« AnteriorContinuar »
nonresident employé, and had garnishment writ served on the company's local agent, who answered for the company, showing an indebtedness for wages. Judgment of the city court against the garnishee was reversed. Chief Justice Stone expressed the opinion of the supreme court in the following language:
“Garnishment, like attachment, is a species of proceeling in rem. It acquires jurisdiction of the person pro hac vice, by seizing his property, goods, or choses in action. If it cannot acquire jurisdiction or control of the res, it needs must fail to acquire, through such res, jurisdiction of the person; for jurisdiction of the person is acquired only through the res, or thing. The debt in this case was contracted in Kentucky, the labor performed in Kentucky, for a corporation and by a laborer each resident in the state of Kentucky. The situs of a debt, in the absence of stipulation to the contrary, is the domicile of the creditor. A court in Alabama cannot obtain legal control of the res, or make any binding disposition of it; for process of attachment, under our statute, cannot change rights of property situated without the state. Hence, if it had been shown that the Louisville & Nashville Railroad Company was doing business in the state of Alabama, by operating a railroad or railroads within its borders, this could not help the plaintiff in this suit."
In Douglass v. Insurance Co., 138 N. Y. 209, 33 N. E. 938, the facts were that the insurance company, a corporation formed under the laws of the state of New York, was indebted to Douglass, a citizen of New York state, the insured, on account of a loss. The insurance company had an agent in Massachusetts, appointed under the laws of that state, upon whom process might be served, and was engaged in carrying on business in that state. Alley and other creditors of Douglass brought suit in Massachusetts jointly against the insurance company and Douglass, and the attachment or trustee process was served on the local agent and was levied on the debt. This was set up as a defense to the suit in New York on the policy by the insured, and the question was whether the Massachusetts court (that suit having been first instituted) had jurisdiction, and it was held that it had not. The court, speaking by Andrews, C. J., said:
“But attachment suits partake of the nature of suits in rem, and are distinctly such when they proceed without jurisdiction having been acquired of the person of the debtor in the attachment. Real and personal property may be subjected to seizure and sale for the payment of debts of the owner, according to the laws of the state or sovereignty where the property is, having regard to the fundamental condition that due process of law shall precede the appropriation."
And further (page 219, 138 N. Y., and page 910, 33 N. E.): “But, we repeat, no court can acquire jurisdiction in attachment proceedings unless the res is either actually or constructively within the jurisdiction, and we are of the opinion that the attempt to execute an attachment in Massachusetts upon the debts owing to the plaintiff by the insurance company by serving upon the agent of the corporation there, and without having acquired jurisdiction of the plaintiff', must faii, for the reason that the debtor, the insurance company, was in no just or legal sense a resident of Massachusetts, and had no domicile there, and was not the agent of the plaintiff, and that in contemplation of law the company and the debt were at the time of the issuing of the attachment in the state of New York, and not in the state of Massachusetts. This court has had occasion heretofore to consider the effect of the act of a foreign corporation constituting an agent in another state, upon whom proceedings may be served, done in compliance with the laws of such state in pursuance of a condition imposed, and to enable the corporation to do business in such state. It has been held that by such act the corporation does not change its domicile of origin, or its residence."
And the supreme court of Mississippi, on facts similar to those in the Alabama case, reached the same conclusion as the supreme court of that state. There is, as stated, a want of harmony in the decisions of the state courts of last resort. But the supreme court of Mississippi, in the case named, referred to this as follows:
“There is some real conflict, and much confusion, not reaching the proportion of actual conflict, in the decisions on this subject. Much of the confusion and some of the conflict has arisen out of a misapprehension of the real nature of the question. With a clear misapprehension of the character of the controversy, several of the courts of last resort in the United States have misled themselves and misled others inveighing against supposed attempts to give extraterritorial effect to exemption laws. The suggestion that this is the question involved is wide of the mark. It is really this question: Shall the state give its exemption laws interterritorial force in cases like the one at bar? Shall railroad corporations doing business and resident in this state be regarded and treated in this and like cases just as natural persons? The natural person resident in this state is not garnishable in a foreign jurisdiction for a debt due and payable here. This is declared, and advisedly, to be settled law, in Bush v. Nance, 61 Miss. 237. The appellant is a resident of this state, and the fact that it may also be a corporation and resident in other states may not operate to abrogate our exemption laws, founded in beneficent public policy, in so far as railroad corporations may be affected by them. Furthermore, it is demonstrably certain that the situs of the debt sued for in this action is in Mississippi. The creditor and debtor are both resident here. The contract creating the debt was made here. By its terms, payment is to be made here. The garnishee in the foreign attachment proceeding is resident here. Can it be seriously contended that the courts of this state have not exclusive jurisdiction of the debt, and that the courts of other states are without jurisdic. tion, and that the sum disclosed by the garnishee in a foreign attachment, as due in the state of his residence and the residence of his creditor, is not liable to condemnation in such proceedings? In this case the debt is not within the jurisdiction of the foreign court, but here, at the residence of the creditor, and the place of payment under the control of its creation." Railroad Co. v. Smith (Miss.) 12 South. 461.
The opinion of the court of appeals of Colorado in the case cited is an able and critical discussion of the subject, reviewing the cases. It is there pointed out by Judge Reed that the decision is in accord with those of the highest courts of the states of Massachusetts, Maine, New Hampshire, New York, Connecticut, Nebraska, Kansas, Michigan, Illinois, Alabama, Mississippi. It is to be remembered that this question of jurisdiction, and for that purpose the situs of the res, is vital and fundamental. And, where a strictly jurisdictional fact is wanting, it cannot be supplied by 'mere assertion or assumption. The fact must legally and rightfully exist. Or, as the court declared in Everett v. Walker (Colo. App.) 36 Pac. 616, in an able discussion of this question:
"It is as impossible by judicial construction as by legislative enactment to declare that property out of the state, having a domicile with the creditor or the debtor, is within the limits of the sovereignty for the purposes of a levy. Upon either consideration the judgment is right. The affidavit did not justify the substituted service, and the writ did not impound the debt which the insurance company owed to Mrs. Walker.”
The essential truth of the proposition must be considered. For example, if a debt is property belonging to and with the creditor only, it cannot be made property in the possession of the debtor by misuse of terms, or by declaring it to be so. Assuming that substantial facts and their effect are changed by misuse of terms or by mere declaration, is a not uncommon error in argument, and was referred to in Brown v. Maryland, 12 Wheat. 411, Chief Justice Marshall saying:
"It is impossible to conceal from ourselves that this is varying the form without varying the substance."
And again, in Pollock v. Trust Co., 157 U. S. 583, 15 Sup. Ct. 673, Chief Justice Fuller observing:
“If, by calling a tax indirect when it is essentially direct, the rule of protection could be frittered away, one of the great landmarks defining the houndary between the nation and the states of which it is composed would Spare disappeared, and with it one of the bulwarks of private rights and pri'rate property."
And in this class of cases there is nothing to justify a strained interpretation to sustain jurisdiction. Garnishment suits, oftener than otherwise, affect wages exempt by the laws of the nonresident's state, and the success of the suit carries privation into the homes of the helpless. These exemption laws are enacted from the highest motives of humanity, and should not be defeated by unwarranted assumption of power.
of power. In view of this injustice some courts give full effect to the exemption laws of other states, as was done in Mason v. Beebee, 44 Fed. 556, and Railroad Co. v. Dougan, 142 III. 248, 31 N. E. 594; and in a note to Railroad Co. v. Smith (Miss.) 19 L. R. A. 577, 12 South. 461, cases on both sides of this question will be found collected.
Coming back now to the question, it has been seen that in the case under consideration and in the leading cases cited the garnishee and principal debtor were both nonresidents, and the place of employment and payment were in another state. It is stated in some of the cases that by statute as well as by contract the situs of the debt may be separated from the person of the creditor, and fixed at the domicile of the debtor or elsewhere. This is recognized in Douglass v. Insurance Co. in regard to a statute, and in respect to a contract in the case of Railroad Co. v. Maggard, the court saying:
“As between the plaintiff and defendant, the debt beyond question followed the domicile of the plaintiff. That was its situs. But the indebtedness of the garnishee to the defendant did not follow the plaintiff. Its situs was by contract fixed where the services were performel, and the payment to be made; and, if such claim or indebtedness is property, in contemplation of the statute, the situs of such property was in Kansas, and not in ('olorado. Care must be taken not to confound the indebtedness due from the defendant to the plaintiff with that due the defendant from the garnishee. They have no relation to each other whatever. Each has its proper situs, regulated by law or contract or both. The courts of the state could not abrogate the contract of the garnishee with the defendant, and compel a different performance."
The plaintiffs refer to the cases of Railroad Co. v. Barnhill, 91 Tenn. 395, 19 S. W. 21, and Holland v. Railroad Co., 16 Lea, 414, as sustaining their contention. Both cases were decided upon substantially the same facts, but the question was discussed at length only in the Barnhill Case. The eminent judge delivering the opinion states the case as follows:
"The facts upon which the defense is made are as follows: That the Mobile & Ohio Railroad Company was chartered originally by the state of Alabama, then by the state of Mississippi, and then by the state of Tennessee; that the indebtedness of the company to Joyner is for labor performed wholly within
the state of Mississippi,' and under contract made in that state, and that he is a citizen of that state. Barnhill is a resident of Tennessee; and the garnishment process, which is in due form, was regularly served on the station agent of the railroad company at Ramer, in McNairy county, this state."
These cases are distinguishable from the one under consideration in the fact that the garnishee corporation had also been created a corporation of the state of Tennessee, and was, therefore, as the court thought, a resident and citizen of Tennessee, and not, in the court's view, a nonresident; and it would seem that the decision in both cases was distinctly rested upon this fact. In the case at bar there is no question that the garnisheeis a nonresident. To sustain jurisdiction, it would seem the court in the Barnhill Case necessarily held that the situs of the debt was with the garnishee debtor, and not the creditor; and such view has been taken by other courts of high authority, and the decision in the Barnhill Case by a court of deserved distinction furnishes to that line of cases an authority of great weight. It is believed that the decision as to the situs of the debt is against the weight of authority, especially recent and well-considered cases; but it is not necessary to extend the inquiry on that point, for in a conflict of opinion in state courts I would decidedly incline to an agreement with the court of highest authority in the state. It is believed, however, that the opinion in the case is not in harmony with the ruling in the courts of the United States in respect to the point on which the decision was distinctly based, as well as the result. I think the question will possibly admit of further examination. In Railroad Co. v. Barnhill, importance is apparently attached to the fact that the principal debtor might have come to Tennessee and sued the company for his wages in the courts of Tennessee. But the action on any debt is transitory, and suit may be maintained in any jurisdiction where process can be served on the debtor. This is a question quite apart from the situs of the debt, where seizure of property takes the place of regular process as the basis of jurisdiction. In cases like this the question is not where the plaintiff may sue, but where the defendant's property is for the purpose of levy in the absence of personal process served. And again, could the servant have sued the Tennessee corporation? The court in this case, as in Holland v. Railroad Co., refers to decisions of the supreme court of the United States to sustain the position that, while the railroad company was originally created under the laws of Alabama, it had also been created a corporation and citizen of the states of Tennessee and Mississippi; and Memphis & C. R. Co. v. Alabama, 107 U. S. 581, 2 Sup. Ct. 432, is cited as an authority. But does the court give full effect to this and similar decisions? It is to be borne in mind that the corporation in such cases remains a citizen of the state originally creating it, and becomes a new corporation of each state subsequently creating it, and that in each state it is a separate corporation of that state only, and a distinct legal entity and corporation from the corporation of the same or a different name in each other state. Mr. Justice Gray, delivering the opinion of the court in the case just referred to, used this language:
"The defendant, being a corporation of the state of Alabama, has no existence in this state as a legal entity or person, except under and by force of its
incorporation by this state; and, although also incorporated in the state of Tennessee, must, as to all its doings within the state of Alabama, be considered a citizen of Alabama, which i annot sue or be sued by another citizen of Alabama in the courts of the United States. Ohio & Mississippi R. Co. v. Wheeler, 1 Black, 280; Railway Co. v. Whitton, 13 Wall. 270, 283.”
And this proposition is clearly brought out and applied in Nashua & L. R. Corp. v. Boston & L. R. Corp., 136 U. S. 356, 10 Sup. Ct. 1004, and by the circuit court of appeals in the recent case of Railroad Co. v. Roberson, 9 C. C. A. 646, 61 Fed. 592. And in the earlier case of Railroad Co. v. Vance, 96 U. S. 450, Jr. Justice Ilarlan, stating the same proposition, said:
“The Indianapolis & St. Louis Railroad Company, as lessee of the St. Louis, Alton & Terre Haute Railroad Company, was thus created, by apt words, a corporation in Illinois. The fact that it bears the same name as that given to the company incorporated by Indiana cannot change the fact that it is a distinct corporation, having a separate existence, derived from the legislation of another state."
The Nashville, Chattanooga & St. Louis Railway, a Tennessee corporation, became lessee of the Western & Atlantic Railroad, a line of railway owned by the state of Georgia, and the lessee corporation was by statute of that state made a corporation of Georgia also, under the name of the Western & Atlantic Railroad Company. The supreme court of Georgia held that the corporation in Georgia was a new and distinct corporation, and that for a tort committed in the operation of the railroad that corporation alone was liable, and suit could not be maintained against the Tennessee corporation (Railway Co. v. Edwards, 16 S. E. 347); and this decision was followed in Railroad Co. v. Roberson. The corporation, then, in Mississippi was distinct from that of Tennessee, as much so for jurisdictional purposes as if it never had been created a corporation in Tennessee; and as to all its acts and doings in Mississippi, and as to a transaction with an employé in which service was rendered wholly within that state, and the wages due there, it was a foreign corporation, and is to be so treated; and Joyner had no contract with the Tennessee corporation and no right of action against it. And the distinct and separate character of these corporations in the different states is not lost or changed by the fact that they are under the same management. In Nashua & L. R. Corp. v. Boston & L. R. Corp., the court (page 373) says:
"Identity of name, powers, and purposes does not create an identity of origin or existence, any more than any other statutes, alike in language, passed by different legislative bodies, can properly be said to owe their existence to both. To each statute, and to the corporation created by it, there can be but one legislative paternity.”
And (page 375): “There are many decisions, both of the federal and state courts, which establish the rule that, however closely two corporations of different states may unite their interests, and though even the stockholders of one may become the stockholders of the other, and their business be conducted by the same directors, the separate identity of each as a corporation of the state by which it was created, and as a citizen of the state, is not thereby lost.”
The case was, then, for all legal purposes, it would seem, exactly like the one at bar, both garnishee and principal debtor being nonresidents, and there was no property or res within the jurisdiction.