Case ID: lock-rev-cas_1/html/0166-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Abraham and Thompson v. Plestoro, Johnston, and others, 3 Wend. 538, 573.
    In Ch. 4 Paige, 236.
    
      Foreign Assignee of Bankrupt.
    
    Abraham, the defendant below, left England in July, 1828, with 24 cases of paintings, merchandize, &c., and on arriving at New York, the goods were deposited in the public store, under charge of the defendant Thompson, as collector of the port. Shortly after Abraham left England, a commission of bankruptcy was sued out against him, and he was duly declared a bankrupt. On the 8th of August, 1828, Johnston, one of the complainants, was made provisional assignee. On .the 24th of September, 1828, he, together with the creditors of Abraham, all of whom were British subjects, resident in England, filed their bill in this cause, before judgments obtained by the creditors, and obtained an injunction restraining the collector from delivering the goods to Abraham, and restraining the latter from receiving or prosecuting for the same. Abraham put in his answer, neither admitting nor denying the proceedings under the commission, but" alleging that he had left England in the lawful pursuit of his business, and with a bona fide intention of returning; and denying that he was insolvent, or had committed any act of bankruptcy in England. He admitted the debt of Plestoro, and some others as stated, but denied others in the bill. On the coming in of the answer, the defendant, Abraham, moved for a dissolution of the injunction.
   The Chancellor denied the motion, holding that the assignment to the provisional assignee under the English bankrupt law divested the title of the bankrupt to the property he brought to this country; and that the injunction was properly granted upon the application of the assignee to restrain a third person from delivering it to the bankrupt, and to restrain the latter from receiving or prosecuting for it. He also held, that the commencement of suits by the English creditors, in the courts of common law of this state, against the bankrupt, to recover judgments for their respective debts, would not defeat the effect of the assignment to the assignee. The Chancellor in his opinion, relies chiefly on the case of Holmes v. Remsen, 4 J. C. R. 460. He says that “in the cases cited to the contrary, the contest was between the foreign assignees and domestic creditors claiming under the lex loci where the suits were brought. It was probably not necessary that the creditors should have joined in this suit with the assignee, but that is no ground for dissolving the injunction.” He also held that “ in this case, the property was constructively within the jurisdiction of the country of the bankrupt, being on the high seas, when the provisional assignment was made.” The motion to dissolve the injunction was denied with costs.

On appeal to the Court of Errors from this decision, that court held, that an assignee under a foreign commission of bankruptcy, is not entitled, nor the creditors before judgment, toan injunction, to restrain the bankrupt from receiving from the custom house here, property which was on the high seas on board a vessel on its way from England to New York-, at the time of the suing out of the commission. Sutherland and Marcy, Js., were for affirming the order of the Chancellor. Four of the senators, Maynard, Oliver, Allen, and Stebbins, delivered opinions for reversal, in which they held that an assignment under the bankrupt laws of England, to an assignee in bankruptcy, did not operate a legal transfer of the personal property of the bankrupt in this country, even as between the assignees and the bankrupt. Maynard and Stebbins, senators, held that if the property be on board a British vessel on the high seas, at the time of suing out. the commission, and thus within the jurisdiction of England, it passes by the assignment; but if so, the fact must be distinctly averred, and will not be presumed. The order of the Chancellor was reversed, 17 to 4 for reversal.