CONFLICT OF LAWS | HUNTINGTON V. ATTRILL 146 U.S. 657 (1892)
HUNTINGTON
V. ATTRILL
146 U.S.
657 (1892)
TOPIC/DOCTRINE
The question whether a statute of one state is
a penal law, in the international sense, so that it cannot be enforced in the
courts of another state, depends upon the question whether its purpose is to
punish an offense against the public justice of the state, or to afford a
private remedy to a person injured by the wrongful act.
FACTS
Huntington, a resident of New York, recovered,
in the supreme court of the state of New York, in an action brought by him
against Attrill, a judgment for the sum of $100,240, which had not been paid, secured, or satisfied. The controversy
started when Attrill signed and made oath to, and caused to be recorded, as
required under Section 21 of the statute of New York of 1875, a certificate,
stating that the whole of the capital stock of Rockaway Beach Improvement
Company, of which he was an incorporator and a director, had been paid, when in truth no part had been paid. By
making such false certificate, Attril became personally liable under said
statute, for all the debts of the company to its creditors, including to
plaintiff Huntington.
Then, Huntington filed in the circuit court of
Baltimore city, Maryland a bill of equity against another company named
Equitable Gaslight Company of Baltimore, a corporation of Maryland, and against
Attrill to set aside a fraudulent transfer of stock made by made by Attril in
that company. Huntington prayed that
the certificates of those shares be canceled and ‘be decreed to be subject to
his claim to the judgment he recovered under section 21 of the statute of New
York.
The
court of the state of Maryland declined to entertain the bill. The ground was
that the liability imposed by section
21 of the statute of New York was intended as a punishment for doing any of the
forbidden acts, and was, therefore, in view of the decisions in that state and
in Maryland, a penalty which could not be enforced in the state of Maryland.
ISSUE
Whether
under statute of New York of 1875, (chapter 611, is a penal law.
RULING
No.
The court held that as a rule, penal laws have
no force of themselves beyond the jurisdiction of the state which enacts them,
and can have extraterritorial effect only by the comity of other states. Penal
laws, strictly and properly, are those imposing punishment for an offense
committed against the state, and which, by the English and American
constitutions, the executive of the state has the power to pardon. The question
whether a statute of one state is a penal law, in the international sense, so
that it cannot be enforced in the courts of another state, depends upon the
question whether its purpose is to punish an offense against the public justice
of the state, or to afford a private remedy to a person injured by the wrongful
act.
Here, the court held that the provision of the
statute of New York now in question, making the officers of a corporation, who
sign and record a false certificate of the amount of its capital stock, liable
for all its debts, is in no sense a criminal or quasi criminal law. The statute
takes pains to secure and maintain a proper corporate fund for the payment of
the corporate debts. With this aim, it makes the stockholders individually
liable for the debts of the corporation until the capital stock is paid in, and
a certificate of the payment made by the officers, and makes the officers
liable for any false and material representation in that certificate. As the
statute imposes a burdensome liability on the officers for their wrongful act,
it may well be considered penal, in the sense that it should be strictly
construed. But as it gives a civil remedy, at the private suit of the creditor
only, and measured by the amount of his debt, it is as to him clearly remedial.
To maintain such a suit is not to administer a punishment imposed upon an
offender against the state, but simply to enforce a private right secured under
its laws to an individual. We can see no just ground, on principle, for holding
such a statute to be a penal law, in the sense that it cannot be enforced in a
foreign state or country.
