20 Johns. 229 | N.Y. Sup. Ct. | 1822
Three points are presented in this case :
1st. Whether the assignment by the commissioners of bankrupt in England, (being prior in date,) transferred this chose in action to the assignees of the bankrupt, in opposition to the claim of the trustees under the attachment here ?
2d. Whether (if that statutory assignment was inoperative) the assignment made personally by Mullett to the same assignees, was effectual, in regard to the debt due from Clason ?
3d. Whether the payment to the assignees of the bank-rapt in England, under the circumstances of the case, is a good, defence to this action ?
I have read, and studied, with respectful attention, thev opinion of his Honour the Chancellor, in a case between the same parties, and involving the same questions; (4 Johns. Ch. Rep. 460.) and it presents a new occasion to admire the extent and accuracy of his researches, and the liberal principles of public policy which characterize his .decisions. After a luminous review of the cases, authorities, and learned dicta on this head, the Chancellor decreed in favour of the defendants, on all the points here stated.
I fully concur with him in opinion, that in respect to the owner’s control over it, (during peace,) personal property ought to have no locality: and my mind would most wil
It is admitted, " that every country may, by positive law, regulate, as it pleases, the disposition of personal property found within it j and may prefer its own attaching creditor to any foreign assignee ; and no other authority has' a right to question the determination.’' (4 Johns. Ch. Rep. 471.) This shows that the liberal rule so ably contended for by our learned Chancellor, and by Lord Hardwicke, Justice Bathurst, Lord Camden, Lord Thur-low, Lord Loughborough, Lord Kenyon and Lord Eldon, has -not yet ripened into a law, obligatory on the community of nations. (Sill v. Worswick, 1 H. Bl. 691. Solomons v. Ross, 1 H. Bl. 131. note. Jollett v. Deponthieu, &c. 1 H. Bl. 132. note. Hunter v. Potts, 4 Durn. and East, 182. Case ex parte Blakes, 1 Cox, 398. Philips v. Hunter, 2 H. Bl. 402. Stein’s case, 1 Rose’s Cases in Bankruptcy, App. p. 462. Selkrig v. Davis, 2 Dow, 230. 2 Rose, 291. Smith v. Buchanan, 1 East, 6. Neale v. Cottingham, 1 H. Bl. 132. note.) In this long list of cases, the English Judges have generally advanced gratuitous dicta, far beyond what was required to decide the cases before them ; and I therefore feel a strong impression, that his honour the Chancellor has allowed to some of them more weight pf authority than they merit.
In the case of Cleve v. Mills, (1 Cook. B. Laws, 303. 4 edit.) Lord Mansfield held, " That the statutes of bankrupts
In the case of Solomons v. Ross, (1 H. Bl. 131. note.) which came before Mr. Justice Bathurst, sitting for Lord JYor thing ton, in 1764, “ Messrs. Deneufmlles, merchants, at Amsterdam, corresponded with Michael Solomons and Hugh Ross, merchants, of London. On the 18th of December, 1759, the Deneufmlles stopped payment; on the 1st of January, 1760, the Chamber of Desolate Estates, in Amsterdam^ took cognizance thereof, and on the next day, they were declared bankrupts, and curators or assignees appointed of their estates and effects. On the 20th of December, 1759, Ross, who was a creditor of the bankrupts, to the amount of near £3000, made an affidavit of his debt in the Mayor’s Court of London, and attached their moneys in the hands of Michael Solomons, who was their debtor to the amount of £1200. On the 8th of March, 1760, Ross obtained judgment, by default, on the attachment, and, thereupon, a writ of execution issued against Michael Solomons, who was taken in execution, but being unable to pay the £1200, gave Ross his note, payable in a month ; on which Ross caused satisfaction to be entered on the record of the judgment.
“ A few days after, one Israel Solomons, who had a power of attorney from the curators to act for them in England, filed a bill, making himself and the curators plaintiffs, praying that the defendant, Michael Solomons, might account with them for the effects of the bankrupts, which were in his hands, might pay and deliver the same over to Israel Solomons, for the use of the curators, and be restrained from paying or delivering them over to Ross.
“ Michael Solomons then filed a bill, by way of inter-pleader, praying an injunction, and that he might be at liberty to bring the £1200 into Court. This money was •accordingly paid into the bank, in the name of the Accountant General, pursuant to an order of the Court.
“ The decree directed, inter alia, that the stock purchased with the money paid into the bank, should be transfer-
In Jollet, &c. v. Deponthieu and Baril, before Lord Camden, in 1769, (1 H. Bl. 132. note.) Deneufvilles, merchants, at Amsterdam, stopped payment on the 30th of July, 1763. On the 8th of October following, the plaintiffs were appointed curators of their effects; and the bankrupts owed the defendant, Deponthieu, of London. On the 5th of January, 1764, the defendant, Deponthieu, attached the money of the bankrupts in the hands of Baril, a debtor of the bankrupts. Pending the attachment, the curators filed their bill for an account between the bankrupts and Baril; and that the balance might be paid to them, and the defendant, Deponthieu, be restrained from proceeding on the attachment. The decree was, “ that the plaintiffs recover the balance due : and that a perpetual injunction issue against proceeding on the attachment.”
In the case of Mawdesley v. Parke and Beckwith, (Lincoln’s Inn Hall, 1779, before Lords Commissioners Smythe and Bathurst, 1 H. Bl. 680, as stated by Serjeant Hill, without contradiction, in Sill v. Worswick,) “ the defendants were assignees under a commission of bankrupt against Campbell and Hayes; and, after the assignment to them from the commissioners, several of the bankrupt’s creditors, in Rhode Island, attached a debt due from the plaintiff to the bankrupt, in pursuance of an act of Assembly there, authorizing such process. The plaintiff coming to England, the assignees brought an action at law against him, and the bill was filed for an injunction, the plaintiff offering to pay what (if any thing) should appear to be due to the assignees, after deducting what should be recovered against him by the plaintiffs in the foreign attachment. The assignees, by their answer, insisted, that the property of the bankrupts was vested in them before the writs were served on the plaintiff, and, therefore, that he had no money or effects belonging to the bankrupts in his hands, and, consequently, that the plaintiffs in those writs were not entitled to recover any thing. An injunction had been granted, and, on showing cause why it should not be dissolved, the Lords Coromis»
It is important to remark here, that as Mr. Justice Bathurst decided the case of Solomons v. Ross, in 1764, he must haye considered it inapplicable to the case of Mawdesley v. Parke, &c. which was also decided by him, in 1779. Perhaps, he may have been influenced by, the consideration, that between Holland and England there was a near vicinity ; and, what is of more importance, that a complete reciprocity existed as to the remedy; because, a bankrupt law existed in both countries.
Solomons v. Ross, and Jollett v. Deponthieu, are the only cases in which the English Courts have awarded the benefit of this rule to any other than British subjects; and it is to be lamented, that the meagre reports of those cases contain “ merely dry decisions, unaccompanied with argument or illustration.”
Lord Karnes, in his “ Principles of Equity,” written in 1766, (b. 3. c, 8. s. 6. p. 573. 4th edit.) discussing the very
It seems to me, that the true principle is, that the assignees of a bankrupt are in the same, and no better situation, than the bankrupt himself, in regard to foreign debts. They take, subject to every equity, and subject to the remedies provided by the laws of the foreign country where the debt is due; and when permitted to sue in a foreign country, it Is not as assignees having an interest, but as representatives of the bankrupt. The law of the domicil having sequestered the bankrupt’s estate, so as to devest him of the control over it, and appointed them to administer it, they stand here on the footing of administrators, merely; with a right of suing, in common with other creditors $ but our law will not regard the chose in action as exclusively appropriated to their use; and the preference can only be gained by pursuing the remedies which our laws afford. This rule was exemplified in the case of Mawdesley v. Parke and Beckwith, before cited. The assignees of the English bankrupt are to be regarded as standing in the shoes of the bankrupt: and if Mullett had himself brought this suit, the attachment would certainly be a bar to his claim.
In the case of Bird, &c. v. Caritat, (2 Johns. Rep. 342.) it Was decided, that the assignees of an English bankrupt
It is a principle universally acknowledged, that a discharge of a bankrupt, or insolvent debtor, affords no relief from his foreign debts : It has no effect beyond the jurisdiction where it is granted. (Quin v. O’Keeff, 2 H. Bl. 553. Pedder v. M‘Master, 8 Term Rep. 609. Smith v. Buchanan, 1 East’s Rep. 6. Proctor v. Moor, 1 Mass. Rep. 198. Van Raugh v. Van Arsdaln, 3 Caines’ Rep. 154. Smith v. Smith, 2 Johns. Rep. 235.) It seems, therefore, unequal and inconsistent, to give such effect to .the bankrupt system of any country, as to strip the bankrupt of all his personal property and choses in action, in a"; foreign country, and yet leave him bound for all that he owes abroad.
The English bankrupt law is, in its nature and origin, penal: against every person who commits an act of bankruptcy, it denounces that he shall, ipso facto, be devested of all his estate; and, according to the genius of the system, and the practice under it, the proceedings are strictly in innitum. Our “ act for giving relief in cases of insolvency,” is entirely different in its character. In theory and practice, it is a remedy voluntarily resorted to by the debtor, to obtain a discharge, upon a cessio bonorum. His honour the .Chancellor, says, (Holmes v. Remsen,) “ we are bound to give effect to the assignment, because it is equivalent to a voluntary act of the party over his own property,” &c. “ Every man’s assent is to be presumed to a statute and he adopts the language of Chief Justice Parsons, (Goodwin v. Jones, 3 Mass. Rep. 517.) that “ he considered the assignment under the bankrupt laws as the party’s own act, since it was in execution of laws by which he was bound, and since he voluntarily committed the act which authorized the malting of it.” But, with great respect, it appears to me, that it would be unwise and unsafe to extend this doctrine so far. May it not, with equal justice, be said, that, if an Englishman commits an act of treason, the consequent forfeiture of his estate shall be deemed equivalent, here, to his own voluntary transfer; because he spontaneously did
As to the acts of governments, generally, throughout the world, such reasoning should be sparingly indulged. It may easily be pushed to an extreme that would be cruel and absurd.
The maxim that “ every man is presumed to be assenting, and a party to, the laws of his own country,” may be just, or unjust, according to its application. When applied to ■Mullet t, the English bankrupt, and to his English creditors, it is just and proper; but, in my judgment, it is not applicable to creditors who owe no allegiance to Great Britain; who have not, in any sense, actually or virtually assented to her laws; and who ask nothing of her tribunals. National comity requires no more, than that we should lend our aid in giving effect to such assignments, so far as may be done without impairing the remedies, or lessening the securities, which our laws have provided for our own citizens. “ Apices juris non sunt jura”
The point decided in the case of Sill v. Worswick, (1 H. Bl. 665.) extended no further than what I here concedej namely: That an English creditor, after an act.of bankruptcy, cannot attach, in a foreign country, money due to the bankrupt, without being liable to refund it to the assignees. It was a question between British subjects all round: and a British Court treated them as parties, who had virtually assented to, and were bound by the act of their own government. I admit, however, that the reasoning of Lord Loughborough in support of that decision, embraced a wider scope. Lord Loughborough, in that case, (page 693.) says, “ The Court of St. Christopher’s ought, unquestionably, to have preferred the title of the assignees, to the title of the creditor using the process of attachment, because the law of the country, to which the creditor making the demand ivas subject, had vested that property in the plaintiffs.”
The case of Philips v. Hunter, (2 H. Bl. 402.) before all the Judges in the Exchequer Chamber, was also a question as to the effect of the English bankrupt law between British subjects. The case of Hunter v. Potts, (4 T. R.
As was well observed by Mr. Justice Yeates, in Milne v. Moreton, (6 Bin. 369.) “ It is one thing to assert, that assignees of bankrupts under foreign institutions should be allowed, by the courtesy of nations, to support suits, as representatives of such bankrupts, for debts due to them j and it is another thing to give efficacy to those institutions, to cut out attaching creditors, although posterior in point of time, who have commenced their proceedings under the known laws of the government to which they owed allegiance, and from which they were entitled to protection.”
It is important to bear in mind, that the rule contended for by the Courts in England and Ireland is, that under a commission of bankrupt, the property passes by relation to the act of bankruptcy. In that respect, Chancellor Kent admits, that in Solomons v. Ross, “ the application oí the rule was pushed too far.” And he also protests against the same extension of the rule in Neal v. Cottingham ; for it gave effect (he says) to the title of the assignees by relation back, beyond the time of their appointment, to the time of the act of bankruptcy committed ; and so overreached the time of the attachment.” And he says, “ This doctrine of relation is a positive rule of mere municipal policy, which no other country is bound to adopt; as it would lead to great inconvenience,” &c. I confess, I do not see on what principle we can adopt or reject the rule, by halves. It is a wise and essential provision of the bankrupt law, that it shall operate by relation to the act of bankruptcy ; without which, the benefits of that law could not be secured ; and every other part of the system, to my apprehension, is equally “ of mere municipal policy.” If we acknowledge it as a binding rule in any respect, I prefer to adopt it in all its parts ; because I think it more just and equal with that feature, than without it. If foreign Courts exercise the right of modifying the English bankrupt law, by rejecting
Mr. Rose terms the rule of comity, as acknowledged in XSngland, e< international bankrupt law” But his honour the Chancellor, more cautiously, and, I think, more correctly, says, " The rule is, that comity is to be observed, yuatenus sine prejudicio indulgentium fieri potest.” After all, it is mere comity; not international law. As a general proposition, I would extend this comity to every nation, whose system of jurisprudence, and whose local vicinity, give assurance that it will be reciprocated with fidelity and convenience. But the relative condition of nations is so various and so variable ; the interruptions by wars and embargoes are so frequent; and the remedies against bankrupt and absconding debtors are so divers and unequal in various countries, as to render this rule of comity extremely difficult in its application. For instance, there are no countries more alike in their principles of jurisprudence, and their commercial habits, than Great Britain and the United States ; and none, where this rule of comity would be more easy or more equal in its application : and yet the mere fact, that in one there is a bankrupt law, and in the other none, destroys, in a great degree, the equality and reciprocity of such a rule. The advantage is greatly in favour of Great Britain, because our foreign attachment
In my judgment, the most convenient and practical rule is, that statutory assignments, as to creditors, shall operate intra territorium only. If, our citizens conduct themselves with a reference to our own laws, in regard to the property
It is an established and universal rule, that, independent of express municipal law, personal property of foreigners dying testate or intestate, has locality. Administration must be granted, and distribution made, in the country where the property is found j and as to creditors, the lex rei sitee prevails against the law of the domicil, in regard to the rule of preferences. In principle, I can perceive no substantial difference between that case and the present. Why should not a liberal comity, also, demand that the first grant of letters of administration should draw to it the distribution, among creditors, of the whole assets, wherever situated ? The plausible reason for the distinction1 may be, that the interests of commerce require a discrimination in favour of the assignees of bankrupts. But, in practice, I believe it will be found, that commerce is equally affected by the rule in both cases ; because the rule, in either case, can seldom be applied, except to merchants and traders; and whether administration be committed to the executors or administrators of a dead man, or to the assignees of a bankrupt, is not very important as to the point before us. Anomalies are inconvenient in the law, and should not be allowed without strong reason.
In deciding this question, it is an important consideration, as a matter of fact, besides the deference and respect due to those tribunals, that the Supreme Court of Pennsylvania, the Superior Court of Connecticut, the General Court and Court of Appeals of Maryland, and the Supreme Court of the United States, have decided against the rule of comity
Upon the whole, I am of opinion, that although such a rule of comity between England, Scotland and Ireland; and, also, between the states of our confederacy, may be convenient, and of easy application; yet, as between independent nations, it is so unstable and precarious, and subject to so many qualifications, and liable to so frequent interruptions, and necessarily involves a discretion so large, and so delicate, as to forbid a reasonable hope, that it can ever form a solid basis for private rights. Besides, the expense and delay of going abroad to prove debts, and to claim dividends, may be extremely inconvenient; and, during wars and embargoes, (so frequent in many countries,) such intercourse would be unlawful. If it be an advantageous rule, let it be the subject of treaty; and then our rights will not depend on the undefinable and capricious theory of judicial comity, .but on the force of positive obligation. I do not mean, however, to suggest a .doubt, but
2. The next question is, whether the assignment made personally, by Mullett, after the commission of bankruptcy, was effectual to transfer this chose in action to the assignees ? In the first place, I doubt its validity, because, it was merely collateral to the proceedings under the commission, and was, in some degree, compulsory. But, there is a stronger ground of objection. I admit that, as between the bankrupt, and his assignees, and English creditors, they are all bound by the law of their own country; and, although I deny the effect of the statutory assignment, to create a lien here, so as to deprive American creditors of their remedy, by attachment, . under our laws; yet, it seems to me, that the bankrupt, M., by the law of his domicil, was incapacitated to make any assignment, after the act of bankruptcy for which the commission issued ; as to him, all his personal property and choses in action, throughout the world, and his power over it, were taken away; and the assignees under the commission, were substituted in his stead. It was in the nature of administration granted on the estate of a man who, in regard to his property, was civilly dead. I deny the lien or preference here, by virtue of that statutory assignment s but freely admit the right of those assignees to
3. But on the last point in this case, I fully concur with his honour the Chancellor, that the payment of the debt in England, by the agents of the defendants, being compulsory, and by the judgment of a Court of competent jurisdiction, is a bar to this action for the same debt; assuming, as I do, that the payment was Iona fide, and that the funds were not transferred to England, for the purpose of evading payment here. Of such collusion, the case presents no shadow of proof. (Chevalier v. Lynch, Doug. 170. Allen v. Dundas, 3 Term Rep. 139. M‘Daniel v. Hughes, 3 East, 367. Embree v. Collins and Hanna, 5 Johns. Rep. 101.)
This last point being decisive of the whole case, my conclusion accordingly is, that the defendants are entitled to judgment.
Spencer, Ch. J., Yates, J., and Wo on worth, J., concurred in opinion, that judgment ought to be entered for the defendants, on the ground, that the compulsory payment in
Judgment for the defendants.