A commission of bankruptcy issued in America preferable to an arrestment used in this country subsequent to no date, though prior to the date of the assignment.
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William Maitland and became a creditor of James Maitland, merchant in New-York, in the sum of 1140 dollars, with interest from 16th December 1798, conform to a bond and obligation executed in his favour on 30th December 1798. James had property to a considerable amount in this country; and in order to recover payment, William raised an action before this Court, and used arrestments (24th February 1802) on the dependence, in the hands of one of James's debtors. Of this debt he (23d June) obtained decree, and then raised a process of forthcoming against the common debtor.
James's affairs in America having become deranged, a commission of bankruptcy was issued against him (2d February 1802.) On the 5th, he was declared a bankrupt; and on the 2d March, an assignment under the commission of bankruptcy was executed in favour of Martin Hoffman, who claimed right to all James's effects, in virtue of this title.
In consequence of this competition a multiplepoinding was raised, in which (29th November 1803) the Lord Ordinary preferred “Martin Hoffman assignee to the effects and estate of James Maitland, primo loco, upon the fund in medio.
William Maitland reclaimed, and
Pleaded: Whatever judicial powers of management may be committed to persons acting under a commission of bankruptcy, the debtor himself is held to be in no respect denuded of his property, by the issuing of a commission to ascertain his bankruptcy, nor previous to the deed of assignment being executed. All that precedes the completion of this deed, is a mere lien imposed by law on whatever property of the debtor may be within the jurisdiction of the court from which the commission is issued; Jacob's Law Dictionary, voce Bankrupt; Blackstone's Commentary, B. 2. C. 31. § 4. An assignment which divests the debtor of his whole property, ought to have effect given to it in every Country, so far as regards moveables, which are supposed to have no sinus, but follow the person of the proprietor: Strother, 1st July 1803, Appendix, Part I. voce Foreign. But although the issuing of a commission may impose a lien upon property within the jurisdiction where it is issued, it cannot be extended to impose a lien upon property not within its jurisdiction, the distribution of which must be regulated according to the legal diligence which has attached it previous to the divestment of the debtor by the assignment.
Answered: An assignee under the commission of bankruptcy, must be preferable to an arrester using his diligence subsequent to the date of issuing the commission; for the assignment, whatever be it date, operates retro, and vests the assignee with all the effects of the bankrupt from the date of the commission; Blackstone, B. 2. C. 31. § 4. The bankrupt is completely divested by the commission; so much so, that it is the commissioner, and not the bankrupt, who grants the assignment. In the case of bankruptcy, as in the case of death, the law of the domicil must regulate the distribution of the effects belonging to the bankrupt; and a commission of bankruptcy awarded in England or America must have the same effect in regard to moveables situated in Scotland, that that it has in regard to moveables situated in England or America; and as in both these countries it is undeniable, that from the date of the commission, the whole property of the bankrupt is legally vested in the assignees, the competing diligence used subsequently cannot interfere with this transfer. The regulations of every civilized country, in which the bankrupt-law is reduced to a system, are to be received in this country, and regulate the distribution of moveable effects belonging to a foreign debtor.
The Court adhered.
Upon the same day, the Court decided a similar question, Morisons against Isaac Watt, which was the case of an English commission of bankruptcy, Which was held to exclude an arrestment used in the country subsequent to its date, but prior to the date of the assignment.
Lord Ordinary, Cullen.Act. Boswell.Agent, R. Rankine.Alt. Gillies.Agent, J. Taylor, W. S.
Fac. Coll. No. 276. p. 622.
