U.S. Supreme Court
Crapo v. Kelly, 83 U.S. 16 Wall. 610 610 (1872)
Crapo v. Kelly
83 U.S. (16 Wall.) 610
A. of Massachusetts, owning a ship then on the high seas bound for the port of New York but registered in Massachusetts, applied to the insolvent court of Massachusetts for the benefit of the insolvent laws of the state, and under the statutes of the state the judge of the insolvent court executed and delivered to the assignee in insolvency a transfer of all the debtor's property, the effect of which, under the statute, was to convey to the assignee all the debtor's property "which he could have lawfully sold, assigned, or conveyed." The debtor himself executed no transfer.
After this, the ship being still on the high seas, B., of New York, sued A. in a New York court for a money debt, and in accordance with the laws of New York respecting nonresident debtors issued an attachment against his property.
The ship arrived in port a few days afterwards and was attached by the sheriff at B.'s suit.
On a suit in New York between the assignee in insolvency appointed by the Massachusetts court and the sheriff of New York to determine with whom was the prior right, whether with the Massachusetts assignee in insolvency or the New York attaching creditor, it was hold by the highest court of New York that the prior right was with the New York attaching creditor.
On appeal to this Court, where a question as to its jurisdiction to review the decision of the New York court was raised as a preliminary point,
lst. That the New York court necessarily decided what effect the insolvent proceedings in Massachusetts had by the law and usage in that state, and that as it decided against the effect which the defendant set up for them, this Court had jurisdiction to review the judgment of the New York court. chanroblesvirtualawlibrary
2d. That for the purposes of this suit, the ship, though on the high seas, was a portion of the territory of Massachusetts, and that the assignment by the insolvent court of that state passed the title to her in the same manner and with the like effect as if she had been physically within the bounds of that state when the assignment was executed.
3d. That accordingly the assignee in insolvency had the prior right, and that the judgment below was wrong.
On the 18th of January, 1861, the American ship Arctic, owned, as to one-half, by Gibbs & Jenny, of Massachusetts and registered as to that half in their names, in the port of Fairhaven, in the state aforesaid, was at the guano islands in the Southern Pacific Ocean, and on that day set sail from the said islands for New York.
On the 12th of February, and the 6th of March following, the ship, then sailing on the said ocean, and the said Gibbs & Jenny being insolvent and applying voluntarily to the judge of the insolvent court of Massachusetts for the benefit of the insolvent laws of the state, that judge, acting under a statute of the state, appointed one Crapo and others their assignees in insolvency, and executed and delivered to them an assignment of all the personal property of the said insolvents. No assignment was made by the insolvents themselves.
The statute which authorizes the judge of the insolvent court thus to transfer the debtor's property makes the transfer operate as a conveyance of all the debtor's property "which he could have lawfully sold, assigned, or conveyed." It however enacts further, that the debtor shall,
"When required by the assignees, make and execute all such deeds and writings, and do all such other lawful acts and things which may be necessary or useful for confirming the assignment so made by the said judge, and for enabling the assignees to demand, recover, and receive all the estate and effects assigned as aforesaid, especially such part thereof, if any, as may be without this Commonwealth."
On the 24th of April following (the ship still on the high chanroblesvirtualawlibrary
seas), one Robinson, a citizen and resident of New York, began an action against the said Gibbs & Jenny on certain promissory notes of theirs held by him, and in consequence of their residence out of the State of New York, a warrant was issued to the sheriff of New York, one Kelly, to attach their property; this proceeding being one in conformity to the laws of New York.
On the 30th of April, the ship arrived at New York, direct from the Pacific Ocean, and the sheriff seized her in the harbor, and attached one undivided half of her as the property of Gibbs & Jenny. Crapo and his co-assignees appeared two days afterwards and, notwithstanding the previous attachment by the sheriff, claimed the ship as assignees of Gibbs & Jenny. She was thereupon released from custody on the claimants giving a bond, in conformity with the statutes of New York, conditioned that in a suit to be brought on the bond they would establish the fact that they were owners of the half of the vessel attached, or on failure to do so pay the sheriff the value of the share.
Kelly accordingly brought suit on the bond, the question on that suit being this, whether a New York creditor of the insolvents, by his prior attachment of their property in the State of New York, and pursuant to the laws of that state, could hold the property against the subsequent possession or claim of possession of such property, asserted in the State of New York, by authority of a statutory sequestration under the laws of Massachusetts of the general property of the debtors for the benefit of their creditors, and seeking to take the property out of the possession of the New York sheriff, on the ground of the sequestration of the Massachusetts insolvent statute antedating the New York sheriff's attachment.
The highest court of the state upheld the sheriff's title, and a recovery accordingly was had upon the bond.
The case was now brought here, as within the jurisdiction of this Court, under the 25th section of the Judiciary Act, chanroblesvirtualawlibrary
because, as was alleged, the highest court of New York had disregarded that provision of the Constitution which ordains that:
"Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state; and the Congress may, by general laws, prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof,"
And to the Act of Congress of May 26, 1790, which, after prescribing the forms of authentication, enacts:
"And the said records and judicial proceedings authenticated as aforesaid shall have such faith and credit given to them in every court within the United States as they have by law or usage in the courts of the state from whence the said records are or shall be taken. "