Argument for Plaintiffs in Error.

We concede further that if he had fraudulently omitted this property from his schedule, and put the title in the name of his wife before his cession, an action would lie by his syndic to recover it.

But we contend that, as Green expressly declared, under oath, in his schedule that the property was not his, but his wife's, and as he not only did not actually surrender it, but did not intend that his insolvent proceedings should have such an effect, and, as his surrender, in the form and manner as made, was accepted by the court and by the controlling majority of his local creditors, and as the syndic made no pretence of claim of title or possession until after the seizure by the marshal, the property remaining thus in Green's actual possession was not in gremio legis so as to exclude his foreign creditors, who were in no manner bound by his insolvent proceedings, from levying their writs upon it.

1. Under the cessio bonorum of the civil law, whether voluntary or forced, the legal title to the property ceded by the insolvent remains in him, and does not pass to the creditors or to the syndic. Rivas v. Hunstock, 2 Rob. La. 187; Smalley v. His Creditors, 3 La. Ann. 386; Walling v. Morefield, 33 La. Ann. 1174, 1177; Jaquet v. His Creditors, 38 La. Ann. 863.

2. The law of Louisiana requires the application of an insolvent to make surrender of his property to be laid before the court to which the application is made, and the acceptance of the surrender, in the form and manner as made, is submitted to the judicial discretion of the judge. State ex rel. Boyd v. Green, 34 Ia. Ann. 1020.

3. The insolvent proceedings in the state court, and the insolvent laws of Louisiana have no extra-territorial effect, and do not affect or control non-resident creditors, unless they volun tarily make themselves parties to the proceedings. Ogden v. Saunders, 12 Wheat. 213; Baldwin v. Hale, 1 Wall. 223; Gilman v. Lockwood, 4 Wall. 411; Towne v. Smith, 1 Woodb. & Min. 115, 136; Poe v. Duck, 5 Maryland, 1. We respectfully submit that, under the circumstances which are found as facts in this case, the courts of the United States will not surrender their jurisdiction of the property, and allow it to be

Opinion of the Court.

distributed among local creditors, to the exclusion of all foreign creditors who are unwilling to submit themselves to the state insolvent law.

The case thus presents nothing but a question of a conflict of jurisdiction between two tribunals of concurrent jurisdiction, each having power to bind the goods of the defendant by its process. The rule in such cases is that where the parties are not the same, nor the cause of action the same in both courts, that court holds the property which first obtained physical custody of it. In other words, in such cases there is no such thing as constructive possession of property which is capable of actual possession of physical prehension. Payne v. Drewe, 4 East, 523; Taylor v. Carryl, 20 How. 583, 594; Freeman v. Howe, 24 How. 450; Wilmer v. Atlantic &c. Air Line Railroad, 2 Woods, 409.

4. All of Green's local creditors who appeared at the creditors' meeting, who voted to accept his surrender and to grant him a discharge, are estopped from saying that the St. Charles Street property is part of Green's estate.

The local creditors who did not so appear might, by proper proceeding, have compelled the syndic to institute an action to recover this property; and this is the reason why the judge imposed upon the syndic, as a condition of the release of the seizure made by the marshal, that he should pay all the costs which have been incurred in the making of the seizure, and that he should also present and file in this cause an order from the Civil District Court, authorizing and directing him to take possession of said property from Green and wife, and to administer the same as part of the insolvent estate of Green committed to the charge of the court and the syndic.

The necessity the judge found himself under of putting this proviso in the judgment, ought to have furnished him a conclusive reason for rejecting the syndic's claim.

Mr. Thomas J. Semmes and Mr. Alfred Goldthwaite for defendant in error.

MR. CHIEF JUSTICE FULLER, after stating the case as above, delivered the opinion of the court.

Opinion of the Court.

It is conceded by counsel for the plaintiffs in error that the St. Charles Street property was, under the law of Louisiana, community property, and liable for Green's debts, and should have been surrendered to the syndic; that if Green had casually omitted it from his schedules it would have passed under the control of the syndic; and that if he had fraudulently omitted the property from his schedules and put the title in the name of his wife before the insolvency proceedings, an action would lie by the syndic to recover it. But it is contended that as Green declared the property to be his wife's, and did not intend it to go under his insolvent proceedings, and as his surrender in the form and manner as made was accepted, and the syndic set up no claim of title or possession until after the seizure by the marshal, "the property remaining thus in Green's actual possession was not in gremio legis so as to exclude his foreign creditors, who were in no manner bound, by his-insolvent proceedings, from levying their writs upon it." The Louisiana Code contains these articles (Rev. Civil Code La. 1875, 473):

"Art. 2175 [2171]. The surrender does not give the property to the creditors; it only gives them the right of selling it for their benefit and receiving the income of it, till sold.

"Art. 2178 [2174]. As the debtor preserves his ownership of the property surrendered, he may divest the creditors of their possession of the same, at any time before they have sold it, by paying the amount of his debts, with the expenses attending the cession."

Sections 1781 to 1822, inclusive, of the Revised Statutes of Louisiana constitute a system of insolvent laws. Rev. Stat. La. 1870, 353 et seq.

Section 1791 reads: "From and after such cession and acceptance, all the property of the insolvent debtor mentioned in the schedule, shall be fully vested in his creditors; and the syndic shall take possession of, and be entitled to claim and recover, all the property, and to administer and sell the same according to law.”

These provisions have formed part of the laws of Louisiana for many years, and the Supreme Court of that State has

Opinion of the Court.

repeatedly held in respect to them, that when a cessio bonorum has been accepted by the court and the creditors, and a syndic has been appointed and qualified, all the property and rights of property of the insolvent are vested in his creditors, represented by the syndic as their trustee, and pass to the creditors by the cession, whether included in his schedule or not. Dwight v. Simon, 4 La. Ann. 490; Muse v. Yarborough, 11 La. 521; West. His Creditors, 8 Rob. La. 123; Dwight v. Smith, 9 Rob. La. 32. These cases sustain and are therefore cited to the proposition by Chief Justice Taney, delivering the opinion of this court in Bank of Tennessee v. Horn, 17 How. 157, 160. The rule relates to possession and disposition, and it has been frequently decided that the surrender of the insolvent does not divest him of the title to the property surrendered, though it strips him of the power to control, alienate or dispose of the same during the administration of his estate, and so vests it in the creditors or in the syndic for them, that it is no longer liable to seizure, attachment or execution, but is held to be administered and disposed of according to law for the benefit of the creditors. Rivas v. Hunstock, 2 Rob. La. 187; Jaquet v. His Creditors, 38 La. Ann. 863; Walling's Heirs v. Morefield, 33 La. Ann. 1174, 1177; Nimick v. Ingram,

17 La. Ann. 85.

It is therefore immaterial that title may not vest absolutely in the syndic or creditors. It is enough that the surrender operates as a transfer for the specific purpose of the disposal of the property and the distribution of the proceeds in concurso among the creditors, and is protected accordingly. Laforest v. His Creditors, 18 La. Ann. 292; West v. His Creditors, ubi supra.

In Nimick v. Ingram, 17 La. Ann. 85, Nimick & Co., judgment creditors of Ingram, issued execution against him from the Fourth District Court of New Orleans, where they had recovered their judgment, and caused property to be seized thereunder after Ingram had gone into insolvency and made a surrender in the Fifth District Court. The proceedings in Nimick & Co.'s suit were transferred to the Fifth District Court and cumulated with the insolvent proceedings. Thereupon, Ingram took out of the latter court a rule on Nimick &

Opinion of the Court.

Co. to show cause why all further action under the writ, of fi. fa. should not be stayed and set aside, which rule was made absolute; and from that order an appeal was taken to the Supreme Court of Louisiana. There Nimick & Co. urged that by their diligence they had discovered the property seized by them, and that Ingram having fraudulently attempted to screen the property, it was legally incompetent for him to take any steps in relation to it to affect their rights; but the Supreme Court said:

"What these rights are it is not necessary for us to decide,

being satisfied, as we are, that they can only be determined contradictorily with the mass of the insolvent's creditors, before the court seized of the concurso, as the whole proceedings in the suit pending originally in the Fourth District Court were . . properly ordered to be cumulated with the insolvent proceedings in the Fifth District Court.

"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 their legal representative, 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 any they have."

Nimick v. Ingram is quoted from and approved in Tua v Carriere, 117 U. S. 201, 207.

In the case in hand, the order of the court in insolvency stayed all judicial proceedings against the insolvent and his property, and, by the acceptance of the cession, passed all the insolvent's assets to the syndic for the benefit of creditors; but its operation was not confined to the property specifically named, nor did the acceptance by the creditors have that effect.