An assignment by commissioners of bankruptcy in a foreign country, does not operate a legal transfer of the bankrupt's property in this State, as against a creditor of the bankrupt.
Thus, where W, a banker in England, having advanced money to pay a bill of exchange drawn upon him by M, a citizen of this State, became a bankrupt, and after an assignment of his effects by commissioners of bankruptcy, but before notice of it had reached this country, the debt due from M, (he not having remitted funds to replace the money advanced,) was attached in his hands by virtue of our trustee process, by B, a citizen of this State and a creditor of the bankrupt, the attachment was held valid as against the assignment.
Whether an assignment made by the bankrupt himself to the same assignees and for the same purposes, of his property here, would be valid against a subsequent attachment under the trustee process, quaere.
The question in this case was whether Marshall, who had been summoned as a debtor of Williams on the 3d of December, 1825, should be adjudged the trustee of Williams, the principal defendant, and held liable to pay over to the plaintiff the amount of the debt acknowledged by Marshall in his answer to be due from him to Williams.
The debt arose on account of a draft drawn by Marshall on Williams, which was paid by funds advanced by Williams, and Marshall had not, at the time of being served with the process in this case, replaced the amount by remittance to Williams. It was disclosed in the trustee's answer, that a commission of bankruptcy had issued against Williams in England, where he resided and had long been established as a banker, on the 27th of October, 1825, in consequence of an
act of bankruptcy previously committed by him; and in pursuance of the commission so issued, the commissioners of bankruptcy, under the English bankrupt law, proceeded to assign over to the assignees, all the property of Williams, including the debts due to him. It appeared from the answer of the supposed trustee, that he had received no formal notice of the assignment by the commissioners in England, at the time of his being summoned, but that such notice was however subsequently given; and the assignees, by a person authorized by them for this purpose, had demanded of him that he should pay over to them the amount of the debt due from him to Williams. The case was argued in writing.
W. H. Gardiner, for the plaintiff, contended that in America, whether colonial or independent, from 1762 to the present time, it had been uniformly and repeatedly held by every court (except one) which had given an opinion on the subject, that attachments similar to the present are valid, even where a commission of bankruptcy had issued in Great Britain, and an assignment had been made under it, previously to the attachment of the debt in this country. The opinion of Chancellor Kent in Holmes v. Remsen, 4 Johns. Ch. R. 46, (see also 20 Johns. R. 229,) must be considered as standing alone against the express decisions in the Supreme Courts of the United States, S. Carolina, Connecticut, and Pennsylvania, and the long settled practice in Virginia, Maryland, and Rhode Island, with the strongest intimations of concurrence in the doctrine in the Supreme Courts of New York and Massachusetts. Bird v. Pierpont, 1 Johns. R. 118; Van Raugh v. Van Arsdaln, 3 Caines's R. 154; Proctor v. Moore, 1 Mass. 198 ; Baker v. Wheaton, 5 Mass. 509 ; Watson v. Bourne, 10 Mass. 337 ; Ingraham v. Geyer, 13 Mass. 146 ; and Walker v. Hill, 17 Mass. 383 . That the doctrine has been expressly adopted, appears from the following cases, statutes and authorities. Stat. Maryland, A. D. 1704, c. 29; 1753, c. 36; 4 Harris & M'Henry, 331; Richards v. Hudson, (a Virginia case,) cited 4 T. R. 187; an anonymous Virginia case cited in Waring v. Knight, 1 Cooke's Bankr.
Law, 307; Burk v. M'Clain, 1 Har. & M'Hen. 236; Mawdesley v. Parke, (a Rhode Island case,) cited in Sill v. Worswick, 1 H. Bl. 680; Jones v. Blanchard, cited in Topham v. Chapman, 1 S. Car. R. 285; Ex parte Blakes, 1 Coxe, 398; Taylor v. Geary, Kirby, 313; Wallace v. Patterson, 2 Har. & M'Hen. 463; Ex parte Franks, 1 Cooke's Bankr. L. 336; Phillips v. Hunter, 2 H. Bl. 402; Ward v. Morris, 4 Har. & M'Hen. 330; Smith v. Smith, 2 Johns. R. 235; Bird v. Caritat, 2 Johns. R. 342; Goodwin v. Jones, 3 Mass. 514 ; Harrison v. Sterry et al. Bee, 244; S. C. 5 Cranch, 289; Dawes v. Boylston, 9 Mass. 337 ; Milne v. Moreton, 6 Binney, 353; Blanchard v. Russell, 13 Mass. 1 ; Dawes v. Head, 3 Pick. 128 ; and Ogden v. Saunders, 12 Wheat. 213.
On the other hand, if we look at the British decisions, we find, that, from 1749 to the present day, it has been uniformly held by the English common law courts, that a creditor who has obtained a priority by legal process abroad, could not be compelled to refund to the assignees, unless he was an Englishman acting in fraud of the laws by which he was bound. Chevalier v. Lynch, 1 Doug. 170; Sill v. Worswick, 1 H Bl. 665; Hunter v. Potts, 4 T. R. 182; Phillips v. Hunter, 2 H. Bl. 402; Hovil v. Browning, 7 East, 154. Upon the same principle it has been held, that an English creditor suing upon an English contract, should not be barred by a foreign discharge. Smith v. Buchanan, 1 East, 6. See also Cleve v. Mills, 1 Cooke's B. L. 303; Waring v. Knight, ibid. 307; and Richards v. Hudson, 4 T. R. 187 In chancery we find it held, that a foreigner is entitled to the priority which he obtains abroad; Mawdesley v. Parke, 1 H. Bl. 680; but the court would not permit him to prove his debt under a commission of bankruptcy without first relinquishing his attachment; Wilson's Case, stated by Lord Mansfield in Cleve v. Mills, 1 Cooke's Bankr. L. 303, in Waring v. Knight, ibid. 308, and in Chevalier v. Lynch, 1 Doug. 170; or to hold what he had got if he were an English creditor, and within the jurisdiction of the court; M'Intosh v. Ogilvie, 4 T. R. 193; but the court would not interfere to defeat priorities obtained by English creditors and perfected by judgment
abroad, if they had proceeded bona fide, and without any intention of violating the bankrupt laws of England. Ex parte d'Obree, and Ex parte Le Mesurier, 8 Ves. jun. 82.
The other British authorities on the subject are Ogilvie's Case, in Scotland, cited 2 Dow, 236; M'Intosh v. Ogilvie, in Chan. temp. Hardw. cited 4 T. R. 193; and more fully reported 3 Swanton, 366; Assignees of Wilson v. Fairholme, in Scotland, cited 2 Dow, 237; Crawford v. Brown, Scotch case, cited 2 Dow, 237; Solomons v. Ross, cited 1 H. Bl. 131; Neal v. Cottingham, cited 1 H. Bl. 132, in notis; Thorold v. Forest, in Scotland, cited 2 Dow, 237; Jollet v. Deponthieu, 1 H. Bl. 132, note; Balantine v. Goulding, 1 Cooke's B. L. 515; Ex parte Frank, 1 Cooke's B. L. 336; Quin v. Keefe, 2 H. Bl. 553; Davison v. Fraser, in Scotland, 2 Dow, 237; Pedder v. M'Master, 8 T. R. 609; Smith v. Buchanan, 1 East, 6; Strothers v. Reid, in Scotland, stated 2 Dow, 237; Potter v. Brown, 5 East, 124; Bank of Scotland v. Cathbert, in Scotland, stated 1 Rose's Cases in Bankruptcy, App. 462; Selkrig v. Davies, 2 Rose, 291; S. C. 2 Dow, 230; Ex parte Cridland, 3 Ves. & Beam. 94; and Birchwood v. Miller, 3 Meriv. 279.
Considering the intimate connexion of England, Ireland and Scotland, their concurrent decision, that no legal process shall enable any subject to obtain a priority over other creditors, in contravention of each other's bankrupt laws, can be no rule of decision for other countries.
The reasoning of Chancellor Kent in the case of Holmes v. Remsen, the only American authority opposed to us, is elaborately examined and answered by the counsel and judges in the case between the same parties in the Supreme Court of New York, 20 Johns. R. 229. The passages in Huberus and Heineccius, cited as authorities to prove a rule of national law, that the succession to personal property, wherever situated, is to be regulated by the domicile of the owner, are, according to Huberus, subject to the limitation, that its adoption in any country must be sine suo suorumque prejudicio. Chancellor Kent says, elsewhere, that "comity is to be observed
quatenus sine prejudicio indulgentium fieri potest; and it certainly would be to the prejudice of our citizens to relinquish attachments, in favor of foreigners, which would be valid against our own citizens. Huberus lays down the rule, that the laws of a state administered within its own territory are valid everywhere, quatenus nihil potestati aut juri alterius imperantis ejusque civium prejudicetur. Huber. part. 2, lib. 1, tit. 3, De Confl. Leg. § 2. He puts as one example of such prejudice, the case of a marriage contract made in Holland, with an agreement, that the wife should not be liable for her husband's debts. Such a stipulation is valid there, without public notice; in the neighbouring province of Friesland it is void if not published. The husband becomes indebted in Friesland; it is considered that the wife is liable for half the debt, according to the laws of Friesland. Ibid. § 11.
The counsel for the plaintiff then went into a particular examination and comparison of the British and Scotch cases already cited. He maintained that the rule of comity could, in this case, at the most, extend only to countries which had similar bankrupt laws, as Holland and England, or France and England; Parish v. Sevon, Cooper's Bankr. L. App. p. 27; and no such reciprocity could take place between England and this State, as we have no similar bankrupt law.
It is admitted by Chancellor Kent, that "in all cases every country may regulate, as it pleases, the disposition of personal property found within it, and may prefer its own attaching creditors to any foreign assignee, and no authority has a right to question the determination." The assignment under the English bankrupt law, has not been admitted in Scotland, until very recently, to supersede the previous arrestment of a debt in Scotland by a Scotch creditor. That the adoptior of any such rule between independent nations is a matter of stipulation, or, in the language of Platt J., of "mere comity and not of international law," appears from the treaties of the United States with France, 1778, art. 11,--the Netherlands, 1782, art. 6,--Sweden, 1783, art. 6,--Prussia, 1785, art. 10, --Spain, 1795, art. 11, (1 U. S. Laws, ed. 1815, p. 80, 153, 179, 232, 269.) See also Poth. Des Successions, c. 1, art. 1,--c. 18, art. 2, 1.
One reason given for this rule of the universal operation of
the assignment in foreign countries, is, that "the assignment is equivalent to the voluntary act of the party over his own property," and to this point are cited Lord Mansfield, in Wadham v. Marlow, 1 H. Bl. 437, note, 8 East, 314, and Parsons C. J. in Goodwin v. Jones, 3 Mass. 517 . See also Cleve v. Mills, Bird v. Pierpont, and Bird v. Caritat, ubi supra. On examining the cases, it appears that the expressions having this import, are used in relation to questions arising between the bankrupt, and the assignees or creditors subject to the same jurisdiction, in which cases the assignment by the commissioners is no doubt equivalent to an assignment by the party himself. It appears from Wadham v. Marlow, that Lord Mansfield, did not admit the reason given by Parsons C. J. in Goodwin v. Jones, for considering the assignment a voluntary act of the bankrupt, namely, that he voluntarily committed an act of bankruptcy; for the commissioners' assignment, in virtue of the act of parliament, is the immediate cause of devesting the estate out of the bankrupt. To take the instance put by Platt J., the bankrupt no more transfers his property by an act of bankruptcy, than does the traitor by an act of treason. It is in each case the law, which, when the fact has been proved, seizes and disposes of the estate; and the bankrupt assents to being stripped of his substance, no otherwise than the traitor does to being hanged. Such assent is a mere presumption or fiction of law. To make the commissioners' assignment equivalent to that of the party, so as to pass the property lying in another jurisdiction, there must be a consideration cognizable by the law of the country where the property is. Ingraham v Geyer, 13 Mass. 146 . The only valuable consideration for the assignment is the bankrupt's discharge, but this is not contemporaneous with the assignment, or necessarily consequent upon it. Whether it will ever happen is entirely contingent, and when the certificate is granted, it is no bar in a foreign country. Ogden v. Saunders and other cases supra. It is said that a payment of debts is a sufficient consideration to support a conveyance, but this supposes a free act on the part of the debtor, and an assent on the part of the creditors.
In the case of bankruptcy, the bankrupt does not give his assent, and it is altogether uncertain at the time of the assignment, whether the creditor will give his. The assignment is made in trust for the creditors, who may or may not assent to it, and it therefore stands upon the same footing as an assignment in this State for the same purpose, which is held not to be valid against attachments made before the creditors give their assent. See Widgery v. Haskell, 5 Mass. 154 ; Ingraham v. Geyer, 13 Mass. 146 ; Marston v. Coburn, 17 Mass. 454 . It follows that there is in this case no consideration cognizable by our laws.
It is a general rule or fiction of law, that personal property is attached to the person of the owner, and governed by the laws of the place of his domicile. But this rule is subject to limitations and exceptions. One of these exceptions is the rule, that the lex rei sitoe regulates the legal remedy. Blanchard v. Russell, 13 Mass. 5 , 6.
The giving effect, in this country, to the foreign assignment, is also put upon the ground of the comity of nations, which is manifestly not a matter of obligation, but merely of discretion and sound policy. The English courts have gone upon this principle; as they give credit to all nations and owe none, the rule of comity, in this case, is for their advantage. The same motives of policy, in their particular case, have influenced the Scotch decisions, and produced their "distressing versatility" complained of by Lord Eldon. They began with asserting the supremacy of the law of Scotland, and end with admitting the force of the English bankrupt law to be the same in Scotland as in England. The courts naturally fluctuated between the old and new decisions, and hence the versatility complained of.
In the colonies, where there were no bankrupt laws, the same principle of policy led to the adoption of a different rule. It was thought that it would be a great hardship upon their traders, to send them to England to collect their debts against English bankrupts, when they had the means of paying themselves at home. The attachment of the bankrupt's property here, was therefore held to be valid against an assignment under a foreign bankrupt law. And we imagine the policy of this country is still the same; for so long at least as we have
no bankrupt law, the rule of comity is not, as between us and England, a rule of reciprocity. Besides, we doubt very much whether courts of law can, to any great extent, be governed by motives of national policy; especially in a country like ours, where the legislative, executive and judicial powers are so entirely distinct. The question seems to belong to the legislature, and not to the courts. If considerations of national policy are to be introduced in any case into the judicial administration, the courts of the United States seem to be the only legitimate organs for the application of this policy; the States have no external policy or relations. The Supreme Court of the United States has expressly declared an opinion against the admission of the force of assignments under foreign bankrupt laws, in this country, to the prejudice of our citizens. Harrison v. Sterry, Ogden v. Saunders, ubi supra.
It is to be considered further, in estimating the weight of the authority of Holmes v. Remsen, before Chancellor Kent, that it was a case in a court of chancery, which might, perhaps, introduce considerations of comity and national policy to a much greater extent than is admissible in a court of law. It is another distinguishing circumstance of that case, that it was not, like the present, a question between a domestic attaching creditor and the assignees under a foreign bankrupt law; it was whether the right of distributing the same fund, to the same persons, and precisely in the same way, should be exercised by one set of trustees in Great Britain, who had already got possession of the fund, or another set of trustees subsequently appointed under the laws of New York, who were attempting to get the fund into their hands by a most inequitable suit. Nothing therefore appears from that suit that would warrant the conclusion, that the same judge, before whom the question was brought in the court of chancery in New York, would, sitting as a judge in Massachusetts, postpone the operation of our attachment laws, to let in an assignment under a foreign bankrupt law. Another distinction between a case in New York and Massachusetts, is, that there is no law in the former authorizing an attachment for the exclusive benefit of the attaching creditor. Another distinction
between the case of Holmes v. Remsen, and the one before the Court, is, that in Holmes v. Remsen the bankrupt in England had made an assignment of the property in question in his own name to the assignees; whereas in the case before the Court, Williams has made no assignment himself, as auxiliary to that made by the commissioners under the English bankrupt act. Such an auxiliary assignment was also made in the case of Dawes, Judge, v. Boylston, 9 Mass. 338 .
If this case had related to the assignment of a chattel, it cannot be denied that the chattel would have been attachable under our laws, at the suit of any creditor, until a delivery should have been made to the assignees, in pursuance of the assignment, even if the assignment had been made by the bankrupt himself. Lanfear v. Sumner, 17 Mass. 110 . Yet chattels are held to follow the person of the owner, and to be subject to the laws of the domicile, as much as choses in action.
Shaw and Aylwin, for the trustee, contended, that he ought to be discharged, because the debt to Williams was payable in London, and not in this country; and to oblige the trustee to pay it in this country, would be obliging him to do that, in favor of an attaching creditor, which he was not bound to do for the principal. To render a debtor to the principal liable as trustee, the principal must have a cause of action. Maine F. & M. Ins. Co. v. Weeks, 7 Mass. 438 . If by the express or implied agreement, Marshall was to pay the debt in England, there could be no cause of action until there had been a breach of that agreement by a failure to remit or otherwise. It does not appear by the answer of the trustee, that there had been any failure on his part to repay the sum advanced by Williams in the manner understood between them, and conformably to the usual course of dealings; and so there was no cause of action by Williams against him. Clark v. Moody, 17 Mass. 145 .
Another ground on which the trustee claims to be discharged, is, that the assignees have a better right to claim and hold the debt than the attaching creditor. The debt attached was contracted with an individual subject to the English bankrupt laws, and arose from transactions at his domicile, and became payable in that kingdom, and on general principles, would seem to be subject to the same laws, which controlled his own actions, and governed the rest of his property. The debtor must be presumed to have contracted with reference to the laws of the place where the contract was to be performed.
It is a rule that a debt is attached to the person of the creditor, like other personal property. This results from the general law of property, which recognises the absolute dominion of its owner. The rule is a law of nature and one of the foundations of the common law, and St. Germain states that, in his time, "it was generally kept in all countries." Dr. and Stud. Dial. 1, c. 5.
The acquisition and transmission of property, are acknowledged to be generally subject to the law of that political society of which the owner is a member; and the mutual convenience of intercourse among civilized nations, requires that they should not only be so considered by them, but be regarded as forming a part of that general code of equitable and conventional rules, which we term the law of nations. Thus Vattel lays it down, that "the goods, even of individuals, ought to be considered as the goods of the nation, in regard to other States. They, in some measure, really belong to it, from the right it has over the goods of its citizens, because they constitute a part of the sum total of its riches, and because a nation has an interest in the protection of its members." Vattel, bk. 2, c. 7, § 81. This absolute dominion of the owner over his property, is only limited by the laws to which he gives his express or implied assent.
It is accordingly the established rule of civilized countries, to admit the authority of the law of the domicile, in regard to the personal property of the owner. Somerville v. Somerville, 5 Ves. jun. 760. At his death, as Vattel asserts, bk. 2, c. 8,
§ 110, (and other writers concur with him, 2 Huber. lib. 1, tit. 3, § 15,) what he leaves ought to devolve on those who are his heirs, according to the law of the state of which he was a member. The right of bequeathing by will, has been held to be a natural right. Desesbats v. Berquiers, 1 Binney, 336 The contract of matrimony and its incidents, are governed by the same rule. See authorities cited by Law in Hunter v. Potts, 4 T. R. 184. The only qualification or restriction made by writers on public law, is, that this rule cannot reach lands or immovable property, since it might endanger the sovereignty of the country. No distinction is anywhere made between debts and other personal property. When a debtor becomes insolvent, justice dictates that his property should be proportionally distributed among his creditors, and if a law is made to effect this object, what rule of national law is there to interpose and say that this equitable object shall not be carried into effect?
A voluntary sale according to the local law, and made on adequate consideration, would be binding. An equal distribution of the debtor's effects, so far as they will extend in discharge of his debts, is one of the highest considerations. Marbury v. Brooks, 7 Wheat. 577. See also 11 Wheat. 78; Holbird v. Anderson, 5 T. R. 235; Pickstock v. Lyster, 3 Maule & Selw. 371; The King v. Braddock, 3 Price, 6. If the law of the country, of which he is a member, assumes to act for him, on this consideration, every principle of justice and of national comity requires that we should facilitate its operation. It is objected, that the bankrupt's discharge is the only consideration, and that it is not simultaneous with the assignment. This might be also objected to the cessio bonorum, where, as in Holland, it discharges only the person. Ex parte Burton, 1 Atk. 255. It is the duty of the debtor to distribute his property proportionally among his creditors, whether they forgive him the remainder or not. The moral obligation in this case forms the consideration; not the ultimate favor which the creditors may grant or withhold. By contracting the debt, the debtor impliedly hypothecates, not only
his present means, but his future ability, to a fulfilment of the obligation. The release of this he has no absolute right to stipulate for, nor is the law of his country bound to procure it for him. Whether given or not, it does not enter into the validity of the consideration on which the assignment rests.
It is idle to attempt a distinction between a transfer by the individual, and one by the nation, or the laws of the nation, to which he belongs. It would be asserting, in so many words, that we have the right to regulate for other nations, by what terms and upon what conditions the property of their citizens shall be held. It follows that the judge, in the place where the property is found, ought to apply the rule of the domicile, although he is to do it according to the forms of the local law.
But it is said there are exceptions to this rule; and that neither the State nor its citizens ought to suffer by its adoption, and that it ought not to contravene the local law. But in the present case, we are to observe, that the agreement was entered into with an English bankrupt, with reference to the place of his domicile as the place of performance. Coolidge et al. v. Poor et al. 15 Mass. 427 . We are then to inquire, whether establishing the validity of the assignment, violates any express rule of our law, or infringes the rights of our citizens. And here we are to distinguish between the doctrines, that the assignment of a bankrupt's property, pursuant to the law of his domicile, ought to operate in respect to the property wherever it is found,--and that a discharge valid by the law of his domicile should be so everywhere. The former of these doctrines is the one we are considering, the latter not being brought in question in the present case; nor are they necessarily dependent upon each other;--the one rests upon the lex domicilii, the other upon the lex loci contractus or lex fori. Whether the certificate is or is not a good discharge for the debt, if sued here, it has been solemnly settled that the assignment under the bankrupt law does operate here to some purposes. It is so far taken notice of by judicial tribunals as to authorize the assignees to collect the debts due to the bankrupt, when not claimed by creditors, and for this purpose to institute suits and to give a good discharge. If it were a question
between the assignees and Williams himself, the assignees would, doubtless, have the more equitable title; and would not the debtor, after notice of the assignment, be restrained from paying over the debt to Williams? Bird et al. v. Caritat, 2 Johns. R. 342. If so, the question of hardship to the bankrupt does not arise in this case, since the assignment is considered valid as respects him. The notion of hardship is suggested by supposing the certificate of discharge to be the consideration; whereas the equitable distribution of the effects, and the discharge of debts so far as they will go, are the true consideration for the assignment.
The provisions of the English bankrupt acts present nothing contravening the rights of our citizens. They provide that all the property of the bankrupt, real and personal, shall be assigned for the benefit of his creditors, as well those out of England as those in England. 6 Geo. 4, c. 16, § 46, 59, 63, 64, 107. What law of this State does it contravene? We have no laws like the Maryland statutes of 1704 and 1753, declaring that no assignment made out of the province should be of any force, unless security was given for the payment of all debts of the grantor due within the province; nor any like that of the South Carolina act, referred to by the plaintiff's counsel.
Our trustee laws merely authorize the attachment of the debtor's goods. It has been constantly held in this Commonwealth, that an assignment of a chose in action for a good consideration, although not operating, technically speaking, a legal transfer of the debt, yet so far passes the equitable interest, that it is no longer subject to the control of the assignor, or liable to be attached for his debts.
[The counsel then went into a minute and elaborate examination of the British and American cases, to show that the current of authority was not against the validity of the assignment. The cases cited and commented upon, have been already referred to in the abstract of the argument on the part of the plaintiff.]
A position is taken by the plaintiff's counsel, that, as the attachment was made here prior to notice, although subsequently to the date of the assignment of this debt, the debt ought to be affected by this lien, in the same manner as other personal property would be, when not reduced to possession. But the difference between chattels and choses in action is too great to admit of their being governed by the same rules. One is susceptible of possession, the other not. The purchaser of one may have his title defeated, if he neglects to perfect it by possession; the assignee of the other, from its peculiar character, can manifest his ownership in no other way than by notice, demand, assignment, &c. All that is required of the assignee is to give notice previously to the payment of the debt. Jones v. Witter, 13 Mass. 304 ; Chartres et al. v. Cairnes et al. 5 Cowen, 578, note. The defeating of attachments where notice of a previous assignment is given after the attachment, is matter of daily experience.
Gardiner, in reply, went pretty fully into the consideration of the arguments on the other side. His reasoning will be the more briefly stated, as the points are distinctly considered in the opinion of the Court.
It is admitted to be a general rule, that a debt, considered as personal property of the creditor, is attached to his person; that it ought, in general, as to succession and transmission, to be governed by the law of his domicile, and that the judge of the place where the property is found, ought, in general, to be guided by that law in the interpretation of the contract. But it is a qualification of these rules, that debts, in respect to the liability of the debtor, follow him, and are subject to the jurisdiction of the law of his domicile; or of the place where his property is situated, against which the process is pending, to enforce the contract. 2 Huber. Prael. Jur. Rom. & Hod. part. 2, lib. 5, tit. 1, De Foro Comp. § 38.
From the earliest period of our colonial history, the laws have enabled a domestic creditor to arrest the property of the absent debtor, lying within the territory, and enjoying the protection of the State. Col. & Prov. L. Mass. 614; Rhod.
Isl. & Prov. Plant. A. D. 1744, ed. of Pub. Laws, 1822, p. 169; Laws of N. Hampsh. ed. 1815, p. 173; Laws of Connect. ed. 1808, p. 61; Laws of N. York, N. R. L. vol. 1, p. 157; N. Jersey Laws, ed. 1821, p. 355; Pennsyl. Laws, see Sergeant on For. Attachm.; Delaware Laws, see Griffith's Law Register, 1069; Maryland, ibid. 944; Virginia, ibid. 363, also 1 Rev. Code, 474, 486; N. Carol. Laws, p. 291; Grimke's S. Carol. Laws, p. 187, and Brevard's Dig. p. 32; Georgia, see Griff. Law Reg. p. 446; Louisiana, ibid. 697. This is a branch of the lex loci rei sitoe, and as such is respected by the law of nations. For not only the territory, but whatever is in the territory, is under the control of the State; which is bound to protect the property of friendly foreigners lying within its jurisdiction, and may, when justice requires, seize it as the property of the foreign State. Voet. ad Pand. lib. 2, tit. 1, § 46. Thus having the control and jurisdiction of the property, it belongs to the lex fori or rei sitoe, to regulate the remedy, whereby creditors are let into the possession, or allowed to make disposition, of the property, and to settle the order of payment and rules of preference, which are various, the estates of persons deceased being marshalled in England in the order of judgments, specialties, &c. of which one class must be wholly paid in preference to others, in case of a deficiency of assets. In Spain a similar principle is adopted in relation to the distribution of a bankrupt's effects. In other countries, as with us, no regard is paid to the character of the debt, and the first lien, in favor of whatever species of debt it may be, binds the property. This order or preference it belongs wholly to the lex fori to settle. The remedy against the person, as well as the property of the debtor, is regulated by the same law; for it has been repeatedly held, that the exemption of the person or property of the debtor from arrest or attachment upon mesne process or as security, at the place of his domicile where the debt was contracted, does not affect the liability of either his property or person in other countries. If the property is so situated that its transmission requires the intervention of a foreign remedy,
its transmission must be regulated by the lex fori. Van Reimsdyk v. Kane, 1 Gallison, 376. For the principles and extent of application of this rule, see Smith v. Spinolla, 2 Johns. R. 198; Ruggles v. Keeler, 3 Johns. R. 263; Scoville v. Canfield, 14 Johns. R. 338; Whittemore v. Adams, 2 Cowen, 626. See also the Reporter's note to Andrews v. Herriot, 4 Cowen, 510, for cases on the lex domicilii, fori, rei sitoe, and loci contractus.
A distinction has been made between the assignment of a chattel, and that of a chose in action, which is described to be "a bare right to the occupation or use of something, the possession whereof may be recovered by a suit." 2 Bl. Comm. 397. The only operation, therefore, of the law of foreign domicile, is to give the foreign assignee a right to pursue the remedy afforded by our law for the recovery of his debt. It is a question exclusively belonging to the lex fori. This being the case, an application is made to the comity or discretion of the court. We are asked, as matter of comity, to permit these assignees to come into our courts, and make use of our laws, to collect the debts due to the bankrupt for the purpose of distributing the proceeds at their own domicile, among such creditors as may be found there to receive them. Our answer is, we will lend them our aid, so far as we can do it without prejudice to our own laws; one rule of which is, that all property within their jurisdiction is liable to be attached at the suit of a creditor of the owner. For this position we have the authority of Chancellor Kent, who says, (2 Comm. 329,) "whatever consideration might otherwise have been due to the opinion in Holmes v. Remsen, and to the reasons and decisions on which it rested, the weight of American authority is decidedly the other way; and it may now be considered as a part of the settled jurisprudence of this country, that a prior assignment in bankruptcy under a foreign law, will not be permitted to prevail against a subsequent attachment by an American creditor of the bankrupt's effects found here."
It is urged by the counsel for the trustee, that this debt is of British origin. It arose on an acceptance and payment of a bill of exchange, some months before the commencement of this suit. That bill was drawn by Marshall in Boston, where,
consequently, the liability arose, which is to be governed by the laws of that place. See Bayley on Bills, (Phil. & Sewall's ed.) 28, 29, and cases there cited. In respect to Marshall's liability, this was an American contract. But supposing it to be English, it has no special reference to the bankrupt law of that country. According to the reasoning of Chief Justice Marshall, "a statute respecting insolvency, however it may act upon contracts, does not enter into them and form a part of the agreement." Ogden v. Saunders, 12 Wheat. 343. The same remark is equally applicable to a contract made in a country where a bankrupt law is in force; the contract is not made with a reference to such a law, or in particular contemplation of its provision. Thus a discharge of a contractor in the State where the contract was made, under the insolvent laws of that State, has been held not to be a valid discharge in another State, where the party contracted with is a citizen. This effect is limited to laws in particular contemplation of which a contract is made. Prentiss v. Savage, 13 Mass. 20 . What is there in a bankrupt law which can make it a subject of particular contemplation with the parties to a contract, any more than a limitation law? The description of bankrupt laws by Blackstone, 2 Comm. 477, that they "create no new debts, but only give a speedier and more effectual remedy for recovering such as were before due," shows that they have reference to the lex fori, rather than the lex loci contractus. They affect the remedy.
The liberal provisions of the English bankrupt law, in favor of foreign creditors, have been urged; but it is apparent, that they do not put such creditors upon an equal footing with the domestic creditors. The foreign creditors can have no voice in the appointment of assignees, in substitution for those appointed by the commissioners, as provided for in the 45th section of that law. They can have very little influence in granting or refusing the bankrupt's certificate. And these are not the only disadvantages under which such creditors are placed by this law.
On the whole, we can perceive no motive of policy or expediency, nor any principle of international law, or rule of
decision adopted in our courts, which should transfer to foreign tribunals, in the case under consideration, the jurisdiction over the rights of our citizens.
PARKER C. J. delivered the opinion of the Court. The person summoned as trustee in this case, admits himself to be indebted to Williams, the defendant in the action, but objects to being charged as trustee, on account of the bankruptcy of Williams in England, and the assignment of his estate and effects by the commissioners appointed according to the laws of that country, which assignment he supposes transferred this debt to the assignees, and thus that it is taken out of the operation of our trustee process.
This process was served after the commission of bankruptcy issued, and after the assignment made by the commissioners, but before any notice thereof was given to the plaintiff in the action, or to Marshall, the supposed trustee.
By our law the service of a trustee process upon one who is indebted to the defendant in the suit, creates a lien upon the debt in favor of the plaintiff in the action; so that if he recovers judgment against the principal, he shall have execution against the trustee to the amount of the effects in his hands, or the debt which he owes, and no distinction is made in the application of this law, between citizens, who may be trustees of other citizens, and those citizens who may be indebted to a person residing in a foreign country, who is indebted to citizens of the United States. Nor is the benefit of the law confined to citizens of the United States; for foreign merchants coming here and finding property or debts of their debtor here, may attach them as our own citizens may. The plaintiff therefore has a right to an adjudication against Marshall as the trustee of Williams, unless the bankruptcy and proceedings under it have transferred this debt to the assignees, so that in effect Marshall was not the debtor of Williams, but of the assignees of Williams, at the time of the service of the writ. In regard to goods and merchandise belonging to a foreign bankrupt or insolvent person found here, if attached before any possession is taken by the assignees, whether under a commission of bankruptcy or otherwise, the attaching creditor
would hold, because delivery, either actual or constructive, is necessary to complete the transfer; but in regard to choses in action, as debts due to the bankrupt, the mere assignment, if valid in law, passes the property, because they are incapable of delivery, and notice to the debtor is not essential to the transfer, otherwise than to protect him in case he should pay over to his creditor after the assignment without notice.
This case raises a question which has been treated by various judicial tribunals as of great magnitude, and as of a general and national, rather than a municipal character; and such is the difference of opinion among learned judges and eminent jurists, that it is difficult to affirm where the weight of argument lies. Our duty however does not require us to enter much into the discussion of the general principles which may be supposed to affect the question; we shall rather look for authority, because, if there is a received and settled law upon the subject, we shall feel ourselves bound to observe it, although we might think that the improved state of the world in regard to its commercial relations requires a more liberal system than that law sanctions; for it is not for one out of a cluster of States, whose jurisdiction is limited in its objects, to affect to improve its jurisprudence by the introduction of rules supposed to be called for by enlarged policy in regard to objects of a general nature. Such changes, if within judicial power, should be wrought by the supreme court of the nation, and if not, by other constituted authorities of the nation, either by treaty with foreign powers, or by legislative enactment. We must be allowed therefore to discharge ourselves of this case on narrower grounds than its importance, or the very elaborate arguments with which we have been favored, would seem to require.
Does then a commission of bankruptcy in England and an assignment of the bankrupt's effects under it, so transfer a debt due to the bankrupt from a citizen of this State to the assignees, that another citizen who is a creditor of the bankrupt cannot seize it on a trustee process and secure it to himself?
We think it very clear that this question has not been settled in the affirmative in this State, nor in any other State in the Union, nor in the Supreme Court of the United States, but on the contrary, that whenever the question has been raised, it has been determined in the negative. With respect to our own State, the question has not been settled either way directly, though there are some cases in which it has incidentally occurred; but from these nothing favorable to such assignments can be inferred.
An expression of Chief Justice Parsons in the case of Goodwin v. Jones, 3 Mass. 514 , 517, is relied upon. Too much stress is laid upon that expression, considering that it is rather a statement of the argument of counsel which he is undertaking to answer, than an opinion of his own. [Note p305-1] He says, "It is admitted that the assignee of a bankrupt duly appointed pursuant to the laws of the State where the bankrupt dwells, may maintain an action in that character in any other State, the laws of which are not repugnant to his recovery." Now the very question here is, whether the laws of this State are not repugnant to his recovery; and this cautious qualification of the admission has at least as much bearing as the admission itself. But even if the admission were unqualified, as the question supposed to be involved in it was not before the Court, it could not be received as authority.
The case of Dawes, Judge, v. Boylston, is cited for the assignees, but if any thing touching the question is to be inferred from that case, it is, that the assignment under a commission of bankruptcy has no effect against the creditors of the bankrupt here. Neither do we see any thing in the case of Blanchard v. Russell, Baker v. Wheaton, or Watson v. Bourne, which sustains the position advanced by the counsel for the assignees, viz. that the assignment under a foreign commission of bankruptcy transfers the property and debts of the bankrupt here, so as to prevent an attachment by our creditors. The question in all those cases related only to the effect of a discharge under the laws of the State where the contract was made, upon the demand of a creditor when sued in another State. Observations which might have fallen from judges in the course of the opinions given by them, of a more general
nature than the subject required, cannot be considered as authorities. It is the point decided which becomes the precedent; what is said arguendo by a judge, ought to have little if any more weight attached to it, than if said by counsel. It would be altogether unjust to give to remarks of the kind the force of judicial decisions. We do not perceive, however, in any of the cases cited, even an intimation that the property of a bankrupt in this country, or his debts here, passes to his assignees in a foreign country by force of the assignment under the commission.
In regard to the case of Blanchard v. Russell, which has frequently been referred to in the argument of the counsel for the trustees, it should be remarked, that the principal question discussed is the constitutionality of State insolvent laws; whether they so impaired the force and obligation of contracts as to come within the prohibitory clause of the constitution of the United States. It is true, in the opinion delivered, the position was attempted to be maintained, that contracts were to be interpreted and construed by the existing laws of the State within which they were made; and also, that what would operate a legal discharge of the contract in that State, would have the same effect elsewhere; and hence it was intimated, that an American citizen, who should become creditor of an English merchant by a contract made in England, might be barred of his debt by a certificate of discharge duly obtained under a regular commission of bankruptcy in England. This position has been questioned, and so far as any judicial decision can be predicated of the case of Ogden v. Saunders, 12 Wheaton, it may be considered to be overruled; for although in that case the legal effect of a State insolvent law is to a certain extent admitted, yet this effect is limited by the decision to cases between parties who are both citizens of the State where the law is enacted, and to suits brought in the courts of that State. [Note p306-1] But whether this Court were right or wrong in the position so laid down, it does not follow that assignments of the commissioners would so divest the property of the bankrupt that it would cease to be subject to our attachment
laws. The case supposed is of a particular creditor, who by reason of the nature and locality of his contract might be deprived of his debt by a plea of a certificate of discharge, upon the ground that he is virtually a party to the commission, leaving untouched the case of an American creditor whose debt was not so situated, and who had, by virtue of our statutes, acquired a lien by attachment, or under the trustee process.
On the other hand, the case of Ingraham v. Geyer, 13 Mass. 146 , in quite unambiguous terms asserts the right of an attaching creditor within our jurisdiction, he being a citizen of this State, as paramount to the right of assignees claiming by virtue of a transfer from the debtor himself in another State. This case has been sometimes cited in this Court and elsewhere, as having decided that in all circumstances an attaching creditor here would prevail over the assignee of the debtor under a transfer made abroad; but we do not think it was intended, or that it does in its terms go to that extent. The assignment set up was clearly void according to the law of this State. It was said it was valid in Pennsylvania, where it was made; the Court said, admit it to be so, nevertheless it would not be received here as valid against our citizens, because it was unjust and unequal in its effect upon them. The meaning was, that though by comity the laws of other States, and contracts made under them, are to be received and allowed here, yet this case would come within the acknowledged exception to that general rule, viz. that our own citizens should not be prejudiced thereby. It was certainly not intended to decide, that a bona fide transfer by a debtor abroad to his creditors, or to trustees for their use, in such form as would be valid to pass the property if made within this State, would be set aside for the benefit of creditors who had acquired no lien until after the making of such assignment. [Note p307-1] And therefore we do not think a decision against the operation of an assignment by commissioners under the bankrupt laws of England, draws after it the inference, that an assignment made by the debtor himself without the intervention of a commission of bankruptcy, if such assignment were lawful in the place where made, would be
unavailing. [Note p308-1] In regard to the intimations given in the case Dawes, Judge, v. Head, 3 Pick. 128 , [2nd. ed. 148, note 1,] which are thought by counsel to be applicable to the case before us, it should be considered that that was a case of insolvency recognised by our statutes, and for which an equal distribution is provided among the creditors. The desire of the Court was, that the foreign creditors should share in the distribution, instead of applying the whole effects found here to the payment of our own citizens. There was no attachment law to interfere, and the way seemed to be open to introduce a liberal system for the settlement of estates of deceased insolvent persons; but it was supposed to be a necessary part of that system, that the effects found here should be here distributed in just proportion to the whole property and all the debts; whereas the effect of the principle contended for in this suit, is to break down the attachment law and transfer all the effects to a foreign country, to be there distributed, much to the inconvenience certainly of some if not all the creditors of the bankrupt here.
There being no case in Massachusetts which can sustain the claim of the assignees of the bankrupt, we have examined the reports of adjudicated cases in other States, in order to ascertain what the law is among them; and with the exception of the case of Holmes v. Remsen, 4 Johns. Ch. R. 460, it may be safely asserted, that not one out of the numerous State courts has adopted the doctrine sought to be maintained in defence of this suit.
In North and South Carolina, [Note p308-2] in Virginia, and in Pennsylvania [Note p308-3] and Maryland, it has been expressly decided, that such assignments have no efficacy against attachments made within their several jurisdictions; [Note p308-4] and if in some of those States these decisions have been founded upon particular legislative enactments, it is very certain, that in regard to Pennsylvania, the opinion of the court was the result of a deliberate and learned discussion of general principles of jurisprudence, as well as a critical examination of most of the important decisions in England upon the subject.
In addition to this, there is the strong, unqualified assertion of Chief Justice Marshall, speaking for the court, in the case of Harrison v. Sterry, 5 Cranch, that "foreign bankrupt laws do not operate to transfer the property of bankrupts within the United States." This decision, it is true, has been found fault with as not being accompanied with any reasoning tending to show its correctness. It can hardly be supposed, however, that it slipped inadvertently from a mind so unapt to entertain or promulgate loose opinions, as that of Chief Justice Marshall, and that its unsoundness should also have escaped the attention of the other acute members of that court. It ought rather to be supposed, that it was considered a maxim too well supported by authority, and too well known in practice, to require the support of argument. And I am inclined to think, that were it not for the profound and captivating discussion of Chancellor Kent in the case of Holmes v. Remsen, the truth of the maxim as stated by Chief Justice Marshall would not have been called in question.
In regard to the last mentioned case, it cannot be considered as settling the law even in New York. The most that can be made of it is, that it gives the opinion of a most accomplished and enlightened jurist in favor of the position, he sitting in chancery, not feeling himself shackled by the technical rules of the common law, and feeling a generous ambition to introduce into the code of the State with which his name is identified, a broad and liberal rule fit for the government of the whole mercantile world, of which no man is better suited than himself to be the legislator. I scruple not to say, that the principles which he advances, and the system which he wished to enforce, ought to belong to the code of nations, and that it would be happy, if, by treaty between this country and the civilized nations of Europe, the principles which received his powerful support should be made to constitute a branch of the jus gentium, and that a place for its execution with fairness and reciprocity should be adopted; but until that shall be done, there seem to be insuperable difficulties in the way of a partial adoption of it by one country, or rather by one small section of the country, when the greater part of the rest of the world
might repudiate it. I will only refer to the very able argument of a sound common lawyer, Mr. Justice Platt of the same State, to show the improbability that the opinion of Chancellor Kent will be adopted as the law of the State of New York.
And we may now conclude, as that eminent man himself has done in his recent work, which does himself so much honor and the public so much good, that the American law is decisively in opposition to the opinion which he maintained in the case of Holmes v. Remsen. And thus ought this case to be settled, for we cannot receive the law of any foreign country; and however well disposed the English courts may be to adopt a more enlarged and liberal system, and however successfully the recent decisions in that country may have contributed to that end, we do not think ourselves at liberty to follow in a train which partakes so much of judicial legislation. Down to the time of our Revolution, we think the adjudications in the courts of law in England would fully justify the position laid down by Chief Justice Marshall in the case of Harrison v. Sterry, viz. that foreign bankrupt laws do not operate to pass the property of bankrupts in other countries. It was certainly so in the time of Lord Mansfield, and no one will deny him the credit of being willing to liberalize the law in all matters relating to commerce or the intercourse of merchants.
In the case of Cleve v. Mills, tried before him at the Cockpit, he is stated to have said, that the statutes of bankruptcy do not extend to the colonies or any of the King's dominions out of England, but the assignments under such commissions are considered as voluntary, and as such can take place between the bankrupt and the assignee, but do not affect the rights of any other creditor. 1 Cooke's B. L. 243.
And in the case of Le Chevalier v. Lynch the whole court of King's Bench affirmed the same doctrine. A creditor of the bankrupt, against whom a commission had issued in England, attached a sum of money in the hands of a debtor of the bankrupt in St. Christopher, an island within the British dominions,
and this attachment was held good. Lord Mansfield says, if a bankrupt has money due to him out of England, the assignment under the bankrupt laws so far vests the right to the money in the assignees, that the debtor shall be answerable to them. But if, in the mean time, after the bankruptcy and before payment to the assignees, money owing to the bankrupt out of England is attached bona fide by regular process, according to the law of the place, the assignees in such case cannot recover the debt. Doug. 161. And the same principle is affirmed by the same eminent judge in the case of Waring v. Knight, 1 Cooke's B. L. 307.
Now this was the law of England down to 1768, and therefore the law of this country. I do not know what can be said in answer, unless it be, that though the laws of the colonies, and of other countries, did not recognise the English statutes of bankruptcy, and therefore the English courts were obliged to give effect to the judgments which took from their operation the effects of bankrupts, yet nevertheless this was wrong and that the courts of other countries ought to adopt a more liberal principle. But however satisfied we may be of this admonition, certainly on the question what is the law, it cannot be suffered to have any influence.
The Scotch courts, until a comparatively recent period, understood the law as Lord Mansfield did, and uniformly gave preference to their arrestments over the assignments of commissioners under the English Bankrupt laws, as appears by the case of Thorold v. Forest, 2 Dow, 237, and some other Scotch cases which have been cited. During this time however the law must be considered as quite unsettled in England, or else the courts of common law and chancery proceeded upon very different principles, for in the year 1769 in the case of Jollet v. Deponthieu, and Solomons v. Ross in the year 1764, full effect was given in the court of chancery, to a process similar to a commission of bankruptcy in England, by allowing the creditors of the bankrupt's estate to recover a debt from an English subject, although it had been attached after the appointment of curators, by another English subject. This was certainly contrary to Lord Mansfield's doctrine, that a commission
of bankruptcy does not reach beyond the jurisdiction where it issued. It is probable, however, that it was not of right, but of comity, that this proceeding was had. The neighbourhood of Holland, its intimate connexion with England in commerce, and the actual or expected reciprocity in regard to English commissions of bankruptcy, without doubt influenced the opinion of the chancellor; for if it was considered as the necessary result of legal obligation, how is it to be accounted for, that in 1779, the same high court, held by commission, should have decided that the assignment did not divest the property of the bankrupt, as the debt was due in the plantations, but that it only gave the assignees the right to sue for it; that the creditor in Rhode Island, a British province at the time of the transaction, had also a right to sue, and by his judgment had obtained a priority? The true reason for this contrariety of decision is the one, probably, stated by the Lords Commissioners, viz. that in the case of Solomons v. Ross and Jollet v. Deponthieu, which were Dutch bankruptcies, "there were bankrupt laws in Holland, but none in the plantations." Thus intimating, that where there would be reciprocal advantages the proceedings in the foreign commission would by comity be allowed to operate in England.
It would be useless to go over the numerous decisions which have taken place in England since our Revolution, it being very obvious that there has been a gradual extension of the legal effect and operation of commissions, until at last it has got to be the opinion of very eminent judges, as it is that of Chancellor Kent, that they are universal in their operation, within the United Kingdom and without, and that all the property of the bankrupt, wherever situated, is transferred by the assignment: and so strong is the opinion in the minds of some eminent judges, that they hardly deem any nation entitled to the appellation of civilized, which does not admit and enforce the same doctrine.
They first began by obliging the English creditor, who had possessed himself of the property of the bankrupt in a foreign
country, to refund to the assignees; and this is wholly unobjectionable, for being a subject of the laws, he ought not to be allowed an advantage over creditors of the same country, but should be considered as the agent of the assignees in collecting the effects of the bankrupt.
I believe this is the whole extent of any English adjudications, for all beyond is only the expression of very strong opinions by individual judges. Sill v. Worswick, 1 H. Bl. 615; Hunter v Potts, 4 T. R. 182; Ex parte Frank, 1 Cooke's B. L. 336, and many other cases. The Scotch courts have followed the English, as was to be expected, considering the almost nominal independence of their judiciary upon that of England. There is no case in which the right of a foreign country to deny this full effect to English commissions has been questioned; so that after all it is a mere question of comity, which will be determined by the courts of every nation according to those circumstances existing there, which ought to affect a question of that kind. It cannot be considered a principle of universal law which every nation is bound to recognise. In Holland and France, where there are bankrupt laws, it is without doubt convenient to give effect to the bankrupt laws of England, she reciprocating the indulgence. The daily intercourse between those countries and their proximity, render it quite easy for the creditors of each to prosecute their claims in the tribunals of either: and if there were a bankrupt law in the United States, such is the increased facility of communication with England, that in many cases it would not be very inconvenient for merchants in either country to transmit their claims to the other. But the want of such laws here seems to remove all ground of reciprocity. If the merchant of New York or Boston becomes insolvent, having property or debts in England, the English creditor may avail himself of them without being subject to refund or distribution. But giving force to the English bankrupt laws here would deprive the American creditor of the right of priority secured to him by the laws of his own State or country. And then again, if this is a matter of law, of right and not of comity, it must be exercised towards the most distant as well as towards the nearest nations, towards Russia and the British dominions in India, as well as towards
the Island of Great Britain; and great inconveniences cannot but suggest themselves as arising out of this broad and universal system. It may be well at some future time, when there shall be bankrupt laws here, to accept the proffer of Great Britain, France, or Holland, to reciprocate the benefits of such a system, but we are persuaded, if such a change shall take place, it must be under the auspices of the national legislature, or the national courts, or of some treaty with the commercial nations of Europe, and not by the adjudications of a court of one out of the numerous governments which compose the United States.
It is asked, whether we should not give force to the assignment of property here by its owner abroad, when the object is to pay or secure particular creditors to the prejudice of the rest. An affirmative answer to this question does not involve the necessity of giving the like force to assignments under a commission of bankruptcy. The former would be consistent with our laws and our practice; it is merely acknowledging the personal right of the proprietor to dispose of his effects for honest purposes. The latter is yielding to the law of another country, which we are not obliged to do, and cannot without establishing a law in Massachusetts which is not recognised anywhere else in America. We do not deny the principles which attach themselves as maxims to personal property, that it has no situs, follows the person of the owner, and at his death is to be distributed according to the laws of the domicile of the owner. [Note p314-1] But the relation of debtor and creditor, and the rights of the latter over the effects of the former, are distinct objects of jurisprudence within the control of the legislative power of the country where the property is. This power is absolute and uncontrollable; it may be unreasonably exercised, but still it is legal, if so willed by a sovereign independent power, for the dominion is here. Such was the law of England; before, upon principles of comity only, the code was accommodated to the mercantile situation of that country, and even now doubts occasionally spring up in the minds of great judges whether the new system rests upon a solid basis;
for as late as the year 1817, we find that great jurist, Sir William Grant, hesitating between the old and the new principle, and manifesting a strong inclination toward the opinion of Lord Chief Justice Eyre, who dissented from the other judges in the case of Phillips v. Hunter. Birchwood v. Miller, 3 Meriv. 279.
In this state of things, the principle having been applied in England as yet only to cases arising in countries where bankrupt laws or something equivalent exist, it having been nowhere adopted in America except in the solitary instance of the chancery decision in New York, and having been expressly rejected by one tribunal of paramount authority, and another of the highest respectability; we think it would be presumptuous in this Court to open the acknowledged code to the reception of a rule, which, however reasonable and beneficial if universally admitted, would be likely to produce embarrassment and inconvenience if so partially introduced.
With respect to the other ground upon which it is suggested that the trustee ought to be discharged, viz. that the debt he owes to Williams was contracted in England and is payable there only, so that he could not and therefore the present plaintiff cannot make it payable here, we do not perceive any legal principle upon which the objection rests. It is a common mercantile debt, arising from acceptances and advances for which no funds were provided, or if provided, were not realized. This was a debt from Marshall every where, in whatever country his person or property might be found. A suit might have been maintained by Williams here, and therefore the debt may be attached here. The cases cited in support of this objection do not apply. That of Maine F. & M. Ins. Co. v. Weeks, 7 Mass. 438 , only decides that there must be a right of action in the principal against the trustee, to sustain the process, and we think there clearly was in this case; and that of Clark v. Moody, 17 Mass. 145 , regards only the liability of a factor to an action, where goods are received by him on consignment. We see no reason therefore why the trustee in this case should not be charged. [Note p315-1]
[Note p305-1] See Story's Confl. Laws. 345, note 2.
[Note p306-1] See Braynard v. Marshall, 8 Pick. 194 ; Pitkin v. Thompson, 13 Pick. 64
[Note p307-1] But see Fox v. Adams, 5 Greenl. 245; Lord v. Brig Watchman, 8 Amer. Jurist, 284.
[Note p308-1] See Greene v. Mowry, 2 Bailey 163.
[Note p308-2] See M'Neil v. Colquhoon, 2 Hayw. 24; Robinson v. Crowden, 4 M'Cord, 519.
[Note p308-3] See Mullikin v. Aughinbaugh, 1 Pennsyl. R. 117.
[Note p308-4] The same has been decided in New Hampshire; Saunders v Williams 5 N.H. 213.
[Note p314-1] See Dawes v. Head, 3 Pick. (2nd ed.) 144, note 1; Story's Confl. of Laws 312, 313.
[Note p315-1] See Story's Confl. Laws, § 403 to § 422, p. 336 to 355; 2 Kent's Comm. (3d ed.) 404 to 407; Saunders v. Williams, 5 N.H. 213; Plestoro v. Abraham, 1 Paige, 236; Abraham v. Plestoro, 3 Wendell, 538; Olivier v. Townes, 14 Martin's (Louis.) R. 93; Fox v. Adams, 5 Greenl. 245; Lord v. Brig Watchman, 8 Amer. Jurist. 284; Angell on Assignments, 57 to 65; Adams v. Cordis, 8 Pick. 200 .