Milne v. Moreton

6 Binn. 353, 1814 Pa. LEXIS 23

Opinion

Tilghman C. J.

Moreton the plaintiff below, claims under an attachment against the effects of Topham a merchant residing in England. A commission of brankrupt had issued against Topham in England, and the commissioners had made an assignment of his estate prior to the issuing of the plaintiff’s attachment. The question is, whether the plaintiff can hold the bankrupt’s effects against the assignees under'the commission. The counsel for the assignees rest their defence on two points. First, that the contract having been made in England, the case must be decided by the law of England. Secondly, that by the assignment an equitable interest passed to the assignees, which will be protected against an attachment.

• 1. Although the transaction from which the plaintiff’s claim arises, originated in England, yet the business was to be done in America. The plaintiff residing in New Tork, advanced money in England, and Topham to whom the money was advanced, made a consignment of goods to the plaintiff. The goods were to be sold, and the plaintiff’s advance being deducted from the proceeds, the surplus was to be remitted to Topham in England. But it turned out, that the proceeds fell short of the money advanced, so that contrary to expectation, ' the plaintiff remained the creditor at the winding up of the concern. Under these circumstances, it cannot be said that the parties looked to the law of England; and if they did not, there is no pretence for having recourse to that law. If a contract is made in one country with a view to its execution in another, it shall be governed by the law of the country where it is to be executed. Such was the opinion of Lord Mansfield in Robinson v. Bland, 2 Burr. 1079, inhis reasoning in the case of a bill of exchange drawn in Paris payable in London; and the principle is correct, because it is the intention of the parties which should decide by what law they are to be governed. Where this intention is not expressed, it may be reasonably concluded, that they resort to the law of the country where the contract is to be carried into effect. But even if it had not been the intention to transact the business relative to the contract in America, I do not consider the principle of the lex loci as applicable to the case; because the dispute arises not on the construction of the contract, but on a collateral matter. In general a contract is said to be expounded according to the law of the country in which it is made; but here is no question about the contract, the controversy is concerning property of the debtor totally unconnecte'd with the contract. In many respects the law of the country where the action is brought, must prevail. It will not be pretended that the defendant an English merchant, could plead the British statute of limitations in bar of the plaintiff’s action. So if the lex loci gives particular privileges to certain, classes of people, they lose them when they go out of the territory where the. ^privilege exists. In France a merchant is not liable to imprisonment in actions of debt, except in certain cases. This law was pleaded here by a French merchant, on a motion to be discharged on common bail in an action on a contract made in France; but the plea was overruled. If the law of England is to govern the case before us, then it must govern not only the construction of the contract, but every other question which arises in the prosecution of the suit, a proposition too extravagant to be contended for. We must decide then according to our own law.

2. The second question is not so easily answered. It has. never been decided in this state and is of great importance,. both as it respects our national character, and the amount of property depending on it. The assignees of Topham stand upon this principle, “ that personal property has no locality, “ but is transferred according to the law of the country in “ whieh the owner is domiciled.” This proposition is true in general, but not to its utmost extent, nor without several exceptions. In one sense personal pfoperty has locality, that ■ is to say, if tangible, it has a place in which it is situated, and if invisible, (consisting of debts) it may be said to be in the place where the debtor resides; and of these circumstances the most liberal nations have taken advantage, by making such property subject to regulations which suit their own convenience. In cases of intestacy, the property is distributed according to the law of the domicil of the intestate. But yet so far as concerns creditors, it depends on the law of the country where it is situated. If an Englishman dies, and leaves property here, we regulate the order in which his debts shall be paid, according to our own law; the residue is distributed according to the law of England, and the English adopt the same rule with regard to foreigners leaving property in England. Every country has the right of regulating the transfer of all personal property within its territoi-y, but when no positive regulation exists, the owner transfers it at his pleasure. We have no laws prohibiting foreigners from the free disposal of their personal property situated here. Therefore if Topham had made an assignment of his property in the hands of the garnishee, the case would not have admitted of a moment’s speculation. For although in strict law, a chose in action is not assignable, yet it is in equity, and an equitable assignment made bona 'jide and for a valuable consideration will be protected against an attachment. This assignment however was not made by Topham, but by certain commissioners appointed by the lord chancellor, according to the law of England., which it is contended is equivalent to an assignment by himself, because every man is supposed to consent to the law of his country. An assignment by law has no-legal obligation out of the territory of the laxo maker. But by the curtesy of nations, founded on principles of mutual convenience, the laws of one country are sometimes regarded in another. The. extensive commerce of England has scattered the property of her subjects all over the globe, and brought much of the property of foreigners within her own territory. Of consequence, questions have often been brought before her courts, concerning the operation of her own bankrupt laws in foreign countries, and the effect of foreign bankrupt laws on property in England. With respect to assignments under the English law, they never were held to operate as legal transfers of property out of England, not even in Scotland, Ireland or the colonies in America. Cleve v. Mills, 1 Cooke 303. Nor has it been denied that an inhabitant of one of the colonies, who has obtained judgment and execution against the effects of a bankrupt under a law of the colony, may hold against the assignees in England. Waring v. Knight, 1 Cooke 407. But if an inhabitant of England attaches the property of an English 'bankrupt’ in foreign parts, and thus obtains payment, he will be compelled to refund the money-in an action by the assignees; Sill v. Worswick, 1 H. Black. 665., Phillips v. Hunter, 2 H. Black. 402., Hunter v. Potts, 4 T. Rep. 182; because residing in England and bound by the law of his country, it is against equity that he should defeat the object of that law, which is the placing of all creditors on an equal footing. As to assignments under foreign bankrupt laws, it was determined in the year 1764 in Solomons v. Ross, 1 H. Black. 331, and Jollet v. Deponthieu, 1 H. Black. 132; that the curators under a cessio bonorum in Holland., should be preferred to English creditors who attached the property of the bankrupt in London. No case has arisen between assignees under a commission in the United States, and English creditors claiming under án attachment? bút it has been decided in the case of Smith v. Buchanan, 1 East 6, that a discharge under a commission of bankrupt in the United States, was no bar to the action of an English creditor for a debt contracted in England., and in Pedder v. M'Master, 8 T. Rep. 609, the Court of King’s Bench refused to enter an exoneretur on the bail.piece,, although the defendant had been discharged under the bankrupt law of Hamburg, where he resided when the debt was contracted. It is true, that the English judges have often said in general terms, that assignees under foreign commissions were permitted to bring actions in England; and lord Loughborough ill particular has contended for this principle in strong terms, and declared that although foreign nations were at liberty to pay no more regard than they thought proper, to assignments under commissions in England, yet to disregard them, would shew a want of good policy and civilization. Sill v. Worswick, 1 H. Black. 693. Yet it must be confessed, that between countries situated at a great distance from each other, the subject is attended with considerable difficulties. This is felt by the English courts as well as our own; for in neither is a discharge under á foreign commission, considered as a bar to an action, and yet it would seem that in order to act with consistency, complete effect should be given to the foreign commission, which is not done while the bankrupt remains liable to an action. It was at one time supposed, that this complete effect should be, given; for in Pedder v. M'Master, the opinion of lord Mansfield is said to have been given in the case of Ballantine v. Golding, as follows) “ It is a general principle that where' there is a dis- “ charge by the law of one country, it will be a discharge in u another.” But when the principle came to be reduced to practice, it was found to be too extensive, and has been rejected in latter times, as appears by the cases which have been cited. In this state we have permitted English assignees to bring actions in the name of the bankrupt for their own use, and wé have held, that betxveen British subjects, a discharge under an English commission is a bar to an action here. Harris Price v. Mandeville, September 1796. But this is the first case in which there has been a collision between the English assignees, and our own citizens claiming under an attachment. Neither do I know that an action of the kind has been directly , decided in any , state northward of Pennsylvania, although in the Supreme Courts of Massachusetts and Nexo Tork it has been said in general terms, that an assignment by commissioners in England is equivalent to a voluntary assignment by the bankrupt himself. In Maryland the law has been long settled. M'Lane's Case, 1 Har. & M'Hen. 236., Wallace &c. v. Patterson, 2 Har. M'Hen. 463. The assignment of the commissioners has no validity there against an attachment. If vie are to give effect to an English commission in preference to an attaching creditor, I do not perceive ©n what ground-we can refuse to adopt the principle of relation by which the property is divested from the bankrupt and. vested ill' " the. commissioners from the time of the commission of the act of bankruptcy. And yet this would be attended with inconvenience too great.to be endured. I am forcibly struck too with the injustice of permitting foreign assignees to take the bankrupt’s property from this country, leaving the bankrupt exposed to actions of his creditors here. This is not giving effect to the xohole system, but maiming and deforming it; for while the bankrupt is compelled on pain of death, to make a fair surrender of all his property, it is intended to compensate him by a complete discharge from his debts.

As it seems impossible therefore consistently with former decisions, to adopt the proceedings under the English commission according to the spirit and intent of their law, and it appears that the English courts find the same difficulty in giving full effect to commissions of bankrupt in the United States, it is at least questionable, whether consulting the real convenience of both countries, it would not be best, to leave creditors to their remedy by attachment, permitting the assignees in other respects to have the benefit of the commission. But whatever might be my own opinion of the policy which an enlightened nation should pursue, I should find no small difficulty in deciding this case, were it not for the authority of the Supreme Court of the United States bearing directly upon the point. In the case of Harrison v. Sterry and others, 3 Cranch 289, there were conflicting claims between 1st, the assignees under an English commission; 2d, creditors in the United States who had laid attachments subsequentto the act of bankruptcy in England, but prior to the assignment by the commissioners; and 3d, other creditors who had issued no attachment. The attachment creditors were preferred to the other two classes, and the residue which remained after satisfying them, was distributed so as to put all the creditors as nearly as possible on an equal footing, without paying any particular regard to assignees under the English commission. I think it safest to rest on this authority; and am therefore of opinion, that the plaintiff is entitled to hold under his attachment against . the claim of the English assignees. Of consequence the judgment of the District Coui*t should be affirmed.

Yeates J.

I feel little difficulty in declaring my sentiments, that the present question is not to be determined by the laws of Great Britain, excluding other systems of jurisprudence, and particularly our own political institutions. The lex loci forms a rule for the exposition of contracts, and in many cases governs exclusively; but not when made in one country to be carried into execution in another country.

Here the original contract was made in England. Top-ham a British subject resident in England., transmitted to the plaintiff Moreton an American citizen,' resident at Neto York, a quantity of goods, through Moreton's agent in Liverpool, tobe sold on commission, and received from the agent an advance in money on account. It turned out in the event, that the sum so advanced exceeded the net proceeds, on the sale of the goods, and the foreign attachment issued for the recovery of the balance. Now it is perfectly clear, that until the sales pf the merchandize were finished in New York, and the concern there wound up, it could not be ascertained which of the parties was indebted to the o.ther, nor what would be the precise balance between them. Although the transaction therefore commenced iñ Liverpool, it necessarily terminated in New York, and in this latter place the debt arose. This in my idea removes every consideration as to Liverpool's being the place, whose laws must guide our decision.

But another question presents itself, more difficult of solution. Shall the mere prior assignment of the effects of a bankrupt, in Great Britain, by the commissioners there, prevail against the attachment of an American citizen, laid upon the effects of the bankrupt in Axe-United StatesP It is -highly important, inasmuch as it involves our national character, and deeply interests every American trader. I have therefore given the subject every consideration in my power; and if the opinion I have- formed shall be found to be erroneous, I cannot shelter myself under the pretext of inattention to the subject of inquiry.

The municipal laws of all kingdoms and countries have no binding force beyond their respective limits. Such regulations are purely territorial in their effect. It is not pretended that the English statutes of bankruptcy have a strictly legal operation in the United States. The claim of preference in this instance in favour of the assignees, is grounded upon what is called the comity of nations. A bankrupt in the eye of the law, from whatever source his misfortunes may have arisen, was anciently supposed to be criminal, and the system of bankruptcy has always been considered of a penal and confiscatory nature. The English books treat their statutes of bankruptcy as merely local, and confined in their operation to that particular portion of the kingdom, called England, not extending to their dominions abroad, nor even to Scotland in their full vigour. The assignment of the property of a bankrupt is a statutable conveyance for the benefit of his creditors generally, in proportion to their debts, and is co-extensive with the power of the legislature.

In two late cases in England, Hunter et al. v. Potts, 4 T. R. 182., and Sill et al. v. Worswick, 1 H. Bl. 665, it was decided, that if after the assignment of a bankrupt’s estate, a British creditor knowing it, and residing in England., should attach the money of the bankrupt abroad, the assignees may recover it in an action for money received to their use. Another determination of the like nature took place in the chancery of Ireland previously, between Neale et al. assignees v. Cottingham and Houghton, 1 H. Bl. 132, note. The grounds of these decisions were, that the parties who had laid the attachment were British subjects, and during the progress of the business lived in England., and of course were bound by the laws of that kingdom, to which they must be presumed to have given their assent. Such persons therefore were not permitted to avail theméelves of proceedings, which enabled them to counteract a general system of municipal jurisprudence, calculated for the common benefit of all the creditors. This Court adopted a similar principle in the cases of Harris and Price v. Mandeville, and McGuire v. Mandeville, in September Term 1796, when they determined that a discharge by the bankrupt laws of England should protect the person of the bankrupt from bail in this state, whex-e the plaintiffs were British subjects; and where the bankrupt had been held to special bail, an exoneretur was directed to be entered. But I am not aware of any instance in the United States, wherein common bail has been ordered in a suit instituted by an American citizen, against'one who'has been’declared a bankrupt, and obtained his discharge under the laws of a foreign country. It has been adjudged by this Court, that where one has been arrested, who had been discharged under an insolvent-law of our sister state of New York, whose courts do not respect discharges under .our bankrupt or insolvent laws, he shall not be discharged on common bail. Fisher v. Hyde, September Term 1801. The same principle has been pursued, where a discharge had been obtained in the district of Columbia, under the insolvent act of congress. Walsh v. Nourse, 5 Binney 381. But where a sister state acknowledges the effect of a discharge under our laws, no bail is required by us on the discharge of a defendant by the laws of such state. Hilliard v. Greenleaf, 5 Binney 336, note, Boggs et al. v. Teackle, Ib. 332. And in England, B. R. will not order an exorieretur to be entered on the'bail piece, upon the ground that the debt was contracted while the defendant was resident in a foreign country, and before he .became a bankrupt by the laws off that country, though he may have obtained his certificate there. The Court distinguished it from the case of Ballantine v. Golding, where it did not appear that both parties resided in England, whereas in the case then before them, the plaintiff was resident in England. Pedder v. M'Master, 8 Term Rep. 610. In Smith et al. v. Buchanan et al., 1 East 11, it was resolved, that a discharge under a commission of bankrupt is no bar to an action for a debt arising in England against the bankrupt, by a creditor an English subject, although the courts there so far give effect to foreign laws of bankruptcy, as that assignees of bankrupts deriving titles under foreign ordinances, are permitted to sue in England for debts due to the bankrupt’s estates; because the right to personal property must be governed by the laws of that country where the owner is domiciled. And in Potter v. Browne, 5 East 131, lord Ellenborough says, “we “ always import together with their persons, the existing “ relations of foreigners as between themselves, according. “ to the laws of their respective countries; except indeed, “ where those laws clash xvith the rights of our own subjects “ in England, and one or other of the laws must necessarily “ give way, in xvhich case our own is entitled to the pre“ference,

In Sill et al. v. Worswick, already cited, LordLoughborough in 1 H. Bla. 693, says, “ It by no means follows that a “ commission of bankrupt has an operation in another coun- “ try against the law of that country. I do - not wish to have “ it understood, that it follows as a consequence from the “ opinion I am now giving, (I rather, think that the contrary “ would be the consequence of the reasoning I am now “ using), that a creditor in that country, not subject to the “ bankrupt laws, nor affected by them, obtaining payment of “his debt and afterwards coming over to this country, “ would be liable to refund that debt. If he had recovered “it in an adverse suit with the assignees, he would clearly “ not be liable. But if the law of that country preferred him “ to the assignees, though I must presume that determina- “ tion wrong, yet I do not think, that my holding a contrary “ opinion would revoke the determination of that country, “ however I might disapprbve of the principle on which the “ law so decided.”

The case now before us, presents to our view, these important prominent features. The defendant in error was an American citizen, resident in New York, xohere and zohen this debt arose in my idea. The parties now stand on their several legal rights; and the question therefore is narrowed down to one point, shall the assignment of the commissioners in a foreign county prevail in such a case, against the attaching creditor here?

Much reliance has been placed by the counsel of the plaintiff in error on Solomons v. Ross, 1 H. Bla. 131, note a, and Jollet and Reitveld v. De Ponthieu and Baril, Ib. 132, wherein the cessio bonorum of a bankrupt in Holland, was preferred to a subsequent attachment laid on the bankrupt’s effects in England. The first case carries the doctrine to an unwariantable extent, by applying the relation to the time of the Deneufville’s stopping payment, and not to the time of the chamber of desolate estates taking cognizance thereof, which relation is not justified by the laws of Holland, where the bankrupt’s effects vest in the curators, from the time oí their appointment. 1 H. Bla. 132, note, Cooke’s Bank. Laxo 307. Although these cases be considered as law, I think they may be distinguished from that befoi-e us. The cessio bonorum in Holland follows the Roman law, and is made by the bankrupt himself. Beawes' Lex Mercat. 608, 612, 4th edit., Instructions of the states of Holland and West Frize to. the commissioners of desolated estates. Art. 38., 2 Black. 473. But the assignment was made by the commissioners under the provisions of municipal regulations merely territorial.' 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 the representatives of such bankrupts, for debts due to them; 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 whom they were entitled to protection.

It was remarked during the argument, that no good reason can be assigned, why an assignment by the bankrupt himself should prevail, and not the present one as made by the commissioners, which ought to be considered as equivalent thereto, and be deemed a voluntary conveyance made by the bankrupt himself, "for a valuable consideration. The difference appears to me sufficiently obvious. Effect is given to the fair assignment of the bankrupt himself, because it is the spontaneous act of the party having the full dominion over the property, transferring an equitable if not a legal title thereto, after which his interest therein necessarily ceases, and is no longer subject to an attachment. It is wholly superfluous to cite Justinian, lib. 2. tit. 1. s. 40, to shew that nothing is more conformable to natural equity, than to confirm the will of him, who is desirous to transfer his property to another. But effect cannot be given to the assignment by'the commissioners, unless we adopt the British statutes of bankruptcy, as laws binding on ourselves, although they were not considered to affect us, when wé were the colonies of Great Britain; and this too, when their operation would manifestly interfere. with the interests of our own citizens. It may also be asked in return, why shall this statutory assignment have the efficacy of vesting in the assignees the effects of the bankrupt, however distant, and thus protect them against foreign creditors who have neither received nor even claimed dividends under the commission, and yet a regular certificate of full conformity to the statutes shall not protect the person of such bankrupt from arrests in our courts, at the suits of such creditors? It was not pretended on the first argument, that the doctrine of relation to the act of bankruptcy committed, which is ex? pressly enacted by the British statutes, can possibly hold here, operating on goods or effects within the United States; and yét if those statutes on the ground of want of locality of such goods or effects, are to be operative, they should be extended in their full forcé, without limitation to their effect. The attachment at the suit of an American citizen brings in the foreign bankrupt; but. if the latter enters special bail, he cannot plead his discharge in bar of the demand. Shall we recognize the act of the commissioners in Europe, as effectual to transfer a debt incurred in the United States, and thereby deprive the creditor of all hopes of enforcing payment of his demand, in our own tribunals?

That anxiety has been shewn by British judges to extend the operation of the British statutes of bankruptcy beyond the kingdom of England, and particularly by Lord Loughborough in Sill et al. v. Worswick, 1 H. Black. 690, 1 will not deny. The general tendency of the cases is, that British subjects although resident abroad are bound by the laws of their own country; and I have no objection to the doctrine, confined within those limits. The two cases on which in point of authority the plaintiff’s strength lies, are Solomons v. Ross, and Jollet & Reitveld v. Deponthieu & Baril, before cited. On the most diligent search, I can find no other adjudications which go to the .same extent, as to the effect of foreign ordinances; and the principle of those cases seems inapugned by other decisions.

In Scotland., it is observed by Lord Kaimes in his Principles of Equity, p. 363, 2d edit., that the statutory transference of property, even from the bankrupt' to. the commissioners, cannot convey any effects in that kingdom, although the English statutes are not there totally disregarded. In Cleve v. Mills, 1 Cook’s Bank. Laws 30.3. 4th edit., Lord Mansfield said that the statutes of bankrupt did not extend to the colonies, or any of the king’s dominions out of England; the assignments under such commissions took place between the assignee and the bankrupt, but did not affect the rights of any other creditors. This was settled in many cases, and particularly in Wilson’s bankruptcy, wherein Lord Hardtvicke declared, that the creditors had a right to affect the estate in Scotland, and get the advantage of the general creditors, notwithstanding the commission in England, although he would not permit them to come in under the commission till the other creditors were made even with them. Wilson’s case is also mentioned with approbation in Waring v. Knight, Ib. 307., and in Le Chevalier v. Lynch, Doug. 161, (170) wherein it was adjudged, that money owing out of England to a bankrupt, might be attached by the law of the place after the bmkruptcy, for a debt due before the bankruptcy.

In Hunter v. Potts, 4 T. R. 190, the defendant’s counsel puts the very case now before us as'not' admitting of doubt; and the Court do not appear to deny the correctness of his remarks. “ If,” says he, “ a subject of Rhode Island had M been a creditor of the bankrupt, it is not to be supposed “ that the courts of law would have turned him round to “ seek his remedy under the commission in England, if “ even after the commission here issued, he had attached “ the property of the bankrupt there.”

In Mawdesley v. Park & Beckwith, assignees of Campbell Hayes, cited by Serjeant Hill, arguendo, in Sill et al. v. Worswick, before mentioned, and stated at large in 1 H. Black. 680, it was held by the lords commissioners Smythe and Bathurst at Lincoln’s Inn Hall, December 13th 1779, that the assignment of the commissioners did not divest the property out of the bankrupt, as the debt was due in Rhode Island, but only gave the assignees a right to sue for it, who having commenced a suit first, and recovered judgment there, had gained a priority over the defendants; and this although the case of Solomons v. Ross, and Jollet et al. v. Deponthieu et al., are admitted to have been decided differently.

And in Smith et al. v. Buchanan et al., 1 East 11, before cited, lord Kenyon, after stating that assignees of bankrupts, deriving titles under foreign ordinances, are permitted to sue in England for debts due to the bankrupt’s estate, mentions the opinion of lord Talbot, that though the commission of bankrupt issued in England, attached on the •bankrupt’s effects in the plantations, yet his certificate would _ not protect him from being sued there for a debt arising therein. '

In Bush et al. v. M'Clain, 1 Harr. & M'Hen. 236, the opinion of Daniel Dulan-y Esq. is given, wherein he distinguishes between plaintiffs resident in Great Britain, taking out attachments against the effects of bankrupts in Maryland, and country Creditors pursuing the same measure; and the Court acted on that distinction.

And in Wallace et al. v. Patterson, 2 Harr. M'Hen. 463, where three persons residing in England became bankrupts, and had effects in Maryland, it was adjudged, that an attachmeiit would lie,by a citizen of Maryland against one third part of the effects, to satisfy a debt due to him by one of the' partners, and contracted in England.

I now proceed to the case of Harrison v. Sterry et al., adjudged in the Supreme Court of the United States, in March 1809, upon an appeal from a decree of the Circuit Court for the district of South Carolina, upon a bill in equity by Harrison for relief. The case in the Circuit Court is reported in Bee’s Admiralty Decisions 244, and on the appeal, in 5 Cranch 289. Six different r classes of creditors claimed the effects in question: 1st. Harrison the complainant, under a deed from Robert Bird in his own right and as attorney d. Henry Mertens Bird and Benjamin Savage his co-part- " iters, dated 3d December 1802, and on a similar instrument of writing without seal, signed by Robert Bird in -behalf .of -the English and American firm, dated 31st January 1-803. These were considered as fraudulent acts off the bankrupt laws, being- made in contemplation of bankruptcy,' .and : consequently void. 2d. The . United States, who - were, declared entitled to a priority :under the. act of congress of 3d March 1797, sec. 5. 3d. The:. American; and 4th. British creditors, who had- attached the .effects of the partnership in South Carolina on the 2d, 15th, 16th and 23d days of April 1803. Robert Bird.alone had become a bankrupt under the laws of the United States, andhis.interest.of one third in the funds of the company, was unaffected by the attaching creditors, but passed to his assignees, subject'to the claim of his co-partners upon a settlement of accounts. ■ The lien of the attaching creditors upon this one third was removed by the bankrupt law of the United States. 5th. Sterry ánd others, assignees .of Henry Mertens Bird and Benjamin ^ Savage,. under a British commission of bankruptcy., The bankruptcy of Bird, Savage .and Bird in London was declared on the 12th of June 1803, and-a commission .issued. On the 6th of February preceding they had stopped payment. 6th. Aspinwall and others assignees of Robert*Bird claimed under an American commission of bankruptcy. The house under the firm of Robert Bird and C<?..stopped payment at Neto Tork on the fifth of iDecember 1.803.. Thomas Parker, who by consent of the creditors, had been appointed an agent for all the parties concerned, to. collect, and "receive the debts due to Bird, Savage and Bird,' was also made a party in the appeal. "

” In 5 Cranch 302, Marshall, Chief Justice, thus expresses the opinion of the whole Court, “ as the bankrupt law of a u foreign country is incapable of operating a legal transfer “ of property in the United States, the remaining two thirds “ of the fund are liable to the attaching creditors, according “ to the legal preference obtained by their attachments.” -

It has been contended by the counsel for the plaintiff in error, that the word legal, used in the. preceding sentence, is contra-distinguished from equitable, and must be under-stood in that sense. This does not appear to. me correct, although I have had frequent occasion to.lament the imperfection of human language, used by persons of the most discriminating minds, and habituated to accuracy of speech. It would seem wholly unimportant to distinguish between legal and equitable effects, upon an appeal from a decree in equity on those éffects in the particular case. I know of no equity arising from a transfer under a foreign law, which does not arise proprio vigore. It is agreed that .the expressions, however general, are to be referred’ to the circumstances of that case. I take the plain meáning of the words Of the Chief Justice to be, that a foreign law cannottransfer property in the United States, and this I think,- will most clearly appear from the conclusion of the decree. “ With iC respect to any. surplus which may remain.of the two thirds, after satisfying the United States and the- attaching .creditors, it ought to be equally divided among all ‘ ■ the creditors, so as to place them on an equal footing _ “ with each other. The dividends paid by the British “ assignees, and those made by the American assignees u being taken into consideration, this residuum, is so to bo “ divided between them, as to produce equality between the “ respective creditors.”

It is true, the attachments of the- creditors were laid on the effects at Charlestown, previously to the issuing of the English commission against Bird, Savage and Bird, but that house stopped payment in London on the 5th of February 1803. How comes it then, that this commission did not effect an equitable transfer of the effects of the firm in the ■ first instance, after payment of the debt due to the United States, by relation to the act of bankruptcy in London, according to the doctrine asserted by the concluding counsel of the plaintiff in error? Or if the doctrine of relation is not contended for, according to the argument of the counsel who preceded him, how does it happen, that after satisfying the United States and the attaching creditors, the residue was not ordered by the Court to be paid over to the British assignees, if the effects vfcre equitably transferred by the British commission upon the principle of comity? Why are all the creditors put upon an equal footing? I know of no satisfactory answers which calí be given to these questions, unless on the concession, that the bankrupt law of a foreign country is incapable of operating any transfer, whether legal or equitable, of property in the United States. I have been thus minute in my observations on this case, because it has had considerable effect on my jnind,-in forming my judgment upon the subject before us. I regard it as a case in point, decided with unanimity in the highest Coürt in the Union, to whose jurisdiction the interests of foreigners are peculiarly intrusted.

I admit that the American as well as British decisions assert, that the assignees under a foreign commission of bankruptcy are considered as the substitutes of the bankrupt, and may support suits in their own names. As between the bankrupt and debtor, this operation is fair, provided the debtor is made safe in his payment; but when it is extended further, and thereby affects the rights of strangers, it assumes a different character. The British courts will not permit the subjects of that kingdom to contravene their bankrupt system; but unless in the two cases of Solo mons v. Ross, and Jollet et al. v. Deponthieu et al., I know of no decisions which attribute this extra-territorial effect ” to foreign laws and institutions. •

I fully agree, that we should pay sedulous attention to the comity of nations. Such courtesies .tend to harmonize mankind, promote public convenience, and enlarge the circle of human happiness in a social state. But our complaisance should be confined to reasonable and temperate limits. At all'events I would be fully satisfied1, that the British courts sustain the doctrine contended for by the plaintiff in error, ás to the effect of our own bankrupt system, before I give my assent thereto. Reciprocity in such instances is true equity as well as sound policy. That fact remains yet to be ascertained, and I avow my incredulity. Persons trading to England, and coming there occasionally, although not resident in that kingdom, may be declared bankrupts by their laws. Cowp. 402., 1 Atk. 82. It is well known, that their practice has been conformable thereto. All intervening acts between the act of bankruptcy ■ committed, and the assignment by the British commissioners, as to the personal property of the bankrupt, are avoided by the English statutes. . Cook’s Bank. .Law 584. The effects of such a doctrine, operating on such property in a foreign country, are too obvious to require any detail. Persons feel the difficulty of proving debts under a commission of bankruptcy among ourselves. How much must it be enhanced, when those proofs are to be made in Great Britain, at the distance of a thousand leagues from the scene of the transactions. In times of war between the two countries, dividends would not be paid in England. My feelings are repugnant to sending our citizens to foreign tribunals, to recover their debts, when full justice may be dispensed to them in their own country; and I can discover no uniform imperious rule, which enjoins this hardship upon them.

Upon the whole, on the fullest reflection, I do not see my -way sufficiently clear, to subject our citizens to such embarrassments and inconveniences, upon the principles of a supposed comity; and I am therefore of opinion, that the effects in -the hands of the garnishee were liable to the attachment ' qf Moreton, notwithstanding the bankruptcy of Topham, and that the judgment of the District Court be affirmed.

Bracicen'ridgé J.

Take the case to be that the contract " was made here, that is, in this state, money advanced to Topham or his agent here to be satisfied by the shipment of goods from England, and the goods not shipped to satisfy according to the contract; (for not being shipped to the whole amount of the sum advanced, the contract cannot be .said to be wholly satisfied;) in that case, Topham became indebted for the deficiency, and not having a domicil here, so that he could be arrested, his property became liable to an attachment to compel an appearance. But the property attached had ceased to be his before the attachment did attach, and it is admitted, and could not but be admitted by intelligent counsel, that a transfer for a valuable consideration by himself before the attachment, would exclude it. By operation of law, the consequence of an act of bankruptcy on his part, the property was transferred, and the attachment excluded. Topham a merchant in England was subject to the bankrupt law of England, and an act of bankruptcy on his part, had wrought a forfeiture of -his effects for the use of his creditors. I take no distinction between the act of law transferring, and his own act. He committed the act of bankruptcy, and the law operating on this, transfers. It works an alienation. It is his own act, what the law does for him, because he must be considered as having originally given. • an assent to this law which operates the transfer, if-it were necessary to recur to the subtlety of first principles in the case, to prove the act of law to be the same thing as a voluntary act on his part. But I lay out of the question all idea of voluntary or compulsory. He did the act to which the law annexes the consequence and effect of a transfer.

The property attached was the property of Topham at the act of bankruptcy. It was his, with as complete an ownership as he would have had over it in England. There is no law here to secure that property from his own transfer, and for the use of his creditors here. It can therefore' make no difference, whether he himself has transferred, or his own law for him. In contemplation of law it is his act. There is no lex loci bearing on the contract. The locus contractus has nothing to do with the case. The question respects the property, whether it remained his, or was transferred at the time of laying the attachment. If it were material, I would say tbe contract was made in England. It was, not until tbe money advanced came to the agent of Tophcun in England, that by his agent he could be considered as assenting and becoming a party to the contract. -A contract requires parties, and the union of two or more minds; and it could be only by accepting the money advanced, that he could be considered as assenting to the contract to ship goods. It was only on this act that the law could raise the implication of a promise. -

Whether a debt due from an individual of a home government, to a creditor in foreign parts, on a contract in foreign parts, is discharged by the certificate, where the creditor in .foreign parts does not come forward to prove his debtunder the commission, it is not necessary-in this case to say; for I am clear, that the interest attached in this case was transferred by the act of bankruptcy, and was no longer in him, so that it could be attached for his debt. The attachment itself, even supposing it before the act of bankruptcy, could not appropriate, and nothing could do it short of a judgment; but the act of bankruptcy here was before even the attachment laid,, so that there can be no question,

- An interest arising on a contract here, unless there is some law with ,usto exclude it, follows the person as much as the ownership of a chattel. There is no difference between a chose in action, and a chose in possession, in this respect. As to the locus contractus and lex loci, it must be immaterial, except so far as affecting the consideration of the contract, the evidence or the enforcement of it, or the right of transferring and carrying it out of the country. There being nothing of this kind in the way here, it is transferred by the bankruptcy, and is the same thing as an interest arising on a contract in England. The domicil of the owner draws personal property with it, and it is the same thing as if in the home government.

Trahit additque acervo. '■

He drags it to his domicil. This is the principle upon which I put the case, and which is abundantly recognized by the law of Englandand by thte decisions of this Court, If there is any dictum of; a judge of the courts of the United States, or even a decision, which would seem to break in upon the unity and simplicity of the system, I shall see more about it, before I shall be disposed to follow it. I cannot think it has been well considered by the judges if such decision has been made. As to the inconsistencies of English judges, I should pull an old house over my head, were I to give myself the trouble to look into them; I confine myself therefore to reason and principle.

Judgment affirmed.