Case ID: va_46/html/0307-01.html
Source: Caselaw Access Project
Author: {"author": "p)AN1EL¡", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Richmond.
    M’Carty v. Gibson.
    (Absent Cabell, P.)
    A bond is executed in Virginia by M to G, both of them being then citizens of and residents in Virginia. M afterwards removes to Maryland, and G sues him there on the bond, and recovers a judgment. M then applies to the Court for a discharge under the insolvent laws of Maryland; and G appears and opposes his discharge, on the ground that he had not made a fair surrender of his property; but the Court grants M a discharge. After-wards G institutes a proceeding by foreign attachment in Virginia,i against M, to enforce satisfaction of his debt, and M sets up his discharge under the insolvent laws of Maryland, as a defence to the suit. Held : That the debt having been contracted in Virginia, between citizens of Virginia, the discharge in Maryland does not bar the claim in Virginia; and the appearance of G in the Maryland Court, and his opposing the discharge of M there, does not give greater effect to the discharge of M by that Court.
    This was a proceeding by foreign attachment, instituted in December 1838, in the Circuit Court of Hampshire, by David Gibson, against Edward M’Carty, jr. an absent defendant, and Cornelius R. and David Long, as garnishees. The bill charged that in July 1823, Edward M ’Carty, sr., P. M ’Carty, and the defendant Edward M’Carty, jr. executed to the plaintiff a bond for 1654 dollars 63 cents, which remained due and unpaid. That at that time all the parties lived in the county of Hampshire, and that the bond was executed there. That the two first obligors died; and the defendant removed to Maryland. That the plaintiff brought suit on the bond against said defendant in the County Court of Alleghany in Maryland, and recovered judgment; but that no part of the judgment had been paid. That said M’Carty had, in 1831, taken the benefit of the act of the State of Maryland for the relief of insolvent debtors; but that the plaintiff had received nothing from the proceeds of the property surrendered, as it was subject to a prior deed of trust. That the plaintiff is entitled to recover his debt, either upon the obligation or his judgment; and that the Longs are indebted to the absent defendant.
    The Longs answered, stating the amount of their indebtedness to M’Carty. M’Carty was allowed to answer, upon giving security for costs ; the attached effects being still held liable for the debt. He did not controvert the facts stated in the bill; but set up his discharge under the insolvent laws of Maryland as a bar to the plaintiff’s claim. With his answer, he filed a copy of the record of the proceedings in the action at law in the County Court of Alleghany, and upon his application for a discharge as an insolvent debtor; and the insolvent laws of Maryland were made a part of the record.
    The record shewed that the proceedings, on the application of M'Carty, to be discharged as an insolvent debtor, had been strictly regular. That Gibson had appeared, as he was authorized to do under the statutes, and filed objections to his discharge; and that the issue made up upon these objections had been tried by a jury, and a verdict found in favour of M’Carty ; and that he had been regularly discharged by the judgment of the Court in October 1832, “from all his debts, covenants, promises and engagements due from, or owing or contracted, in his individual as well as in his copartnership capacity, at the time of his application, for the benefit of the act of assembly and supplements as aforesaid, according to the true intent and meaning of the act of assembly for the relief of sundry insolvent debtors, and the several supplements thereto; provided that any property which he may hereafter acquire by gift, descent, or in his own right by bequest, devise, or in any course of distribution, shall be liable to the payment of his debts.”
    The fifth section of the Maryland statute of November 1805, provides: “That upon the said petitioning debtor’s executing and acknowledging a deed to the trustee to be appointed as aforesaid, which deed is hereby directed to be recorded within the time limited by law, conveying all his property, real, personal and mixed, and all debts, rights and claims, agreeable to the oath or affirmation of such debtor as aforesaid, and on his delivery to the said trustee of all his said property which he shall have in possession, and of his books, papers, and evidences of debt of every kind, and the said trustee’s certifying the same in writing to the County Court, it shall be lawful for the County Court to order that the said debtor shall be discharged as well from all debts, covenants, contracts, promises and agreements, due from, or owing or contracted in his individual, as also in a copartnership capacity, by him, before the passage of this act, or at the time of his application to the County Court for the benefit of this act, and by virtue of such order, the said debtor shall be discharged as aforesaid; provided, that no person who has been guilty of a breach of the law, and hath been fined or is liable to be fined for such breach, shall be discharged from the payment of any fine incurred for any breach of the laws of this State; and provided, that any property which he shall hereafter acquire by gift, descent, or in his own right, by bequest, devise, or in any course of distribution, shall be liable to the payment of the said debts; and provided also, that the discharge of such debtor shall not operate so as to discharge any other person from any debt.”
    The ninth section of the said act provides: “That if any creditor, on the application of any debtor to the County Court, or within two years thereafter, shall allege in writing to the County Court, that such debtor hath, directly or indirectly, sold, conveyed, lessened, or otherwise disposed of, or purchased in trust for himself, or any of his family or relations, or any person or persons, entrusted or concealed any part of his property of any kind, or any part of his debts, rights or claims, thereby to deceive or defraud his creditors, or any of them, or to secure the same, or to receive or expect any profit or advantage thereby, or that he has passed bonds, or other evidences of debt, either without consideration, or on improper consideration, or lost more than one hundred dollars by gaming at any one time, or hath assigned or conveyed any of his property, with intent to give an undue and improper preference to any creditor or creditors, or security, before the passage of this act, or before the time of his application to the County Court for the benefit of this act, the said County Court may thereupon, at the election of the creditor making such allegation, either examine the said debtor, and any person or persons to whom he may have made any conveyance of his property, or passed bonds or evidences of debt as aforesaid, on interrogatories (of which interrogatories the person or persons answering the same shall, at the election of the person or persons making the allegation, be furnished with a copy or copies,) on oath or affirmation, touching the subject of said allegations, or direct an issue or issues in a summary way, without the form of an action, to determine the truth of the same; and if, upon the answer of the said interrogatories, or the trial of the said issue or issues by a jury, such debtor shall be found guilty of any fraud or deceit of his creditors, or loss by gaming as aforesaid, or having given preference as aforesaid, he shall be forever precluded from any benefit of this act.”
    The effects or debts attached in this case, were not acquired by the defendant M’Carty, by gift, descent, or in his own right by bequest, devise, or in any course of distribution.
    When the cause came on to be heard in the Court below, that Court held that the discharge of M’Carty under the insolvent laws of Maryland, was no bar to the plaintiff’s claim; and made a decree against him for the amount, aud against the defendants Cornelius R. and David Long, for the sums they admitted to be due from them respectively to M’Carty, to be applied in discharge pro tanto, of the decree against him. From this decree, M’Carty applied to this Court for an appeal, which was allowed.
    The case was argued here in writing, by Leigh, for the appellant, and Philip Williams, for the appellee.
    
      For the appellant:
    I. The first remark I have to make is, that the bond of July 28, 1823, is merged in the judgment of the County Court of Alleghany, Maryland, of 1830, in Gibson’s action of debt upon that bond. Gibson invoked the laws of Maryland, obtained judgment, took his debtor’s body in satisfaction of his execution, earnestly contested his right to a discharge under the insolvent laws of that State ; and being defeated in that, turns round and claims upon his bond.
    That the bond is merged in the judgment upon it, see 4. Stark. L. Ev., vol. 3, p. 128, note; 6 Co. 45, Higgens’ Case. The plaintiff has chosen his own remedy, and can no longer claim under the bond. Toussaint v. Martinnant, 2 T. R. 100, 104. In Drake v. Mitchell, 3 East 251, the principle is admitted, though its application to the case before the Court is denied. Though this proceeding is in form in equity, in order to attach the effects of the absent defendant, the claim is strictly legal in its nature. If an action at law had been instituted on this claim, the plaintiff could not have sunk his judgment, and claimed on the bond.
    II. The judgment of the Court of Alleghany in this case, is, that M’Carty be discharged, of course at the suit of Gibson, and from his judgment particularly, provided that M’Carly’s property acquired by gift, descent, bequest, devise, or in any course of distribution, shall be liable to his debts.
    The constitution of the United States requires this Court to take it for granted, that the judgment of the County Court of Alleghany, Maryland, was right. C. U. S., art. 4, § 1; L. U. S. 1 Cong. 2 Sess. ch. 2; 2 Bior. 102; Clarke’s adm’r v. Day, 2 Leigh 172. If it was wrong in not providing that Virginia or foreign creditors, and particularly the plaintiff, because he was a Virginia creditor, should be no wise affected by M’Carty’s discharge, Gibson ought to have appealed to the Supreme Court of Appeals of Maryland. He cannot sink his Maryland judgment by claiming upon the original bond executed in Virginia, and contest in Virginia, the regularity of proceedings in Maryland, to which he was himself a party, in which, indeed he was the actor.
    But, upon examination of the laws of Maryland, in the book filed, and by consent made a part of the record, I submit that the judgment is conformable with them. Act of 1805, ch. 110, § 5, p. 16, 17; of 1812, ch. 88, § 3, p. 26 ; of 1819, ch. 88, § 5, p. 35; of 1828, ch. 70, § 6, p. 51.
    III. Taking it, then, that M’Carty stands discharged in Maryland, from all his creditors, and particularly from Gibson, we are are to enquire, whether he is discharged from Gibson in Virginia.
    
    The doctrine is laid down, Story’s Conf. Laws, <§> 348, that “if a State should, by its laws, provide that a discharge of an insolvent debtor under its laws, should be a discharge from all contracts, and even those made in a foreign country, its own Courts would be bound by such provisions; but they would be held nullities in every other country.” And if Gibson had never invoked the laws of Maryland to his aid ; if he had never brought a suit on his bond against M’Carty in the County Court of Alleghany, and recovered judgment; or if, having recovered judgment, he had never prayed him in custody, and prosecuted him to insolvency; or even, if M’Carty, having been imprisoned on Gibson’s judgment, had taken the oath of insolvency, without any proceedings on Gibson’s part, under the laws of Maryland, to hold him bound, then in the first case certainly, in the second case probably, and in the third case possibly, Gibson, being a citizen of Virginia, and the debt he claimed having been contracted here, might not, in a Court of Virginia, be bound by M’Carty’s discharge as an insolvent debtor in Maryland. But Gib
      
      son resorted to the law of Maryland to recover his debt, brought his action there to recover it, obtained judgment in one of her Courts, and M’Carty being snrrendered by his special bail, prayed him in custody. ’Carly being in custody at the suit of Gibson, applied for relief as an insolvent debtor, according to the laws of Maryland; he took the oath of insolvency, and was regularly discharged from custody ; a bond was exacted of him to appear and answer the allegations of his creditors ; he did appear, and Gibson filed eight allegations against him; issue was taken upon those allegations ; M’Carty was acquitted; and judgment was given discharging him from all his debts, and particularly from the debt due to Gibson, at whose suit the whole proceeding was carried on. Under these circumstances, it seems to me monstrous, that Gibson should now be entertained in a Court of Virginia, to shew his original bond, that it was executed in Virginia, and that he and his debtor, at the time the debt was contracted, were citizens of Virginia; and that, therefore, the proceedings under the Maryland act, for the relief of insolvent debtors, and the discharge of M’Carty, were inoperative as to Gibson, at whose instance, and in regard to whose debt, those proceedings were had.
    None of the cases in which the State laws of insolvency have been brought into question, resemble this. In Clarke’s ex’or v. Van Riemsdyk, 9 Cranch 155, the creditor was a foreign creditor, who had never invoked the laws of Rhode Island, whose insolvent law had discharged the debtor. So in Sturges v. Crowningshield, 4 Wheat. 122, the debt was contracted in New York, the action on it was brought in Massachusetts by the creditor, a citizen of New York, against the debtor, a citizen of Massachusetts, the creditor having never invoked the laws of New York, under whose insolvent laws the discharge from the debt was claimed, and the insolvent law under which he claimed to be discharged, having been passed subsequent to the contracting of the debt, and so a retrospective effect being claimed for it. In M’Millan v. M’Neil, 4 Wheat. 209, the debt was con-traded in South Carolina, the creditor was a citizen of that State, the suit was brought in Louisiana, to whose laws and Courts the creditor had never resorted to recover his debt, and a discharge under authority of which the defendant relied on. In The Farmers and Mechanics Bank of Pennsylvania v. Smith, 6 Wheat. 131, the insolvent law of Pennsylvania, under which the debtor was discharged, was subsequent to the origination of the debt; and though the creditor and debtor were both citizens of Pennsylvania, and the debt was contracted there, the insolvent law was held unconstitutional and invalid, because it was retrospective. In Ogden v. Saunders, 12 Wheat. 213, a majority of the Supreme Court decided that a bankrupt or insolvent law of any State, which discharges both the person of the debtor, and his future acquisitions of property, is not “ a law impairing the obligation of contracts,” so far as respects debts contracted subsequent to the passage of such law; and, in the second branch of that case, Id. 357, that a certificate of discharge under such a law, cannot be pleaded in bar of an action brought by a citizen of another State, in the Courts of the United States, or of any other State than that where the discharge was obtained. These cases, then, do not affect our case; and none of the following cases (all of which I have examined) touch it: Mason v. Haile, 12 Wheat. 370; Boyle v. Zacharie and Turner, 6 Peters’ R. 635; Breedlove and Robeson v. Nicolet and Sigg, 7 Peters’ R. 414, (where the proceedings in which the discharge was obtained, were irregular;) Beers v. Haughton, 9 Peters’ R. 329; Haydel v. Girod, 10 Peters’ R. 283, (where the discharge was irregularly obtained;) Suydarn and others v. Brodnax and others, 14 Peters’ R. 67; and Duncan v. Darst, 1 How. R. 301.
    
      In short, the only case I have seen, that is, in its circumstanees, like the case at bar, is Clay v. Smith, 3 Peters’ R. 411; where the plaintiff, a citizen of Kentucky, gue(j j-jjg ¿lebtoi-j a citizen of Louisiana, for a debt incurrecj jn 1§08, and he pleaded his discharge under the bankrupt law of Louisiana in 1811, under which both his person and future effects were forever discharged from all claims of his creditors ; and it appeared that the plaintiff, whose debt was specified in the list of the defendant’s creditors, received a dividend of ten per cent, on his debt declared by the assignees of the defendant. The Supreme Court held, that the creditor, by voluntarily making himself a party to the proceedings which resulted in the discharge of the debtor, had abandoned his extra-territorial immunity from the operation of the bankrupt laws of Louisiana, and was bound by the decision of the State Court to the same extent to which the citizens of that State were bound. In the case at bar, Gibson did not, indeed, receive any money ; but he was a party to all the proceedings in Maryland ; in fact, the proceedings were all in his own case, and at his instance ; hd took the body of his debtor, and endeavoured to hold him bound for the debt; and so, by voluntarily making himself a party to the proceedings in Maryland, which resulted in the discharge of his debtor, he abandoned his extra-territorial immunity from the operation of the insolvent law of Maryland.
    
    For the appellee ;
    Is the contract between the parties discharged by M'Carty’s having taken the oath of insolvency? If it is not, Gibson is entitled to recover.
    1. It is submitted that it is not discharged, because it was made in Virginia, between citizens of Virginia, to be performed in Virginia; and by the laws of Virginia, the property of a debtor, whether acquired before or after he has taken the oath of insolvency, is liable for the payment of the debt; and the discharge being . _ _ , _ , . . . in Maryland, cannot be a bar to a recovery upon this Virginia contract, in the Courts of Virginia. °
    . 2. It is submitted that the contract is not discharged, because the Maryland law does not vacate or discharge the contract or judgment; it exempts the person, and a certain description of property, leaving other property liable to the payment of the debt. The law, therefore, affects the remedy only, and provides that property acquired in a particular way shall be exempt, leaving the contract in force, to be levied on the property which is not exempt. The law of the forum where the suit is brought, must necessarily regulate the remedy, and the property which is liable to the payment of the debt.
    A discharge of the contract by the law of a place where the contract was not made, or to be performed, will not be a discharge in any other country. Story’s Conflict of Laws 283, and the cases cited there, especially Lewis v. Owen, 4 Barn. & Ald. 654; Smith v. Smith, 2 Johns. Rep. 235, a case between citizens of different States of the Union; and M’Millen v. M’Neill, 4 Wheat. 209; and Green v. Sarmiento, 1 Pet. C. C. R. 74.
    This is a well established doctrine of international law.
    Let us now examine the effect of the decisions in the Supreme Court under our constitution. The constitution, instead of giving greater validity to a discharge under the insolvent laws of one State, when pleaded in another, narrows the effect, because it provides that no State shall pass a law impairing the obligation of contracts.
    There are three classes of cases. 1. Those where the contracts were made between citizens of the same State when the discharge under the insolvent laws took place. 2. Those made between citizens of different States, but made in the State where the discharge took place. 3. Those made between citizens of one State, and the discharge took place under the laws of another State.
    jt be found that in the first class of cases, the discharge releases the debt wherever sued upon. In the second, it is not a discharge so as to release the debt if sued upon in the United States Courts, or in the Courts of another State, unless the- creditor voluntarily made himself a party to the proceedings, and accepted a dividend. In the third, it will be found that it will not release the debt if sued upon in the United States Courts of another State. It will be found upon examination, that the authorities fully sustain every position here laid down.
    It may be of service to examine the course of decisions in the Supreme Court upon these questions.
    In Sturges v. Crowningshield, 4 Wheat. R. 122, the contract was made in New York, in March 1811, and the insolvent law was passed in April 1811. The debtor was sued in Massachusetts, and he pleaded his discharge under the insolvent laws of New York in bar. It was held that it was not a bar. Here the contract was made before the law passed.
    But in M’Millen v. M’Neill, 4 Wheat. R. 209, the same point was settled, although the contract was made after the law passed. But in that case, the discharge was made under the law of a different State from that in which the contract was made.
    In Farmers and Mechanics Bank of Pennsylvania v. Smith, 6 Wheat. R. 131, the contract was made in Pennsylvania, between citizens of that State — held, that the discharge under the insolvent laws of Pennsylvania, was not a bar. But in this case, also, the law was passed after the contract was made.
    Then comes the case of Ogden v. Saunders, 12 Wheat. R. 213, in which it was decided that where the contract was made between two citizens of the same State, (under whose laws the discharge was granted,) after the passage of that law, that such discharge might be pleaded in the Courts of such States, in bar of a recovery upon such contract. But if the creditor is a citizen of another State, although the contract may have been made in the State where the discharge was granted, such discharge is not a bar to the recovery. See Boyle v. Zacharie, 6 Peters’ R. 635.
    The next case is Clay v. Smith, 3 Peters’ R. 411. Smith, a citizen of Kentucky, sued Clay, a citizen of Louisiana, to recover a debt, who pleaded his discharge under the insolvent laws of Louisiana in bar; and averred that the plaintiff, after the defendant took the oath of insolvency, received a dividend under the commission. The Court decided that the plaintiff by voluntarily making himself a party, and receiving the dividend, waived his extra-territorial immunity, and was to be treated as if he was a citizen of Louisiana, and that thereupon the debt was barred.
    The reported case does not state where the contract was made; but the original record, which has been examined, shews that it was made in Louisiana.
    
    The last ease upon the question is Boyle v. Zacharie, &c., 6 Peters’ R. 635. The contract was a Louisiana contract, to be performed there. Zacharie and Turner were citizens of Louisiana, and Boyle a citizen of Maryland, when the contract was made. Zacharie and Turner brought suit upon the contract in Maryland, against Boyle, who took the benefit of the insolvent law of Maryland, and as the practice is in Maryland, confessed a judgment, subject to the legal effect of his discharge under the insolvent law. The legal effect was this: if the plaintiffs were bound by the discharge, then no property acquired by the defendant, by his own exertions, would be liable to the debt; but if it was acquired by gift, devise, descent, &c., it would be liable. The plaintiffs levied their execution on property acquired by the defendant himself, and Boyle injcined it upon the ground that the plaintiffs were bound by the discharge, and that this property was not liable. The counsel insisted that the plaintiffs had submitted to the insolvent laws of Maryland, by instituting a suit in that State. See p. 639. But the Court decided that the plaintiffs were not bound by the discharge, because it was a Louisiana contract.
    Only that the case at bar is stronger for the creditor, the cases are analogous. In that case the creditors resided in Louisiana; the contract was to be performed there; they sued the debtor, a citizen of Maryland, in that State; he took the benefit of the insolvent laws there; and yet it did not bar the plaintiffs’ claim. In the case at bar, both debtor and creditor were citizens of Virginia when the contract was made. It was made in Virginia, to be performed there — the debtor removed to Maryland', when the creditor sued him and obtained a judgment; the debtor took the benefit of the insolvent laws of Maryland, and now asks to be discharged of the debt entirely, because of his having done so, and that, too, in the Courts of Virginia.
    
    The case of Boyle v. Zacharie, &c. is decisive of this case.
    But we come now to consider the second ground why the recovery of the plaintiff is not barred. That the contract is not discharged by the Maryland law, even admitting that it is to be placed upon the footing of a Maryland contract, made between two citizens of Maryland.
    
    Now in all cases where there is not a positive or virtual extinguishment of all rights and remedies of the creditor, the contract is not deemed extinguished, and therefore it may be enforced in other countries. Story’s Conflict of Laws 279.
    In Maryland, if the oath of insolvency and the discharge are in the suit upon the claim itself, and the plaintiff wishes to subject property acquired by gift, devise, descent, &c., a scire facias is sued out on the original judgment; or if the discharge was in another suit, the plaintiff may sue out execution upon the judgment, and levy it upon property thus acquired. This shews clearly that the judgment or contract is not discharged, because, if it was, a scire facias or execution could not be sued out upon it. The debt still remains an acknowledged debt, which may be enforced against property of a certain description. There remains, then, a modified liability, which proves that there is not a positive or virtual extinguishment of all rights and remedies of the creditor. But if a suit is then brought in Virginia, the species of property which is to be subjected to the payment of the debt, must depend upon the laws of Virginia, and not of Maryland.
    
    It might be that in Maryland all a man’s real estate may be sold under a fi. fa. In Virginia a moiety may be taken under an elegit. In Maryland negroes might be exempt from execution ; in Virginia they are liable.
    In a suit in Virginia, the only enquiry is, whether it is a subsisting debt; if so, judgment or decree must be rendered, (as the case may be, either at law or in equity,) and the kind of execution, or the extent of the remedy, must depend upon the law of Virginia. It will not be denied that if the cattle that were sold to the Longs in Virginia, came to McCarty by gift, devise, &c., or the money with which they were purchased, came thus to his hands, we are entitled to recover. But how is such a question to be raised or tried here ? Can the Court in Virginia enquire what kind of property would be taken if the proceedings were in Maryland, and give a decree or execution against that property only? This will hardly be insisted on. If the debt be a subsisting debt; if it be not entirely discharged, we are entitled to a decree in Virginia, and the law of Virginia must provide the means of enforcing it, and the kind of property liable to be taken under it.
   p)AN1EL¡

it is a well established doctrine of the ]aw 0f nations, that the entire discharge of a contract by the laws of a country in which the contract was not made or to be performed, will not be a discharge in any other country. Story’s Conflict of Laws 283.

How far this doctrine is to be recognized by the Courts of any State of this Union, or by the Courts of the United States, in passing upon the legal effect of such a discharge, obtained in any State other than that in which the contract was made or to be performed, whether it is competent for the several States to pass bankrupt or insolvent laws, by which to discharge debtors from the obligation of their contracts ; and if so, upon what contracts and persons such laws are to operate, are questions which have given rise to much discussion, and led to many decisions in the Supreme Court of the United States, and also in the State Courts of several of our sister States. The case of Ogden v. Saunders, 12 Wheat. R. 213, though preceded by some cases in which a contrary doctrine was maintained, is now, I believe, generally relied on, as having settled in the affirmative, the question as to the constitutionality of such laws, so far as they may provide for a discharge of the obligation of debts and contracts made and entered into subsequent to their enactment. As to the extent to which discharges obtained in pursuance of such laws, are to be allowed to operate — Judge Story in his work on the Constitution, 3d vol. 256, briefly sets forth the result of the decision in Ogden v. Saunders, and other decisions of the Supreme Court not in conflict with it, as being; (1.) That they apply to all contracts made within the State, between citizens of the State. (2.) That they do not apply to contracts made within the State, between a citizen of the State and a citizen of another State. (3.) That they do not apply to contracts not made within the State.

It is admitted by the appellant that the debt forming the origin of this suit was contracted, and the bond by which it is evidenced, was executed in Virginia, at a time when all of the contracting parties were residents of the State ; and it is no where alleged that the parties had any other State in contemplation as the place for the performance of the contract, the payment of the debt. The surviving obligor in the bond having moved out of the State of Virginia into the State of Maryland, leaving the debt wholly unpaid, his creditor brought suit against him in a County Court of the last mentioned State, and obtained judgment. The debtor is still a resident of Mamyland; and the present suit is an attachment in chancery — seeking to subject to the payment of the debt certain debts alleged to be due by the home defendants to the absent debtor.

It is admitted that the debt is still unpaid; and the only defence relied on by the absent debtor, is an order of the County Court of Alleghany in Maryland, for his discharge as an insolvent debtor. The order seems to have been regularly obtained upon proceedings had in pursuance of certain acts of Assembly of that State for the relief of insolvent debtors. The fifth section of the act of 1805 authorizes the Court to order an insolvent debtor, who has taken certain steps prescribed in the preceding sections of the act, to be discharged from all debts, covenants, contracts, promises and agreements due from, or owing, or contracted by him before the passage of the act, or at the time of his application, “ provided that any property which he shall hereafter acquire by gift, descent, or in his own right by bequest, devise, or in any course of distribution, shall be liable to the payment of said debts.” The funds in the hands of the garnishees were not acquired in any of the modes mentioned in the proviso : whether they are liable, therefore, to the process of attachment, depends on the va1 lidity of the discharge. The Court below has refused to recognize the yalidity of the discharge; and in so , . , * „ ,, . , , , . doing, would seem to be fully sustained by the authori£jes above cited; in illustration of which it may be well to refer to some further decisions of the Supreme Court, which, in their main features, are similar to the case before us.

In the case of Boyle v. Zacharie and Turner, 6 Peters’ R. 635, the legal effect of a discharge under the same laws of Maryland, by virtue of which the appellant procured the order for his discharge, was the subject of decision.

In that case the debt was contracted in Louisiana, with a citizen of that State, by a citizen of Maryland. Upon a suit brought in the Circuit Court of the United States for the State of Maryland, judgment was confessed by the debtor, “ subject to the legal operation of the defendant’s discharge under the insolvent laws of Maryland.” An execution having been sued out and levied on property of the debtor which had not been acquired in any of the modes that would, under the proviso in the insolvent laws relating to future acquisitions of property, make it liable to the execution, an injunction was obtained to stay proceedings on the execution. On an appeal from an order of the Circuit Court dissolving the injunction, the Supreme Court decided that the discharge was inoperative; and Judge Story, in delivering the opinion of the Court, stated that “ the ultimate opinion delivered by Mr. Justice Johnson, in the case of Ogden v. Saunders, was concurred in and adopted by the three Judges who were in the minority upon the general question of the constitutionality of State insolvent laws, so largely discussed in that case;” “that so far as decisions upon the subject of State insolvent laws had been made by the Court, they were to be deemed final and conclusive ;” and that the memo-random of agreement accompanying the judgment, that it should be subject to the legal operation of the insolvent laws of Maryland, ought not to be deemed an acquiescence on the part of Zacharie and Turner in the validity of the discharge; that it neither admitted its validity, nor waived any rights of Zacharie and Turner, if the laws under which it was obtained were unconstitutional.

In the case of Cook v. Moffat & als., 5 How. R. 295, decided by the Supreme Court at its January term 1847, the decision turned upon the validity of a discharge obtained under the same laws of Maryland. In that case the creditor was a citizen of New York, where the debt was contracted, and the debtor a resident of Maryland. Whilst there was much conflict of opinion among the Judges as to the reasoning upon which the decision ought to rest, there was no difference of opinion as to the result. They were unanimous in deciding that the discharge was of no avail as a defence to the suit brought in the Circuit Court for the district of Maryland. The decision in Boyle v. Zacharie and Turner was approved; and by a majority of the Court the further doctrine was maintained that such a discharge could not be pleaded even in the forums of the State which enacted the law under which it was obtained.

Unless then there be peculiar circumstances attending the case of the appellant, imparting to his discharge special efficacy, and taking it from without the influence of these authorities, his appeal here must fail. Indeed, I understand it to be conceded by the counsel for the appellant, that such must be the result, unless the part taken by the appellee in the proceedings in Maryland, is to make this case an exception to the general rule. It is argued that Gibson, by instituting suit upon his bond, and obtaining judgment thereon, by praying his debtor in custody on the surrender by his bail, by filing, under the statute, allegations impeaching the fairness of the schedule given in by M'Carty, and regularly contesting his discharge, submitted himself voluntarily to the laws of Maryland, and is now precju(je(j from questioning, in any forum, the discharge obtained in pursuance of those laws. The authority mainly relied on in support of this argument, is the case of Clay v. Smith, decided by the Supreme Court of the United Stales, and reported in 3 Peters’ R. 411. In that case it appears that Smith, a citizen of Kentucky, instituted an action of debt in Louisiana, against Clay, a citizen of the last mentioned State, who pleaded his discharge by the bankrupt law of Louisiana. The plea sets out his petition, his surrender of his effects, the schedule of his debts, in which Smith's debt is specified, as also the payment to him of ten per cent., the dividend declared by the assignees of the bankrupt; and the judgment of the Court rendered in pursuance of the consent of more than a majority of his creditors in number and amount. The language of the plea is “upon which said petition, the usual proceedings being had thereon, the said plaintiff and other creditors being parties thereto, the said Supreme Court, by their final decree, pronounced in the premises on the 15th June 1811, declared the said defendant, as well his person as his subsequently acquired property and effects, forever released from all claims, debts and demands, &c. previously due.” I have used in stating the case the language employed by the Judge who pronounced the opinion of the Court, as without particular attention to the statement, there might be some difficulty in apprehending the meaning of the brief opinion by which it is followed. The opinion proceeds: “ This plea is demurred to, and thus the question is raised, whether Smith, by voluntarily making himself party to such proceedings, has not abandoned his extra-territorial immunity from the operation of the bankrupt laws of Louisiana. We are of the opinion that he did ; and was bound by the decision of the State Court to the .... . . „ . same extent to which the citizens ot that State were bound.” The true meaning of the decision of the Court is, I think, that Smith, by being party to the steps taken in Court, and by receiving his distributive share of his debtor's estate, had waived the objections which he might otherwise have urged, against the validity of the discharge as to him. Such too is, I think, the view of Judge Story, as to the purport of that decision. In the 3d vol. of his work on the constitution he says: “ If a creditor voluntarily makes himself a party to the proceedings under an insolvent law of a State which discharges the contract, and accepts a dividend declared under such law, he will be bound by his own act; and be deemed to have abandoned his extra-territorial immunity;” and he cites Clay v. Smith as his authority for the proposition. The decision in question, is viewed in the same light by the Supreme Court of New York. In the case of Van Hook v. Whitlock, 26 Wend. R. 54, Chief Justice Nelson, in delivering the opinion of the Court, having occasion to comment on the case of Clay v. Smith, says, The facts are so imperfectly stated in the report of the case, that no principle can be deduced from the decision, except we may presume that without the assent of the creditor to the proceedings, by coming in and accepting a dividend, the discharge would have been invalid.”

Thus regarding the decision in Clay v. Smith, I do not think it can be relied on as authority to sustain the validity of the discharge in this case, when pleaded in a Virginia forum, as a bar to a suit founded upon a contract originating in this State, between parties, who at the date of the contract, were citizens. Gibson has done nothing from which it can be inferred that he assented to the discharge of his debtor under the laws of Maryland. So far as by his own acts he became a party to the proceedings, he took part in opposition to, and not as assenting to or ratifying the discharge.

The question which he submitted for the decision of the Court, and which he contested on the trial of his allegations, with his debtor, was, whether the latter had not been guilty of fraud in concealing his property; and ha(j (.jjjjg deprived himself wholly of the benefit of the act. Can it be truly said, that by thus becoming a party to the proceedings for one purpose, he thereby became a party for all purposes connected with the discharge of his debt; and conferred upon the Court a power which it would not otherwise have had, to bind him by its judgment. I think not. The defect of power in the Court to order a discharge of the debt that would be valid in another forum, arises not only out of a want of jurisdiction over the person, but also out of a want of jurisdiction over the subject matter. The person of the creditor and the contract were both subject to the laws of another forum. If the voluntary appearance of the creditor to contest the discharge, on the ground that the debtor had rendered an unfair schedule, could have the effect of removing the first objection to the jurisdiction of the Court, this is, certainly, all that could be claimed for it. It could not have the effect to impart jurisdiction to the Court over the subject matter. It has been decided that when there is a want of jurisdiction over the subject matter, a judgment of the Court upon it, though regularly obtained upon such proceedings as would be proper in a case clearly within the jurisdiction of the Court, cannot be used as an estoppel, even against the party who instituted the proceedings. It is still in the power of such party to object the want of jurisdiction ; and treat the judgment as a nullity. In the case of Blin v. Campbell, 14 John. R. 432, the plaintiff had brought an action of assault in a Justice’s Court, in which a trial was had and a judgment rendered against him. He afterwards brought an action on the case for the same injury in another Court, and was met by a plea of the former trial and judgment. The Supreme Court of New York held, that inasmuch as the justice had no jurisdiction over actions of assault and battery, the former judgment was null, and could not be pleaded in bar of the second suit. Other cases in the same Court have gone to the extent, that where a Court is expressly inhibited by law from taking jurisdiction of a subject, no consent of parties could confer jurisdiction ; and that a confession of judgment even would be a mere nullity. Thus in the case of Coffin v. Tracy, 3 Caines’ R. 129, a confession of judgment by an executor in a Justice’s Court, was held wholly invalid ; there being a statute of New York forbidding justices to hold pleas in cases where executors or administrators are parties on either side.

The same principle was recognized in the case of Striker v. Mott, 6 Wend. R. 465. And in this Court, in the cases of M'Call v. Peachy, 1 Call 55, and Clarke v. Conn, 1 Munf. 160, the general principle was asserted, that when the Court had not jurisdiction of the subject matter, the consent of parties cannot give it.

In this aspect of the case, it does not seem to. be material whether the want of jurisdiction in the County Court of Maryland to make an order for the discharge of a debtor, reaching to contracts made in other States, and between citizens of such other States, be placed on the ground assumed in the third resolution of the Supreme Court, in the case of Ogden v. Saunders, to wit, that the exercise of such a power is incompatible with the rights of other States, and with the constitution of the United Statesor on the general doctrine of international law, that the discharge of a contract by the laws of a country in which the contract was not made or to be performed, will not be a discharge in any other country. Upon the first hypothesis there would be an inhibition to the jurisdiction of the Court, which the mere appearance of the party to oppose the discharge could not remove ; and upon the second, a mere want of power in the Court over the subject matter, which such appearance could not confer. In this view I am further sustained by the decision of the Supreme Court of Connecticut, in the case of Norton v. Cook, 9 Conn. R. 314. In that case the discharge was obtained in New York, in pursuance of an act of the Legislature of that State, and purported to discharge the debtor from all debts, &c. due before the assignment of his property under the act. The contract was made in New York, and the discharge obtained at a time when the creditor was a citizen of Connecticut, and the debtor a citizen of New York. In a suit brought in Connecticut on the contract, the discharge was regularly pleaded; and it was averred in the plea that upon a citation to appear before the Judge before whom the insolvent’s petition was pending, and shew cause why the insolvent should not be discharged, the defendant and plaintiff had both appeared before said Judge, and were fully heard on said petition. From a judgment of the Court, deciding the plea to be insufficient, there was an appeal, and the judgment of the Court below affirmed. The Supreme Court of Connecticut, after first deciding that the discharge was, under the authority of the cases decided by the Supreme Court of the United Slates, invalid, proceeded to consider whether the creditor had done any act which precluded him from insisting on its invalidity. “It is averred in the plea, (said the Judge delivering the opinion of the Court,) that the plaintiff was cited to appear, and did appear by attorney, before the Judge, and was fully heard on the debtor’s petition then pending. And it is contended that by this act he has waived his extra-territorial immunity, and submitted himself to the laws of the State of New York. The case of Clay v. Smith has been relied on as sustaining this position. In that case the only point decided was, that the defendant having obtained his certificate of discharge under a State law, and the plaintiff having come in and received his dividend under the law, was no longer at liberty to question its constitutionality.” It is very manifest that this case is not like the present, in point of fact; and I think there is a clear distinction between them in point of principle. There, the plaintiff might be considered as acquiescing in the validity of the discharge, by coming in voluntarily and accepting a dividend under it. But here no such inference can be drawn. The clear inference from the averments in the plea, is, that the plaintiff appeared to oppose the motion; and it would be difficult to conceive upon what principle he can be considered as acquiescing in the constitutionality of a law, when, for aught that is shewn, the very object of his appearing was to make it appear that the law was unconstitutional.”

I do not deem it necessary to express any opinion as to the propriety of the decision, in the foregoing case, upon the first question therein presented, but I rely upon the reasoning of the Court upon the second branch of the case, as strong in support of the view I have taken of the effect that Gibson’s appearance to contest his debtor’s discharge, ought to have upon his rights.

I have not seen any decision of the Supreme Court of the United States, or of any of the State Courts, maintaining the proposition that a discharge of an insolvent debtor, under the laws of one State would, of itself, be valid as a discharge of a contract made in another State between citizens of such other State; and there has not, in my opinion, been any thing in the conduct of the creditor to bring him within the influence of the case of Clay v. Smith, or to debar him of the privilege of insisting upon the invalidity of the discharge before a Virginia forum. I am of opinion therefore to affirm the decree.

The other Judges concurred in the opinion of Judge Daniel.

Decree affirmed.