Bushel v. Commonwealth Insurance
Bushel v. Commonwealth Insurance
Opinion of the Court
The plaintiffs have issued a foreign attachment, and have attached, in the .hands of Ralston and Lyman, as garnishees, certain property belonging to the defendants. On motion, the following rule has been entered. Rule on the plaintiffs to show cause of action, and why the attachment should not be dissolved, on the ground that.it has issued against a foreign corporation. Cause of action has been shown by the plaintiffs, so that the single question is, whether a foreign corporation is within the true intent and meaning of the laws regulating attachment, and particularly the act of 1705, entitled an act about attachments. In. order to sustain
It is difficult to conceive, that if corporations are artificial persons,—if they can do all acts that natural persons may,—if they can sue within a foreign jurisdiction, why they should not also be liable to suit, in the same manner, and under the same regulations .as domestic corporations.- The reason why they have not been, in point of fact, more frequently sued, is given by Chief Justice Spencer, in 16 Johns. 7.
The process against a corporation, by the common lav/, must be served on its head or principal officer, within the jurisdiction of the sovereignty, where this artificial body exists. If the president of a -bank of another state were to come within this state, he would not represent the corporation here: his functions and his character would not accompany him, when he moved beyond the jurisdiction of the government under whose laws he derived his character. That this would be the case, when he was within the state on, business unconnected with the corporation, there can be no question; but where a corporation locates the president, or other officer within the state, for the express purpose of making contracts here, whether process served on him, would not' be sufficient, is a question which I shall not undertake to determine, because it does not necessarily arise. There is nothing, then, in the nature of a corporation to exempt it from suit. The difficulty arises from there being no person within the limits of the state on whom you can serve your process. .
With the multiplication of corporations, which has and is taking place to an almost indefinite extent, there has been a corresponding change in the law in relation to.them. There was a time, when it was supposed that no suit could 'be sustained against "them, unless upon an express contract, under the .seal of the corporation. It is now held, that they are liable in trespass, and in case, upon an implied contract. 7 Mass. 169. 7 Cranch, 299. 4 Serg. & Rawle, 16. 14 Johns. 118. This change in the law has arisen from a
The motion to dissolve the attachment, is made on the ground that the defendant is a foreign corporation, and, as such, is not within the act of 1705, nor liable to attachment by the custom, of London. The effect of sustaining the motion, will be to deny the plaintiffs, citizens of Pennsylvania, all remedy in this state, on a contract made here, and to deprive them of a special lien on the goods attached, it will be for the defendants, then, to show most clearly, that foreign corporations do not come within the intention of the laws regulating attachments.
When we consider the nurnber of corporations which now exist, their continual increase, the extent of their operations, the establishment of agents within this state for the express purpose of making contracts here, it is difficult to conceive a valid reason why they should be exempted from the operation of laws, which regulate the contracts of individuals and domestic corporations. They are not such favourites in courts of justice, as to claim an exemption on that ground.
The reason of the passage of the act of 1705, is set forth in the preamble to be, “That the laws of this government have/hitherto. been deficient in respect of attachments, so that the effects of persons absenting are not equally liable with those of persons dwelling upon the spot, to make restitution for debts contracted or owing within this province, to the great injury of the inhabitants thereof, and the encouragement of such unworthy persons, as frequently by absconding, make advantage of the defect aforesaid.”
In the third section, “ provided always, that no writ, of attachment. shall hereafter be granted against any person or persons’ effects, but such only as at the time of granting such writs are not resident or residing within this province, or are about to remain or make their escape out of the same, and shall refuse to give sufficient security to the complainant for his debt, or other demand, before he depart the said province.” -
It cannot, I think, be" reasonably doubted that-,corporations are within the words of the act. When the word person, is used in a statute, corporations as well as individuals are included.. As, where the inhabitants of a town are .bound to repair a bridge, or to pay taxes, corporations, as well as individuals, are liable.' 2 Inst. 697, 703. Cowp. 83. 5 Crunch, 61.
Are foreign corporations within the spirit of the act ? We are so to construe the act, as to suppress the mischief and advance the remedy. The mischief which the legislature intended to remedy was, that the effects .of persons, artificial or ,natural, who were absent, were not equally liable with those of persons, artificial or natural, dwelling upon the spot, to make restitution for debts con
It may be- here proper to remark, that the act has been already construed to extend to persons, who have never been within the state, it has therefore the same application to corporations which are stationary, as to natural persons. Foreign corporations, it is true, ai;e necessarily absent from the state, but may have effects within it, and may contract and owe debts to citizens of this state, which they may be unable or unwilling to pay.
It is no answer to say, that this is a mere question of remedy; that the corporation may be sued in Massachusetts, as in this case, or in Europe or Canton, as the case may be.
But suppose suit should be commenced within a foreign jurisdiction, judgment, obtained, and execution issued, and,the company should prove insolvent, (and daily experience shows us that this is no improbable supposition,) what would be the remedy against their effects within this" state? Relief must depend entirely on the laws of the foreign government. If there was a power in their courts to compel an assignment, or to sequester their property, in and out of the state, there might be some remedy, however inadequate, to the creditor. . I cannot bring myself to believe, that the legislature ever intended that citizens of Pennsylvania, who had the property within their grasp, or a lien upon it, should be deprived of that lien, and depend for the payment of their debts on the laws of á sister state, or of a foreign government, and the more especially am I unwilling "to adopt, that construction at this time, when this contract, was máde, and contracts are daily making by foreign corporations, within the limits of this state, and under the jurisdiction of this court. If this were a case of doubtful construction, the argument ab inconvenienti, would be exceedingly strong, and would go far with me, in the determination of the case.
But it is said that corporations are. not within the act, because it is provided, “That if the plaintiff in the attachment obtain a verdict, judgment, and execution,- for . the money and goods, in the garnishee’s possession, yet the defendant in the attachment may, at any time before the money be paid, put in bail to the plaintiff’s action, upon which the attachment is grounded, whereby the garnishee will and shall be immediately discharged.”
Granting, merely for the sake of the argument, "that “ bail to the. plaintiff’s action,” as used in the act of assembly, means special bail only, and agreeing; as I certainly do, that a corporation cannot enter special bail, yet it-by means follows that the effects ©f foreign corporations cannot be attached, under the act of 1705.
This point, has undergone a judicial" investigation, in the casé of
From this it was inferred, that corporations defendants were not' within the act, in the same manner, and by the same arguments as it is here contended that corporations ’are not within the act of 1705, because bail to the plaintiff’s action, means special bail, and that they cannot enter such bail. The court, however, decided that the plaintiffs were not prevented from entering as rule of réference, which in effect decided the principal point in this case. If bodies corporate, say, the court, are not within the law, it must be because there is something in their nature inconsistent with its provisions; for they are not expressly excepted. It is contended, they must be excepted by implication, because they are excluded from the benefit of an appeal, which is given on condition-incompatible with the'nature of a corporation. It is clear, says the Chief Justice, that one of the alternatives of this condition is not applicable to a corporation, which is not a natural, but political body, incapable of being surrendered or imprisoned. I agree that the form of the recognizance is not applicable to a body corporate, but from this I draw a different conclusion from them. 1 do not infer that .the defendant can have no appeal, but that they may have an appeal without entering into any recognizance.
In this ease, I do not infer that the effects of foreign corporations cannot be attached, but should infer, were it not for considerations which I shall state, that the attachment should be-dissolved by entering an appearance without bail.
In Pennsylvania, a foreign attachment will not lie against an executor, as defendant, for a debt due from the testator; though the custom of London seems different. 1 Serg. on Attachment, 61. 2 Dali.
It will not lie in Pennsylvania, because it would interfere with the order prescribed for the payment of debts. This is not a consideration in England, the executor having full power over the assets of the deceased, their laws differing in that respect from ours. Heirs, executors, and administrators cannot be arrésted and held to bail, the demand being not on the person, but the assets of the deceased. 1 Sell. P. 45. .Although they cannot be held to special bail, yet it appears that by the custom of London, a foreign attachment will not lie; against the executors, as defendants, for a debt due-from the testator. 1 Serg. & Rawle, 61.
The case of Fitch v. Ross, 4 Serg. & Rawle, 564, decides,— That the death of the defendant, in a foreign attachment, after
I ci'e these cases for the inference which necessarily arises, that neither the issuing of a foreign attachment, nor its dissolution, depend upon the ability of the defendant in the attachment to enter special bail.
Taking the point as now settled, that foreign corporations are liable to a foreign attachment, the next question which claims the attention of the court is, the manner in which the attachment may be dissolved. As a matter of practice, and one about which a difference of opinion may exist, it is better that it should be put at rest.
In my view of this case, it is a consideration of some weight, that the object of the laws regulating attachments, is merely to compel an appearance by the debtor. 1 Serg. on Att. 1. Carth. 26. 4 Serg. & Rawle, 564.
“ Foreign attachments,” says Justice Duncan, in the case of Fitch v. Ross, 4 Serg. & Rawle, 564, is a “peculiar process to compel the appearance of the non-resident debtor, by distress and sale of the property attached.” By the attachment, the creditor obtains a special lien on the effects of the absent debtor, of which lie can only be deprived by the appearance of the debtor, which js the great object of the'act. When a. foreign corporation or debtor enters an appearance to the action, they are placed upon the same and no worse footing than a resident debtor. They submit themselves to the jurisdiction of the courts of this state, in which the merits of their cause, will be fairly examined.
The motion to dissolve is to relieve the defendants from the effects of the lien, and it would he unreasonable to do so, without giving the plaintiffs adequate security. If the' bail to the action, in the act, means special bail only, then the only remedy for the corporation would be by scire facias ad disprobandum, debitum, on the 4th section of the act. i his, however, in some cases, would not be an adequate relief, and would not be such a fair and equitable construction of the act as we are bound to give.
As a foreign corporation cannot from their nature give the plaintiff security by the body, the highest security known to the law, 4 Serg. & Rawle, 564, it is but reasonable that the security should be dissolved, upon their giving the next best security, which is security for the debt, which may be.found to be due, together with the costs of suit.
- Although the terms used in the act,—“ bail to the plaintiff’s action,”—ordinarily mean special bail, yet'am I so disposed equitably to construe the act, as to suit the nature of the corporation, which seeks the dissolution of the attachment.
The putting in special bail, is one of the modes of dissolving an attachment, yet it is not the only mode, nor is it so expressed or
The court will inquire into the justice and extent of the plaintiff’s demand, and if no'sufficient cause of action be shown, they will discharge the property altogether. 1 Dall. 154. An attachment will be dissolved, where the defendant was not an object of the foreign attachment laws. 1 Dall. 152. Or. where the property was not liable to a-former attachment. 1 Dall. 354. 2 Dal. 73. Or where the court had not jurisdiction. So, under the custom of London, an attachment will bé dissolved where the defendant surrenders himself. 1 Com. Dig. 154.
These cases show the latitude of construction adopted by the courts, in relation to the lawns regulating attachments. In my view of this case, the construction which the court have given the act is'altogether in favour of the cefendant, enabling him to repossess himself,of the property, upon doing common justice to the plaintiff; enabling him to have his claim examined by a court, competent in all respects to do exact and equal justice to all the parties.
The ground upon which the Chief Justice in the case of Carpentier v. The Delaware Insurance Company, gave the appeal to the corporation without bail, was, that the appeal was to be construed liberally, because it is in support of the constitution, which secures the trial by jury. This reason not applying to this case, we are of the opinion that the defendants take nothing by their motion, but that upon their giving bail for the payment of the debt, interest and costs, on the affirmance of the judgment against the corporation, the court will permit the defendants to appear, and on motion will dissolve the attachment.
The corporation cannot appear except by leave of the court. In Carth. 26, it was agreed by all that a foreign attachment in London, is to no purpose but to compel an appearance of the defendant in the action; for if he appear vyithin a year and a day, and put in bail to the action, the garnishee is discharged, but without bail, they will not compel an appearance.
This is a rule to show cause why the foreign attachment issued in this case ought not to be dissolved.' It is quite clear, that if it is not authorized by law, and ought not to have issued, the court on motion is bound to dissolve or quash it; and it is equally clear, that if this be a corporation of the state, foreign attachment would not lie: so that the true question is, does a foreign attachment, by the laws of Pennsylvania, lie against a foreign corporation, which by attaching their effects can compel them to appear, in order to dissolve it, by entering special bail. I do not think it a question of such great magnitude as has been represented, or that such mighty mischiefs will arise from deciding that the effects of a-corporation created by a sister state cannot be attached. Inconvenient it may be to the party entering into a
This question is to be decided exclusively on our own statutes. The foreign attachment, though partly borrowed from the custom of London, is not a process known to the common law,—is not a process by which, according to that law, corporate bodies'can be brought into their courts; and I think it was put fairly by the counsel of the plaintiffs, on the only plausible ground,—the enactments of our own state. The process of foreign attachment is founded on. the act of 1705, a law passed' in the infancy of the colony, when corporations and monied institutions were unknown in the whole of the American provinces. The provisions of the act were therefore not intended for those creatures of the law, invisible, intangible, incorporeal and imaginary, but for natural persons, with whom in their natural character the primitive people of the colony, had dealings. But if I could find any terms in the act, or if by any, the most liberal construction, I could so extend the act as to draw these creatures of the law within its provisions, I would willingly do so, for I acknowledge the inconvenience. But as in my conscience' I do not think this within the view of the legislature, and as I think it inconsistent with the whole letter and structure of the act, 1 cannot alter the law, or mould it anew to meet the emergency.
The foreign attachment was iatended to compel bail to be put in by an absent debtor, by impounding the property, if found within the jurisdiction. It is not special bail, because bail to the action
The arguments of the counsel of the plaintiffs, addressed to the legislature, might be very convincing to show that the altered state of society required an alteration of the law; but these are not topics properly addressed to a judicial tribunal, whose province is the interpretation of the laws, here the written laws, the lex scripta.
There was an instance put by the counsel, and put with force,— the case of a feme sole trader, exempt from distress by our laws; but it is readily answered: if she enters into a contract-in another state, and can be found there, she is liable to arrest; and if she cannot be found, and there is such law as our foreign attachment law, her goods found within the jurisdiction might be attached.
If this process does not lie, the plaintiffs have the right to call for its dissolution, and no terms can be exacted from them by the court not prescribed by the law. What is this court to do ? We must either dissolve the attachment, quash it, as having issued irregularly against a party not subject to it, or . require special bail for the surrender, not of the members of the corporation, but of the
I am of opinion that the motion should be granted, and the writ quashed or dissolved.
Rule discharged.
Reference
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