HALL, District Judge.
The petitions upon which the bankruptcy proceedings in this case are founded were filed on the 12th day of December, 1872 — -nearly thirty days before the commencement of the suit in which the judgment in favor of the • Merchants’ Bank of Canada was obtained, and (an adjudication in bankruptcy having been granted thereon on the 24th day of the same month) the' right of the assignee in bankruptcy to all the property of the bankrupt transferred by such bankruptcy proceedings, vested, by relation, on the day such petitions were filed. Under such circumstances the creditor-claimant, if it had had its corporate-existence in the United States, could not have obtained, by a suit at law and judgment therein in the courts of this country, any right to property sold under such judgment; and proceedings in any suit commenced by such creditor in a court of the United States or any state of the Union, either before or after such adjudication, would, on proper application, have been stayed by an order of the bankruptcy court Bankrupt act, §§ 14, 20, 21 [14 Stat. 522, 526]. If the creditor in this case can sustain its full claim it must do so in violation of the principle that “equality among creditors is equity,” as well as of the policy and principles of our bankrupt act, and solely upon the ground that, as against the execution or attachment of a foreign creditor, our. bankrupt act does not operate to transfer the title of the property of the bankrupt in the foreign country of such creditor’s residence, ■ and that such creditor has therefore a right to seize such property by execution, and apply it in part payment of his debt without being affected thereby, except so far as his debt is reduced by the application of the proceeds' of the property so seized. And the question now is, whether a foreign creditor, invoking the aid of our bankruptcy courts in the execution of our own bankruptcy laws, must, by these courts, be held to enjoy the right of seizing, by process of law, the property of the bankrupt found in the country of the creditor’s domicile, and by process of law in that country I applying it in part payment of his debt, and when so seeking a further remedy in the bankruptcy courts of the United States, must be allowed to take a dividend upon the balance of his debt without other regard to what he has' so realized under his foreign execution than the reduction of his claim and proof to the amount of such balance. Such a right on the part of a foreign creditor has no foundation in natural equity, nor can it be based upon any known principle of international or judicial comity. It must, therefore, be maintained, if at all, upon some rule of positive law binding upon the as-signee and the general creditors of the bankrupt
It was conceded that the assignment of the property of the bankrupt, under the proceedings in bankruptcy in this court, did not, under our laws or under the laws of Canada, (which, in respect to this .question, are pre-' sumed to be the same as ours,) operate as a legal transfer of the bankrupt’s property in Canada, as against a subsequent attachment or execution there levied upon it to enforce the collection of a debt due to a creditor domiciled in that dominion; and it is clear that the assignee in bankruptcy might, under the comity of nations; take and remove, or if necessary sue for and recover such property, except as against the competing rights of Canadian creditors. Harrison v. Sterry, 5 Cranch [9 U. S.] 289; Ogden v. Saunders, 12 Wheat. [25 U. S.] 213; Crapo v. Kelly, 16 Wall. [83 U. S.] 610; 2 Kent, Comm. 457; Booth v. Clark, 17 How. [58 U. S.] 322; Oakey v. Bennett, 11 How. [52 U. S.] 33; Betton v. Valentine [supra]. In this case the foreign creditor had a right to take and hold what had been reached by the foreign execution until a further remedy was sought.in this court, and it thereby became a party to the proceedings in bankruptcy; but this is because our courts have refused to adopt the rule • of comity which now prevails in England and in other countries of Europe, under which the title of foreign assignees in bankruptcy to the personal estate of the bankrupt is admitted to be vested by the operation of bankruptcy acts and proceedings, so as to defeat the attempts of creditors of bankrupts residing in a foreign jurisdiction to enforce the collection of their debts by subsequent levy on attachment or execution within such foreign jurisdiction — a doctrine which was not admitted in England until about the middle of the last century, and was not firmly established there until after the American Revolution.
We concede to foreign creditors the same rights to proceed by attachment or execution in the country of their domicil which we assert in favor of our own people in respect to the property of foreign bankrupts attached here to enforce the payment of debts due to our own citizens. (See the cases and authorities just cited.) Our doctrine is founded upon the principle that the laws of other governments have no force beyond their ter[611]*611ritorial limits, and that if permitted to operate in other states it is upon a principle of comity which allows its .operation only when neither the state nor its citizens would, as a general rule, be injuriously affected by the operation of .such foreign laws. Greenwood v. Curtis, 6 Mass. 358, 378; Story, Confl. Laws, §§ 32, 38, 244, 414, 415. This principle is one jiniversally acknowledged by civilized nations, and no state is bound to permit the operation of foreign laws when they are contrary to its known policy or prejudicial. to its interests. Bank of Augusta v. Earle, 13 Pet. [38 U. S.] 519, 589; Bowyer, Pub. Law, 162. It is not generally deemed prejudicial to the country in which the personal property of a bankrupt is situated at the time of the bankruptcy to permit the assignment effected by the bankruptcy proceedings to operate as a transfer of the title of such property to the assignees except as against the rights of its own citizens as creditors of the bankrupt; and we have accordingly • seen that such title íb deemed to have passed to the assignees, except where such rights are asserted. England, having large foreign territory and immense dependencies in which her law can operate, and to whose merchants, traders and capitalists there is always a large bal-lance of indebtedness due from the residents of almost every civilized country of the globe, has deemed it not inconsistent with the interests of her citizens to go further and to hold that foreign proceedings in bank-, ruptcy operate to transfer the title of the movable property of the bankrupt wherever situated; and now that bankrtiptey courts exist in most commercial countries, and telegraphic and steamship lines afford the means of rapid communication, it may well be doubted (as, indeed, it has heretofore been doubted by some of our most eminent jurists) whether the United States might not adopt the English rule, but the question cannot now be considered an open one by judges of the district courts.
It is conceded .that the creditor’s proceedings .and remedy in Canada were wholly unaffected by the bankruptcy proceedings until the proof of debt made here. A remedy was then sought in this court, and the nature, extent and character of the remedy to be afforded in these bankruptcy proceedings must be- determined by the bankrupt act and other laws of the United States. 2 Bouv. Law Dict. (12th Ed.) tit. "Lex Fori" 5, and cases cited; 2 Kent, Comm. 462, 463; Suydam v. Barber, 6 Duer, 34; Townsend v. Jemison, 9 How. [50 U. S.] 407; Story, Confl. Laws, § 327.
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HALL, District Judge.
The petitions upon which the bankruptcy proceedings in this case are founded were filed on the 12th day of December, 1872 — -nearly thirty days before the commencement of the suit in which the judgment in favor of the • Merchants’ Bank of Canada was obtained, and (an adjudication in bankruptcy having been granted thereon on the 24th day of the same month) the' right of the assignee in bankruptcy to all the property of the bankrupt transferred by such bankruptcy proceedings, vested, by relation, on the day such petitions were filed. Under such circumstances the creditor-claimant, if it had had its corporate-existence in the United States, could not have obtained, by a suit at law and judgment therein in the courts of this country, any right to property sold under such judgment; and proceedings in any suit commenced by such creditor in a court of the United States or any state of the Union, either before or after such adjudication, would, on proper application, have been stayed by an order of the bankruptcy court Bankrupt act, §§ 14, 20, 21 [14 Stat. 522, 526]. If the creditor in this case can sustain its full claim it must do so in violation of the principle that “equality among creditors is equity,” as well as of the policy and principles of our bankrupt act, and solely upon the ground that, as against the execution or attachment of a foreign creditor, our. bankrupt act does not operate to transfer the title of the property of the bankrupt in the foreign country of such creditor’s residence, ■ and that such creditor has therefore a right to seize such property by execution, and apply it in part payment of his debt without being affected thereby, except so far as his debt is reduced by the application of the proceeds' of the property so seized. And the question now is, whether a foreign creditor, invoking the aid of our bankruptcy courts in the execution of our own bankruptcy laws, must, by these courts, be held to enjoy the right of seizing, by process of law, the property of the bankrupt found in the country of the creditor’s domicile, and by process of law in that country I applying it in part payment of his debt, and when so seeking a further remedy in the bankruptcy courts of the United States, must be allowed to take a dividend upon the balance of his debt without other regard to what he has' so realized under his foreign execution than the reduction of his claim and proof to the amount of such balance. Such a right on the part of a foreign creditor has no foundation in natural equity, nor can it be based upon any known principle of international or judicial comity. It must, therefore, be maintained, if at all, upon some rule of positive law binding upon the as-signee and the general creditors of the bankrupt
It was conceded that the assignment of the property of the bankrupt, under the proceedings in bankruptcy in this court, did not, under our laws or under the laws of Canada, (which, in respect to this .question, are pre-' sumed to be the same as ours,) operate as a legal transfer of the bankrupt’s property in Canada, as against a subsequent attachment or execution there levied upon it to enforce the collection of a debt due to a creditor domiciled in that dominion; and it is clear that the assignee in bankruptcy might, under the comity of nations; take and remove, or if necessary sue for and recover such property, except as against the competing rights of Canadian creditors. Harrison v. Sterry, 5 Cranch [9 U. S.] 289; Ogden v. Saunders, 12 Wheat. [25 U. S.] 213; Crapo v. Kelly, 16 Wall. [83 U. S.] 610; 2 Kent, Comm. 457; Booth v. Clark, 17 How. [58 U. S.] 322; Oakey v. Bennett, 11 How. [52 U. S.] 33; Betton v. Valentine [supra]. In this case the foreign creditor had a right to take and hold what had been reached by the foreign execution until a further remedy was sought.in this court, and it thereby became a party to the proceedings in bankruptcy; but this is because our courts have refused to adopt the rule • of comity which now prevails in England and in other countries of Europe, under which the title of foreign assignees in bankruptcy to the personal estate of the bankrupt is admitted to be vested by the operation of bankruptcy acts and proceedings, so as to defeat the attempts of creditors of bankrupts residing in a foreign jurisdiction to enforce the collection of their debts by subsequent levy on attachment or execution within such foreign jurisdiction — a doctrine which was not admitted in England until about the middle of the last century, and was not firmly established there until after the American Revolution.
We concede to foreign creditors the same rights to proceed by attachment or execution in the country of their domicil which we assert in favor of our own people in respect to the property of foreign bankrupts attached here to enforce the payment of debts due to our own citizens. (See the cases and authorities just cited.) Our doctrine is founded upon the principle that the laws of other governments have no force beyond their ter[611]*611ritorial limits, and that if permitted to operate in other states it is upon a principle of comity which allows its .operation only when neither the state nor its citizens would, as a general rule, be injuriously affected by the operation of .such foreign laws. Greenwood v. Curtis, 6 Mass. 358, 378; Story, Confl. Laws, §§ 32, 38, 244, 414, 415. This principle is one jiniversally acknowledged by civilized nations, and no state is bound to permit the operation of foreign laws when they are contrary to its known policy or prejudicial. to its interests. Bank of Augusta v. Earle, 13 Pet. [38 U. S.] 519, 589; Bowyer, Pub. Law, 162. It is not generally deemed prejudicial to the country in which the personal property of a bankrupt is situated at the time of the bankruptcy to permit the assignment effected by the bankruptcy proceedings to operate as a transfer of the title of such property to the assignees except as against the rights of its own citizens as creditors of the bankrupt; and we have accordingly • seen that such title íb deemed to have passed to the assignees, except where such rights are asserted. England, having large foreign territory and immense dependencies in which her law can operate, and to whose merchants, traders and capitalists there is always a large bal-lance of indebtedness due from the residents of almost every civilized country of the globe, has deemed it not inconsistent with the interests of her citizens to go further and to hold that foreign proceedings in bank-, ruptcy operate to transfer the title of the movable property of the bankrupt wherever situated; and now that bankrtiptey courts exist in most commercial countries, and telegraphic and steamship lines afford the means of rapid communication, it may well be doubted (as, indeed, it has heretofore been doubted by some of our most eminent jurists) whether the United States might not adopt the English rule, but the question cannot now be considered an open one by judges of the district courts.
It is conceded .that the creditor’s proceedings .and remedy in Canada were wholly unaffected by the bankruptcy proceedings until the proof of debt made here. A remedy was then sought in this court, and the nature, extent and character of the remedy to be afforded in these bankruptcy proceedings must be- determined by the bankrupt act and other laws of the United States. 2 Bouv. Law Dict. (12th Ed.) tit. "Lex Fori" 5, and cases cited; 2 Kent, Comm. 462, 463; Suydam v. Barber, 6 Duer, 34; Townsend v. Jemison, 9 How. [50 U. S.] 407; Story, Confl. Laws, § 327. That a creditor of the bankrupt residing in the United States could not, after the bankruptcy proceedings were commenced, have secured by proceedings in our own courts any such right as is here claimed by the foreign creditor, is entirely clear; and a foreign creditor cannot claim Jinder the comity of nations to be more favored-than our own citizens, to the diréct prejudice of creditors residing here. If the creditor-claimant in this case had taken, in and under the authority of a eojirt of another state of this Union, the same proceedings which were taken in Canada, it would have been liable to account to the assignee for the full value of the property thus wrongfully converted to its own jise. That it must account for the property converted to its u,se in Canada, if allowed a further remedy in the bankruptcy proceedings here, is deemed beyond question. These doctrines are believed to be fully sustained by the decisions of the English courts. In De La Vega v. Vianna, 1 Barn. & Adol. 284, Lord Tenter-don, in. delivering the opinion of the court of king’s bench, said: “A person suing in this country must take the law as he finds it; he cannot by virtue of any regulation of his own cojmtry enjoy greater advantages than other .suitors here, and he ought not' therefore to be deprived of any superior advantage which the law of this country may confer. He is to have the same rights which all the subjects of this kingdom are entitled to.”
• It is not. doubted that, under the provisions of our bankrupt act,- the amount collected by a foreign creditor under his execution levied after the adjudication, miist be accounted for ■ to the assignee, and proof ■ be made and dividend taken upon the original debt without regard to the subsequent judgment thereon; or that such order be made in the premises as to produce substantially the same result. And it is believed that, even in the absence of any such statutory provision, the English courts would, upon the general principles of equity jurisprudence; limit the remedy of the foreign creditor so as to produce the like result. Westlake, in his admirable Treatise on Private International Law (page 271), say.s: “If, however, a creditor have attached abroad personal property of the bankrupt, he will not be suffered to receive dividends here without communicating what he. has so received, and suspending • the further progress of his foreign proceedings. ‘The principle is,’ said Lord Wensleydale in Cockerell v. Dickens, 3 Moore, P. C. 132, 1 Mont., D. & D. 45, ‘that one creditor shall not take part of the fund which otherwise would have been available for the payment of all creditors, and at the same time be allowed to come in pari «passu with other creditors, for satisfaction out of the remainder of the fund; and this principle . does not apply when that creditor obtains by his diligence something which did not and could not form a part of that fund/ as the foreign land in the case supposed. But the principle applies to personality, to which the assignment in bankruptcy makes, even abroad, an effectual title in the absence of a competing claim by attachment. Hence it may be concluded that same doctrine would operate against even a foreign [612]*612creditor, who might, by foreign law, obtain .possession of the bankrupt’s personality, in spite of an intimation of the assignment. The res adjudicata would, as we have seen, protect his retention of the property from the suit of the assignees in England, a country to the bankrupt laws of which he is not personally subject; but our own law would have a right to impose its conditions on him if he sought to avail himself of it by proving his debt.”
In Selkrig v. Davies, 2 Rose, 97, 99, Lord Eldon said: “If a Scotch creditor came in under an English commission, he must be considered to all intents and purposes as an English creditor;” and in the lord chancellor’s opinion, on which his decision was affirmed in the house of lords, he said (2 Bose, 318): “It. has been decided that a person cannot come in under an English commission without bringing. into the common fund what he has received abroad.” In Phillips v. Hunter, 2 H. Bl. 402, 414, Lord Chief Justice Eyre, referring to a decision of Lord Mansfield in Waring v. Knight, said: “It is there said If a man uses legal diligence in a foreign country and obtains a preference it cannot be helped; but if he afterwards came here for a dividend he shall first refund whát he has so acquired by his legal diligence, and come in equally with the rest of the creditors, or not come in at all. This is the only fair and practical coercion that can be used against creditors abroad,” &e. And see Hunter v. Potts, 4 Term B. 182; Sill v. Worswick, Id. [1 H. Bl.] 065. As before stated, it has been necessarily assumed, in the absence of all proof upon the subject, that the law of Canada'is the same as ours in respect to the operation of foreign bankrupt laws upon movable property' within its jurisdiction, but if it is not so and title to the property seized passed to the assignee, as it would do under the English rule, it is obvious that the right of the assignee to require the claimant to account for the value of such property is entirely clear; and surely this court should not, under such circumstances, compel the assignee to seek redress against such claimant in a foreign country, when it has the power, by its own action in these proceedings, to adjust and secure the rights of all parties in interest. No objection to the right of the claimant to prove its debt for the amount of the drafts included in the Canadian judgment was urged on the ground that they were merged in and extinguished by that judgment, or that proof could not be made upon a judgment recovered after the adjudication upon a demand which existed before the bankruptcy proceedings were commenced; questions upon which conflicting opinions have been given by different district judges. These questions were not raised upon the argument, and, therefore, no opinion upon them will now be expressed.
In the brief submitted on behalf of the ! creditor, an offer was made to withdraw its proof of its judgment, retaining the proof of the drafts not in judgment, if this court should be of the opinion that the claimant must account to the assignee for the amount realized in Canada before his proof could be allowed to stand; and permission to do so, in that event, was asked, on the ground that the debt in judgment and the residue of the debt due claimant were separate and entirely distinct debts. This, however, cannot be allowed, for the principles of equity on which the conclusions already stated rest require that, for the purposes of the present case, the whole debt of the creditor, at the time the bankruptcy proceedings were commenced, shall be considered the debt upon which this principle of equality among creditors is to operate. And this, I think, has also the sanction of English authority. Ex parte Dickson, 1 Rose, 98; Ex parte Hardenbergh, Id. 204.
It does not appear, upon the papers submitted, when the acceptances of the bankrupt became due, but it is alleged in the brief submitted on the part of the assignee, and was apparently assumed upon the argument, that none of the drafts became pay-' able until after the adjudication in • bankruptcy. It was also insisted that no damages could be allowed as against the accept- or of a draft payable here. On both these grounds it must be held that the four per cent, damages claimed cannot be allowed. Napier v. Shneider, 12 East, 420; Woolsey v. Crawford, 2 Camp. 445; 3 Kent, Comm. 116; Byles, Bills, 330. The proof Bled, it is said, includéd interest up to the day of making the deposition, and it was insisted that the interest should not be allowed. It is-very clear that the amount proved should not include interest beyond the day of adjudication; and this rule should be applied' to the claimant’s proof, and all other proofs in bankruptcy. An order in accordance with' this opinion will be settled upon proper notice to the parties in interest