The American JudiciaryBaldwin, Simeon E. (Simeon Eben)
History
The American Judiciary
Baldwin, Simeon E. (Simeon Eben)
Courts -- United States; Law -- United States -- History
Every bankruptcy or insolvency proceeding is a great lawsuit.
The discharge is the final judgment in it. It can bind none who
are not parties to the action. Only those are parties who were
bound to appear, or who did appear. No one belonging to any
other State or country can be bound to appear, unless in the rare
case of a personal service of proper process upon him, made while
he was within the territorial jurisdiction. Any creditor,
wherever he may reside, who files a claim against the insolvent
estate, or receives a dividend from it, makes himself a voluntary
party. But as against a non-resident who keeps aloof and takes
no part in the proceedings the discharge is worthless, even in
the courts of the very State by authority of which it was
granted.
On the other hand, the creditor gets less aid from the State
courts than a trustee in bankruptcy. The trustee in bankruptcy
can sue in any court in the country in which the debtor could
have sued for the same cause of action. The trustee or assignee
in insolvency, acting under the appointment of a State court, can
only sue within that State, unless his title has been fortified
by a conveyance from the insolvent which would be good at common
law. So far as his title rests on a law, by which it was taken
away from the bankrupt and vested in him, it is ineffectual
wherever that law is ineffectual; and the law of no sovereign is
effectual of its own force outside of his territorial
jurisdiction.
*[Footnote: Booth _v._ Clark, 17 Howard's Reports, 322, 337;
Hale _v._ Allinson, 188 U. S. Reports, 56.]*
If, therefore, as is commonly true in estates of any magnitude,
part of the assets can only be recovered by suit in other States,
there must be ancillary insolvency proceedings there, to clothe
the principal assignee with the right of action. Should the
insolvent be the owner of land in another State, the title to
this can only be transferred in accordance with its law, and a
foreign assignment in insolvency will be wholly ineffectual. Nor
will ancillary proceedings in insolvency be allowed to prejudice
the rights of citizens of the State in which they are instituted
to any security which they might otherwise have for debts due
them from the insolvent.[Footnote: Ward _v._ Conn. Pipe
Mfg Co., 71 Conn., 345; 41 Atlantic Reporter, 1057; 42 Lawyers'
Reports Annotated, 706; 71 Am. State Reports, 207.] The right,
however, of every sovereignty to postpone claims under a foreign
bankruptcy or insolvency to the interests of its own people is
modified in the United States by the constitutional provision
that the citizens of each State are entitled to all privileges of
citizens in the other States.[Footnote: Blake _v._ McClung,
172 U. S. Reports, 239.]
* * * * *
CHAPTER XVII
CRIMINAL PROCEDURE
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