the courts of that State will assist him in retaining it as against an attaching creditor of the corporation.30 If a foreign receiver is allowed to sue he must of course prove his right, including the jurisdiction of the court which assumed to appoint him.31 §796. Competition of foreign receiver and domestic creditors. It is almost everywhere held that a foreign receiver or assignee will not be allowed to claim the assets in competition with a domestic creditor; and this is equally true whether the domestic creditor has attached the property before the appointment of the receiver or not.32 A foreign corporation which is in the hands of a receiver in the State of charter may be garnisheed by a domestic creditor.33 This is in accordance with the well-settled general rule as to foreign assignments by operation of law.34 § 797. Competition of foreign receiver and foreign creditors. By the prevailing doctrine, even a foreign creditor who claims that the property of the insolvent corporation should be applied to the payment of his debt will prevail over a foreign receiver, 30 Chicago, M. & S. P. Ry. v. Packet Co., 108 Ill. 317. 31 Kronberg v. Elder, 18 Kan. 150. 32 Sands v. E. S. Greeley & Co., 83 Fed. 772; Zacher v. Fidelity T. & S. V. Co., 109 Ky. 441, 22 Ky. L. Rep. 987, 59 S. W. 493; Hunt v. Columbian Ins. Co., 55 Me. 290; Day v. Postal Tel. Co., 66 Md. 354; Taylor v. Columbian Ins. Co., 14 All. (Mass.) 353; Willetts v. Waite, 25 N. Y. 577; Dunlop v. Paterson F. I. Co., 12 Hun (N. Y.), 627 (aff. 74 N. Y. 145); Vogt v. Covenant B. & L. Assoc., 21 Pa. Co. Ct. 351; New Zealand L. & M. A. Co. v. Morrison, [1898] A. C. 349. See Tinkham v. Borst, 31 Barb. (N. Y.) 407. In Falk v. Janes, 49 N. J. Eq. 484, 23 Atl. 813, a foreign receiver appointed at the suit of a New Jersey creditor, who alone was interested, was allowed to sue even against the interest of another domestic creditor. 33 Taylor v. Columbian Ins. Co., supra; Vogt v. Covenant B. & L. Assoc., supra. See Osgood v. Maguire, 61 N. Y. 524, where the State of charter refused to recognize such proceedings; but in that case the debt was secured by promissory note, which was in the hands of the corporation; and it was held that a court of another State could not discharge the note. 34 Security Trust Co. v. Dodd, Mead & Co., 173 U. S. 624, 43 L. ed. 835; Barth v. Backus, 140 N. Y. 230, 35 N. E. 425. whether such creditor secured a prior lien by attachment, 35 or made his claim subsequently to that of the receiver.36 An occasional authority held otherwise in the latter case; 37 but the Supreme Court of the United States having held it unconstitutional to distinguish between domestic creditors and those of other States, (though not between domestic creditors and foreign corporations or domestic creditors and those of other countries), 38 it must be taken that individual creditors of other States will everywhere be protected against a foreign receiver. 8798. Competition of foreign receiver and creditors from his own State. A creditor domiciled in the State where the receivership is granted has however no right to compete with the receiver, even in a foreign State; and a foreign receiver will therefore always be given the preference over an attaching creditor from his own State.39 So, it would seem that the receiver would be given preference over the corporation itself if the latter attempted to maintain suit abroad after the appointment of the receiver in the charter State.40 The contrary view was to be sure taken by the Supreme Court of Illinois, where a creditor 35 Schindelholz v. Cullum, 55 Fed. 885; Ward v. Conn. Pipe Mfg. Co., 71 Conn. 345, 41 Atl. 1057; Rhawn v. Pearce, 110 Ill. 350; Lichtenstein v. Gillett, 37 La. Ann. 522; Bartlett v. Wilbur, 53 Md. 485, 496; Kruger v. Bank of Commerce, 123 N. C. 16, 31 S. E. 270; Warren v. Union Nat. Bank, 7 Phila. (Pa.) 156; Moseby v. Burrow, 52 Tex. 396. And see Chipman v. Mfg. Nat. Bank, 156 Mass. 147, 30 N. E. 610; Jenks v. Ludden, 34 Minn. 482. In Long v. Girdwood, 150 Pa. 413, 24 Atl. 711, the court held otherwise on the mistaken analogy of cases involving the effect not of an assignment by operation of law but of a voluntary assignment. 36 Catlin v. Wilcox Silver Plate Co., 123 Ind. 477, 24 N. E. 250, 18 A. S. R. 338, 8 L. R. A. 62; Linville v. Hadden, 88 Md. 594, 41 Atl. 1097; John Ray Clark Co. v. Toby V. S. Co., 14 Pa. Co. Ct. 344. 37 Sands v. E. S. Greeley & Co., 80 Fed. 195. 38 Blake v. McClung, 172 U. S. 239, 43 L. ed. 432. 39 Schindelholz v. Cullum, 55 Fed. 885; Bagby v. Atlantic, M. & O. R. R., 86 Pa. 291; Gilman v. Ketcham, 84 Wis. 60, 54 N. W. 395. See Faulkner v. Hyman, 142 Mass. 53. 40 Kerwan Mfg. Co. v. Truxson, 1 Pen. (Del.) 409, 44 Atl. 427. of a Rhode Island corporation, himself a citizen of Rhode Island, was allowed to maintain an attachment of real estate in Illinois against the Rhode Island receiver, on the ground that the decree of the court in Rhode Island could not pass title to land in Illinois. 41 And in the Supreme Court of Tennessee, it was held that a judgment confessed by an Ohio corporation in favor of an Ohio creditor after petition filed for the dissolution of the corporation, which judgment by Ohio law was void as against the receiver, could be enforced in a suit against such corporation in Tennessee.42 The court had in an earlier part of the opinion denied the foreign receiver any power to sue, pushing to an extreme the case of Booth v. Clark. But these cases are opposed to the great weight of authority. It would also seem clear that, since a stockholder is bound in all his relations with the corporation, by the laws of the State of charter, a domestic creditor who is a stockholder of a foreign corporation cannot reach the property in competition with a receiver appointed in the State of charter; and it has been so held.43 The reason for this preference of the receiver appears to be that the creditor has been enjoined in the course of the receivership proceedings, and being subject to the jurisdiction of the court he is bound by the injunction. If he persists in claiming a remedy abroad, he may be punished for contempt by his own court.44 If however no injunction has been issued he may freely compete with the receiver. "The receiver is not put in possession of foreign property by 41 City Ins. Co. v. Commercial Bank, 68 Ill. 348. Acc. Henry v. Stuart, 14 Phila. (Pa.) 110, on the ground that the statute under which the proceedings were instituted in the foreign State had no application in Pennsylvania. 42 Com. Nat. Bank v. Matherwell Iron, etc., Co., 95 Tenn. 172, 31 S. W. 1002. 43 Hintermeister v. Ithaca, O. & P. Co., 1 Pa. Co. Ct. 466; McKean v. New York N. B. & L. Assoc., 10 Pa. Dist. Rep. 197. 44 Sercomb v. Catlin, 128 Ill. 556, 21 N. E. 606, 15 A. S. R. 147. the mere order of the court. Something else has to be done, and until that has been done in accordance with the foreign law, any person, not a party to the suit, who takes proceedings in the foreign country is not guilty of a contempt either on the ground of interfering with the receiver's possession or otherwise. For this purpose no distinction can be drawn between a foreigner and a British subject. . . . It cannot be reasonable that I should deprive English creditors of a right against French assets which French creditors undoubtedly enjoy." 45 § 799. Statutory successor may compete with creditors. Though a foreign receiver will not be admitted to compete with domestic creditors, an official of the State of incorporation who by the charter is designated as successor of the corporation upon dissolution will, it is held, succeed to the assets wherever situated, and may hold them against all the world. In Relfe v. Rundle 46 a statute of Missouri provided that on a decree of dissolution of an insolvent life insurance company the entire property should vest absolutely and in fee simple in the superintendent of the insurance department of the State. After such a decree, the superintendent was admitted as a party in a suit brought in Louisiana to have the property in Louisiana declared a trust fund for the exclusive benefit of Louisiana creditors. The only point decided in the case was that being admitted as a party he had a right by virtue of his Missouri citizenship to remove to a Federal court. The decision itself is unquestionably sound; but the language of the opinion is very broad: "Relfe is not an officer of the Missouri state court, but the person designated by law to take the property of any dissolved life insurance corporation of that state, and hold and dispose of it in trust for the use and benefit of creditors, and other parties interested. . . . He was, in fact, the corporation itself for all the purposes of wind 45 Cozens-Hardy, J., in In re Mandsley Sons & Field, [1900] 1 Ch. 602, 611. 46 103 U. S. 222, 26 L. ed. 337. ing up its affairs." "No state need allow the corporations of other states to do business within its jurisdiction unless it chooses; but if it does, without limitation, express or implied, the corporation comes in as it has been created. Every corporation necessarily carries its charter wherever it goes, for that is the law of its existence. It may be restricted in the use of some of its powers while doing business away from its corporate home, but every person who deals with it everywhere is bound to take notice of the provisions which have been made in its charter for the management and control of its affairs both in life and after dissolution." This opinion was followed in Virginia in the case of the same company.47 Upon the authority of the same case it was ruled in the United States Circuit Court in Iowa that the assets in Iowa of an insolvent Connecticut corporation passed to the receiver appointed by the Connecticut court in accordance with a general statute of Connecticut, and that the receiver appointed by the State court in Iowa for the benefit of creditors in that State had no claim.48 But in a very similar case in New York the contrary has been held. The charter provided that the property of the corporation should vest in a receiver in case of its insolvency, and a receiver had been appointed in the court of the State of charter. This receiver was however not allowed to obtain the New York assets in competition with the creditors of that State.49 § 800. Foreign receiver claiming as assignee. If the corporation makes a voluntary assignment to the receiver, the assignment passes a title which should prevail against any subsequent attachment, with notice of the assignment, by any creditor, domestic or foreign.50 And so a foreign 47 Bockover v. Life Assoc. of America, 77 Va. 85. 50 Ward v. Conn. Pipe Mfg. Co., 71 Conn. 345, 41 Atl. 1057; Graydon v. Church, 7 Mich. 36; Parker v. Stoughton Mill Co., 91 Wis. 174, 64 N. W. 751. |