Case ID: njl_16/html/0196-01.html
Source: Caselaw Access Project
Author: {"author": "Ryebsoít, J.'", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

BALLANTINE AND MARSH v. HAIGHT.
    In case on demurrer.
    The law of the State of New York, called the two thirds act, discharging insolvents from their debts, is a bankrupt law and not within the legiti mate bounds of State legislation. Or if not a bankrupt law, it is one that impairs the obligation of contracts and therefore void.
    The ease is set forth in the following abstract of the pleadings.
    The declaration in this cause is in the usual form, on a promissory note dated New York, April 26,1831 for the sum of three hundred and forty-eight dollars and fifteen cents, drawn by the defendant, payable to the plaintiffs, with the Common Counts.
    The defendant has pleaded the general issue, and secondly, his discharge as an insolvent debtor, under a law of the State of‘ New York, passed December 4, 1827, being the third article of the first title of the fifth chapter of the second part of the revived statutes of that State, and entitled “of voluntary assignments made pursuant to the application of an Insolvent and his creditors,” and which commenced and took effect as a law, on the first day of January, 1830. The defendant in this plea states that at the time of the making of the said several promises in the declaration mentioned, and at the time of making the discharge thereinafter mentioned, he was a citizen and resident of the city and State of New York. The plea then sets forth particularly the provisions of the said law; and among other things, that every insolvent debtor might be discharged from his debts as therein-after provided, upon executing an assignment of all his estate for the benefit of his creditors, and upon the provisions of that article being complied with. That a discharge granted pursuant to the provisions of the said article, should exonerate and discharge such insolvent from all debts due at the time of the assignment, or contracted before that time, though payable afterwards, founded upon contracts, &c. That the said law is still in force. That after the making of the said supposed promises, to wit, on the 14th June 1831, at the city of New York, the defendant being then and there an insolvent debtor, within the true intent and meaning of the said law, did, in conjunction with so many of his creditors residing within the United States, as had debts in good faith owing to them by the defendant, or thereafter to become due, amounting to at least two-thirds of all the debts owing by him, present a petition in the name and form prescribed by the said law, to Richard Riker then being Recorder of the city of New York. The plea further sets forth the proceedings of the defendant upon his petition and application, and his discharge by the said Recorder, whereby he was discharged from all his debts, pursuant to the provisions of the said law, and concludes in the words following, “and the said defendant avers, that the said defendant in this suit, and the said Nicholas Haight the insolvent in the said discharge mentioned, are one and the same person, and not other or different, and that the debt or demand for which this action was brought, was contracted within the said State of New York, after the passing of the said law, and before the presenting of the petition as aforesaid, to the said Recorder in manner aforesaid. Wherefore he prays judgment, if the said plaintiffs ought to have or maintain their aforesaid action thereof against him.
    The plaintiffs’ replication is in the words following,.to wit: — ■ “ And the said plaintiffs, as to the plea of the said defendant by him first above pleaded, and whereof he hath put himself upon the country, do the like.
    “ And the said plaintiffs, as to the said plea of the said defendant by him secondly above pleaded, say, that they, the said plaintiffs, by reason of any thing by the said defendant in that plea alleged, ought not to be barred from having and maintaining their aforesaid action thereof, against him the said defendant, because they say, that at the times of the making of the said several promises and undertákings by the said defendant, in their said declaration mentioned, and at the times of the proceedings by the said defendant under the law of the State of New York, as mentioned in the said second plea of the defendant, and at the time of the defendant’s pretended discharge, pursuant to the provisions of the said law, they the said plaintiffs were arid still are citizens of the State of New Jersey, and during all the times aforesaid, resided and still do reside in the State of New Jersey, to wit: at New Barbadoes aforesaid, and this, they, the said plaintiffs are ready to verify, wherefore they pray judgment, and their damages by them sustained, on occasion of the non-performance of the said several promises and undertakings in their said declaration mentioned, to be adjudged to them, &c.”
    To this replication the defendant filed a special demurrer, and assigns the following causes of demurrer, that is to say, “that the plaintiffs in and by their said replication, deny the discharge set forth in the said second plea, and at the same time state matter in avoidance of it. And also for that the plaintiffs in and by their said replication, have neither confessed the said discharge to have been made, nor taken or offered an issue upon the fact alleged in the plea, that such discharge was made; and also for that the said replication is in other respects uncertain, informal and insufficient, &e.
    
    Iba C. Whitehead, Attorney of plaintiffs.
    
      S. Gassedy for defendant.
    Mr. Whitehead in support of the replication, contended that it is not usual, nor necessary in replications of this description, to admit in express terms, the material facts alleged in the plea, and cited 1 Chitty’s Plead. 3d Am. Ed. 433-4.
    That the replication is in proper form. 3 Ghitt. PI. 470, 474. But if the plea is defective the Court will consider the whole record and give judgment against the party committing the first error. — 1 Saund. Pl. and Ev. 499. Gelston v. Burr, 11 Johns, R. 432.
    The rule is the same in case of general or special demurrer, Cooke v. Graham adm. 3 Cranch P. 235; 1 Chitt. Pl. 446
    The New York law pleaded, is a bankrupt act, Oldens v. Hallet, 2 South. 466. Or at least it impairs the obligation of contracts, and therefore unconstitutional.
    The plea should have stated that the plaintiffs were citizens of the State of New York. Baker v. Wheaton, 5 Mass. R. 509, Ogden v. Sanders, 12 Wheaton's U. S. R. 213; Braynards v. Marshall, 8 Pick. Mass. R. 194; Watson v. Bowne, 10 Mass. R. 337.
    The replication is sustained by the last case cited. 6 Wheeler Am. Com. Law. Abr. 74 to 83.
   The opinion of the Court, was delivered by

Ryebsoít, J.'

The declaration in this case, is on a promissory note. The defendant has pleaded a discharge from his debts, under a law of the state of New York; the provisions whereof, and proceedings under the same, are set out. The plea also contains an allegation that the debt was contracted in New York; after their statute went into operation, and that the defendant then, and ever since, has resided there. To this, the plaintiffs have replied, that at the time of contracting the debt, and the making of the said pretended discharge, the plaintiffs were, and still are, residents in New-Jersey. The defendant has demurred specially, alleging for causes of demurrer, that the replication attempts to deny the matter alleged in the plea, and also to allege new matter in avoidance thereof: and that it neither confesses nor denies the matter contained in the plea, as it should. But I do not suppose a more formal confession is necessary. Constructively, it is confessed: as whatever in one pleading, is not denied in the next subsequent one, is in law admitted. Nor does the replication deny, as is supposed, the said discharge. It is only therein called a pretended discharge. But this is no denial that such supposed discharge was had, or made, as in the plea is stated. It should only be considered as a denial of the legal efficacy, or validity thereof. Saunders Rep. by Williams — 291 a note 1. Chit. PI. vol. 2 — 460 note. On an inspection of this pleading, it will be found, beyond all question, to admit or assume as true, that such law was enacted, such proceedings had, and such discharge made, under the same, as in the plea attempted to be answered, are alleged. This is all that approved precedents require. The expression, pretended discharge, makes the doubt. But in this connection it means no more than supposed discharge. And it will be found, on consulting the authorities, that where a pleading has been held faulty, in the respect in question, the fact has been expressly denied, or some matter has been alleged, giving it a different character from that given in the pleading answered. Chit. PI. vol. 1, 511, and cases there cited.

But however this may be, the plaintiff must have judgment, because the plea itself is defective in matter of substance. By decisions of this Court, the law in question is a bankrupt law. It discharges, not only the person from imprisonment, but from the debt itself. The provisions therefore of the law under which this discharge was made, are not, by the same decisions of this Court, within the legitimate bounds of State legislation. And if not a bankrupt law, it is a law impairing the obligation of contracts,' and therefore void. Vanuxem v. Hazlehurst, South, vol. 1,192. Olden’s Ex. v. Hallet, South, 2, 466.

The plea, perhaps would have deserved greater consideration, if it had alleged the plaintiffs’ residence in New York, where the contract was made or that it was made to be executed there, or with a view to their law.

Horkbloweb, C. J. and Ford, J. concurred.

Judgment for plaintiff.