that if the title to certain lands were not confirmed to the covenantor by the courts of the United States, before which it was pending, upon final adjudi. cation of the same, the covenantor would pay a sum of money, does not become a cause of action when the district court refuses to confirm the title and declares it invalid. Until the time for appeal has elapsed, or until the judgment of the highest court in which the suit could be determined has pronounced against the validity of the title, there has been no such final adjudication as was intended by the parties to the covenant": Freeman on Judgments, 4th ed., sec. 21.

MACDONALD v. FIRST NATIONAL BANK.

[47 MINNESOTA, 67.]

INSOLVENT LAWS-PREFERENCE IN FAVOR OF NON-RESIDENTS. — A transfer to a creditor, which is void by the laws of the state relating to insolvents as an unlawful preference, cannot be enforced by him on the ground that he is a non-resident of the state, and therefore not affected by such laws. INSOLVENT LAWS ENACTED BY A STATE OPERATE AGAINST NON-RESIDENTS SO far as such laws control the disposition of property within the jurisdiction of the state, though they cannot release the insolvent from the obligation to pay debts due from him to persons not resident in the state. W. A. Sperry and Lewis L. Wheelock, for the appellant. J. L. Macdonald, for the respondent.

DICKINSON, J. This action by the assignee (under our insolvent law) of an insolvent debtor is for the purpose of avoiding a transfer of personal property executed in writing by the insolvent to the defendant, a creditor, as security for the debt. The conditions under which this was made were such that by force of the insolvent law, it was avoided by the insolvency proceedings as an unlawful preference, unless that result is affected by the fact that the defendant thus preferred was a non-resident of the state. The contract was made in this state, and the property in question was and still remains here. The defendant (appellant) disclaims making any attack upon the validity of the law, or of the assignment; but relies upon the proposition that by reason merely of its non-residence, the insolvent law had no effect to avoid its contract.

This position of the defendant cannot be sustained. The contract in question, made in this state concerning property here, and to be executed here, was subject to the law under which it was made. Its legal effect in no respect depended upon the residence of the parties. The law under which it was made declared that under certain specified conditions

(which are found to have existed), such a contract should be void, legally ineffectual as a transfer of the property. The legal effect of invalidity followed from the conditions specified in the law, and which the parties must be deemed to have had in contemplation. That law makes no exception in favor of non-residents entering into such contracts here. The property is still here, subject to our jurisdiction. As to that property, the court is exercising its jurisdiction in the enforcement of the law under which the contract was made. This enforcement of the law, by the legal appropriation of the property within our jurisdiction to the payment of the debts of the insolvent, does not involve the giving of an extraterritorial effect to the statute.

The appellant relies, in support of its contention, upon Ogden v. Saunders, 12 Wheat, 213, and other decisions of the same court, and upon what is said in Wendell v. Lebon, 30 Minn. 234. But a later decision of the supreme court of the United States removes whatever seeming support the language of prior decisions may have afforded for such a proposition as that here contended for: Denny v. Bennett, 128 U. S. 489. That was an action for conversion, prosecuted by the assignee of an insolvent debtor against the United States marshal, who, after the assignment under our insolvent law, and after the assignee had acquired actual or constructive possession of certain personal property embraced in the assignment, seized the same by virtue of an attachment issued out of the circuit court of the United States, in an action against the insolvent by non-residents of this state. The plaintiff recovered judgment in this court (Bennett v. Denny, 33 Minn. 530), which was affirmed in the supreme court of the United States. That court stated the principal question to be decided as being whether our insolvent law was repugnant to the constitution of the United States so far as it affects citizens of other states. The argument of the plaintiff in error was to the point (aside from that based on the doctrine of the inviolability of contracts) that such a statute can have no extraterritorial operation, and cannot, therefore, be binding on creditors living in a different state from that of the debtor and of the situs of his property; and that is the point of the appellant's argument in this case. The court, referring to its former decisions, including Ogden v. Saunders, 12 Wheat. 213, said (p. 497): "The proposition lying at the foundation of all these decisions is, that a statute of a state, being without force in any other state,

cannot discharge a debtor from a debt held by a citizen of such other state. . . . . The substance of the restrictive principle goes no farther than to prohibit, or to make invalid, the discharge of a debt held by a citizen of another state than that where the court is sitting, who does not appear and take part, or is not otherwise brought within the jurisdiction of the court granting the discharge. In other words, whatever the court before whom such proceedings are had may do with regard to the disposition of the property of the debtor, it has no power to release him from the obligation of a contract which he owes to a resident of another state who is not personally subjected to the jurisdiction of the court. Any one who will take the trouble to examine all these cases will perceive that the objection to the extraterritorial operation of a state insolvent law is, that it cannot, like the bankrupt law passed by Congress under its constitutional grant of power, release all debtors from the obligation of the debt. The authority to deal with the property of the debtor within the state, so far as it does not impair the obligation of contracts, is conceded; but the power to release him, which is one of the usual elements of all bankrupt laws, does not belong to the legislature where the creditor is not within the control of the court. The Minnesota statute makes no provision for any such release. The creditor who became such after the statute was passed cannot complain that the obligation of his contract is impaired, because the law was a part of the contract at the time he made it." This decision recognizes our insolvent law as being effectual as to the nonresidents as well as to residents of the state, so far as it controls the disposition of property within our jurisdiction. The decision in Wendell v. Lebon, 30 Minn. 234, is to the same effect, and is an authority opposed to the contention of the appellant here.

Judgment affirmed.

INSOLVENCY - PREFERENCES. - Ordinarily, an assignment of personalty valid by the laws of the state where made is valid everywhere, but an exception exists to this rule when a transfer giving preferences to a creditor is made in another state, of property in a state where such preferences are prohibited: In re Dalpay, 41 Minn. 532; 16 Am. St. Rep. 729, and note. In the case of In re Howes, 38 Minn. 403, where proceedings were had with reference to a preferential conveyance made by a non-resident insolvent, of property in Minnesota, it was decided that the validity of the conveyance must be determined by the laws of Minnesota, where the proceedings were instituted and the property situated, and not by the laws of the domicile of the debtor, where the conveyance was executed.

INSOLVENT LAWS, OPERATION OF. - States cannot pass laws concerning Insolvency having the effect to discharge the obligations of contracts made elsewhere: Lowenberg v. Levine, 93 Cal. 215. The insolvent laws of Maryland profess to operate upon all claims, wherever arising, of both resident and non-resident creditors, but with respect to non-resident creditors their effect is controlled by the constitution of the United States: Frey v. Kirk, 4 Gill & J. 509; 23 Am. Dec. 581. As to the extraterritorial effect of insolvent laws, see McClure v. Campbell, 71 Wis. 350; 5 Am. St. Rep. 220, and note.

HEBERLING v. Jaggar.

[47 MINNESOTA, 70.]

EXECUTION SALE OF PROPERTY UNDER A WRIT AGAINST ONE WHO IS NOT ITS OWNER, though it is levied upon while in his possession, cannot di vest the title of the true owner.

CONVERSION. INNOCENT PURCHASER OF PRoperty at an EXECUTION SALE,

under a writ against one who is not its owner, is guilty of its conversion if he takes possession of it in pursuance of the sale, and afterwards sells it to a third person.

Sheehan and Cannon, for the appellant.

Thompson and Taylor, for the respondent.

DICKINSON, J. This is an action for the conversion of an office desk. At the trial, in the municipal court of St. Paul, the action was dismissed when the plaintiff rested her case. The plaintiff showed a purchase of the property by her from one Ogden in 1889, and that she authorized on John M. Heberling, her brother-in-law, to sell it for her, and it was in his possession when, as the defendant claims, in October, 1890, it was seized under an execution as the property of John M. Heberling, and sold under the execution, the defendant being the purchaser; and he afterwards disposed of the property by sale. This made a case upon which the plaintiff was entitled to recover. The statute of frauds is relied upon by the respondent as affecting the plaintiff's title; but that has nothing to do with the case. The defendant traces no right of property back to the plaintiff's vendor, Ogden, and the fact that the property remained in the possession of Ogden for some months after the sale raised no legal presumption against the plaintiff's title. The fact was shown of the sale to the plaintiff by Ogden, that the property had been delivered by the seller, and was in the possession of John M. Heberling as agent of the plaintiff, or as bailee for her, when it is claimed to have been levied upon as the property of the latter. The right of the

owner, other than the defendant in the execution, to recover against the purchaser at the execution sale is not affected by the fact there was never any affidavit of title served upon the officer, as specified in the General Statutes of 1878, chapter 66, section 154. That statute was intended for the protection of the officer in the discharge of his duties. Its provisions do not extend so far as to protect the purchaser at the execution sale, and it has no application or effect in this case. By the sale under the execution against the property of John M. Heberling the plaintiff's title was not divested. The defendant in the execution had no title, the plaintiff owning the property, as the case shows. There was no legal authority for the sale of her property, and the purchaser not only acquired no rights by the sale, but having assumed to deal with the property as his own, by taking possession of and selling it, he became liable to the true owner as for a converson: Champney v. Smith, 15 Gray, 512; Bryant v. Whitcher, 52 N. H. 158; Coombs v. Gorden, 59 Me. 111.

Order reversed.

EXECUTION SALES-PURCHASER'S TITLE.-The sale of property under an execution passes only the right, title, and interest of the judgment debtor. If he has no interest, none passes by the sale to the purchaser: Lewark v. Carter, 117 Ind. 206; 10 Am. St. Rep. 40, and note; Mechanics' Bank v. Merchants' Bank, 45 Mo. 513; 100 Am. Dec. 388; Zabriskie v. Meade, 2 Nev. 285; 90 Am. Dec. 542, and note.

CONVERSION BY VENDEE OF Property Sold wITHOUT AUTHORITY. — As to when an innocent purchaser of property may be deemed guilty of conversion, see note to Polling v. Kirby, 24 Am. St. Rep. 797, 798. The sale of a whole crop under an execution on a judgment against the tenant, where the land is leased on shares, is a conversion for which the purchaser is liable, as well as the constable who makes the sale: Case v. Hart, 11 Ohio, 364; 38 Ain. Dec. 735; and to the same effect substantially is Jamison ▼. Hendricks, 2 Blackf. 94; 18 Am. Dec. 131; for monographic note on coversion of personalty, Bee Bolling v. Kirby, 24 Am. St. Rep. 795-819.

SALES-PURCHASER FROM ONE WITHOUT TITLE. As to the rights and liabilities of one who becomes the purchaser of property sold by one who has no title thereto nor authority to sell it, either at private or judicial sale, see extended note to Velsian v. Lewis, 3 Am. St. Rep. 195–206.