Court Opinion

ID: 5460024
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:32:44.758264+00
Date Added: 2024-06-11T08:32:50.377214
License: Public Domain

Bonnet,, J.
(Dissenting.) The question as to the admissibility of the exemplification of the proceedings in France in evidence before the trustees, has not been argued on this appeal, and the only question to be determined is, what creditors of Messrs. Bonaffe are entitled to dividends out of the estate in the hands of the trustees.
Our statute provides that in proceedings by attachment against non-resident debtors, the trustees, after paying costs of proceedings &c. shall distribute the residue of the moneys in their hands among all those who were creditors at the time of issuing the warrant of attachment, who have exhibited their claims and whose .debts shall have been ascertained. (R. S. part 2, ch. 5, title 1, art. 8, 5th ed. vol. 3, p. 120, § 38.) Ho creditor is preferred or excluded by reason of his residence in Hew York or elsewhere, or on account of the place where his claim or debt was contracted or made payable ; but all “ creditors,” within the most extended definition of the word, who were such when the warrant of attachment was issued, and have exhibited their claims, and whose debts have been ascertained, are entitled to participate. This was decided by this court in the matter of Coates and Hillard, (13 Barb. 452,) and that decision was affirmed by the court of appeals. It is not alleged or pretended that any of those who claim to be entitled to a dividend in this matter, were not creditors of Messrs. Bonaffe at the time when this attachment was issued, or that their debts have been assigned or paid wholly or in part, or been in any manner discharged, barred or affected, except by or under the concordat and other proceedings in France, or the payments there made; and consequently the sole question to be determined is as to *484the effect of that concordat and proceedings, and of the payments made in France upon such debts respectively.
The law of France applicable to this question (code de commerce) provides (art. 438) that every person -failing shall, within three days, make report thereof to the tribunal of commerce, and (art. 439) attach thereto a statement of his affairs containing a schedule of his property and liabilities. Thereupon (art. 440) the failure is declared by judgment of the tribunal, which judgment, (art. 443) from its date, divests the failed person of all his property and prevents the prosecution of any action against him, or any execution against his personal or real property; such judgment (art. 444) renders demandable, in respect of the failed person, his liabilities not yet due ; and also (art. 446) renders void many specified acts done by the'failed person, within ten days preceding the date of the failure, or since that date. Such judgment (art. 451) designates a member of the court as judge commissary, who (art. 456) is specially charged with the administration of the failure, and required to report to the tribunal all contestations to which it gives rise. Such judgment (articles 455, 458) also orders all property of the debtor to be sealed up and his person to be incarcerated or kept in the manner designated; and (art. 462) appoints one or more provisional syndics. The judge commissary immediately calls a meeting of supposed creditors to be held within a certain period, not exceeding a fortnight, at which he consults the creditors present, in relation to the formation of the list of presumed creditors, and the nomination of new syndics, and then reports the proceedings to the tribunal, which thereupon names definitive syndics, who (articles 471, 474,484; &c.) take the management of the estate of the failed person, collect debts and sell property &c. under the supervision of the judge commissary, and (art. 489) pay aE proceeds over to the treasury of deposits and assignments. Immediately after definitive syndics are appointed, (art. 492) notice is given by publication, and by letter of the clerk of the tribunal, to all creditors to appear and present their claims *485within twenty days from the date of the first publication; all creditors residing in France are allowed certain additional days, according to the distance of their residence from the place where the proceedings are had, and those out of France additional time, from two months to one year; and (articles 493, 494) times are appointed for verification of debts, which may be contested by other creditors, or by the debtor. And (art. 497) those debts which are admitted, are so marked by the syndics, and certified by the judge commissary; and for eight days after such verification any creditor maybe held to vouch his debt. After the expiration of the delays required as regards persons domiciled in France, (art. 502) the formation of the concordat and the operations of the failure are proceeded with, subject to certain exceptions in favor of creditors domiciled out of continental France.
In three days after the last mentioned delays (articles 504, 505) a meeting is convoked by notice of ah creditors whose claims have been admitted, for the purpose of deliberating on the formation of a concordat, at which meeting the judge commissary must preside, and the debtor is required to attend.
The concordat (agreement, art. 507) can be established only by the concurrence of a majority of the creditors representing at least three-fourths of the total amount of debts admitted; and (art. 509) must be signed while'the meeting is in session; and (art. 512) within the week following the concordat, all creditors who have had the right to concur therein, or whose right shall have been afterwards acknowledged, may present objections thereto, which shall be heard before the tribunal.
The confirmation of the concordat (art. 513) must be moved before the tribunal, but cannot be decided before the expiration of the above mentioned delay of eight days, and (art. 514) before the homologation (allowance or confirmation) of the concordat, the judge commissary must make before the tribunal a report on the general character of the failure, and on the admissibility of the concordat.
*486Art. 516. “ The homologation of the concordat will render it obligatory on-all the creditors, named or not named, in the balance sheet, verified or not verified, and even upon the creditors domiciled out of the continental territory of France, as well as upon those who, in virtue of articles 499 and 500, have been admitted provisionally to deliberate— whatever may be the amount that the definitive judgment may finally allow to them.”
As soon as judgment of homologation becomes definitive (art. 579) the functions of the syndics and of the judge commissary (after he has made his report) cease. And the syndics account with the failed person and deliver to him all the assets.
The proceedings in this ease, of Messrs. Bonaffe, appear to have been conducted in conformity with the provisions of said code. On 12th May, 1848,- a meeting was held pursuant to notice, at which the judge commissary presided, and the debtors, and 52 (being a majority) of their creditors, representing three-fourths in amount of all the debts stated in the proceedings, then appeared, and also the definitive syndics (or assignees) who made a report of the condition of the estate, and proceedings had. Whereupon Auguste Bonaffe, on behalf of himself and Edward Bonaffe, made to the creditors the proposition to be entirely acquitted and discharged towards them by making surrender to them of all their assets, as well in the states of America, the United States and Mississippi, as in France, its colonies and elsewhere, to be sold and liquidated, reserving only their movable furniture— and the furniture of their counting house—which proposition the 52 creditors accepted. And then thejudge referee, considering that all things Were correct and as required by the code, and that there was no objection to the composition, drew up the agreement of the parties (concordat) to this effect:
First. The debtors surrender to their creditors all their assets, every where, to be sold and liquidated under super*487vision; reserving only their movable furniture and household furniture.
Second. The liquidation shall be made by Auguste Bonaffe, appointed liquidator, with ample powers to do all things necessary for collecting the assets and converting them.
Third. The expenses of the proceedings and the debts entitled to preference shall be deducted, and the balance of the assets distributed to the creditors pro rata.
Fourth. The concordat, when confirmed, shall be made known to the syndics (assignees) who shall give up their accounts to the debtors (failing parties) and they (the debtors) shall be free in their persons and their property; and consequently all seals and executions on the things belonging to them, and the inscription in the mortgage office, are unconditionally withdrawn.
This concordat was then signed by all the parties, and, being properly reported, on 23d May, 1848, the tribunal of commerce authorized it to be executed according to its form and tenor; and declared the said composition to become obligatory on all the creditors, subscribers or non-subscribers, credited and not credited, entered and not entered, on the balance sheet.
The balance sheet of debts admitted show;
Debts entitled to preference, . . F, 330,887 10 u by specialty, ...... 2,244,984 40
Francs 2,375,871 50
Among which does not appear the name of Claudius Dord.
What then is the effect of this concordat, thus made, pursuant to the French code, and by 'judgment of the tribunal of commerce, authorized (confirmed) and declared to be obligatory on all the creditors ?
The whole proceedings, from their inception to their conclusion, are strictly regulated by the code de commerce, and if not conducted in pursuance of such regulations are absolutely void. The terms of the concordat at first agreed upon *488at a meeting at which are present the “ failed persons,” the requisite proportion in number and amount of their creditors, the judge commissary having charge'of the proceedings, and the definitive syndics. having the custody and charge of their property, are reported to, and made a judgment of the court (tribunal of commerce) having jurisdiction; and that concordat so made a judgment pursuant to said code, amounts, as I understand it, to this: That the whole estate of.the “ failed persons,” (except their furniture) is surrendered by (transferred from) them for the benefit of their creditors, to the liquidator (assignee) designated in the concordat, to collect, realize and distribute the same; and, thereupon said “ failed persons are entirely acquitted and discharged” towards their creditors—that is, are absolutely discharged from their debts. This was the proposition made by the “ failed persons” and accepted by the creditors, and by the concordat and judgment of the court, as I understand them, carried into effect.
It is true that before the concordat was made, an attachment had been issued in this state, pursuant to our law, and the property of the failed persons within this jurisdiction was held thereby, so that said liquidator cannot probably obtain the same, or the proceeds thereof, for distribution among the creditors under the proceedings in France ; but that fact (in my opinion) did not affect the surrender made as aforesaid or the discharge granted thereupon, both of which became absolute on the entering of the judgment confirming the concordat and declaring its obligation.
As I view these proceedings under the law of France, and the concordat thus made and established by the judgment of the proper court, they are essentially and in effect the same as proceedings in bankruptcy taken, and a discharge granted under the bankrupt law of England. The ultimate result of the proceedings under French law, as well as under English law, is the surrender of all property of the failed person or bankrupt, so far as he has any power over it, and *489his absolute discharge from all claims of creditors who are parties to the proceedings, or subject to the law of the country in which such proceedings are taken.
These further questions then arise t What creditors of Messrs. Bonaffe are bound by their discharge under said proceedings in France ? And, what is the effect of that discharge upon the rights of such creditors to receive a dividend out of the proceeds of the property attached in this state, and to be distributed by these trustees ?
In the matter of Coates & Hillard, above referred to, it was declared by the court of appeals, (as I understand that decision,) that all debts which Coates & Hillard owed to persons against whom their discharge in bankruptcy, under the laws of England, was effectual, were thereby absolutely discharged, and such persons were no longer creditors of said banhrupts, and consequently could have no claim to receive a dividend out of the proceeds of their property attached in this state; and that decision, in my opinion, applies directly to this case.
It is clear then that all creditors of Messrs. Bonaffe, who became parties to the proceedings in France, and signed said concordat, are bound thereby, and their debts are discharged.
It must also be held, on well settled principles, that all creditors residing in France, and having debts contracted in France, are bound by proceedings had under and pursuant to the laws of France, and their debts must be considered barred or discharged by this concordat and judgment. (Smith v. Buchanan, 1 East, 6.) And also that all creditors, wherever residents or wherever their debts were contracted, who since the making and confirmation of this concordat have voluntarily come in and received a dividend under it, have become bound and their debts barred or discharged thereby. (Tindal v. Hibbard, 40 Eng. L. and Eq. Rep. 268. Watkinson v. Inglesby, 5 John. 386. Clay v. Smith, 3 Peters, 411.)
In my opinion, also, those creditors residing out of France, whose debts were contracted in France, and there payable, *490are bound by the discharge of the debtors under French law. But creditors resident out of France and having debts contracted out of France, whether payable in France or elsewhere, in my opinion are not bound by the discharge of these debtors, by reason of the concordat and judgment to which such creditors have not become parties nor assenting; and any creditor who has sent his claim to an agent in France for collection only, will not, I think, be prejudiced by reason of his agent having, without authority except to collect only, received a dividend under the proceedings in France, and remitted the samé to his principal here, who has received such remittance and retained it without notice or knowledge that it was paid by the liquidator under this concordat. (Donnolly v. Corbett, 3 Seld. 500. See Story’s Confl. of Laws, § 337; Tappan v. Poor, 15 Mass. R. 419; Cook v. Moffat, 5 How. U. S. Rep. 295, 314.) The debt held by this petitioner is one of the last mentioned class, and is not bound by the concordat and judgment, and he may claim a dividend from the trustees, and may contest the validity of the other debts on which a dividend is also .claimed.
[New York General Term,
November 5, 1860.
Sutherland, Allen, and Bonney, Justices.]
In my opinion the order made at special term should be reversed, and an order be entered directing the application of the funds in the hands of the trustees, pursuant to the conclusions above stated.
Order appealed from affirmed, with costs.