Fuller v. Steiglitz.

Pomeroy on Remedies, 198 et seq. See, also, Beckwith v. Union Bank, 9 N. Y. 212; Williams v. Brown, 2 Keyes, 486; Walker v. McKay, 2 Metc. (Ky.) 294; Ogden v. Prentice, 33 Barb. 160; Wells v. Stewart, 3 Barb. 40; Adams v. Rodarmel, 19 Ind. 339.

It is said in argument that these decisions are made under the New York statute of set-off, which is materially different from ours. We have compared section 99 with the New York statute on the same point. It reads: "If the demand be such as might have been set off against such plaintiff or such assignee while the contract belonged to him."

The meaning of this is the same as section 99, so far as the effect of an assignment on a set-off is concerned.

In each the test of whether the debtor preserves his set-off depends on whether he could have set it up before the assignment – that is, while the contract belonged to the assignor.

Whether we regard this as a question to be determined by the statutes of New York or Ohio is not material, as they are substantially the same.

We conclude, therefore, that Smal, by the assignment before the maturity of either claim, prevented a set-off from accruing. The converse of this holding might work a more injurious prefer ence than is complained of.

A number of cases have been cited to the effect that if the setoff accrue before suit brought, it cannot be thus defeated. In New Hampshire the statute is: "If there are mutual debts between the plaintiff and defendant at the time of the commencement of the action, one debt may be set off against the other." The phraseology of different statutes gives rise to this diversity in the cases.

Again, many cases arising under the bankrupt laws adopt a broader rule.

The court, in 4 Ohio St. 593, speaking of these decisions, say: "They have very little if any application to this case. These statutes have generally permitted a set-off of mutual credits, whether due or not, and have, therefore, administered a much broader equity than the ordinary law of set-off." See notes to Rose v. Hart, 2 Smith's Lead. Cases, 293.

This subject is fully reviewed, and numerous authorities cited, in the recent valuable treatise on the subject of Remedies and Remedial Rights, by Prof. Pomeroy, where the conclusion we have reached is fully supported.

Fuller v. Steiglitz.

II. The second defense is in the nature of an equitable set-off, based on the ground that it is against the public policy of the State to enforce an assignment which gives preferences, where the general creditors will be deprived of a large share of their claims.

The defendant, as such a creditor, asks that the principles of the Ohio law on the subject be applied, and to that end prays the court to ascertain what the estate would pay pro rata, and have the amount that he would thus be entitled to offset. He claims that the principles of comity between States does not require our courts to enforce the New York assignment when it injures a citizen of our own State.

If we are correct in our conclusions on the first point, the defendant has no valid set-off in this action, and no legal or equitable lien or charge against this account. It is not, therefore, a case where he as a citizen of Ohio is claiming rights under our laws as against claims arising under New York laws.

By the New York law the plaintiff's right of recovery is complete, and by the Ohio law there is no set-off.

If the plaintiff was acting under the insolvent law of this State, the defendant could not have his set-off, and a court of equity would not grant him the relief he asks on such grounds, and thus interfere with the Probate Court in the administration of the estate.

The fact that he is a citizen of Ohio creates in his behalf no equities in fact. As such citizen, he is entitled to the authority of its courts in support of his rights, founded upon its laws. A court of equity would not interfere with an insolvent court of our own State, unless the usual ground for equitable relief was made. The defendant has no equities in this case that is not common to all general creditors, whether citizens of Ohio or not.

An assignment preferring credits was valid at common law. Lawrence et al. v. Davis, 3 McLean, 177.

The general rule of inter-state comity is that the law of the domicile of the owner of personal property and choses in action controls in their disposition by sale, devise or assignment. Bank of Augusta v. Earle, 13 Pet. 519; Sortwell v. Jewett 9 Ohio, 180, Story's Conflict of Laws, §§ 379-384; Dundas v. Bowler, 3 McLean,

397.

In Sortwell v. Jewett, it is said, "that as between citizens of the United States there is neither justice nor expediency in a rule of

Fuller v. Steiglitz.

policy that a State should prefer the rights of its own citizens, and discriminate against citizens of other States. The natural right of the owner to dispose of his own property depends on no locality, and is subject to no restrictions, except in conformity to law. A compliance with these laws should avail equally the stranger as the citizen." That was a case of an assignment in New York, giving preferences where the land assigned lying in Ohio had been seized in attachment after the assignment. The court held the Ohio attachment was subordinate to the rights of the assignee.

On the same point the Supreme Court of the United States say: "The intimate union of these States as members of the same great political family - the deep and vital interests which bind them so closely together - should lead us to presume a greater degree of comity and friendship and kindness toward each other than we should be authorized to presume between foreign nations."

State insolvent laws of other States so far constitute a part of the contract, that a discharge under them, where the contract, was made and to be performed, is a bar, in Ohio, to any further action. Bank of Utica v. Card, 7 Ohio, pt. 2, p. 170.

Interest laws of other States, though in conflict with ours, are enforced the rule being that, if the contract was valid where made and to be performed, it would be sustained in Ohio. 1 Ohio St. 253.

So, a devise in Jamaica of personalty in Ohio is governed by the laws of that island. It is said: "As personal property has no locality, but accompanies the owner, the consequence necessarily is that the voluntary disposition, as well as distribution of it must depend exclusively on the law of the domicile." McCune v. House, 8 Ohio, 144; Dundas v. Bowler, 3 McLean, 397; Kanaga v. Taylor, 7 Ohio St. 134.

In Oliver v. Townes, 14 Martin (La.), 93, a leading case, an exception to this general rule is stated. It is there laid down "that when the laws of a foreign State clash with and interfere with the rights of citizens of the country where the parties to the contract seek to enforce it, as one or the other must give way, those prevailing where the relief is sought must have the preference."

This exception, though not sanctioned by any case of authority in this State, is strongly supported both by reason and authority. Guillander v. Howell, 35 N. Y. 657; Ingraham v. Geyer, 13 Mass. 146; Story's Conflict of Laws, § 388.

Fuller v. Steiglitz.

In all of these cases, there is a conflict of rights under the laws of the two States. Each party is asserting claims founded upon conflicting laws, when one or the other must give way. Oliver v. Townes was a conflict between a vendee of a vessel lying at New Orleans, under a sale made in Virginia, and valid there, and an attaching creditor in Louisiana, where the sale was invalid. So, also, was the case of Ingraham v. Geyer. In that case, PARKER, J., says: "A citizen who has actually seized the debt by attachment, before it was paid to the assignee, would be protected in his lien. To give effect to the assignment, so as to intercept the lien obtained by the creditor under the laws of our own State, when, by the effect of that assignment, he would be deprived of all opportunity of participating with creditors in Pennsylvania in the proceeds of the debtor's effects, would be undue partiality toward foreign creditors."

In Gunlaudet v. Hall, 35 N. Y. 657, a distinction is drawn between personal property actually located out of New York and choses in action owing by citizens of other States. The former are held subject of seizure in attachment, so as to defeat the New York assignment; but the latter, having no actual situs, other than the domicile of the owner, cannot be taken from the assignee by the laws of another State. Whether this distinction is sound, it is now

immaterial to inquire.

In none of these cases, constituting what is called the exception to the general rule, have the courts refused to apply the rules of comity, unless there was an actual conflict of rights growing out of a conflict of laws of the two States.

In this case, there is no such conflict between the plaintiff's rights, founded on the New York law, and the defendant's, founded on Ohio law.

If, by attachment or otherwise, this account had been seized, and a lien or charge established against the same under Ohio laws, by a citizen creditor of Smal, the question decided in 13 Mass. 146, would have been presented here for decision.

As it stands, the defendant having no valid claim to reach and appropriate this account to the payment of his claim against Smal, he must be governed by the general rules of comity in such cases. The judgment is, therefore, affirmed.

Judgment affirmed.

SCOTT, C. J., DAY, WRIGHT, and ASHBURN, JJ., concurred.

The power vested in the general assembly under article 13, section 6 of the Constitution of Ohio, to restrict the powers of taxation and assessment by municipal corporations, is subject to the limitations imposed by article 1, section 10 of the Constitution of the United States, which declares that "no State shall pass any law impairing the obligation of contracts,” and of article 2, section 28, of the Constitution of Ohio, which declares that the general assembly shall pass no retroactive law or laws impairing the obligations of contracts.

Where a statute authorized a municipal corporation to improve its streets, and make assessments on abutting lots to pay the cost thereof, and it has, after taking the necessary steps, required by law and the ordinances governing in such cases, made a contract with an individual to do the work fór a stipulated price, and binding itself to pay such price in assessments under such statute, which the contractor agrees to accept in full payment, the obligation of the corporation to pay in the manner stipulated cannot be impaired by a subsequent amendment of such statute, which takes away the power to make an assessment equal to the amount agreed to be paid. A subsequent statute which repeals or restricts the power of assessment so previously given, is, in so far as it affects the obligations of contracts existing at the time, a statute impairing the obligation of such contract. Unless adequate provision is made to enable the corporation to perform its existing contract obligations, such subsequent statute will be construed as prospective in its operations, and not applicable to such contracts; and it will be the duty of the corporation to be governed by the statute in force when the contract was made.

A

CTION to recover an assessment. The opinion states the case.

Caldwell, Coppock & Caldwell and J. G. & H. Douglass, for plaintiffs in error.

Henry M. Cist, for defendant in error. The legislature had no power to change the limit of the assessment, so far as these cases are concerned, during the progress of the work. Van Hoffman v. City of Quincy, 4 Wall. 535, 553; Planters' Bank v. Sharp, 6 How.

301.

VOL. XXII.-41