Collins & Co. v. Rodolph

3 Greene 299

• Court: Supreme Court of Iowa
• Decided: July 15, 1851
• Status: Published

Opinion

Opinion by

Kinney, J.

Collins & Company sued the defendant in an action of debt before a justice of the peace, and filed the following claim as their cause of actions “ Plaintiffs claim one hundred dollars their due on judgments rendered against said Kodolph, Iowa county, Wisconsin, before John P. Tramel, a justice of the peace, in February, 1818.” The same day on which the claim was filed one of the plaintiffs filed an affidavit, on which a writ of attachment was issued. On the day of trial two transcripts of judgments were filed, duly certified and authenticated, by which it appeared that two several judgments were recovered by the plaintiffs against the defendant before John P. Tramel, a justice of the peace, in Iowa county, "Wisconsin. The defendant moved to quash the writ of attachment because: 1st. There was not sufficient account filed previous to the issue of said writ. 2nd. Because of the insufficiency of the affidavit. On thiB motion the justice quashed the writ and dismissed the proceedings at the costs of the plaintiffs. From this decision of the justice the plaintiffs appealed to the district court.

In that court a similar motion was made by the defendant, and it appears from the bill of exceptions that the court sustained the motion and quashed the writ, on the ground that the transcripts should have been filed at the time of the suing out of the writ of attachment, and that it was not sufficient to file a statement as was done in this case without the transcripts being filed at the time of the commencement of the action. This decision of the court below the plaintiffs contend is erroneous.

The statute under which the writ of attachment was issued, after enumerating the conditions upon which a vmt of attachment may be sued out by a creditor, provides that “ any such creditor wishing to sue his debtor by attachment may apply to any justice of the peace, who would have jurisdiction of the debt, if the suit was brought in the common form, and if the cause of action be a bond or note, shall file the same with the justice; and if it be any other kind of a contract, shall file with the justice a plain intelli-> gible account or statement thereof,” &c. Key. Stat. 339, § 2.

It was not necessary in this case for the plaintiffs to have filed their transcripts in the first instance before the writ could issue. The statute embraces only those causes of action which are founded on bonds or notes, and when either a bond or note constitute the foundation of the action, such bond or note must be filed with the justice before the attachment can be sued out. These being the only instruments necessary to file, it follows that if the action is based upon any other cause of action this provision in relation to notes .and bonds is not applicable.

The statute cannot be extended So as to include other obligations than those enumerated. That which constituted the cause of action in the case under consideration was neither a note nor a bond, hence it was not incumbent upon the plaintiffs to file it as a condition to the issuing of the writ. .The statement of the cause' of action filed with the justice was in strict compliance with the statute, and consequently the court errSd in quashing the writ by reason .of the transcripts not having been filed with the justice before the attachment issued.

It appears from a separate transcript sent up to this court that by agreement of parties the issues of law and fact were submitted to the court, whereupon the judgment was rendered in favor of the plaintiffs upon the judgments rendered on the notes, which constituted the original foundation of the actions against the defendants. The following agreement was filed in the court below, and made part of the record: “It is agreed by the parties, in submitting this case to the court, that the plaintiffs are, and always have been, residents of Galena, Illinois, and never have been residents of Wisconsin; that the notes appended to the transcripts are the identical notes upon which suits were brought in Wisconsin, and upon which transcripts on file have been issued and judgments rendered; that the notes aforesaid are the identical notes mentioned in the discharge under the insolvent laws in Wisconsin, a copy of part of the record of which is on file, as far as the names of the plaintiffs appear, or the interests of the plaintiffs are concerned.” It appears also from a record of the probate court of the county of Iowa, Wisconsin, filed in the court below, that by a proceeding under the insolvent laws of that state that the defendant was on the 23d day of December, 1848, discharged from all his debts, including the claims of the plaintiffs in this suit, and also that the plaintiffs appeared by counsel and resisted such discharge. Tiffs discharge was pleaded in bar of the plaintiffs’ action, but was overruled by the court, and decided to be no bar, whereupon a judgment was rendered in favor of the plaintiffs upon the transcripts aforesaid. This decision the defendant, by consent of. plaintiffs’ counsel, assigned for error.

Upon the facts presented in this case, two questions naturally, ai'ise:

1st. Will a discharge under the insolvent laws of a particular state bar debts contracted in another state, the creditor not being a resident of the state where such discharge was obtained? If not, then, 2d. Does the creditor abandon his extra-territorial immunity by appearing- and contesting the discharge of the insolvent debtor?

This first question underwent an able examination in the case of Watson v. Bourne, 12 Mass. 336. Tiffs was air action of debt, brought upon a judgment rendered in the court of common pleas, for the county of Kent, in the state of Rhode Island. The defendant pleaded in bar a discharge under the insolvent laws of that state; to which the plaintiff replied, that at the accruing of the debt, and at the time of the proceeding under the insolvent laws, and the rendition of the judgment on which the action was brought, he was. and ever since had Leen, a citizen of the commonwealth of Massachusetts. To this replication the defendant demurred. The demurrer was overruled and the replication adjudged good. It was held that a discharge could only operate where the law was made by an authority common to the creditor in all respects; where both are citizens and subjects. The same doctrine obtained in the case of Mason v. Wash, 1 Breeze 17. See also cases of Burton v. Wallack, 8 Pick. 186; Witt v. Follett, 2 Wend. 457; Norton v. Cook, 9 Conn. 314. A large number of authorities might be cited in support of the doctrine laid down in the case of Watson v. Bourne, but we consider it unneo essary. Wherever this question has been presented the courts, with but few exceptions, have held that debts in another state were not barred by a discharge under the insolvent laws where the debtor resides. These laws are local. They are made for the relief of the citizen, residing within the territorial limits of the state which enacts them, and they cannot be made to effect the rights of the citizens of other states. The creditor residing in the foreign state cannot enjoy the advantages which they confer, neither can he be prejudiced by proceedings iinder them. As he does not constitute a part of the sovereignty of the commonwealth, he cannot consent to their enactments, and is not bound by tbeir provisions. The civil process of the court cannot reach him, nor can he be compelled by any proceeding which the state may institute to file his claims and receive a jpro rata dividend of the assets of the debtor. The state has no right to pass any law by which the contracts of a citizen of a sister soverignty shall be absolved, nor can any published notice airect his rights as a party to a contract in another state. The general rale is that a state bankrupt law, as it prima faoia 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. Agnew v. Platt, 15 Pick. 417. The territorial immunities of the citizens of one state cannot be affected or impaired by the legislation of a state of which he is not a resident. But it may be said that a state has the right to pass statutes of limitation so as to operate upon contracts in the hands of nonresidents. If this is so, it is no argument against the doctrine here laid down. In that case the statute does not impair the right', it only prescribes a time in which the creditor must bring his action, and if it is not brought within the time limited, payment is presumed.

On this branch of the subject then, we have no hesitation in coming to the conclusion that the discharge under the insolvent laws of Wisconsin would not bar the plaintiff’s right to recover, he being a resident of the state of Illinois, at the time the contract whs made and the discharge in insolvency obtained.

We now come to the next branch of this case. Did the plaintiff's abandon their extra territorial immunities by appearing and contesting the defendant’s right to a discharge? To a satisfactory solution of this question we have only to look into the authorities, which, if not so full and uniform, are still entirely satisfactory.

In the case last referred to it was contended by counsel for defendant that as the plaintiffj who was a non-resident, was one of the petitioning creditors, he made the proceeding and the discharge under it valid and effectual by his personal act, when it would not have been so by the force of law. But the court say, “it being void as a legal proceeding, his assent could not 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. 444; 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.”

Emanating, as this authority does, from a highly respectable tribunal, it is entitled to much weight. But if the plaintiffs, in the case under consideration, had petitioned tor the discharge of the defendant, we would be inclined to the opinion that such discharge would bar the claim unless other authorities could be produced in support of the one last quoted. But it will be recollected that they appeared, to oppose the discharge, and filed their objections on the ground that they were citizens of Illinois, and no proceeding in insolvency in Yfisconsin could operate as a bar to their contract. But if a petitioning- creditor’s debts are not absolved by a discharge in insolvency in the state where he is not domiciled a fortiori a contesting creditor’s debts certainly would not be.

In the case of Norton v. Cook, 9 Conn., 314, it was held that, although the creditor a citizexx of Connecticut, with the debtor aprpeared in New Yox-k before the jxxdge, by whom the petition was tried at a time appointed, and both parties xvere fully heard thereon, the certificate of discharge would be no bar to an action in favor of the citizen of Connecticut upon a contract made in New York. If the creditor petitions for a discharge and receives a pro rata share of the property of the baxikrupt we are inclined to the opinion, that he could not afterwards xnaintain an action against the debtor oxi a pre-existing contract or debt. Iix such case the law coxxld presume not only consent to the discharge, but a satisfaction of debt, by becoming party to the proceedings axxd receiving the dividend to which he was entitled.

This appears to be the purport of the decision in the case of Clay v. Smith, 3 Peters, 411, so confidently relied upon by counsel for defendant. Smith was a citizen of Kentucky, and Clay of Loxxisiana. The latter obtained his discharge and Sxnith received texx per cent., the dividend declared by the assignee of the bankrupt. Smith'voluntarily made himself a party to the proceedings by petitioning with other creditors for the discharge of day, and receiving his pro rata dividend of the assets. The question before the supreme court was, whether Smith, by voluntarily making himself party to such proceedings, had not abandoned his extra territorial immunity from the operation of the bankrupt laws of Louisiana. '

The court were of the opinion that he had, and was bound by the decision of the state court to the same extent to which the citizens of that -state were hound.

This decision chief justice -Shaw takes occasion to review in the case of Agnew v. Platt, before referred to, in which lie says that the case is very briefly reported, tbo facts are not fully stated, and no reasons assigned. Whether it is the deliberate decision of the supreme court or not, it cannot be an authority in favor of the defendant in this case. By adopting the decision to the fullest extent it cannot be made applicable to the facts in the case at bar.

The plaintiffs were not petitioners, nor is there any evidence that they received their pro rata .share of the bankrupt’s estate.

They contested the -defendant’s discharge, but by doing tbis they ;did not waive or abandon any of their rights as non-resident creditors. The case of Field v. Howland, 17 John. 85, cited by the counsel for the defendant arose between two citizens residents of the state of New York, and tbe only question decided was that the conduct of the plaintiff’s attorney on the trial in bankruptcy was equivalent to an abandonment of his suit. The court granted a motion to set aside an execution issued after the discharge, and also a. perpetual stay of the execution on the judgment.

We have not been able, after much .examination, to find a single adjudged case to the effect that an apj)earance on the part of a .non-resident creditor merely to contest the insolvent’s -discharge will waive Ms rights as a .-citizen of another state, or jeopardize the collection of his debts. We are, therefore, of the opinion that She .court did not err in coverruling the plea of the defendant, and in entering judgment against him.

'P. <& J. M. Smith-, -for plaintiffs in error. ¡0. A. Thomas, for defendant.

'Plie decision of the coiirt, quashing the writ of attachment and ordering a .restitution of .the property ■to the idefendant is reversed at -his costs. But the decision of -the .court.rendering judgment upon the transcripts and .notes,ig ¿affirmed.