Case ID: la-ann_5/html/0391-01.html
Source: Caselaw Access Project
Author: {"author": "Eustis, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Benjamin Florance v. His Creditors.
    The proceeding to compel an insolvent to make a surrender of the property he has acquired since liis cession of property, cannot be prosecuted by a rule against him taken in the original insolvent proceedings, but mustbe conducted as an ordinary suit, by petition and citation in the court of the parish in which the insolvent is domiciliated.
    APPEAL from the Fourth District Court of New Orleans. Stmwbridge, J. This case came up on a rule taken by the creditors of Benjamin Florance, to compel him to make a surrender of the property he had acquired subsequent to his application for the benefit of a surrender of his property.
    
      Hoffman and Ogden, for plaintiffs in the rule,
    contended : The appellees, creditors of said Florance, having ascertained that he had become a man of wealth, moved the Fourth District Court (as succeeding the late Commercial Court, in which said Florance had made a surrender of property,) for an order directing him to make a new surrender of his property, as having come to better fortune.
    Every exception was put forth to defeat the application. This was to be expected. They were: 1st. That he was domiciliated in the parish of Jefferson. 2d. That he cannot be held to answer by rule. These exceptions were overruled, and the reasons and authority relied on by the court, are relied on as all-sufficient. See the case of Quimper v. Bierra, 8 R. R. 204.
    
      Benjamin and Micou, for the insolvent and appellant,
    contended: The first question presented to the court relates to the regularity of the proceedings and the jurisdiction of the lower court. The residence of Florance in the parish of Jefferson is clearly proved. Consequently, no new or original suit can be instituted against him in the parish of New Orleans. Spangenburg’s case, lately decided. But the exception to the jurisdiction was avoided in the lower court, by the plea that this proceeding was merely a continuance of the original proceedings, over which the court had jurisdiction, and not a new suit. Whether this is correct we have now to examine.
    The present proceedings began by a paper entitled a petition, which we consider as a mere motion, and the order endorsed it (though somewhat peremptory in its terms) a rule to show cause; and in this light the proceeding was considered and supported in the court below. No authority was cited below, but the counsel for appellees now rely upon the case of Quimyer v. Bierra, 8 R. R. 204, as conclusive upon the point. The opinion in that case certainly supports the position assumed by the appelles; but it is obvious that the question was not before the court. The suit was brought by an old creditor, not to compel a new cession, but to obtain judgment and execution for his debts. It Was instituted in a court having no jurisdiction over the subject of cessions or surrenders either voluntary or forced.
    The right to sue for a cession is a distinct right from that of suing for the debt. The creditor had the former, but not the latter, right. If the law had given him the right of sumg for his debt, then his suit was well brought and would have been maintained. But not having that right, he had mistaken his j.p^gjiy^ pie asked a relief which the law did not give him, and if he had sought that which the law did confer, he would have been compelled to resort to another court. Whether the proceedings were properly a continuation of the former cession, was evidently not a question at all before the co-urt. That the opinion pronounced on this point was without either examination or reflection will appear by its perusal. We therefore consider the case as a mere obitur dictum, and not entitled to the weight of an authority.
    The first case which bears on the subject in our reports is that of Fitzgerald v. Philips. 3 M. R. 589. in which the court quotes from the Partidas, and from the Code of 1808. The Partidas declare, that the debtor who had made a cession could not be sued by his creditors, unless he should have made such gains as to be able to pay all his debts, or a part of them; while by the Code of 1808 it was declared that the debtor was obliged to surrender whatever property lie may afterwards acquire.
    The form of the proceeding, however, was not determined; and the court say they had not found it in the books, and proceed to say : “ But it is obvious, that with the exception of the arrest of tho debtor, the same steps must be taken and the same remedy sought as where a forced surrender takes place for the first time.” If this be true, the only course would be by a new suit. It was suggested, that the syndic was the proper party to sue; but the court thought that having administered the estate his functions were at an end, and he could bring no new suit whatever ; it was therefore decided that the Partidas remained in force so far as to give each creditor the right to sue for his debt. The case was ended by a judgment for the debt. This case was several times before the court, and was elaborately argued. 3 M. R. 588. 4 M. R. 290, 559. The proceeding was begun and continued by the creditor as an ordinary suit.
    The act of 1817 and the New Code, article 2173, establish more explicitly the right of creditors, but again omit to provide any form for the proceeding. The creditor cannot, under the present law, sue for his debt, but only for a. new cession ; he can only maintain his suit where the debtor has acquired property over and above what is sufficient for his maintenance after paying his new debts.
    If the proceeding were intended to be a mere continuation of the cession, then it woulij seem that the right would have been given to the creditors generally, or to the syndic as their common representative. The law, however, seems to contemplate the entire close of the originafproceedings, which united the creditors as a mass, by giving to each the right of suit. The concurso being at an end there was no longer any common representative; and hence, each creditor was free to act, though the result inured to the common benefit. But this right the creditor could only exercise on due proof. He could force a new cession by showing the acquisition of better fortune; then the burthen of proof rested upon him, and without proof there could be no action of the court. This involves an issue and decree upon the fact. In this issue the defendant certainly has rights. What is the extent of his fortune ? what the amount of his debts ? and what sum is necessary for his maintenance 1 are questions of great importance, and which would be proper for the decision of a jury. The last, especially, a jury should be called upon to assess. The position in life of the debtor, the number of his family, etc., would be subjects more properly cognizable by a jury than a judge.
    It is a general rule, that whenever the law gives a right without prescribing a special form of remedy, the remedy can only be obtained by ordinary suit: by petition, citation, issue and trial. No special" remedy is prescribed in this case. This seems to be conclusive on the point; for all summary proceedings being exceptions, if the case does not fall within them it is necessarily governed by the general rule. But if the court, at the mere suggestion of a creditor, and without any proof whatever, can render an order to surrender, or show cause on a day fixed, then an exception to the usual form of proceeding is created, not recognised by law, and the debtor is deprived of the important right of trial by jury.
    We believe that the books do not afford an instance in which a new cession has ever been compelled by a mere rule. In Morgan v. Dalton, 3 L. R. 334, the debtor having come to better fortune before the administration of the first cession was complete, the court expresses the opinion that the syndic still representing the mass could act in the proceeding; but the form of action was that of an ordinary suit.
    
      In Beuvais v. Morgan, 2 L. R. 289, and Bernard v. Vignaud, 1 N. S. 10, it was ruled that the functions of the syndic ceased on the completion of his administration, and that after filing his final account he could bring no suit whatever. This is in accordance with the rule of Fitzgerald v. Philips, and leaves the remedy to the individual creditors. The original case is at an end. No cause remains in court in which a rule can be taken, and the jurisdiction of the court has actually ceased over the subject matter. Yet the right to enforce a new surrender exists. It follows that it must be done via ordinaria, for there is no suit pending to which it can be attached as an incident. We have seen by the case from 3 L. R. that even while the estate was in course of administration the syndic did not attempt to confound the new surrender with the old one, by taking a rule. The propriety of a rule in that case was doubtful, but it is clear that after the original proceedings are closed, rules are no longer appropriate remedies.
    In this case, the debtor has only removed to an adjoining parish; but if the rule be established, that such proceedings can be conducted by rule, and in continuance of the original proceedings, then a debtor who may have failed in Caddo parish and afterwards removed to New Orleans, might be forced to go to Caddo to defend a suit of this nature; and, as one suit could be brought after another, they would afford the means of perpetual vexation and annoyance. The debtor might be forever prevented from attaining better fortune by repeated and premature demands for a new cession.
    The view we have taken of this point is the only one consistent with the opinion of this court in the late ease of Plympton v. Preston. The point was not directly before the court, but an attempt had been made upon a mere suggestion of old creditors to sequester the new property of a debtor. The court considered the attempt inadmissible, and declared that the acquisition of a better fortune was a thing en pais, to be judicially ascertained before any order to make the cession could be obtained. This opinion evidently looks to a new suit as the only mode of ascertaining the faetón which the obligation to make a new cession depends.
    Another reason for new and distinct proceedings is, that the debtor himself is not a party to the concurso. He abandons his property, and obtains an order staying all proceedings against him. He then ceases to be a party, and the creditors administer and divide the estate. If a surplus remains ho comes in again to receive it, but until the creditors are paid he has no voice in the matter, and neither appears nor is he represented. To bring him in again by a rule is to make a new party, and rules are only taken against those already parties to suits.
    This mode of proceeding is another instance of the attempt to substitute rules for suits, which this court has so often denounced as calculated to throw the administration of justice into confusion. The plain and undoubted remedy is by suit. The preliminary issue to be tried is one of fact, on which either party should be permitted to call a jury. The debtor has then the common right of every other citizen of defending at his own domicil. If a surrender is decreed, then it will be made where the property lies, and where it may be disposed of to advantage. If he may be called out of his parish and forced to surrender there, in addition to the injustice to himself, the inconvenience of administration and the danger of sacrifice will both be increased.
   The judgment of the court was pronounced by

Eustis, C. J.

The appellees, creditors of Benjamin Florance, who had filed his bilan as an insolvent debtor in the late Commercial Court of New Orleans, in 1849, alleging that he had acquired sufficient property to authorize them in exacting a new surrender for the purpose of paying their several claims which had not been dischax-ged by the insolvent proceedings moved in the Coui't of the Fourth Disti-ict of New Ox-leans, which had succeeded to the commercial court, for an order directing him to make a new sun-ender.

A petition was filed making out a px-oper ease, and the ox-der of the court was, that the insolvent within ten days after notice of the petition and order-, malte a surrender of the property acquired by him since the date of his cession in 1840, or show cause why he should not do so. The insolvent to this px-oceeding filed two exceptions : one to the jurisdiction of the court, he being domiciliated and residing in the parish of Jefferson ; the other, that he was not bound to answer to the rule, the action to compel a new surrender being one which ought to be institued and conducted according to the usual forms of civil actions, by petition, citation, &c.

The exceptions were overruled; the district judge considering the proceedings of the appellees as a continuance of the former proceedings in insolvency, judgment was afterwards rendered decreeing a surrender of property, and the insolvent Florance has appealed.

The right of the creditor, whose debt has not been discharged under the insolvent acts, to compel a new cession of the property of his debtor, if the latter has acquired property over and above what is necessary for his maintenance, is given by the article 2173 of the Code, But on this fund the creditors since the cession have a preference over the old ones.

The practice in proceedings of this kind does not appear to have been uniform. Morgan v. Dalton, 3 L. R. 333. 8 R. R. 304. In the case of Plympton v. Preston, 4th Ann. 360, we had occasion to examine this subject, and we think it necessarily results, from what we held to be the law in that case, that the proceedings of the creditor in the exercise of this right to force a new surrender must be by action in the ordinary form. It is but proper and just that the defendant should have the privilege of meeting the issues of fact presented as in any other suit.

The question of domicil, in a case of this kind, also involves rights of the most serious kind. Men who have failed in remote parts of the State, and instituted their insolvent proceedings in the courts of their domicil, frequently remove and establish themselves in the city or some other part of the Stale. They form new establishments, and often retrieve their fortunes on the credit they obtain. The creditors since the surrender of property have a preference on their property newly acquired over their old ones. To subject the debtor and his new creditors to the exclusive jurisdiction of the courts in a distant parish, having original cognizance of the insolvent proceedings, and to transfer the debtor’s property there for administration and distribution, would be an abuse in the administration of justice.

¥e therefore think, the court erred in overruling the exceptions filed by the appellant. The judgment of the district court is therefore reversed, and the plaintiff’s petition dismissed, with costs in both courts.