22 S.Ct. 391
46 L.Ed. 573
SIMON ROTHSCHILD and Frank Rothschild, Copartners, Doing Business under the Firm Name and Style of S. Rothschild & Brother, Plffs. in Err.,
ROBERT A. KNIGHT, Assignee in Insolvency of James McKeon.
Argued January 16, 17, 1902.
Decided March 3, 1902.
The indebtedness being overdue, Frank J. Rothschild, Jr., son of one of the plaintiffs in error, went to Supringfield with full 335 power to collect the debt. When there, he received from McKeon a quantity of fur garments, part of McKeon's stock. The garments had not been purchased of plaintiffs in error, and when they were received by Rothschild, Jr., for plaintiffs in error he knew McKeon was insolvent.
The furs were sent to the railroad station in trunks, checked and taken to New York as the personal baggage of Rothschild, Jr. A receipted bill or list of the goods was delivered by McKeon to Rothschild, Jr. Subsequently, however, in New York it was testified that McKeon 'tore from the bill the receipt and wrote on the bill the word abbreviation 'Memo.' to indicate that the goods were on memorandum or consignment, and the defendant said that he would write to his bookkeeper that night and have the entry in his books made to conform with the bill by writing in the word 'Memo."
This was done by the advice of the attorney of plaintiffs in error, and so stated by him in an affidavit filed in an action brought by plaintiffs in error in the supreme court of the city and county of New York against McKeon.
The advice was given, the attorney deposed, in order to make the transaction appear what it was stated in his presence to be; that is, for security only, and not for the sale of the goods; and he advised a suit by plaintiffs in error against McKeon and an attachment of the goods. The suit was subsequently brought and the goods attached.
On the 20th December, 1895, McKeon was adjudged an insolvent in Massachusetts, and the defendant in error was appointed his assignee, and as such he brought this action by trustee process in the superior court for Hampden county, Massachusetts, for the value of goods conveyed by McKeon to plaintiffs in error, on the ground that the conveyance was made in fraud of the insolvency laws of Massachusetts. The officer's return on the writ showed service on the trustees, but none on the plaintiffs in error.
The writ was duly entered on the first Monday in May, 1896, and a declaration for goods sold and delivered by McKeon to the plaintiffs in error was duly filed. Subsequently upon its being brought to the notice of the court that plaintiffs in error were not inhabitants of the commonwealth of Massachusetts, notice was ordered to be given to them by publication, and that the action be continued until such notice should be given. The notice was returnable on the first Monday in September, 1896, and was given as ordered, but no return or proof of it was made until July 6, 1899. On the 16th of September, 1896, plaintiffs in error (defendants in the action) appeared generally by their attorney, Charles C. Spillman, Esq., thereto duly authorized. On October 12, following, defendant in error (plaintiff) moved to amend his declaration, to which counsel for plaintiffs in error consented, and it was allowed. Plaintiffs in error filed an answer denying each and every allegation in the original and amended declaration. On June 21, 1897, the defendant in error again amended his declaration with the consent of E. N. Hill, Esq., who was then acting as counsel for plaintiffs in error, having been retained generally by plaintiffs in error, though his written appearance was not entered until June 26. By virtue of his general authority he could consent to the allowance of amendments. He conducted the case for plaintiffs in error.
The amendment added two counts to the declaration, charging the conveyance to plaintiffs in error by McKeon as having been made to prevent the property from coming to his assignee in insolvency, in fraud of the laws of the state relating to insolvent debtors.
The jury rendered a verdict against the plaintiffs in error for the sum of $6,420, and they moved for a new trial by their attorney, E. N. Hill. On the 31st of July, 1897, plaintiffs in error 'alleged sundry exceptions to the opinions and rulings of the court, which, being found conformable to the truth, were allowed and signed by the presiding judge, and the questions were transmitted to the supreme judicial court for consideration.'
The bill of exceptions contained the evidence, and concluded as follows:
'Upon this evidence the defendants asked the court to rule that there was no evidence to warant the finding that McKeon intended to prefer the defendants, or intended to prevent, this property from coming into the possession of the assignee or from being distributed according to the laws relating to insolvency, and that the action could not be maintained. The court refused so to rule and the defendants duly excepted.
'And the defendants being aggrieved by these rulings and refusals to rule, and having excepted thereto, after verdict against them, pray that their exceptions and their exceptions to the admission of testimony as hereinbefore stated, be allowed.'
On the 15th of February, 1898, the motion for a new trial was denied, and on the 28th of February, 1899, a rescript was received from the supreme judicial court overruling the exceptions of plaintiffs in error.
On the 6th of March, 1899, judgment was entered against plaintiffs in error 'for the sum of $7.071.63, damages, and costs of suit, taxed at $91.07, and that execution therefor issue against the goods, effects, and credits of the said defendants in the hands and possession of the said trustees, Smith & Murray and Houston & Henderson, who were by the court adjudged to be trustees' of plaintiffs in error.
On May 12, 1898, plaintiffs in error filed an assignment of errors under the state practice as follows:
'1. That the record discloses that there was no valid and effectual attachment of the goods, estate, or effects of the plaintiffs in error upon the writ, which is the necessary foundation of the jurisdiction of said superior court to support any proceeding against an unserved, absent defendant.
'2. That the record discloses that the action was an attempt to obtain jurisdiction over these nonresident plaintiffs in error by means of trusteeing a debt due them, and said attempt was an infringement of the rights of the plaintiffs in error as guaranteed by the Constitution of the United States.
'3. That the record discloses that neither the plaintiffs in error nor either of them were voluntarily before said superior court, and the record fails to show any service upon them, either personally or by publication as ordered by said court.
'4. That the record discloses that the judgment, if allowed to stand, will deprive these plaintiffs in error of their property, contrary to the provisions of the 14th Amendment to the Constitution of the United States.
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'10. That the record discloses that the various amendments to the declaration of the defendants in error converted the action into one for the recovery of a penalty, and that such attempt is an infringement of the rights, privileges, and immunities of the plaintiffs in error, guaranteed by the 14th Amendment to the Constitution of the United States.
'11. That the record discloses that there were counts in the declaration of the defendants in error, which under the laws of this commonwealth involved a penalty, and that a judgment on said counts would be conclusive on these plaintiffs in error as to their liability therefor, and would, without further trial, subject their rights to such penalty, and that such attempt to obtain jurisdiction over the persons or property of these plaintiffs in error, by the trustee process served on a debtor in this state, for the purpose of fixing upon them a liability for such penalty, is contrary to the provisions of the 14th Amendment to the Constitution of the United States.'
The assignments of error were subsequently amended by adding the following:
'16. That the record discloses that the judgment, if allowed to stand, will impair the obligation of contracts, contrary to the Constitution of the United States.
'17. That the record discloses that the superior court did not give full faith and credit to the judicial proceedings of the courts of New York, as required by the Constitution of the United States.'
On the 17th of June, 1898, the defendant in error filed his plea and traverse. A hearing was subsequently had before a single justice to establish the plea and traverse, who, a doubt being suggested as to his authority to dispose of the case, after finding the facts, reported the case to the full court. The case was heard by the supreme court, and on May 15, 1900, a rescript was sent to the superior court affirming the judgment. 176 Mass. 48, 57 N. E. 337. This writ of error was then sued out and allowed by the chief justice of the superior court.
Messrs. H. J. Jaquith and Thomas J. Barry for plaintiffs in error.
Messrs. Charles M. Rice and Robert A. Knight for defendant in error.
Springfield, Massachusetts, and became indebted to plaintiffs in error in the sum of about $4,000.
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Mr. Justice McKenna delivered the opinon of the court: