Sacramento daily record-union., 1883-11-06
----------
AN IMPoRTAsT DECISION.

The Superior Court of this county, Judge
Mcfarland presiding, yesterday rendered
a very important decision. 1t was in
proceeding where it was necessary to de-
termine whether an insolvent debtor could
be discharged from liabilities contracted
prior TO the passage of the Insolvency
Act OF 1880 Under the Constitution of the
United States, no Stateispermitted to pass
law to impair the obligation of contract.
One division of lawyers in this State have
held that the Act of 1850 is, in effect, a
new insolvent law; that it provides for
the repeal of all Acts or parts of Acts in
conflict with it, and repeals all former
Acts by implication therefore debts con.
tracted prior to its passage cannot be
affected by proceedings under it, for to per-
NIT that would be to infringe the constitu.
tional provision referred to- Another di.
vision of lawyers hold to the doctrine that
the Act of 1850 is in continuation of the
insolvency system of the State adopted by
the Act Of 1852, and that the Act of 1880
did not repeal the system, nor was it in
tended that it should, and that therefore
all creditors between 1852 and 1880 ex-
tended credit to debtors with knowledge of
the law, and hence a discharge under the
Act Of 1850 is no impairment of the obi.
cation of contract. Judge Mcfarland
holds that the latter view is the correct
one (; that the Act of 1880 did not repeal
the Act of 1852, but that it repealed or
modified it in part only that the later
Act only affected the system of insolvency
established by the earlier statute as to a
portion of the procedure to be observed in
the process of insolvency discharges.
Therefore, he holds. as the State system
was established in 1852, and has ever since
been Of effect, and is not repealed by the
Act of 1850 modifying the procedure un-
der the Act of 1852, obligations of debtors
may be passed upon in insolvency proceed.
ings that accrued anterior to 1880, and
after the State set up its system, for there
is no impairment of an obligation under a
contract, if the creditor contracted with
the debtor under prevailing system of
insolvency, by svailing of which the
debtor might be discharged of his indebt-
edness. He holds that the Legislature did
not intend. by the Act of 1850, TO utterly
obliterate the system set up and main
tained under the Acts of 1852 and 1876,
ana thus abruptly break the chain of legis.
lation on the subject, running back alriost
to the origin Of the Government. The
State esrly adopted the policy of disohsrg.
ing honest and unfortunate insolvents from
their debts, and from that time for more
than quarter of a century, and down to
the Act of 1880, continuously maintained
that policy. The Legislature of 1880
showed no hostility to that policy, or any
desire to overthrow it. A contrary view
and construction Of the law would, without
any imaginable reason, debar from the ben
eft of the law all those who knew them
selves to be insolvent at the date Of the
Act, Du0 hau not cohmehceu proceedings
under the former Acts all those actually
insolvent at the time but did not realize it,
and practically all who should become
insolvent within the next few yesrs.
But if the Act of 1880 is to be construed
as totally repeating all former laws of that
nature, still, as the contract of the plain.
tiff was entered into st time when there
was in full effect 4 law OF similar charac.
ter, on which could be based proceedings
and right TO be discharged and as the
creditor gave the credit with the full
knowledge of that law. and the right of
the defendant under it, the plaintiff may
be discharged on application under the