In Louisiana, on the death of one of several members of a firm,
the survivors may surrender their own undivided interests in the
assets of the firm for the benefit of the creditors of the firm,
but cannot surrender the interest of the deceased partner for that
purpose; but, when such surviving members make such a surrender,
purporting to include both their own interests therein and the
interest of the deceased partner, and it is accepted by the court
and acted upon in the manner provided by the law of the state, the
action of the court therein is a judicial act, which cannot be
attacked collaterally by an attaching creditor of the firm,
interested in setting aside the proceedings for the purpose of
retaining the lien of his attachment.
The insolvent laws of Louisiana were in force before and when
the uniform Bankrupt Act of 1867 was enacted by Congress, and
revived when that act was repealed.
A state insolvent statute, passed at a time when an act of
Congress establishing a uniform system of bankruptcy is in force,
is inoperative, so far as in conflict with that act while the act
is in force, but on its repeal, the state statute becomes
operative.
The plaintiff in error brought this suit on August 18, 1884, on
certain bills of exchange drawn by the firm of A. Carriers &
Sons, on which he alleged there was due him the sum of $12,437. His
petition stated that A. Carriers & Sons was a commercial firm
lately doing business in New Orleans, composed of Antoine Carriers,
Emile L. Carriers, and Charles J. Carriers; that Antoine Carriers
had departed this life on June
Page 117 U. S. 202
4, 1884, testate, and that Olivier Carriere and Emilie L.
Carriere had been appointed his executors. The petition alleged as
a ground for the issue of a writ of attachment that the defendants
had converted, or were about to convert, their property into money
or evidence of debt with intent to place it beyond the reach of
their creditors, and prayed that the writ might issue against the
property, goods, and effects of the firm of A. Carriere & Sons,
and of Emilie L. Carriere and Charles J. Carriere; that said firm
be cited, and the individual members thereof, Emilie L. and Charles
J., and Antoine Carriere, through his testamentary executors,
Olivier Carriere and Emilie L. Carriere, and, after due
proceedings, that judgment be rendered in favor of petitioner and
against A. Carriere & Sons, and change, "with lien and
privilege on the property attached."
In accordance with the prayer of the petition, a writ of
attachment was issued, and, as appears by the marshal's return, was
levied on certain property and effects already in his custody on
other writs of attachment. Afterwards one James M. Seixas filed his
intervention and opposition in the cause, in which he averred that
on July 18, 1884, the defendants, A. Carriere & Sons, made a
cession of all their property to their creditors, in the Civil
District Court of the Parish of Orleans, which was accepted by the
court for their creditors; that the petitioner was appointed by the
court, and on August 21, 1884, was elected by the creditors and
qualified as syndic of said insolvent estate, and as such had title
and right of possession to the goods seized by the marshal, and
that the property was not subject to attachment, and prayed that
the attachment might be dissolved. Olivier Carriere, as executor of
Antoine Carriere, joined in the petition and intervention of
Seixas, and prayed for the dissolution of the attachment.
Emilie L. and Charles J. Carriere filed for themselves
individually, and for the firm of A. Carriere & Sons, an answer
in which they averred that individually, and in behalf of A.
Carriere & Sons, they had, on July 18, 1884, in the Civil
District Court of the Parish of Orleans, surrendered all their
assets to their creditors, and the surrender had been accepted by
the
Page 117 U. S. 203
court and their creditors, and they prayed that the attachment
might be dissolved. The plaintiff filed an answer to the
intervention of Seixas, in which he denied that the latter was the
syndic of Carriere & Sons; averred that the property attached
was in the hands of the United States court, and that Seixas never
had any control over the same, and had no right to disturb the
possession of the United States court.
Upon the issues thus raised upon the original petition of the
plaintiff and the intervention of Seixas, the case was tried by a
jury, which returned a verdict for the plaintiff for $12,437.82,
and that the attachment be dissolved. It appeared from a bill of
exceptions taken upon the trial that evidence was given tending to
show that the firm of A. Carriere & Sons was composed of
Antoine Carriere, Emilie Carriere, and Charles J. Carriere; that
Antoine Carriere departed this life on the fourth day of June,
1884, and Olivier Carriere was appointed his testamentary executor,
and that Emilie L. and Charles J. Carriere, individually and as
surviving members of A. Carriere & Sons, took, on the 18th day
of July, 1884, the benefit of the insolvent law of Louisiana, and
filed schedules of their individual assets and liabilities and of
the assets and liabilities of the firm of A. Carriere & Sons;
that at the meeting of the creditors, J. M. Seixas was appointed
and qualified as the syndic of Emilie L. and Charles J. Carriere,
individually, and as surviving members of the firm of A. Carriere
& Sons; that their creditors refused them a discharge, either
individually or as surviving members of said firm; that said syndic
was appointed prior to the attachment in this case, and that the
attachment was levied subsequent to the refusal to discharge the
said Emilie L. and Charles J. Carriere; that the attachment was
levied on property already in the hands of the marshal by virtue of
attachments issued prior to the eighteenth of July, 1884, and that
said prior attachments were dissolved by the court on the day of
the trial. Thereupon the court charged the jury that
"the cession shown in this case is made by E. L. Carriere and
Chas. J. Carriere, individually and as surviving partners of A.
Carriere & Sons, and, by operation of law, carries into the
surrender all their individual
Page 117 U. S. 204
property and all the property of the firm, and that the effect
of the cession and proceedings thereunder was to stay and
practically dissolve all attachments then issued against the said
surrendering partners, and all property surrendered in the state
courts by direct operation of state laws, and in the national court
by force of § 933, Revised Statutes."
The plaintiff excepted to this charge. The court gave effect to
the verdict of the jury by rendering judgment in favor of the
plaintiff for $12,487.82, and dissolving his attachment. Thereupon
the plaintiff sued out the present writ of error to bring under
review that part of the judgment of the circuit court which
dissolved his attachment.
MR. JUSTICE WOODS delivered the opinion of the Court.
It is not disputed that if the insolvent law of Louisiana was a
valid law, and the surrender made by the surviving partners of the
dissolved firm of A. Carriere & Sons was a valid surrender of
the effects of the firm, the attachment of the plaintiff was
rightfully dissolved, for, under the law of Louisiana, the effect
of a cession of property by an insolvent person is to dissolve all
attachments which have not matured into judgments. Code of
Practice, 724;
Hanna v. His Creditors, 12 Martin 32;
Fisher v. Vose, 3 Rob. 457;
Collins v. Duffy, 7
La.Ann. 39. And by § 933 of the Revised Statutes of the United
States, an attachment of property upon process instituted in any
court of the United States is dissolved when any contingency occurs
by which, according to the law of the state where the court is
held, such attachment would be dissolved upon the process
instituted in the courts of said state. But the plaintiff insists
that the partnership of Carriere & Sons having been dissolved
on June 4, 1884, by the death of Antoine Carriere, the surviving
members of the firm had no
Page 117 U. S. 205
power to surrender the assets of the firm for the benefit of its
creditors, and the plaintiff's attachment of said assets was
therefore good.
We agree that the attempt of the surviving partners to surrender
the share of their deceased partner in the assets of the firm
dissolved by his death was not authorized by law unless by consent
of the heirs or for some other reason not disclosed by this record,
for, under the jurisprudence of Louisiana, upon the death of a
member of a partnership, the title to his interest in the
partnership effects descends to his heir, and does not vest in the
survivor. The law of Louisiana on this point is stated and
illustrated by the following decisions of the Supreme Court of that
state:
In the case of
Simmins v. Parker, 4 Martin N.S. 207,
the court said: "We think the power of the surviving partner to
alienate the property belonging to" the partnership "ceased with
the dissolution; that the heirs of the deceased" partner "became
joint owners of the common property, and that the utmost effect
that can be given to a transfer" by the surviving partner "is to
consider it as disposing of all the right which the vendor had in
the thing sold."
In
Shipman v. Hickman, 9 Rob. 149, it was held that
after the death of a member of a partnership, the partnership
property was owned in common by the representatives of the deceased
partner and the surviving partner, and that the interest of the
representatives of the deceased could not be disposed of or
alienated by the surviving partner.
So in
Notrebe v. McKinney, 6 Rob. 13, it was said:
"Our laws recognize no authority in a surviving partner. He
cannot administer the partnership effects until regularly
appointed; nor is he then surviving partner, but
administrator."
In
Norris v. Ogden, 11 Martin 453, the court held that
the heirs of a commercial partner have a right to participate with
the survivor in the liquidation until a partition. If a partner
sues for a partnership claim, the others may be made parties to
secure their rights.
"In commercial partnerships," say the court in
Flower
v.
Page 117 U. S. 206
O'Conner, 7 La. 194,
"the survivor, to receive the deceased partner's share, and hold
it subject to partnership debts, must apply to the probate court,
have the portion ascertained and valued, and give security."
In
Shipwith v. Lea, 16 La.Ann. 247, it was held that at
the death of a partner his interest in the firm is vested in his
heirs at law, and the surviving partner can only acquire that
interest by transfer or assignment from the heirs.
See also
Pickerell v. Fisk, 11 La.Ann. 277, and
McKowen v.
McGuire, 15 La.Ann. 637.
But while it must be conceded that the cession made by the
surviving members of the interest of Antoine Carriere, the deceased
partner, in the assets of the firm, was not authorized unless for
some reason appearing to the court but not shown by this record, we
are of opinion that the validity of the cession cannot be attacked
in this collateral way. The cession of the surviving partners
carried their own undivided interest in all the partnership
effects, and it purported to carry the interest of the deceased
partner. The surrender was accepted by the court, which, by the
appointment of a syndic, undertook the administration of all the
property of the late firm of A. Carriere & Sons. It is not
disputed that the court had jurisdiction over the subject matter
and the parties interested. It had jurisdiction, and it was its
duty to decide whether the cession of the effects of the
partnership was valid and effectual, and what property it conveyed.
The fact that the heirs of Antoine Carriere did not join in the
cession does not render the orders of the civil district court
void. The judgment of that court accepting the cession of the
property and appointing a syndic could only be reversed in a direct
proceeding. This is the well settled law of Louisiana. It has been
held by the supreme court of that state that the order of a court
accepting a cession of goods under the insolvent laws, and the
staying of proceedings, is a judgment which demands the exercise of
legal discrimination, and which, when granted, can be set aside
only by appeal or action in nullity.
State ex Rel. Boyd v.
Green, 34 La.Ann. 1027. So, in
Cloutier v. Lemee, 33
La.Ann. 305, the same court said: "The judgment of the civil
district court
Page 117 U. S. 207
accepting the cession of the property and appointing a syndic
cannot be collaterally attacked."
In
Nimick & Co. v. Ingram, 17 La.Ann. 85, the facts
were that Ingram had made in the Fifth District Court a surrender
of his property for the benefit of his creditors, among whom were
Nimick & Co. The court accepted the cession, and stayed all
proceedings against his person and property. After these events,
Nimick & Co. caused an execution to be issued on a judgment
which they had recovered against Ingram in the Fourth District
Court, and under it seized certain property which they charged was
the property of Ingram, and in his possession. Thereupon Ingram
took a rule upon Nimick & Co. in the Fifth District Court,
where the insolvency proceedings were pending, requiring them to
show cause why they should not respect the order of that court
suspending proceedings against him, and why all further action upon
the execution sued out by Nimick & Co. should not be stayed.
The rule was upon trial made absolute, and Nimick & Co.
appealed. In the supreme court they urged that by their diligence
and vigilance they had discovered the property seized by them which
had never been surrendered by the insolvent debtor, and, having
thus made it available, had the right to appropriate it to the
satisfaction of their claim. Upon the case thus stated, the court
said:
"However irregular the proceedings in insolvency may have been,
and however fraudulently the debtor may have acted, the plaintiffs
could not on that account disregard the decree of the court which
stayed all judicial proceedings against the insolvent and his
property. They were parties to the proceedings, and were bound to
respect them. . . . Any informality in the proceedings, when
questioned, must be by direct action. No creditor will be permitted
to disregard and treat as an absolute nullity a judgment accepting
a surrender made by his debtor and granting a stay of proceedings.
. . . The acceptance for the creditors by the court of the ceded
estate vests in them all the rights and property of the insolvent,
whether placed on the schedule or not, and the syndic may sue to
recover them. But any creditor may show, provided it be
contradictorily with the mass of the creditors or
Page 117 U. S. 208
their legal representatives, that any particular object or fund
is not embraced in the surrendered estate, but is subject
exclusively to his individual claim. And this is the remedy of the
plaintiffs, if they have any."
See also Hanney v. Healy, 14 La.Ann. 424.
This is in accord with the general rule that when property is in
the possession of one court for administration, it is not liable to
be seized by process from another.
Taylor v.
Carryl, 20 How. 583;
Freeman v.
Howe, 24 How. 450;
Buck v.
Colbath, 3 Wall. 334;
People's Bank v.
Calhoun, 102 U. S. 256;
Krippendorf v. Hyde, 110 U. S. 276.
If there was any defect or informality in the surrender, the
remedy of the plaintiff was first to apply to the court in which
the surrender was made, to set aside its order accepting the
surrender and appointing a syndic. The plaintiff could not seize
the property, the administration of which the civil district court
had accepted, as if no surrender thereof had been attempted.
Tyler v. Their Creditors, 9 Rob. 372;
Harris v.
Knox, 10 La. 229.
The property surrendered to and accepted by the civil district
court included the undivided shares therein of the surviving
partners. The cession of their shares was valid. Of this there can
be no question. This gave the syndic appointed by that court the
right to the possession of the whole. It was impossible for that
court to perform its duty in respect of the property surrendered if
its possession was disturbed. But the plaintiff, assuming the
session to be void
in toto and giving it no effect even as
to the shares of the surviving partners who made it, contends that
he can attach the entire interest of all the partners, and apply
all the proceeds of the property to the payment of his debt, to the
exclusion of other creditors. His attachment was made with this
purpose. It could not be effectual except by actual seizure and
detention of the property attached.
Nelson v. Simpson, 9
La.Ann. 311. In this case, the property was seized on the
attachment after the civil district court had accepted the
surrender of the entire assets of the dissolved partnership, and
after the property was constructively in its possession. We think
the writ was improvidently
Page 117 U. S. 209
issued, and the levy invalid and ineffectual, and the attachment
was properly dissolved, unless, as is next contended by the
plaintiff in error, the insolvent law of Louisiana is of no force
or effect.
This position is based on the assertion that the insolvent law
of Louisiana was passed while the general Bankrupt Act of the
United States was in force, and, as the provisions of the two acts
were inconsistent, the insolvent law was invalid and void. The
plaintiff in error concedes, as well as he may, that if the
insolvent law of Louisiana had been enacted before the passage of
the Bankrupt Act, it would have been valid, and that the effect of
the Bankrupt Act would have been to suspend it only while the
Bankrupt Act remained in force, and on its repeal the insolvent law
would have revived.
Ward v. Proctor, 7 Met. 318;
Lothrop v. Highland Foundry, 128 Mass. 120;
Orr v.
Lisso, 33 La.Ann. 476. But he asserts that the insolvent law
of Louisiana was passed while the Bankrupt Act of the United States
was in force, and was therefore invalid and void, and so continued
after the repeal of the Bankrupt Act. We do not agree with either
the premises or the conclusion. The Supreme Court of Louisiana, in
the case of
Orr v. Lisso, 33 La.Ann. 476, which was
decided in April, 1881, held "that the insolvent laws now in force
in this state were in existence in 1867 when Congress adopted a
uniform system of bankruptcy," and the court added:
"The operation and effect of those laws were suspended until
September 1, 1878, when the general bankrupt law was repealed. This
repeal vivified the state laws, in the meantime dormant."
A reference to the statutes of Louisiana shows that the
insolvent law was first enacted in 1817 (
see Acts of the
First Session of the Third Legislature of Louisiana, begun November
18, 1816, p. 126); it was carried into the Revision of 1855
(
see Revised Statutes of Louisiana, 1856, pp. 251-259),
and included in the Revision of 1870 (
see Revised Statutes
of 1870, p. 353), and still remains upon the statute book
(
see Voorhies' Revised Laws of Louisiana, 1884, pp.
279-288). The act, as it appears in the Revision of 1855, is
substantially the same as in Voorhies' Revised Laws of 1884. The
circumstance alleged by the plaintiff that in the
Page 117 U. S. 210
Revision of 1870 the insolvent law was formally reenacted is
entirely immaterial. If those laws had then been enacted for the
first time, they would, so far as inconsistent with the Bankrupt
Act, have been inoperative while that act remained in force, but
upon its repeal would have come into operation. The enactment of
the insolvent law during the life of the Bankrupt Act would have
been merely tantamount to a provision that the former should take
effect on the repeal of the latter. It follows that, since the
repeal of the Bankrupt Act, all the provisions of the insolvent law
of Louisiana have been valid and operative.
Although, as appears from what we have said, the charge of the
court did not accurately state the effect of the cession by the
surviving partners of the assets of the dissolved firm of A.
Carriere & Sons, yet it is clear that, upon the law and the
facts, the verdict of the jury was right. The error of the court
therefore works the plaintiff no injury, and does not require a
reversal of the judgment dissolving the attachment.
Brobst v.
Brock, 10 Wall. 519;
Phillips Construction Co.
v. Seymour, 91 U. S. 646.
Judgment affirmed.
