Difference between revisions of "Devisme v. Martin"

Latest revision as of 14:16, 29 March 2022

First page of the opinion Devisme v. Martin, in Decisions of Cases in Virginia by the High Court of Chancery, with Remarks upon Decrees by the Court of Appeals, Reversing Some of Those Decisions, by George Wythe. 2nd ed. (Richmond: J. W. Randolph, 1852).

Background

British merchants Henry Martin and Co. declared bankruptcy in England. Two of the people Martin owed money to were English merchants Philip Nathaniel Devisme and Henry Smith, but the British bankruptcy court did not assign any of Martin's assets to Devisme or Smith. Devisme and Smith filed a bill with the Virginia High Court of Chancery to collect money that Virginia citizens owed Martin.

The Court's Decision

The Chancery Court dismissed Devisme's and Smith's bill.

Wythe said that because Martin, Devisme, and Smith were all British citizens living in England, they were subject to English law.^[2] English law stated that if the bankruptcy court did not assign a bankrupt debtor's assets to a creditor, that creditor cannot try to get payment for its debt by suing the debtor or attempting to get hold of the debtor's assets that are now in other people's hands.

Wythe's Discussion

In a footnote, Wythe takes the opportunity, as he often did, to state his disagreement with English caselaw on a subject.

The subject of Wythe's ire in this case was a doctrine expressed by Lord Justice Loughborough in the case Sill v. Worswick,^[3] found in Henry Blackstone's Reports. Loughborough said that if a bankrupt English citizen has property outside of England, then the country where that property lies should uphold the assignees' title in that property over any other creditor - that is, if that country has any sense of justice. Loughborough cites the decision of Solomons v. Ross^[4] to support this idea.

In Solomons, a Dutch court declared Dutch merchants Deneusvilles bankrupt. At the time of the bankruptcy, Deneusvilles owed £3000 to English merchant Ross. Ross filed suit in the London Mayor's Court and sued English merchant Michael Solomons for £1200 that Michael owed to Deneusvilles. The Mayor's Court found for Ross, and Michael posted a note for the £1200 to Ross. After that decision, Israel Solomons, who was the English agent for the Dutch trustees in charge of Deneusvilles' bankruptcy estate, filed a bill with the English chancery court asking Michael to turn that same £1200 over to Israel for the bankruptcy trustees' use. The chancery court ordered Michael to cancel his note to Ross and instead pay £1200 to Israel for the bankruptcy trustees' use.

Wythe noted that the Solomons case did not state the court's reason for its decision, but he took an educated guess based on Loughborough's opinion in Sill v. Worswick. Loughborough stated that in any country in the world "where law has the semblance of science", the citizenship of the owner, not the location of the property, decides which law governs how personal property is distributed. Therefore, Wythe assumed that Dutch law transfers a bankrupt person's property to trustees so that those trustees could distribute it among the Deneusvilles' creditors. Following Loughborough's principle, the assignment of the Deneusvilles' property thus also included any money due the Deneusvilles in England.

Wythe found Loughborough's statement ambiguous and in need of qualifications.^[5] Wythe agreed that the law of the bankrupt person's country of citizenship should apply against other citizens of that country, but did not think that the laws of the bankrupt person's home nation should apply against citizens of different countries.

Thus, Wythe disagreed with the outcome in Solomons, and proceeded to lay out the reasons why:

• Ross, as an English subject, was not subject to Dutch law;
• A creditor has a right to a portion of the bankrupt person's estate equal to the debt that bankrupt person owed, or a percentage of that amount if there is not enough money in the estate to cover all creditors. Wythe noted that both English and Dutch law recognize this principle, since they both assign all the bankrupt person's property to supervisors to distribute among the bankrupt person's creditors;
• If Ross was not subject to Dutch law, then Dutch law cannot deprive him of his right to get what he is due;
• Ross's right to get the money due him was governed by English law, since Ross was an English citizen. Wythe could not find a reason why Dutch law would have priority over English law in an English court on this issue.

Wythe said that the best way to deal with a situation such as that in Solomons would be for all of the people who were assigned the bankrupt person's property place that property into a common fund and have the English court assign a supervisor for that fund to properly distribute it to all the creditors in all the countries.

Wythe also hypothesized that a British subject not living in Great Britain might be able to recover debts the bankrupt person owed him by suing the bankrupt person in the court where the property is located. In such a case, the English subject is not represented by British Parliament and should not be bound by British laws.^[6] Furthermore, a British citizen living abroad might not get notice of a debtor's bankruptcy until after the bankrupt debtor's property had already been distributed among the creditors living in England.

Works Cited or Referenced by Wythe

Henry Blackstone's Reports of Cases Argued and Determined in the Courts of Common Pleas and Exchequer Chamber

In footnote (a), Wythe comments upon the words of Lord Loughborough:

If the bankrupt happen to have property which lies out of the jurisdiction of the law of England, if the country, in which it lies, procede according to the principles of well regulated justice, there is no doubt but it will give effect to the title of assignees. by Loughborough, H. Blackstone, reports, p. 691. this position is too general, and is not sufficiently qualified by what follows it in p. 693.^[7]

He then includes Blackstone's summary of the case Solomons v. Ross:

'Solomons vs. Ross, in canc. 26 january, 1764, before mr. justice Bathurst, who sat for lord chancellor Northington. messieurs Deneusvilles, merchants and partners at Amsterdam, corresponded with Michael Solomons and Hugh Ross, merchants in London. on the 18 day of december, 1759, the Deneusvilles stoped payment. on the 1 day of january, 1760, the chamber of desolate estates in Amsterdam took cognizance thereof, and on the next day, they were declared bankrupts, and curators or assignees appointed of their estates and effects. on the 20 day of december, 1759, Ross, who, was a creditor of the bankrupts to the amount of near 3000 pounds, made an affidavit of his debt in the mayors court of London, and attached their moneys in the hands of Michael Solomons, who was their debiter to the amount of 1200 pounds. on the 8 day of march, 1760, Ross obtained judgement, by default, on the attachment, and thereupon a writ of execution was issued against Michael Solomons, who was taken into execution, but being unable to pay the 1200 pounds, gave Ross his note payable in a month; on which Ross caused satisfaction to be entered on the records of the judgement. a few days after, one Israel Solomons, who had power of attorney from the curators to act for them in England, filed a bill, making himself and the curators plaintiffs, praying that the defendant Michael Solomons might account with them for the effects of the bankrupts, which were in his hands, might pay and deliver the same over to Israel Solomons for the use of the curators, and be restrained from paying or delivering them over to Ross. Michael Solomons then filed a bill, by way of interpleader, praying an injunction, and that he might be at liberty to bring the 1200 pounds into court. this money was accordingly paid into the bank, in the name of the accountant general, persuant to an order in the court. The decree directed, inter alia, 'that the stock purchased with the money paid into the bank should be transfered to Israel Solomons, for the benefit of the creditors of the bankrupts, and that Ross should deliver up the note, given by Michael Solomons for 1200 pounds, to be canceled.' H. Blackstone, p. 131. in the notes.^[8]

Finally, in detailing his disapproval of the decision in Solomons v. Ross, Wythe again quotes Loughborough:

It is a clear proposition, said Loughborough, H. Blackstone, p.690, not only of the law of England but of every country in the world, where law has the semblance of science, that personal property has no locality. The meaning of that is, not that personal property has no visible locality but, that it is subject to that law which governs the owner. ^[9]

John Horne Tooke's Epea Pteroenta, or The Diversions of Purley

In his dialogue "Of the Noun," Horne Tooke writes "Reason is an arrant despot; who, in his own dominions, admits of no authority but his own."^[10] Wythe alludes to this passage as a defense for his presumption in disagreeing with a decision from the British Court of Common Pleas:

The writer of these notes, differing in this point with three capital english judges, is aware, that he will be regarded with a fastidious eye by men, whose veneration for the westmonasterian oracles is equal to the veneration of the antients for the dodonaean and delphic oracles; but, when he has reason, the only despot,* to which he professeth unconditional submission, on his side, he will venture to differ with any man. *John Horne Tooke^[11]

References

1. ↑ George Wythe, Decisions of Cases in Virginia by the High Court of Chancery with Remarks upon Decrees by the Court of Appeals, Reversing Some of Those Decisions, 2nd ed., ed. B.B. Minor (Richmond: J.W. Randolph, 1852): 298.
2. ↑ Wythe cites Page v. Pendleton for this idea.
3. ↑ 126 Eng. Rep. 379, 393; 1 H. Bl. 665, 691 (1791).
4. ↑ Wythe said that Loughborough's summary of Solomons did not support Loughborough's statement, so Wythe referred to a more detailed description of that case from Folliott v. Ogden, 126 Eng. Rep. 75, 79; 1 H. Bl. 123, 131, note b (1789). As it turns out, Folliott was also in Henry Blackstone's Reports.
5. ↑ Wythe (perhaps mockingly) acknowledged that his opinion would not be popular with people "whose veneration for the westmonasterian oracles is equal to the veneration of the antients for the dodonaean and delphic oracles". Wythe 300.
6. ↑ Wythe admitted that English and colonial-era American courts held otherwise, but that did not seem to matter much to him.
7. ↑ Wythe 299.
8. ↑ Wythe 300.
9. ↑ Ibid.
10. ↑ John Horne Tooke, Epea Pteroenta, or, The Diversions of Purley (London: Printed for J. Johnson, 1786), 75.
11. ↑ Wythe 300.