Plestoro v. Abraham

The Chancellor :—In the case of Holmes v. Remsen, (4 Johns. Ch. R. 460,) Chancellor Kent decided that an assignment by the commissioners of bankruptcy in England operated as a legal transfer of the personal property and dioses in action of the bankrupt in this country, even as against a subsequent attachment taken out here by an American creditor, under the act against absconding and absent debtors. It is doubtful whether that decision, to its full extent, can be sustained. It was strongly questioned and ably opposed by Platt, J., in a case between the same parties, which subsequently came before the Supreme Court. ( 20 John. Rep. 229 .) It also stands in opposition to the opinions of the state courts in Connecticut, Massachusetts, Pennsylvania, Maryland, and in both of the Carolinas, (Kirby’s Rep. 313; 9 Mass. Rep. 350 ; 13 Mass. Rep. 146 ; 6 Binney, 353; 1 Harris & M’Henry, 236; 2 Haywood, 24; 1 Const. Rep. 283 ;) and to the decision of the Supreme Court of the United States in Harrison v. Sterry, ( 5 Cranch, 289 ,) and in Ogden v. Sanders, ( 12 Wheaton, 213 .)

But the case before me steers clear of all these decisions. In the cases cited, the contest was between foreign assignees *and domestic creditors claiming under the laws of the country where the property was situated, and where the suits were brought. The question in those cases was, whether the personal property of the debtor was to be considered as having locality, for the purpose of giving a remedy to the creditors residing in the country where the property was in fact situated at the time of the foreign assignment. In this case, the controversy is between the bankrupt and his assignee and creditors, all residing in the country under whose laws the assignment was made. Even the property itself, at the time of the assignment, was constructively within the jurisdiction of that country, being on the high seas, in the actual possession of a British subject. Under such circumstances, the assignment had *239 the effect to change the property and divest the title of the bankrupt, as effectually as if the same had been sold in England under an execution against him, or he had voluntarily conveyed the same to the assignee for the benefit of his creditors. If no act of bankruptcy has been committed, he must apply to the proper tribunal of his own country to supersede the commission; for while it remains in force the adjudication of the commissioners is conclusive against him as to that fact.

It probably was not necessary for the creditors to join with the assignee in this suit; but that affords no ground for the dissolution of the injunction.

By the sixty-ninth section of the English bankrupt act, (Statute 6, Geo. 4, ch. 16, sec. 69,) proving a debt under the commission by a creditor, is declared to be an election by him not to proceed against the bankrupt by action. Although the creditors in this case have prosecuted the bankrupt in the Superior Court of the city of New York, they will still be entitled, on relinquishing these suits, to prove their debts under the commission. If they elect to proceed under the commission, perhaps that court may consider it a sufficient ground to order a stay of proceedings in those suits, and to discharge the defendants without bail. But the institution of these suits by the creditors cannot prevent the legal effect of the assignment in changing the property in the goods and *vesting them in the assignee for the benefit of the creditors generally.

The motion to dissolve the injunction is therefore denied, with costs.