Foucher v. His Creditors

Bullard, J., delivered the opinion of the court. In this case it appears, that the plaintiff Foucher, had, through the agency of an attorney in fact, offered to make a cession of his property, for the benefit of his creditors, and that the judge of the District Court accepted the surrender, ordered a meeting of the creditors, and a stay of all proceedings against the property onty. Certain creditors came forward, and moved the court to set aside the order, accepting the surrender, and for a meeting of creditors, on the following grounds: 1. That the petition and schedule are not sworn to. 2. That the petitioner had absconded, before the granting of said order. 3. That the petitioner is a fraudulent debtor. 4. That the property left by said insolvent, will not be sufficient to pay one-third of his debts. 6. That a cession of property cannot be made by an attorney in fact. The District court maintained its first order, and the opposing creditors appealed. The act of 1817, relative to the voluntary surrender of property, requires that the debtor, who wishes to avail himself of its benefit, should present his petition, and annex to it a statement of his affairs, and the losses he has sustained, the names of his creditors, and a statement of all his property. [430] This schedule must be signed by the debtor, if he can write, an(j SWOrn to or affirmed. The fifth section gives the form of the oath to be taken : among other things, he is required to swear, that “ he has neither directly nor indirectly, diverted any of his property, to the injury of his creditors.” By the act supplementary to that above mentioned, approved March 29th, 1826, the judge, to whom such petition has been presented, in the mode and form required by the original act, is authorised to accept the cession of property. An absconding apply for^the solvent kw^and make a surrenperty! by aiwtótm-ney m fact. swear by proxy, authorisec?1 °S by torney’’'in^fact cannot swear,. thf ’insolvent’s Seenedivertedhto the injury of the creditors, which is essential in the affidavit. . , . The judge is not authorised to proceedingsf either against the person or property, of an insolvent debtor; and to accept the bindaiíiheerí ditors, without a r$Hf the ’vUh^thedess°Ktial forms of law. It appears to us clear, that unless the debtor complies with MI the preliminary formalities required by these statutes, the without authority, either to order proceedings to be stayed, or to accept the surrender. No man can swear by proxy, unless expressly authorised by law, and even if he cou;m an essential part of the affidavit has been omitted, to wit, that no part of the property of the debtor, has been diverted to the injury of his creditors. An absconding debtor iglM> without much violence, be presumed to have carried 0ff g0me means with him. Whether he absconded to avoid the payment of his debts, or the punishment demanded I>y law for his crimes, is not material. But it is said, that although Foucher may not be entitled , , , J , , to his discharge, under the insolvent laws, yet he may make a gurren¿er to his creditors, for their common benefit, by his attorney in fact; he may surrender to them their common pledge, and that they may go on and administer it. This may be true, if the creditors all consent. But this opposition shows the dissent of a part of them : and the question is, has 1 7 . 1 7 the district judge a right, under such circumstances, to accept the surrender for all the creditors, and to restrain them in the prosecution of the claims against the common debtor ? We r ° are of opinion, that the judge had not authority to order t 5 ,. ../ ° . , J a stay of proceedings, either against the person or property, an(I t° accept the cession, so as to bind all the.creditors, without a compliance on the part of the insolvent, with the essential forms of law. It is true, the property of the debtor Is common pledge of his creditors, but it does not follow that one creditor has a right to interfere in all cases, in the [431] pursuit of another, to be paid out of the common fund. The law favors the vigilant, by giving to recorded judgments the rank of mortgage; and one creditor could not restrain another from proceeding to judgment, against their common debtor, under the pretext, that he would thereby obtain a preference. _A person’s owning a saw-miil and brick-yard, as an appendage to a sugar plantation, and selling the bricks and plank, does not constitute him a trader, within the meaning of the 6th section of the act of 1826, relating to forced surrenders of property. The opposing creditors further asked from the court of the first instance, a sequestration of the property of Foucher, as an absconding merchant or trader, under the sixth section of the above mentioned act, of 1826. This was refused, on the ground, that the absconding debtor is not a merchant or trader. The correctness of this judgment, is also contested on the appeal. In the year 1823, the legislature abolished the forced surrender, as it existed by the Spanish law, and restricted the right of compelling a surrender, to cases when the debtor should be in actual custody. The act of 1826, reinstated it only in relation to merchants or traders, who should abscond or conceal themselves, in order to avoid the payment of their debts. The principal question is one of fact, is Foucher a merchant or trader, according to the true intent and meaning of the statute? The statement of facts shows, that he has a plantation at a small distance above the city of New-Orleans, where he resided; that he has thereon a sugar-mill, a great quantity of cane, and also a steam saw-mill, a water saw-mill, and a brick-yard; the sugar, lumber, and brick were sold, either on the plantation, or in the city; and that he bought rafts for said saw-mills. It is extremely questionable, whether even under the bankrupt laws of England, Foucher would be considered as a trader, within the statutes. One authority says, “a man’s buying and selling, brings him not within the statutes, for they intend, such as gain the greatest part of their living thereby.” Bacon’s Abr. verbo Bankrupt. No very precise rule, has been laid down in England. But in this state, we are to take words in their usual sense. It seems to us, that having a saw-mill and brick-yard, as an appendage to a sugar plantation, and selling the brick or plank, does not [432] constitute the proprietor a trader. No man perhaps ever imagi^ed, before the absconding of Foucher, that he was a merchant or trader ; and if we make one of him now, it can be done only by implication. It is impossible to say where we are to stop, if we once deviate from the broad distinction, obvious to common sense, between a planter, who profits by the labor of his slaves, and his own industry, partly in raising crops, and partly in some mechanical or manufacturing branch of industry, and the merchant or trader, who lives by buying, and selling for a gain. In the first case, it is principally labor, which affords the profit; in the second, it is capital invested and kept in circulation, without adding any value to the articles bought and sold. We think the judge did not err, in refusing the sequestration. But it is said, if neither of these modes of proceeding is sanctioned by law, the parties are without remedy, and the property will be wasted by protracted litigation, among the creditors, and unequally distributed. We cannot help that. It is not our business to legislate, nor to remedy defective enactments of the legislature. Our judgments ought to form rather the development, than the supplement of legislation. It is, therefore, ordered, adjudged and decreed, that the judgment of the District Court, be reversed, so far as relates to the original order, and that the order of the court, accepting the surrender, and directing a stay of proceedings and a meeting of the creditors, be rescinded and annulled, and that the appellee pay the costs of both courts.