns. 192, was a proceeding in rem. 47 How Pr. 470, and 8 Johns. 86, were actions in this State upon judgments reversed in another State, without personal service of process. 63 N. Y. 124, 125, recognized the right of a State to extend its laws and process over all .the property, &c., within the State (Spafford v. Page, 15 Vt. 490). [MAJORITY — Landon, J.] Landon, J. The plaintiff and his assignors were during all the transactions stated in the stipulation reciting the facts, residents of the State of New York, and not within the State of Vermont. They, therefore, were not, and could not be, without their consent, personally duly served with process of the courts of Vermont ; and since’ they never by their own acts came within the jurisdiction of that State, the courts of that State could acquire no jurisdiction over their persons, and did not. The cases cited by the plaintiff amply sustain this position, and it is not controverted by the defendant. But while the judgment of the Vermont court, rendered under such circumstances, is of no force against the person of the debtor, it may be binding against his property, as a proceeding in rem, if his property came within the jurisdiction, and was disposed of by the judgment of the Vermont court, according the laws of that State, and if such judgment is binding and conclusive in the State in which it is rendered, it is binding and conclusive everywhere. If once executed, that execution will be respected (Cochran v. Fitch, 1 Sandf. Ch. 142; Holmes v. Remsen, 4 Johns. Ch. 467; S. C., 20 Johns. 229; Embree v. Hanna, 5 Id. 101; Burrows v. Miller, 5 How. Pr. 52; Donovan v. Hunt, 7 Abb. Pr. 29; Andrews v. Herriot, 4 Cow. 521; 1 Kent Com. 260, 261, note b. 2 Id. 119). It seems that the situs of the debt follows the person of the debtor, so far as to be attachable wherever the debtor is personally present so as to be served with process, unless the debt is evidenced by a written security held by the creditor, in which case the situs of the. debt follows the situs of the security (Osgood v. Maguire, 61 N. Y. 524; Guillander v. Howell, 35 Id. 657, 661). The general rule is that any transfer of personal property, — whether voluntary or involuntary, as by trustee process, attachment, bankruptcy and the like, —if valid by the lex fori, is valid everywhere ; valid by the law of the country in which the transfer is made by the force of that law; valid in other countries where the common law is administered, by the comity of nations and States. But every State protects its own citizens, and will not extend its comity to their hurt; and, in case of conflict, will prefer its own attachments, judgments, and other methods of protecting its citizens to the operation of the foreign laws (Willits v. Waite, 25 N. Y. 577; Kelly v. Crapo, 45 Id. 86; Hoyt v. Thompson, 5 Id. 351; and will not allow a transfer of visible and tangible property within its jurisdiction, that violates its own laws (Guillander v. Howell, 35 N. Y. 657); but will allow it if the property be merely a debt, not evidenced by a security (Ib., and cases cited on page 661). It seems in this case the proceedings were had in the nature of trustee process strictly in accordance with the laws of Vermont. The debt was within its jurisdiction, and the defendant was adjudged to pay it, and has obeyed the command which it was impossible for it to avoid or resist. The judgment being valid there, the principles above stated require us to recognize its validity here. It is true this proceeding in the Vermont court deprives the plaintiff of an exemption which our laws accord him; but justice having been done according to the law and the policy of a sister State, it will not become us to attempt to disregard it by any pretense of Superior humanity or wisdom. The defendant having lawfully responded to the demand once, is not to respond again.