Huntington v. Attrill[1893
International Law—Foreign Judgment—Penal Actions—Distinction between Public and Private Penalties.
FACTS: On March 21, 1888, in the circuit court of Baltimore city, Collis P. Huntington, a resident of New York, filed against the Equitable Gaslight Company of Baltimore, a corporation of Maryland, and against Henry Y. Attrill, his wife and three daughters, all residents of Canada, to set aside a transfer of stock in that company made by him for their benefit and in fraud of his creditors, and to charge that stock with the payment of a judgment recovered by the plaintiff against him in the state of New York, upon his liability as a director in a New York corporation, under the statute of New York of 1875.
On June 15, 1886, the plaintiff recovered, in the supreme court of the state of New York, in an action brought by him against Attrill on March 21, 1883, a judgment for the sum of $100,240, which had not been paid, secured, or satisfied. That judgment was recovered from the Rockaway Beach Improvement Company, Limited, of which Attrill was an incorporator and a director, and which became a corporation under the law of New York, with a capital stock of $700,000.
Attrill, as a director of the company, signed and made oath to, and caused to be recorded, as required by the law of
New York, a certificate, which he knew to be false, stating that the whole of the capital stock of the corporation had been paid in, whereas in truth no part had been paid in, and by making such false certificate became liable, by the law of New York, for all the debts of the company contracted before January 29, 1881, including its debt to the plaintiff..
Attrill was domiciled and resident in that state, and that his transfers of stock in the gas company were made in the city of New York, where the principal office of the company then was, and where all its transfers of stock were made; and that those transfers were, by the laws of New York, as well as by those of Maryland, fraudulent and void as against the creditors of Attrill, including the creditors of the Rockaway Company, and were fraudulent and void as against the plaintiff.
On March 8, 1882, by proceedings in a court of New York, the corporation was declared to be insolvent, and to have been so since July, 1880, and was dissolved. At the time of its dissolution, the said company was indebted to the plaintiff and to other creditors to an amount far in excess of its assets.
The plaintiffs prayed that the transfer of shares in the gas company be declared fraudulent and void, and executed for the purpose of defrauding the plaintiff out of his claim as existing creditor; that the certificates of those shares in the name of Attrill as trustee be ordered to be brought into court and canceled; and that the shares ‘be decreed to be subject to the claim of this plaintiff on the judgment aforesaid,’ and to be sold by a trustee appointed by the court, and new certificates issued by the gas company to the purchasers, and for further relief.
One of the daughters demurred to the bill because it showed that the plaintiff’s claim was for the recovery of a penalty against Attrill arising under a statute of the state of New York, and because it did not state a case which entitled the plaintiff to any relief in a court of equity in the state of Maryland.
ISSUE: The question whether due faith and credit was of a punitive or penal nature, and as such was enforceable only by the Courts of New York.
As a rule, 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.
‘The rule that the courts of no country execute the penal laws of another applies, not only to prosecutions and sentences for crimes and misdemeanors, but to all suits in favor of the state for the recovery of pecuniary penalties for any violation of statutes for the protection of its revenue, or other municipal laws, and to all judgments for such penalties.’ Page 290, 127 U.S., and page 1374, 8 Sup. Ct. Rep.
Crimes and offenses against the laws of any state can only be defined, prosecuted, and pardoned by the sovereign authority of that state; and the authorities, legislative, executive, or judicial, of other states take no action with regard to them, except by way of extradition, to surrender offenders to the state whose laws they have violated, and whose peace they have broken.
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, while it enables persons complying with its provisions to do business as a corporation, without being subject to the liability of general partners, 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
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. Statutes giving a private action against the wrongdoer are sometimes spoken of as penal in their nature, but in such cases it has been pointed out that neither the liability imposed nor the remedy given is strictly penal. enal 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. Statutes giving a private action against the wrongdoer are sometimes spoken of as penal in their nature, but in such cases it has been pointed out that neither the liability imposed nor the remedy given is strictly penal.
It has been held in many instances that, where a statute gives accumulative damages to the party grieved, it is not a penal action. The test whether a law is penal, in the strict and primary sense, is whether the wrong sought to be redressed is a wrong to the public or a wrong to the individual
The question whether a statute of one state, which in some aspects may be called penal, 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.
[G.R. No. 110263. July 20, 2001]
ASIAVEST MERCHANT BANKERS (M) BERHAD, petitioner, vs. COURT OF APPEALS and PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, respondents.
De Leon, Jr.,J:
FACTS: The petitioner Asiavest Merchant Bankers (M) Berhad is a corporation organized under the laws of Malaysia while private respondent Philippine National Construction Corporation is a corporation duly incorporated and existing under Philippine laws.
In 1985, the High Court of Malaysia ordered the Philippine National Construction Corporation (PNCC) to pay $5.1 million to Asiavest Merchant Bankers (M) Berhad. This was the result of a recovery suit filed by Asiavest against PNCC in Malaysia for PNCC’s failure to complete a construction project there despite due payment from Asiavest. Despite demand, PNCC failed to comply with the judgment in Malaysia hence Asiavest filed a complaint for the enforcement of the Malaysian ruling against PNCC in the Philippines. The case was filed with the Pasig RTC which eventually denied the complaint.
The Court of Appeals affirmed the decision of the RTC.
Asiavest appealed. In its defense, PNCC alleged that the foreign judgment cannot be enforced here because of want of jurisdiction, want of notice to PNCC, collusion and/or fraud, and there is a clear mistake of law or fact. Asiavest assailed the arguments of PNCC on the ground that PNCC’s counsel participated in all the proceedings in the Malaysian Court.
ISSUE: Whether or not the Malaysian Court judgment should be enforced against PNCC in the Philippines.
PNCC failed to prove and substantiate its bare allegations of want of jurisdiction, want of notice, collusion and/or fraud, and mistake of fact. On the contrary, Asiavest was able to present evidence as to the validity of the proceedings that took place in Malaysia. Asiavest presented the certified and authenticated copies of the judgment and the order issued by the Malaysian Court. It also presented correspondences between Asiavest’s lawyers and PNCC’s lawyers in and out of court which belied PNCC’s allegation that the Malaysian court never acquired jurisdiction over it. PNCC’s allegation of fraud is not sufficient too, further, it never invoked the same in the Malaysian Court.
The Supreme Court notes, to assail a foreign judgment the party must present evidence of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. Otherwise, the judgment enjoys the presumption of validity so long as it was duly certified and authenticated. In this case, PNCC failed to present the required evidence.