Receiver, Ancillary. Corporation. Conflict of Laws. Certain creditors of a foreign corporation, which had been engaged in the construction of buildings under contracts with the owners, had valid and enforceable mechanics' liens upon certain land and a building constructed thereon by the corporation in the State of its incorporation for the payment of claims which under the contract of the owner with the corporation had to be paid before anything became due from the owner, so that a receiver of the corporation, appointed in proceedings in the State of its incorporation, in order to obtain from the owner the balance due upon the contract, was compelled to allow payments to such creditors in full. Ancillary receivership proceedings were instituted in this Commonwealth, in which a Massachusetts creditor proved an unsecured claim before the receiver. Held, that such Massachusetts creditor had no right to payment of his claim in full from the assets in possession of the Massachusetts receiver, but could insist only upon being allowed to share on equal terms with other unsecured creditors of the corporation, wherever they resided.
Where a Massachusetts creditor of a foreign corporation, who has proved his claim in receivership proceedings in this Commonwealth ancillary to proceedings against the corporation in the State of its incorporation, has been given an opportunity also to prove his claim in the proceedings in the other State, and has refused to do so, he cannot object to a distribution of the assets in the hands of the Massachusetts receiver among creditors who have proved in both proceedings, irrespective of their places of residence.
In an ancillary receivership in the courts of this Commonwealth, preference will not be given to domestic creditors unless it appears that there is danger of discrimination against them in the forum of the principal receivership, and then only so far as is necessary to counteract such discrimination.
In receivership proceedings against a foreign corporation in courts of this Commonwealth, ancillary to similar proceedings against the corporation in the State of its incorporation, it is proper for the court, in order to secure equality of distribution among all creditors, where Massachusetts creditors have been allowed to prove their claims before the original receiver, to allow foreign creditors to prove their claims here.
SHELDON, J.
The only funds in the hands of the ancillary receiver are the proceeds of his collection of the amount due to the Walsh Company for the construction of certain buildings in Fall River. The appellant's claim is against the Walsh Company for materials supplied to it by him for that construction. He has, however, no lien upon the land or buildings or upon the fund in the hands of the receiver, and stands as an unsecured creditor. He can maintain no such lien under the statute of Rhode Island, because the land is situated wholly in this Commonwealth. He has none under our statutes because he gave no notice to the owner of the land in accordance with the provisions of R.L.c. 197, § 3. His attachment by trustee process has been dissolved by the appointment of the receiver. R.L.c. 167, § 126. Second National Bank v. Lappe Tanning Co. 198 Mass. 159.
In this state of the facts and under the provisions of R.L.c. 167, § 127, as the claim of the appellant has not been paid in full, the funds in the hands of the ancillary receiver must be distributed here in such a manner as to secure as far as possible equality of domestic creditors with those who are resident elsewhere. Buswell v. Order of Iron Hall, 161 Mass. 224. But there is no foundation for the contention that because some foreign creditors, having demands of a nature similar to that of the appellant, are secured by a mechanic's lien given by their local law and so may obtain payment in full, therefore the appellant must be paid in full to be put upon an equality with them. He is simply to be put upon an equality with other creditors who stand in the same position as himself, that is, with other unsecured creditors. American Loan Trust Co. v. Northwestern Guaranty Loan Co. 166 Mass. 337.
Nor is it material that a further dividend may be received by creditors who have proved their demands in Rhode Island under the principal receivership. The appellant has had like opportunity to prove his demand there. When the decree appealed from was entered, it was stated in open court that he "might then file his claim with the petitioner as original receiver, and that no objection would be made on account of the lateness of such filing"; and his counsel refused to do so. There is nothing to indicate that if he had accepted this offer he would not be allowed to participate in any distribution to be made in Rhode Island. Nor was his refusal put upon any such ground. Gerding v. East Tennessee Land Co. 185 Mass. 380.
In an ancillary receivership in our courts, preference will not be given to domestic creditors unless it appears that there is danger of discrimination against them in the forum of the principal receivership, and then only so far as is necessary to counteract such discrimination. It does not appear that there is in this case any such danger. And it was proper for the court, in order to secure equality of distribution among all creditors, to allow foreign creditors to prove their claims here, just as creditors resident here apparently have been allowed to prove their claims in the proceedings in Rhode Island. Garham v. Mutual Aid Society, 161 Mass. 357.
The decree appealed from must be affirmed.
So ordered.