Parker v. Stoughton Mill Co.

The first important question in this case is simple. An Illinois mutual insurance company has become insolvent, and a receiver thereof has been appointed by an Illinois court of competent jurisdiction, and an assessment upon the premium notes has also been made by the court. The defendant, a Wisconsin corporation, was insured in the insolvent company, thus becoming a member thereof, and gave its premium note, which was a part of the assets of the company in the hands of the receiver when the assessment was made. Can the receiver maintain an action in the courts of this state to recover of the defendant the amount of the assessment upon its premium note?

This court has held that an assignment of property made by a foreign court pursuant to a bankrupt act does not transfer the title to personal property in this state. McClure v. Campbell, 71 Wis. 350. Also, that a receiver of an insolvent debtor, appointed in a creditor’s suit in a foreign state, has no title to the property of the debtor within this state, and will not be allowed to maintain an action in the courts of this state to set aside an alleged fraudulent conveyance of such property. Filkins v. Nunnemacher, 81 Wis. 91. The principle of both these decisions is manifestly, the same, namely, that decrees of foreign courts have no effect upon the title of property within this state. This court has also held, in effect, that a foreign receiver will be heard to assert in the courts of this state a title to a chose in action; *180which, he claims by an assignment valid and binding against all parties to the litigation. Gilman v. Ketcham, 84 Wis. 60. The last-named case rules the present case. Here it appears that the receiver has been invested by the Illinois court with the practical ownership of choses in action which were then in possession of the insurance company and within the jurisdiction of the court, namely, the premium notes of the defendant. I say “ practical ownership,” because it is apparent from the complaint that the corporation itself is either actually dissolved or in process of dissolution, and all its property is in the hands of the court. So far as there can be any ownership of such property under such circumstances, it must be in the receiver. The corporation will never rise to claim it. It is not the property of the court, and hence, whatever substantial property there is in any one must be in the receiver, charged of course with his duties in relation to it. There is no question here of a transfer of property in this state. No such transfer was attempted. The property in question (that is, the defendant’s note and its liability to pay assessments) was in Illinois at the office of the company. They were choses in action, and their situs was at the residence of the company. State ex rel. Dwinnell v. Gaylord, 73 Wis. 316. The case, therefore, is simply this: A foreign receiver is attempting to enforce in the courts of this state a contract of which he has been invested with the practical ownership by a foreign court having jurisdiction of the property and of its former owner. We think the principles of judicial comity laid down in Gilman v. Ketcham, 84 Wis. 60, fully cover the case, and, following them, we hold that the action may be maintained.

Eut it is argued that the complaint shows that the assessment made was inequitable and unjust, and was in fact a horizontal assessment, and hence will not be enforced. Upon this contention the case of Great W. Tel. Co. v. Burnham, 79 Wis. 47, is relied upon. That was a case of an assess*181ment, made by an Illinois court baying jurisdiction, upon the stockholders of a bankrupt telegraph company; and it affirmatively appeared upon the face, of the complaint that, some of the stockholders had paid forty,per cent, of their subscriptions, and some only two per cent,, and that the assessment sued on was a horizontal assessment of thirty-five per cent, upon all. This was h.eld to be conclusively unequal and unfair. It seems to have been considered that the plaintiff had, by his own allegations, impeached and discredited the decree of the court; and it was held that, the complaint was demurrable, notwithstanding the fact that the assessment was made by a court of competent jurisdiction. We. shall no.t attempt to justify all that is said, in that case. Ey the constitution of the United States (art.. IV, sec. 1), the courts of this state are bound to give full faith, and credit to the “ public acts, records and judicial proceedings of every other state.” If a judgment is conclusive in the state where rendered, it is conclusive here. The decree by which the assessment in question was made was undoubtedly conclusive on the members or policy holders of the defunct company, unless attacked in a direct proceeding,, notwithstanding they were not present when it was rendered. Hawkins v. Glenn, 131 U. S. 319; Lycoming F. Ins. Co. v. Langley, 62 Md. 211. It has so been held by the appellate-court of Illinois in considering this very assessment. Fanil, McNally Co. v. Mut. F. Ins. Co. 58 Ill. App. 528. We can come to no other conclusion than that we are bound, under the' constitutional requirement of “ full faith and\ credit ” to hold that the decree making the assessment ini question, being conclusive in Illinois upon all members and; policy holders unless attacked by direct proceeding, is conclusive here and not open to. collateral attack. Griggs v. Becker, 87 Wis. 313. Whatever is said in Great W. Tel. Co. v. Burnham, 79 Wis. 47, inconsistent with this conclusion,, we are unable to follow.

*182The necessary conclusion from these considerations is that the complaint stated a good cause of action, and that the general demurrer to the whole complaint on the ground of want of capacity in the plaintiff to sue was improperly sustained. . It was admitted on the argument that an error had been made inadvertently in the statement of the second cause of action, which rendered it demurrable; therefore the demurrer will be overruled as to the first cause of action, and sustained as to the second cause of action, with the usual leave to amend.

By the Gourt.— The order appealed from is reversed, with costs in favor of the plaintiff, except that part which overrules the demurrer to the first cause of action, which is affirmed; and .the cause is remanded for further proceedings in accordance with this opinion.