creditors whose rights,-that is to say, whose preferences,—are to be protected. So, where, on the dissolution of an insurance company domiciled in Pennsylvania, a receiver was appointed in that State, under a statute thereof, which clothed him "with power to prosecute and defend suits in the name of the corporation," it was held that an action might be maintained by him in Maryland in the name of the corporation, for his use, against a policy-holder, to recover assessments due by him.2 So, it has been held that the courts of Alabama may properly take jurisdiction of an action by the receiver of an insolvent foreign corporation, brought for the purpose of gathering in its assets for an equal distribution amongst its creditors, where only the parties litigant appear to be interested, and where no domestic creditor appears to assert rights adverse to those of the receiver, and this, although eight years have elapsed since the appointment of a receiver. So, it has been held in Vermont that a foreign receiver of an insolvent insurance company may sustain an action to recover assessments on premium notes, no creditor having intervened to prevent the prosecution of the suit." Where a receiver had been appointed under a creditors' bill by a court in New York, and the debtor, in pursuance of the order of the court, made a general deed of assignment of all his property to the receiver, reciting therein the proceedings had in the cause, which assignment was in due form to transfer his interest in land under the statutes of Michigan, — it was held that the receiver might file a bill in chancery in Michigan to foreclose the mortgage interest, or to enforce the right of redemption held by the debtor at the time of the assignment, in lands in Michigan. The court proceeded upon a view elsewhere explained, that the receiver in such a case

1 Comstock v. Frederickson, 51 Minn. 350; s. c. 53 N. W. Rep. 713. To the same effect, Bidlack v. Mason, 26 N. J. Eq. 230.

2 Lycoming Fire Ins. Co. v. Langley, 62 Md. 196.

Boulware v. Davis, 90 Ala. 207;

8. c. 9 L. R. A. 601; 8 Rail. & Corp. L. J. 412; 20 Ins. L. J. 83; 8 South. Rep. 84; 32 Am. & Eng. Corp. Cas. 526. Compare ante, § 3774.

4 Lycoming Fire Ins. Co. v. Wright, 55 Vt. 526.

• Ante, § 7339; post, § 7347.

does not sue strictly in his official character, by virtue of his appointment by the foreign tribunal, but as a voluntary assignee, holding legal title by virtue of the assignment of the debtor. It is not necessary, in such a case, for the receiver to go behind the recitals in the deed of assignment, and prove the prior proceedings of the court. The recitals of those proceedings in the deed are to be taken as true, so far as they may become material; and the courts of Michigan will notice and act upon them, so far as to recognize the complainant substantially as a trustee for the creditors of the insolvent, in whose behalf the assignment was made, and will assist him to collect and render the property available for the purposes of his trust; but will not concern themselves with any question relating to the disposition of the proceeds as between him and the creditors of the insolvent, nor interfere between him and the court by whose appointment he acts. It is for that court to hold him to his accountability for the trust property, especially where all parties reside in that State, and the creditors have not appealed to the Michigan court for any such purpose.2

§ 7341. May Sue to Repossess Himself of Property Removed into the Domestic Jurisdiction. A notable exception to the general rule that a receiver can maintain no action outside of the State appointing him, has been admitted in the case where he has once acquired title and possession of property, for the purposes of his trust, and that property has found its way into another State, and is there unlawfully or unjustly detained from him. In such a case it has been held that he may maintain an action in such other State to recover it. This exception to the rule does not rest upon the principle of comity, but rather upon the principle that where the legal title to personal property has once passed and become vested in accordance with the laws of the State where it is situated, the validity of such title will be recognized everywhere. Under this rule, it

1 Graydon v. Church, 7 Mich. 36. • Ibid.

Chicago &c. R. Co. v. Keokuk

&c. Packet Co., 108 Ill. 317, 324; 8. c. 48 Am. Rep. 557. That such is the rule in regard to title to property, the

has been held that, where a receiver has once obtained rightful possession of personal property situated within the jurisdiction of his appointment, which he was appointed to take charge of, he will not be deprived of its possession, though he take it, in the performance of his duty, into a foreign jurisdiction; and that, while there, it cannot be taken from his possession by creditors of the insolvent debtor, who reside within that jurisdiction. In such a case it was pointed out that it was not the case of an officer of a foreign court seeking, as against the claims of resident creditors, to remove from the State the assets of the debtor situated there at the time of the officer's appointment, and ever since, of which he had never had possession. It was rather the case where a non-resident had acquired a special property in, and right to the possession of, certain chattels, which had found their way into the domestic State, in which case he was entitled to reclaim the chattels as their owner, and the trust upon which he held title to them was a question not to be considered.*

court cite: Cammell v. Sewell, 5 Hurlst. & N. 728; Clark v. Connecticut Peat Co., 35 Conn. 303; Taylor v. Boardman, 25 Vt. 581; Crapo v. Kelly, 16 Wall. (U. S.) 610; Waters v. Barton, 1 Coldw. (Tenn.) 450.

1 Chicago &c. R. Co. v. Keokuk &c. Packet Co., 108 Ill. 317, 325; s. c. 48 Am. Rep. 557.

Ibid. That a special property in chattels will support a possessory action for their recovery, see Cagill v. Wooldridge, 8 Baxt. (Tenn.) 580; s. c. 35 Am. Rep. 716; Pond v. Cooke, 45 Conn. 126; 8. c. 29 Am. Rep. 668; McAlpin v. Jones, 10 La. An. 552; Hurd v. Elizabeth, 41 N. J. L. 1. The Supreme Court of California has, by a divided court, Thornton and McFarland, JJ., dissenting, reached the opposite conclusion, even in respect of the right of a receiver appointed in a court of the United States in another State, to reclaim property by replevin in California

which has been in the possession of the receiver in the State of his appointment, and which has been levied upon by a creditor of the insolvent corporation in California. The case was that a receiver of the Wabash railway system had been appointed by the Circuit Court of the United States at St. Louis, in Missouri, and that a freight car had come into the possession of the receiver within the jurisdiction of his appointment and had been sent to California, in the usual course of business of the receiver in operating the railroad, and transferring freight over other lines, and was attached in California by creditors of the railroad company; and the court held that the receiver could not recover it in an action of replevin in California. Humphreys v. Hopkins, 81 Cal. 551; 8. c. 15 Am. St. Rep. 76. The opinion of the majority, though written by a judge of more than usual ability, is weak,

§ 7342. Illustrations of This Principle. facturing corporation, domiciled in New Jersey, had contracted to build a bridge in Connecticut, and had become insolvent, and a receiver of its assets had been appointed in New Jersey, who, with the funds of the estate, purchased iron in New Jersey and sent it to Connecticut to be there used in completing the bridge, it was held that the iron could not be attached in Connecticut by a Connecticut creditor of the New Jersey corporation.' The Connecticut court admitted that there would be force in the claim of the attaching creditor, if the property had been in Connecticut at the time of the appointment of the receiver in New Jersey, and if the receiver had never taken possession of it prior to the levy of the plaintiff's attach

860

ment. In that case, the court said, "the local law of New Jersey could not vest property in the receiver which was located in Connecticut." "But," said the court, "when property has once vested in a trustee, assignee, or receiver, by the law of the State where the property is situated, it makes no difference whether it is done under the local law of the State or under the common law. The law of another State will not divest the trustee, assignee, or receiver of his right to the property, should he take it into such State in the performance of his duty. The courts of such State will inquire whether he has such right to the property when it comes into the State, as between himself and their own citizens; but when the fact that he has such right is ascertained, they will not regard it as important by what mode the right was acquired." On the same principle, where personal property on the high seas, belonging to a citizen of Massachusetts, had been transferred to an assignee, by proceedings under the insolvent laws of that State, and the property afterwards found its way into the State of New York, and was attached by a creditor of the Massachusetts insolvent residing in New York, — it was held that the assignee in Massachusetts had the prior right to the property. On like grounds, where a receiver, appointed by a

1 Citing Upton v. Hubbard, 28 Conn. 274; 8. c. 73 Am. Dec. 670; Paine v. Lester, 44 Conn. 196; s. c. 28 Am. Rep. 442; Taylor v. Columbian Ins. Co., 14 Allen (Mass.), 353; Willitts v. Waite, 25 N. Y. 577.

Pond v. Cooke, 45 Conn. 126, 132; 8. c. 29 Am. Rep. 668, 672; opinion by Park, C. J.

Crapo v. Kelly, 16 Wall. (U. S.) 610. The court held that, for the purposes of the suit, the ship, though on the high seas, was a portion of the territory of Massachusetts, since it belonged to a citizen of Massachusetts; and that the assignment, by the insolvent laws of Massachusetts, passed title to the ship, in the same manner and with the like effect as if it had been physically within the bounds of that State when the assignment was executed. Ibid. This decision was rendered upon a writ of error to the Supreme Court of New York. It

seems that an appeal was taken in the same case to the Court of Appeals of New York; for the case of Kelly v. Crapo, is found reported in 45 N. Y. 86, in which, on the same state of facts, the New York Court of Appeals holds, contrary to the decision of the Supreme Court of the United States, that the title of the attaching creditor in New York was paramount. The New York decision was, however, rendered in 1871, while the decision of the Supreme Court of the United States was rendered in 1872. The decision of the New York court proceeds on the ground that the legal fiction of the extension of national territory to its vessels on the high seas, does not apply to a State of the American Union; and this was, evidently, the ground of deflection between the opposing conclusions reached by the two courts. In the decision in 16 Wallace, the judges were considerably divided.