Court Opinion

ID: 6406663
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:49:30.154328+00
Date Added: 2024-06-11T15:51:14.000550
License: Public Domain

Shaw C. J.
delivered the opinion of the Court. We consider it to be settled by the authority of the Supreme Court of the United States, in Ogden v. Saunders, 12 Wheat. 213, that a State bankrupt law, which provides for the discharge of contracts generally, upon the assignment of the debtor’s effects, will be a law impairing the obligation of contracts, and repugnant to the Constitution of the United States, and void, unless, in a particular case, for its own citizens, in the absence of legislation on the same subject by the Congress of the United States, by providing a uniform system of bankrupt laws. In that case it is held, that where a contract is made after the passage of a State bankrupt law, between parties, both of whom are citizens and subjects of that State, and by its terms, the contract is to be performed within such State, a discharge under such an insolvent law is, between such parties, valid.
The defendant does not, either by his plea, or by his evidence, bring himself within these provisions. He does not state by his plea, that he is, or ever was, an inhabitant of the State of New York. The proceedings before the judge merely state, that the petitioner was imprisoned in King’s County, not that he was an inhabitant or resident of any county in New York. The act of that State, passed April 12, 1813, provides, that the debtor shall make application in the county of which he is an inhabitant, or within which he is imprisoned, and not elsewhere. This merely settles, in which of the several counties jurisdiction shall be had, when, tn other respects, the petitioner is one who is entitled to apply ander the act. The fact therefore, that the insolvent was imprisoned in King’s County, at the time of his petition, affords no presumption that he was then an inhabitant or resident of the State. He might have been arrested when passing through it.
But independently of the pleadings, this is a question of evidence, and the report finds, that the defendant, at the time of the contracting of this debt, was, and ever since has been, % citizen of this commonwealth, residing in Pittsfield. We are therefore ail very clear, that at the time of the suppose-proceeding, *bn advent was not subject to the operation *421nor entitled to the benefit, of the insolvent laws of New York ; but more especially, that at the time of the contract, he was not an inhabitant of that State, and therefore the contract between him and the plaintiff cannot, in contemplation of law, be deemed to be made between parties subject to the laws of that State.
It is no satisfactory answer, that Joyce & Platt were partners, that Joyce lived in, and was an inhabitant of, the State of New York, and that the business of the firm was carried on there. It was also carried on under the same firm at Pittsfield ; but if it were otherwise, and if Platt was a dormant partner, we think it would make no difference. The general rule is, that such a State bankrupt law, as it prima facie does impair the obligation of contracts, is unconstitutional and void, and that this effect is avoided only in case the debtor and creditor, the contracting parties, are domiciled in the State where such law already exists, at the time of the contract. It is immaterial to inquire whether, if Joyce, the New York partner, had obtained a discharge under the insolvent law, it would have availed him as against this plaintiff, because it affords no test of the efficacy of a similar dis charge, obtained in the State of New York, by a citizen of Massachusetts. Though a debt against partners is joint, yet to some purposes, one may be liable where the other is not Both being liable, each is a debtor for the whole. In this very case, the action is proceeding against one, because probably the other is not within the jurisdiction. What the plaintiff relies on, is, the contract between him and the defendant Platt. That contract could not be discharged by the insolvent law of New York, unless both of the contracting parties were at the time of the contract inhabitants of that State. As it is shown that the defendant was not an inhabitant at that time, that discharge cannot avail him.
The last plea alleges a discharge by the plaintiff himself. This is founded solely on the ground, that the plaintiff, by being one of the petitioning creditors, had made the proceeding, and the discharge under it, valid and effectual by his personal act, where it would not have been so by the force of law. But we are all well satisfied, that this plea is not maintained by the evidence. There is nothing to show that *422the plaintiff considered that he constituted the judge his attoi ney in pais, for the purpose of giving his debtor a discharge, if he had not authority by law to give him one ; and it would be a forced construction of this act, to.give it that effect. He considered himself as assenting to, and concurring in, a legal proceeding. This being void as a legal proceeding, his assent cannot make it good as a contract in pais, on several grounds ; not as a ratification, because the whole proceeding was without legal authority and void, and there was nothing to ratify, as in Kimberly v. Ely, 6 Pick. 440 ; nor as a new' contract, because it cannot be inferred from the act of petitioning, that he intended'to renounce or waive his legal rights, any further than that effect would be produced by the legal effect and operation of the proceeding itself.
This point was much considered, in the case last cited ; that decision is directly in point, and we refer to that case generally, for the principles on which this decision is founded
This case is entirely distinguishable from that of Betts v. Bagley, 12 Pick. 572, in this particular, that in that case the contracting parties, at the time of the contract, were both inhabitants of New York, and therefore must be deemed to have made their contract in reference to the existence and to the terms of the laws of that State.
A nonsuit having been entered subject to the opinion of the Court, that nonsuit is to be set aside and a new trial granted.
Shaw C. J.
After this opinion had been delivered, the Court were referred, on the point of the plaintiff’s having been a petitioning creditor, to the case of Clay v. Smith, 3 Peters’s Sup. Court R. 411. It certainly seems, at first view', opposed to our decision. But the case is very briefly reported, the facts are not fully stated, and no reasons are assigned.1 It does not appear w'hether the bankrupt law of Louisiana was deemed void, as repugnant to the Constitution of the United States, which was the precise ground of decision in. Kimberly v. Ely, 6 Pick. 440. That case was decided about the same time, was very fully considered, and is directly in point, and we think, under the circumstances, cannot be considered as controlled by the case cited, which is entitled to the highest respect.