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Argument for Plaintiff in Error.
DISCONTO GESELLSCHAFT v. UMBREIT.
ERROR TO THE CIRCUIT COURT OF MILWAUKEE COUNTY
(BRANCH NO. 1), STATE OF WISCONSIN.
No. 63. Argued December 10, 11, 1907 – Decided February 24, 1908.
It is too late to raise the Federal question on motion for rehearing in the
state court, unless that court entertains the motion and expressly passes
on the Federal question. While aliens are ordinarily permitted to resort to our courts for redress of
wrongs and protection of rights, the removal of property to another jurisdiction for adjustment of claims against it is a matter of comity and not of absolute right, and, in the absence of treaty stipulations, it is
within the power of a State to determine its policy in regard thereto. The refusal by a State to exercise comity in such manner as would impair
the rights of local creditors by removing a fund to a foreign jurisdiction for administration does not deprive a foreign creditor of his property without due process of law or deny to him the equal protection of the law; and so held as to a judgment of the highest court of Wisconsin holding the attachment of a citizen of that State superior to an earlier attachment of
a foreign creditor. While the treaty of 1828 with Prussia has been recognized as being still in
force by both the United States and the German Empire, there is nothing therein undertaking to change the rule of national comity that permits a country to first protect the rights of its own citizens in local property before permitting it to be taken out of its jurisdiction for administration
in favor of creditors beyond its borders. 127 Wisconsin, 676, affirmed.
The facts are stated in the opinion.
Mr. F. C. Winkler for plaintiff in error:
The Federal questions on both points were brought before the Supreme Court of the State and claim made under them in the argument for rehearing. The motion was denied and opinion rendered expressly overruling the claim based on the treaties and by necessary implication, also the claim based on the Constitution of the United States.
The rulings upon them are therefore subject to review. MoKay v. Kalyton, 204 U. S. 458; Leigh v. Green, 193 U. S.
Argument for Plaintiff in Error.
79; Columbia Water Power Co. v. Columbia Street Railway Co., 172 U. S. 465.
The plaintiff's suit was brought under the statutes of Wisconsin. The defendant was in Wisconsin. The property attached had been brought by him and placed on deposit in the State of Wisconsin. No court in the world could exercise jurisdiction either over his person or over his property except the courts of Wisconsin. No statute debars an alien from seeking justice in Wisconsin courts where the protection of his rights requires it.
The plaintiff is denied the benefit of the proceedings and of its judgment because being a foreigner it has no rights in the State of Wisconsin except such as "comity,” which is "good nature,” will accord it. Even under the ruling of the state court that the right of the plaintiff to pursue its absconding debtor into this country and to invoke the latter's remedial processes against him rests upon the comity, it is, however, the comity of the sovereignty, not of the court. Wharton, Conflict of Laws, & la.
Comity cannot be given or withheld at will. Civilization demands its exercise where justice requires it. It cannot be denied, in whole or in part, except on clear, clean principles of justice.
Under the treaty between the United States and the Kingdom of Prussia, made in 1828, if a proper and liberal interpretation be given thereto, the plaintiff in error is entitled to the same standing in court as a citizen of the United States would be in a like case. Public Treaties (Govt. Printing Office, 1875), p. 656; Tucker v. Alexandroff, 183 U. S. 424, 437. The cases cited by the Supreme Court of Wisconsin, viz.: Eingartner y. Illinois Steel Co., 94 Wisconsin, 70; Gardner v. Thomas, 14 Johnson, 134; Johnson v. Dalton, 1 Cowen, 543; DeWitt v. Buchanan, 54 Barb. 31; Olsen v. Schierenberg, 3 Daly, 100; Burdick v. Freeman, 120 N. Y. 421, can easily be distinguished from the case at bar.
The state court erred in stating that plaintiff sues as the
Argument for Plaintiff in Error.
agent of a foreign trustee in bankruptcy. That trustee has and claims no rights to the bankrupt's property in Wisconsin. Foreign law does not operate on property beyond its jurisdiction. Segnitz v. G. C. Banking & Trust Co., 117 Wisconsin, 171, 176.
The property in question was not transferred to the trustee and that left its legal title in the debtor. The plaintiff being a creditor brought suit on his own claim in his own right.
The circumstance that the creditor after suit commenced promised to turn over the proceeds he should recover to the trustee for distribution does not impair his rights as a creditor.
The course of the plaintiff in no way "sets at naught” the rule of our law that the trustee in bankruptcy does not obtain title to property in Wisconsin by reason of the proceedings in Germany. No claim is made on this score in the intervenor's answer.
The decision of the Supreme Court of Wisconsin deprives the plaintiff of its property rights without due process of law, in violation of the Constitution of the United States.
The judgment which the intervenor obtained, although in the form of the statute, is in point of fact no better than an ex parte affidavit. The defendant was to the intervenor's knowledge a prisoner in Germany. The only notice given was by publication of the summons in a Milwaukee paper. No copy of the summons and complaint was ever mailed to the defendant as required by $ 2640, Statutes of Wisconsin.
The defendant Terlinden, when the intervenor's suit was commenced against him, had not the slightest interest in the property sought to be reached. All his interest had passed to the plaintiff. The plaintiff was the only party adversely interested to the intervenor. It had an adjudicated lien good against all the world (except the claim of the intervenor).
An alien, too, is entitled to due process of law under the Constitution of the United States. In re Ah Fung, 3 Sawyer, 144; Ah Kow v. Nunan, 5 Sawyer, 562; In re Ah Chung, 2 Fed. Rep.
Argument for Defendant in Error.
The judgment against Terlinden was, as against this plaintiff, absolutely without process of law. It adjudicated nothing. The plaintiff was not a party therein, nor was it notified, and it had no opportunity to defend against it.
Mr. Joseph B. Doe for defendant in error:
Domestic creditors will be protected to the extent of not allowing the property or funds of a non-resident debtor to be withdrawn from the State before domestic creditors have been paid. Every country will first protect its own citizens. Catlin v. Silver Plate Co., 123 Indiana, 477; Chafey v. Fourth Nat. Bank, 71 Maine, 414, 524; Bagby v. Railway Co., 86 Pa. St. 291; Lycoming Fire Ins. Co: v. Wright, 55 Vermont, 526; Thurston v. Rosenfelt, 42 Missouri, 474; Willitts v. Waite, 25 N. Y. 577.
Citizens and residents of the country where insolvency proceedings have been instituted are bound by such proceedings and cannot pursue the property of the insolvent debtor in another country. Cole v. Cunningham, 133 U. S. 107; Linville v. Hadden, 88 Maryland, 594; Chafey y. Fourth Nat. Bank, supra; Einer v. Beste, 32 Missouri, 240; Long v. Girdwood, 150 Pa. St. 413; Bacon v. Horne, 123 Pa. St. 452.
A creditor, by proving his claim in bankruptcy or any insolvency proceedings, submits to the jurisdiction of the court in which the proceeding is pending and cannot pursue his remedy elsewhere. Clay v. Smith, 3 Peters, 411; Cooke v. Coyle, 113 Massachusetts, 252; Ormsby v. Dearborn, 116 Massachusetts, 386; Batchelder v. Batchelder, 77 N. H. 31; Wilson v. Capuro, 41 California, 545; Wood v. Hazen, 10 Hun, 362.
Where both parties, plaintiff and defendant, are residents of a foreign State, the plaintiff cannot come into our country and obtain an advantage by our law which he could not obtain by his own.
If he seeks to nullify the law of his own State and asks our courts to aid him in so doing, he cannot have such assistance, if for no other reason than that it is forbidden by public policy
and the comity which exists between states and nations, which comity will always be enforced when it does not conflict with the rights of domestic citizens. Bacon v. Horne, supra; In re Waite, 99 N. Y. 433; Bagby v. Railway Co., supra.
Citizens of a foreign State or country will not be aided by the courts of this country to obtain, by garnishment, a preference of their claim against a foreign debtor, in disregard of proceedings in their own country for the sequestration of the debtor's estate and the appointment of a trustee thereof in bankruptcy. Long v. Girdwood, supra.
It is the uniform rule and doctrine of all courts that the principles of comity do not require that courts confer powers upon a foreign receiver or trustee in bankruptcy or permit him to bring and maintain actions in this State that interfere with and impair the rights of domestic creditors. Humphreys v. Hopkins, 81 California, 551; Ward v. Pac. Mutual Life Ins. Co., 135 California, 235; Hunt v. Columbian Ins. Co., 55 Maine, 290; Pierce v. O'Brien, 129 Massachusetts, 314; Rogers v. Riley, 80 Fed. Rep. 759; Catlin v. Wilcox Silver Plate Co., 123 Indiana, 477.
MR. JUSTICE Day delivered the opinion of the court.
The Disconto Gesellschaft, a banking corporation of Berlin, Germany, began an action in the Circuit Court of Milwaukee County, Wisconsin, on August 17, 1901, against Gerhard Terlinden and at the same time garnisheed the First National Bank of Milwaukee. The bank appeared and admitted an indebtedness to Terlinden of $6,420. The defendant in error Umbreit intervened and filed an answer, and later an amended
A reply was filed; taking issue upon certain allegations of the answer, and a trial was had in the Circuit Court of Milwaukee County, in which the court found the following facts:
"That on the 17th day of August, 1901, the above-named plaintiff, the Disconto Gesellschaft, commenced an action in