« ForrigeFortsett »
finally adjudged to be his property, and not | Gay, Administrator, v. Morgan, Executor, subject to the claims of creditors of Morgan, et al., but the careful reading and consideraand prayed to set off the one half of the rent tion which we have given the opinions and wrongfully collected between 1884 and 1891 decrees of the supreme court, and particu against the one half due for the years 1891 larly the supplemental decree in all the cases and 1892, and for a judgment over against consolidated, give us the firm impression the receiver for any surplus. The trial court that the court intended to hold and declare sustained his defense so far as to decree a full that the portions recovered by said heirs set-off to the claims of the receiver. The were theirs of right, and that they were to supreme court of the state affirmed the trial have them, not only free of the claims of court in this respect, but amended the judg-creditors of the estate of Oliver J. Morgan, ment so "as to reserve the defendant's but free from all costs and claims except as right to demand of and recover from the in the several decrees adjudged, and as thereplaintiff the residue of the amount of the after might be necessary in effecting partirents he has collected in excess of the sum ac- tion." And in the decree it was among tually due by the defendant, after a suffi- other things adjudged that "so much of said} ciency thereof has been used to extinguish by decree of June 2, 1893, as the same is of reccompensation the demands of said receiver in ord herein, as charges or attempts to charge this suit." 49 La. Ann. 668. Whereupon the said John A. Buckner and Etheline Buck. the receiver sued out this writ of error. ner as the owners of one half of Melbourne plantation, or that attempts to charge their said one half of said Melbourne plantation with lien privilege to contribute or to recuse the contribution of the sum of seven thousand three hundred and forty-seven .30 dollars to the payment of costs, disbursements, and solicitors' fees allowed by the court in and for the prosecution of the bill and action in case No. 6612 of the cases herein consolidated, be, and the same are, canceled, abrogated, annulled, and taken from said decree, and that the said John A. Buckner and Etheline Buckner, be, and are now decreed to take and hold said one half of the said Melbourne plantation allotted to them free from said charge and liability for said costs, disbursements, and solicitors' fees charged against them in said decree of June 2, 1893, as contribution to the expenses of the prosecution of said cause No. 6612 and of the causes herein consolidated." Obviously, the effect of this last decree was to materially modify the terms of prior orders and decrees, and to change the relations of the defendant as the owner of one half of the Melbourne plantation to the receivership.
The provision in the decree of this court in reference to the division between the creditors and the heirs of the moneys in the hands of the receiver after paying his expenses and compensation is one evidently applicable in case of the sale of the entire property, and cannot be construed as charging against the defendants, the heirs of Mrs. Morgan, any share of the costs incurred by the creditors of Mr. Morgan, in their efforts to subject his property to the payment of their debts.
Rents follow title, and the owner of the
Two questions are presented: First, Was the defendant entitled to set off against the rent unquestionably due for the undivided half of the plantation for 1891 and 1892, one half of the amount paid by him for rent between 1884 and 1891, on the ground that it had been finally adjudged that he was the owner of one undivided half of the plantation, and therefore that the receiver had improperly collected the rent therefor and, second, if he was entitled to such set-off, was he precluded from obtaining the benefit of it in the state courts by the fact that the receiver was an officer of the Federal court, or by any proceedings had in that court?  *The contention of the receiver is that the defendant's right to one half of the plantation dates from the decree in 1891, while the defendant insists that it dates from the conveyance in 1858, and that the decree only determined a pre-existing right. We concur in the latter view. As a rule courts do not create, but simply determine rights. The adjudication that the defendant was entitled to an undivided one half of the plantation was neither a donation nor an equitable transfer of property in lieu of other claims. It was a determination of a pre-existing right, and that right dates and could only date from the conveyance in 1858.
The conclusions of the circuit court of the United States, as expressed in an opinion and passed into a decree,-a decree not appealed from, and therefore final between the parties, are to the same effect. Such opinion and decree appear in the record. In the opinion, which was announced after the decision of this court in 139 U. S. 388 [35: 199], it was said: "From this last opinion and decree of the supreme court in the mat-realty is the owner of the rent. So that from ter, we are forced to conclude that the por- 1884 to 1891, and while the question of title tions of lands set off and adjudged to the was in dispute, the defendant was paying to heirs of Julia Morgan and heirs of O. H. the receiver rent for an undivided half of the Kellam, Jr., were so set off and adjudged to plantation, property which was absolutely them as the owners thereof in their own his own, and which the receiver ought not to right as the heirs of Julia Morgan and O. H. have had possession of. The rent thus colKellam, Jr., who were the heirs of Narcisse lected belonged to defendant, and could not Deeson, the wife of Oliver J. Morgan, and not be taken by creditors of Morgan or appro- to them in any way as the heirs of Oliver J. priated to pay the cost of their lawsuits. So Morgan or as creditors or claimants of his it is that the receiver, having in his possesThe heirs of Julia Morgan sion money belonging to the defendant, to and Oliver H. Kellam, Jr., participated in wit, the rent of one half the property from the fund recovered in the original case of 1884 to 1891, now asks a judgment which
shall compel defendant to pay him a further | 1.
It is said in the brief that the court first acquiring jurisdiction has a right to continue its jurisdiction to the end. We fail to see the application of this. The receiver voluntarily went into the state court, and, having voluntarily gone there, cannot question the right of that court to determine the controversy between himself and the defendant. A similar proposition was often affirmed in cases of bankruptcy, although by $ 711, Revised Statutes, the courts of the United States are given exclusive jurisdiction "of all matters and proceedings in bankruptcy." Mays v. Fritton, 20 Wall. 414 [22: 389]; Winchester v. Heiskell, 119 U. S. 450[30: 462], and cases cited in the opinion. The same rule applies here. The question presented is, not how the estate belonging to the receiver shall be administered, but what is the estate belonging to him. The two questions are entirely distinct. Further, the right to sue a receiver appointed by a Federal court without leave of the court appointing him is granted by the act of August 13, 1888, chap. 866, § 3, 25 Stat. at L. 436. A counterclaim or set-off comes within the spirit of that act. And certainly no objection can be made to the allowance of a set-off, when, as here, it is simply in harmony with the decrees of the Federal court, and in no manner questions their force or efficacy.
The jurisdiction of the state court is therefore clear, and the judgment of the Supreme Court of Louisiana is affirmed.
C. G. BLAKE, ROGERS, BROWN, & CO.,
(See S. C. Reporter's ed. 239-269.)
A state statute giving to residents of that state a priority over nonresidents in the distribution of the assets of a foreign corporation which, by filing its charter or articles of association in the state is deemed a corporation of that state, is, so far as it discriminates against citizens of other states, in violation of U. S. Const. art. 4, giving equal privileges and immunities to the citizens of the several states.
The constitutional guaranty of equal privileges and immunities to citizens forbids only such legislation affecting citizens of the respective states as will substantially or practically put a citizen of one state in a condition of alien age when he is within or when he removes to another state, or when asserting in another state the rights that commonly appertain to the people, by and for whom the government of the Union was established. A corporation is not a citizen within the meaning of the constitutional provision that "the citizens of each state shall be entitled to all privileges and immunities of citizens of the several states."
A corporation of another state cannot invoke the constitutional guaranty of equal privileges and immunities of citizens in case of a discrimination against it in favor of the residents of a state, in respect to participation in the assets of an insolvent corporation. A corporation of another state is not deprived of property without due process of law by denying it equality with residents of the state in the distribution of the assets of an insolvent corporation.
A corporation not created by the laws of a state, nor doing business in that state under conditions that subject it to process from the courts of that state, is not within the jurisdiction of that state, within the meaning of the constitutional provision that no state shall "deny to any person within its jurisdiction the equal protection of the laws." 7. The Tennessee statute of March 19, 1877,
so far as it subordinates the claims of private business corporations of other states, who are creditors of a corporation doing business in that state under that statute, to the claims against the latter corporation of creditors residing in Tennessee, is not a denial of the "equal protection of the laws," secured by the 14th Amendment to the Federal Constitution to persons within the jurisdiction of the state.
IN ERROR to the Supreme Court of the
The facts are stated in the opinion.
Messrs. Henry H. Ingersoll, John W. | payment of debts over all simple *contract[248) Green, and Charles Seymour for defendants in error.
creditors, being residents of any other country or countries, and also over mortgage or judgment creditors, for all debts, engage ments, and contracts which were made or owing by the said corporations previous to This writ of error brings up for review a the filing and registration of such valid final judgment of the supreme court of Ten- mortgages, or the rendition of such valid nessee sustaining the validity of certain pro-judgments. But all such mortgages and visions of a statute of that state passed March 19th, 1877.
40] Mr. Justice Harlan delivered the opinion of the court:
The chief object of the statute was declared to be to secure the development of the mineral resources of the state, and to facilitate the introduction of foreign capital. § 7.
granted to citizens or corporations for the
The case made by the record is substan-
judgments shall be valid, and shall constitute a prior lien on the property on which they are or may be charged as against all debts which may be incurred subsequent to the date of their registration or rendition. The said corporations shall be liable to taxIt provides, among other things, that ation in all respects the same as natural per"corporations chartered or organized under sons resident in this state, and the property the laws of other states or countries, for the of its citizens is or may be liable to taxapurpose of mining ores or coals, or of quar- tion, but to no higher taxation, nor to any 241]rying stones *or minerals, of transporting the other mode of valuation, for the purpose of same, or erecting, purchasing, or carrying taxation; and the said corporations shall be on works for the manufacture of metals, or entitled to all such exemptions from taxa. of any articles made of or from metal, tim-tion which are now or may be hereafter ber, cotton, or wool, or of building dwelling houses for their workmen and others, or gas works, or waterworks, or other appliances designed for the promotion of health, good order, or general utility, in connection with such mines, manufactories, and dwelling houses, may become incorporated in this state, and may carry on in this state the business authorized by their respective charters, or the articles under which they are or may be organized, and may enjoy the rights and do the things therein specified, upon the terms and conditions, and in the manner and under the limitation herein declared." § 1. The second section provides for the filing in the office of the secretary of state by "each and every corporation created or or ganized under or by virtue of any government other than that of the state, of the character named in the first section of this act, desiring to carry on its business" in the state, of a copy of its charter or articles of association, and the recording of an abstract of the same in the office of the register of each county in which the corporation proposes to carry on its business or to acquire any lands. 2.
-was a cor
The Embreeville Freehold Land, Iron, &
On the 20th day of June, 1893, C. W. McClung & Co. and others filed an original general creditors' bill in the chancery court of Washington county, Tennessee, against this company and others, alleging its insolvency and default in meeting and discharging its current obligations; charging that it had made a conveyance in trust of certain personal property in fraud of the rights of its The third section declares that, "such cor- other creditors, and asking the appointment porations shall be deemed and taken to be of a receiver and the administration of its corporations of this state, and shall be sub-affairs as an insolvent corporation. The ject to the jurisdictions of the courts of this state, and may sue and be sued therein in the mode and manner that is, or may be, by law directed in the case of corporations created or organized under the laws of this state." § 3.
The fifth section provides:
court took jurisdiction of the corporation,
No question is made in respect of the
"35. That the corporations, and the property of all corporations coming under the provisions of this act, shall be liable for all the debts, liabilities, and engagements of the said corporations, to be enforced in the manner provided by law, for the application of the property of natural persons to the payment of their debts, engagements, and conThere were holders of debentures executed tracts. Nevertheless, creditors who may by the British company whose claims were be residents of this state shall have a prior-not specifically adjudicated in the decree beity in the distribution of assets, or subjec- low. The original debenture issue amounted tion of the same, or any part thereof, to the to $500,000, and another issue, subsequent
The company maintained its home office in London, its managing director resided there, and after this suit was instituted liquidation under the companies' acts of Great Britain was there ordered and begun.
172 U. S.
U. S., BOOK 43.
in time, and in respect of which priority in | state of Tennessee, are entitled to share rat-
The cause was carried to the supreme court of Tennessee, and so far as the plaintiffs in error are concerned was heard in that court upon appeal from the court of chancery appeals, as well as upon writs of error to the chancery court.
By the final decree of the chancery court of Washington county, it was, among other things, adjudged that the act of 1877 was constitutional; that all of the creditors of the Embreeville Company residing in Tennessee were entitled to priority *of satisfaction out of its assets (after the payment out of It was adjudged by the supreme court of the proceeds of the real estate of the claim the state that the act of March 19th, 1877, of the Pittsburgh Iron & Steel Engineering was in all respects a valid enactment, and Company) as against its other creditors who not in contravention of paragraph 2 of arwere "residents and citizens of other states ticle IV. or of the Fourteenth Amendment of the United States or other countries;" of the Constitution of the United States, nor that the creditors who were "citizens of other in contravention of any other provision of states of the United States, and who con- the National Constitution; that all of the tracted with the company as located and do-holders and owners of the debenture bonds ing business in Tennessee, are entitled to of the Embreeville Company were simpleshare ratably in its assets, being adminis- contract creditors of the company, and stood tered in this cause next after the payment upon the same footing with reference to the of the Pittsburgh Iron & Steel Engineering distribution of its assets as all of its other Company and the Tennessee creditors." creditors who "reside out of the state of TenUpon appeal to the chancery court of ap-nessee, whether they be residents of other peals the decree of the chancery court was re- states or of the Kingdom of Great Britain; versed in certain particulars. In the find- that all of the creditors of the Embreeville ings of the chancery court of appeals it was Company" who resided in the state of Tenstated that the chancery court of Washing-nessee are entitled to priority of payment ton county adjudged, among other things, out of all the assets of said company, both that "under the act of 1877 (which was ad-real and personal, over all of the other credjudged constitutional) all the creditors of itors of said company who do not reside in said Embreeville Company residing in Ten- the state of Tennessee, whether they be resi nessee are entitled to priority of satisfaction out of the assets of the Embreeville Company (after the payment out of the proceeds of the real estate of the claim of the Pittsburgh Iron & Steel Engineering Co.) as against the other creditors of said company who are nonresidents and citizens of other states of the United States or other countries; that the other creditors of the Embreeville Company who are citizens of other states of the United States, and who contracted with the said Embreeville Com-in full. pany as located and doing business in the *The plaintiffs in error contend that the 246]
dents of other states of the United States or of the Kingdom of Great Britain; that all of the creditors of the Embreeville Freehold Land, Iron, & Railway Company who reside out of the state of Tennessee, whether they reside in other states of the United States or in the Kingdom of Great Britain. have the right and must share equally and ratably in the distribution of said funds of the said company after the residents of the state of Tennessee shall have been first paid
judgment of the state court, based upon the
We have seen that by the third section of
Tennessee, but who were citizens, not simply residents, of some other state or country. It is impossible to believe that the statute was intended to apply to creditors of whom it could be said that they were only residents of other states, but not to creditors who were citizens of such states. The state did not intend to place creditors, citizens of other states, upon an equality with creditors, citizens of Tennessee, and to give priority only to Tennessee creditors over creditors who resided in, but were not citizens of, other states. The manifest purpose was to give to all Tennessee creditors priority over all creditors residing out of that state, whether the latter were citizens or only residents of some other state or country. Any other interpretation of the statute would defeat the object for which it was enacted. We must therefore consider whether the statute infringes rights secured to the plaintiffs in error, citizens of Ohio, by the provision of the second section of article IV. of the Constitution of the United States declaring that the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states.
Beyond question, a state may through ju dicial proceedings take possession of the assets of an insolvent foreign corporation within its limits, and distribute such assets or their proceeds among creditors according to their respective rights. But may it exclude citizens of other states from such distribution until the claims of its own citizens shall have been first satisfied? In the administration of the property of an insolvent foreign corporation by the courts of the state in which it is doing business, will the Constitution of the United States permit discrim ination against individual creditors of such corporations because of their being citizens of other states, and not citizens of the state in which such administration occurs?
These questions are presented for our determination. Let us see how far they have been answered by the former decisions of this court.
The suggestion is made that as the statute refers only to "residents," there is no occasion to consider whether it is repugnant to the provision of the National Constitution relating to citizens. We cannot accede to this view. The record shows that the litigation proceeded throughout upon the theory that the plaintiffs in error, Blake and the persons composing the firm of Rogers, Brown, & Co., were citizens of Ohio, in which state they resided, transacted business and had their offices, and that the plaintiff in error, the Hull Coal & Coke Company, was a corporation of Virginia. The intervening petition of the individual plaintiffs in error, as we have seen, states that they were residents of Ohio, engaged in business in that state, their residence, offices and places of business being at the city of Cincinnati, and that they were citizens of the United States, and not citizens of Tennessee. Although This court has never undertaken to give these allegations might not be sufficient to any exact or comprehensive definition of the show that those parties were citizens of Ohio words "privileges and immunities" in article  within the meaning of the statute *regulating IV. of the Constitution of the United States. the jurisdiction of the circuit courts of the Referring to this clause, Mr. Justice CurUnited States (Robertson v. Cease, 97 U. S. tis, speaking for the court in Conner v. El646 [24: 1057]), they may be accepted as liott, 18 How. 591, 593 [15: 497, 498], said: sufficient for that purpose in the present "We do not deem it needful to attempt to case, no question having been made in the define the meaning of the word 'privileges' in state court that the individual plaintiffs in this clause of the Constitution. It is safer, error were not citizens, but only residents of and more in accordance with the duty of a Ohio. Looking at the purpose and scope of judicial tribunal, to leave its meaning to the Tennessee statute, it is plain that the be determined, in each case, upon a view of words "residents of this state" refer to those therein. And especially is this true when we the particular rights asserted and denied whose residence in Tennessee was such as in- are dealing with so broad a provision, involv licated that their permanent home or habi- ing matters, not only of great delicacy and tation was there, without any present inten-importance, but which are of such a charaction of removing therefrom, and having the intention, when absent from that state, to return thereto; such residence as appertained to or inhered in citizenship. And the words, in the same statute, "residents of any other country or countries" refer to those whose respective habitations were not in
ter that any merely abstract definition could