Case ID: us_1/html/0384-01.html
Source: Caselaw Access Project
Author: {"author": "Shippen, President.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Gorgerat et al. v. McCarty.
    
      Bwnlcrwptcy. — Bail.
    Where one who had declared himself bankrupt according to the law of France, but had not received a conclusive discharge, was arrested in Pennsylvania, by one of the creditors, who had proved and registered his debt in the French court, it was held, that he was not entitled to be discharged on common bail.
    On a rule to show cause why the defendant should not be discharged on common bail, McCarty stated in his deposition, that, being considerably embarrassed, he had, according to the laws of France, declared himself a bankrupt, by filing a statement of his debts and credits, and delivering all his books and papers into the consular court of L’Orient, for the benefit of his creditors; the principal part of whom, in consequence of this surrender, had met together, appointed trustees or syndics, in the usual form, and then granted him a letter of license, for three years, together with a power of attorney, to collect his outstanding debts in America, in order to remit the same for their use; stipulating, however, that he should return to France within one year from the time of his departure. The plaintiff, among others, had proved and registered his debt in the consular court; and it was agreed by the counsel for both parties, that, on a surrender of this description, if three-fourths in value of the creditors had consented to the defendant’s discharge, the agreement or composition by them signed, being homol-ogated, that is to say, recorded and confirmed by the court of parliament (which is a matter of course, unless fraud is shown), became, by the lex loci, obligatory upon the non-subscribing creditors.
    
      Ingersoll, in support of the rule,
    contended, that it was settled by the decisions in Millar v. Hall (ante, 229) and Thompson v. Young (ante, 294), that a discharge under the laws of one country, operated as such in every other; and he offered to prove, by the testimony of the defendant himself, that three-fourths in value (the deposition only stating that the principal part) of the creditors had agreed to the composition at L’Orient; observing, that, if this would be sufficient to induce the court to order an exoneretur, after judgment, it would also be sufficient to induce them to discharge the defendant, in the present stage of the cause.
    
      Du Ponceau, having read a positive affidavit of a subsisting debt, opposed the admission of the defendant’s testimony. He said, *that, even if McCarty’s discharge according to the lex loci could be actually proved, it would not operate against the plaintiff, on a motion of this kind. The mutual spirit of intercourse among nations has, indeed, introduced a more liberal idea of the cessio bonorum; and upon trial of the cause, such proof would probably be fatal to the plaintiff’s demand; but whether he is discharged, or not, is a matter of fact, to be decided by the verdict of a jury (Salk. 100); and to deprive the plaintiff of special bail, at this time, would not only be an illegal anticipation of that decision, but, in effect, a denial of justice, as it appears that the defendant is under an obligation to repair shortly to France, and would probably never venture again within the jurisdiction of this court.
    He contended, however, that even by his own showing, McCarty had not been discharged in France; and represented, that the proceedings in the consular court amounted to no more than an inchoate bankruptcy ; for, the concurrence of three-fourths in value of his creditors to the composition alleged, and the homologation or confirmation thereof by the parliament, being an indispensable requisite to his discharge, until that was established, it could not avail the defendant, that he had made a surrender, or that the plaintiff had proved his debt, any more than the surrender of a bankrupt here, or the proof of a debt under the commission, would be sufficient to preclude a creditor from his remedy at law, before a certificate was actually granted.
    Nor was the defendant’s testimony, he urged, competent to prove the fact, which, by the lex loci, operates as a discharge ; it is a matter to be shown by an exemplification of the foreign record ; when, perhaps, it may be tantamount to a bankrupt’s certificate ; or, with stricter analogy, it may be compared to the case of a discharge under the composition law of England ; and he cited a case, which he said was exactly in point, from Salk. 99, pl. 7, where the court, on a question of bail, would not allow the defendant to show that he had obtained his discharge under the act, and that the plaintiff was bound, though a non-subscriber, to the composition.
    
      Ingersoll, in reply,
    said, that he did not mean to contend, that the debt was discharged; but only to show, by the testimony of the defendant, a collateral fact, which entitled his person to an exemption from arrest in the present case. He agreed, that the proceedings amounted only to an inchoate bankruptcy, under the insolvent laws of France ; but he insisted, that if would be cruel and unjust, to allow the plaintiff all the advantage of nis concurrence there, and likewise the benefit of special bail in an action here. Although it may be true, therefore, that the defendant had not yet received what would amount to a certificate, yet, as has surrendered all his effects, muniments and vouchers, to the proper officers, for the benefit, and with the knowledge and approbation of the plaintiff, as well as his other creditors, the court will not suffer the opju’ession that is now attempted, but rather incline to hear the defendant in favor of the rule ; and, if it can be shown that three-fourths in *value of his creditors have agreed to his discharge, the established principles of law will protect him here from the molesta- L tion of a refractory individual.
   Shippen, President.

There are certain rules adopted for the goiem ment of the court in respect to bail, which, as they are consonant to law and reason, ought not to be wantonly violated. In cases of necessity, however, these rules admit of some relaxation ; as, where it is impracticable to obtain a positive affidavit of the debt, the court, being satisfied of its existence, by collateral proofs, will order special bail to be entered.

But the present question is not of that nature ; for the matter alleged in support of the rule, goes immediately to the merits of the cause, and cannot with any propriety, be considered as a fact merely collateral. It is, in effect, saying, that the defendant has paid the plaintiff’s debt; which surely cannot be tried, on a motion of this kind ; nor can it, at any time, be substantiated by the testimony of the defendant himself.

I think, indeed, that the liberality of our courts has already extended the benefits of a cessio bonorum in another country, as far as prudence will justify. In the cases of Millar v. Mall, and Thompson v. Young, there had been a general surrender for the benefit of all the creditors ; and judgments of discharge from their respective debts, were regularly pronounced and certified in favor of the defendants by the court of a sister state. This distinguishes these cases from the case of James et al v. Allen (ante, 188), where the defendant’s person only was discharged, under a law of New Jersey, clearly local in its terms and operation ; and in the case of Le Clerc v. Richette, our opinion, in directing the jury to find for the defendant, was founded upon the evidence that the plaintiff was a party to the proceedings in France, and that an actual discharge had been obtained conformable to the laws of that kingdom.

From these decisions, it may be collected, that the judgment of a foreign court, discharging the debt, would, for that purpose, be recognised here ; but it would be contrary to reason, justice and law, to protect a man from arrest, who had made his way to this country, before he obtained his certificate, merely because he had committed an act of bankruptcy, and surrendered to the commissioners in England. The objections are equally strong upon the present occasion ; for it is clear, that the proceedings, which have hitherto taken place in the consular court of L’Orient, are inchoate and inconclusive ; and, even if the plaintiff had signed the letter of license for three years, that, according to an express authority in Barnes, would not be a sufficient cause for refusing special bail.

Upon the whole, the Court are clearly of opinion, that the defendant is not entitled to be released on common bail; and, therefore, direct—

The rule to be discharged, 
      
      
         See the note to James v. Allen, ante, p. 188; and see also Harris v. Mandeville, 2 Dall. 256, s. c. 2 Yeates 99; Milne v. Moreton, 6 Binn. 353.