Hempstead v. Reed

6 Conn. 480

• Court: Supreme Court of Connecticut
• Decided: July 15, 1827
• Status: Published

Opinions

Daggett, J.

The defendant in error contends, that the plea is insufficient, because if the act were valid, it is not well pleaded. Here several objections are relied on ; one only of which will be noticed, as that, in the opinion of the Court, is fatal to the plea.

The act counted upon, and set up, is introduced into the plea, and repeatedly declared to be “ An act for giving relief in cases of insolvency.”

It is averred, that the recorder of the city of New-York, by the act declared on, is authorized to exercise the power to discharge insolvent debtors, in the cases therein mentioned. On inspection of the certificate of discharge, recited in the plea, in hisce verbis, granted, as the plea alleged, by Peter A. Jay, recorder of the city of New-York, to the defendant, it appears, that the proceedings were had, and the discharge allowed, by virtue of an act of the legislature of the state of New-York, entitled “ An act giving relief in cases of insolvency, and the acts amending the same." What acts of amendment existed, and if any existed, what provisions they contained, no where appears. On those, in part, the recorder’s certificate of discharge rests for its validity ; and yet they are neither pleaded, counted upon, nor referred to, except in the certificate as be-ore stated. It is very clear, that the courts in this state cannot judicially take notice of these acts of the legislature of New-York, and certainly not of proceedings under them. Both must be set out, with at least certainty to a common intent; but here no part of the acts amending the act of the 12th of April, 1813, and on which the discharge is grounded, is shown to the court. That the laws of the state of New-York are, in this state, deemed foreign laws, and must be proved as facts, appears in Brackett v. Norton, 4 Conn. Rep. 517. That proceedings under them must be specially set forth, in cases of this nature, is a doctrine too familiar to require argument. The plea is, therefore, bad.

But a far more important question has been argued, by the counsel, one which involves the merit of the defence, and on which I will now express an opinion. That question is, could this defence avail the defendant, if well pleaded? Here two en-quines are naturally suggested.

1. Would the matter upon the facts set forth, if correctly pleaded, avail the defendant before the tribunals of the state of New-York ?

2. And if so, will the defence be sustained, by the courts of Connecticut ?

The peculiar importance attached to one of these enquiries, and the manner in which it has been discussed and decided, by the courts of the United States, and several of the state courts, seem to justify a few preliminary remarks. Whether since the adoption of the constitution of the United States, the legislature of a state can pass a law discharging a debtor from his contract to pay a debt consistently with the 10th section of the 1st article of the constitution, which declares, that “no state shall pass any law impairing the obligation of contracts,” is a question which has undergone all the research, which genius, talent, and learning could bestow on it, by the bar, and the bench. It has been truly vexala questio ; and perhaps, in some respects in which it may be viewed, it is yet an open question.

Again : Bound together in the most interesting and important relations, as are the United States and the several states, conflicting opinions in their respective tribunals, especially in regard to constitutional questions, could not be too deeply deplored- If, on such questions, there could be a harmonious concurrence of opinion, every patriot would rejoice. If this cannot be attained, it is no improper condescension in the state tribunals, to yield to the supreme tribunal of the nation, to which is wisely confided the power of an ultimate decision of such questions.

In Jackson ex dem. St. John v. Chew, 12 Wheat. Rep. 153. the supreme court say : “ This Court adopts the local law of real property, as ascertained by the decisions of the state courts, whether these decisions are grounded on the construction of the statutes of the state, or form a part of the unwritten law of the state.” And again in the same case, the following declaration forms a part of the opinion of the court: “So also, in the cases of Polk’s lessee v. Wendall, 9 Cranch 98. and Thacher v. Powell, 6 Wheat. Rep. 127. the construction of state statutes respecting real property, was under consideration; and the court say, they will adopt and be governed by the state construction, when that is settled, and can be ascertained, especially where the title of land is concerned.” Again, in the same opinion, it is said, (speaking of the necessity of adopting the decisions of the state courts relative to the construction of statutes, or the application of settled rules of real property)- “ Such a course is indispensable in order to preserve uniformity, otherwise the peculiar constitution of the judicial tribunals of the states and of the United States, would be productive of the greatest mischief and confusion.” These principles are so fit, and so eminently worthy of regard, and express such extensive comity to the state tribunals, that they call for a corresponding comity on their part; and justify this Court in yielding unreservedly to the decisions of the supreme court, when ascertain ed, in all questions involving a construction of any part of the constitution of the United States.

Having made these remarks, the first question above stated will be considered; would the matters, upon the facts set forth in this plea, if correctly pleaded, avail the defendant before the tribunals of the state of New-York?

In Golding v. Prince, 5 Hall’s Law Journal 602. Judge Washington gave an opinion, that since the adoption of the constitution of the United States, no state could pass a bankrupt law, because that power was, by the constitution, exclusive in the congress. In Blanchard v. Russell, 13 Mass. Rep. 1. the supreme court of Massachusetts, in March, 1816; in Adams v. Story, in 1817, Judge Livingston, in the circuit court of the United States ;-in the Farmers’ and Mechanics' Bank v. Smith, the supreme court of Pennsylvania, in 1817, 6 Hall’s Law Journal 547.-held, that such laws were valid, when passed by the states, no bankrupt law of the United States being in operation ; and that a discharge regularly obtained under them, was good. In Sturges v. Crowninshield, in 1819, 4 Wheat. Rep. 122. the supreme court of the United States decided, that ‘‘since the adoption of the constitution of the United States, a state has authority to pass a bankrupt law, provided such law does not impair the obligation of contracts, within the meaning of the constitution, art. 1. sect. 10. ; and that a law of the state, which not only liberates the person of the debtor, but discharges him from all liability for any debt contracted previous to his discharge, so far as it attempts to discharge the contract, is a law impairing the obligation of contracts,” and therefore void. In that case, the law of the state of New-York then in question, was passed after the contract was made ; and it was therefore retrospective ! In McMillan v. McNeill, 4 Wheat Rep. 209. the court, at the same term decided, but without argument, that “ it made no difference in the application of the principle, whether the law was passed before or after the debt was contracted.” In Mather v. Bush, 16 Johns. Rep. 233. the supreme court of the state of New-York, in 1819, adopted the doctrine of the supreme court of Pennsylvania and Massachusetts, and held, that the insolvent act now in question was valid, so as to discharge the debtor from all liability, the debt having been contracted in New-York, before the passage of the law;-the debtor having obtained a discharge under the act; both parties being, and always having been, citizens of New-York. That case was, in the opinion given, not considered as opposed to the decision of Sturges v. Crowninshield, or McMillan v. McNeill, cited above.

The first case involving this question, which came before this Court, was that of Smith v. Mead, 3 Conn. Rep. 253. in June, 1820. The debt was contracted in Canada, by a citizen of New-York, with a citizen of New-York, in July, 1818. A discharge under the insolvent law of the state of New-York, passed April, 1813, (the law now pleaded) was, with the proceedings under it, set up as a defence. It was decided, that as the contract was made in Canada, the parties did not refer to the insolvent law of New-York, and therefore, if it were valid, the discharge under it was without any effect. This Court also expressed its acquiescence in the decisions in Sturges v. Crowninshield, and McMillan v. McNeill, considering them as the voice of the court entrusted to decide ultimately questions of this description. In Hammett v. Anderson, 3 Conn. Rep. 304. in the same year, the same doctrine was holden, where the debt was contracted in New-York, between citizens residing there, subsequent to the insolvent law, and a discharge under it pleaded. Judge Bristol dissented in both cases. He held, that the cases cited from Wheaton, did not settle the question of the validity of a state law when the debt was contracted and a discharge obtained under it, the parties being citizens of the same state. He concurred in the opinion of Chief Justice Spencer, in Mather v. Bush, cited above. In the cases of Medbury v. Hopkins, 3 Conn. Rep. 472. and Woodbridge v. Wright, 3 Conn. Rep. 523. the same doctrine was recognized by this Court, following, as was believed, the decisions of the supreme court of the United States.

In 12 Wheaton 213, the case of Ogden v. Saunders is reported at large ; and the reporter has furnished the decisions of several other cases argued in connection with it. It is to be observed, that these cases had been continued, in the supreme court, two or three terms, for advisement, after the most elaborate and learned arguments of eminent counsel. In the principal case, Ogden v. Saunders, the plaintiff, a citizen of Louisiana, sought, by writ of error, to reverse a judgment obtained against him, by the defendant in error, a citizen of Kentucky, before the district court of the United States in Louisiana. The plaintiff below declared upon certain bills of exchange, drawn in 1816, by one Jordan of Lexington, in Kentucky, upon the defendant below, Ogden, in the city of New-York, (the defendant being then a citizen and resident of New-York,) accepted by him there, and protested for non-payment. The defendant pleaded, among other pleas, a certificate of discharge under an act of the state of New-York, of 3rd April, 1801, for the relief of insolvent debtors, called the three fourths act. The facts were found in the form of a special verdict, on which the court in Louisiana rendered a judgment for the plaintiff below, thereby declaring the act void ; and the cause was brought up, by writ of error. Judges Washington, Thompson and Trimble were in favour of a reversal, proceeding on the ground, that the debt having been contracted subsequent to the passage of the law, although the creditor was a citizen of Kentucky, and the suit instituted in Louisiana, the law of New-York and the certificate of discharge under it, created a bar; and that the decisions of Sturges v. Crowninshield and McMillan v. McNeill did not govern the case. Chief Justice Marshall, and Judges Duvall and Story, were in favour of an affirmance, adhering to the doctrine in the above cases. Judge Johnson, holding the destiny of the case in his hands, concurred with the three judges last-named in affirming the judgment, on the ground that the law of New-York, did not affect the creditor Saunders, as he was a citizen of Kentucky, and had not submitted to the laws in New-York, by instituting his suit before their tribunals. In the case of Shaw v. Robins, cited in a note, page 369. of the 12th of Wheaton, the decision was grounded on similar principles, and governed by that of Saunders v. Ogden. In the history of this case, page 357, Wheaton, the learned and faithful reporter, says : " Judgment having been en-tend in favour of the validity of a certificate of discharge under the state laws in those cases (argued in connection with Ogden v. Saunders) where the contract was made between citizens of the slate under whose law the discharge was obtained, and in whose courts the certificate was pleaded, the cause was further argued, by the same counsel, upon the points reserved, as to the effect of such a discharge, in respect to a contract made with a citizen of another state, and where the certificate was pleaded in the court of another state, or of the United States.”

I cannot doubt the correctness of the information thus given in relation to these cases: and if the decisions were as declared by the reporter, it follows irresistibly, that the first question in this case, as before stated, viz. Would the matter upon the facts set forth, if correctly pleaded, avail the defendant before the tribunals of New-York, must be answered in the affirmative, in conformity to the decisions of the supreme court; because that must have been the precise point adjudged in the cases mentioned.

I am, then, brought to the second question proposed, viz. Will such a defence be sustained by the courts in Connecticut ? I am well satisfied, that this question must also be answered in the affirmative. That an instrument executed in New-York, by the creditor, releasing the debt, and that an award of arbitrators, or a judgment of a court of competent jurisdiction in New-York against the creditor’s right of recovery, would bar it, before a court in Connecticut, cannot be doubted. In the case of Griswold v. Pitcairn, 2 Conn. Rep. 84. it was declared, by the court, to be an established rule, that a foreign judgment, when used by way of defence, is as conclusive, to every intent, as one of our own courts. It is no less clear, that a certificate of discharge legally obtained under a valid act of the state of New-York, will be a discharge every where. It has been shown, that this defence would have prevailed before the courts where-the law was passed, where the parties lived, where the contract was made, and where the discharge was obtained. It ought, then, upon principles of law generally recognized, to prevail in Connecticut. In Pearsall al. v. Dwight & al. 2 Mass. Rep. 89. Chief Justice Parsons, in delivering the opinions of the supreme court, on the question whether the statute of limitations of New-York could be pleaded to an action on a promissory note executed in New-York, and sued before a court in Massachusetts, by a citizen of the former state, against a citizen of the latter state, lays down the following as established principles of law : “ The law of the state of New-York, will be adopted, by the court, in deciding on the nature, validity and construction of the contract. The form of the action, the course of judicial proceeding, and the time when the action must be commenced, must be directed, exclusively, by the laws of this commonwealth.” In 5 Mass. Rep. 509. is the case of Baker v. Wheaton. That was an action on a promissory note, made by the defendant, payable to one Benjamin T. Chandler, and by him indorsed to the plaintiff. The defendant pleaded in bar the several insolvent acts of the state of Rhode-Island, and that he was discharged pursuant to those acts; and he avers, that he and Chandler were citizens of the state of Rhode-Island, at the time of the discharge, and long before and after; and that Chandler, long after the discharge, indorsed the note to the plaintiff The suit was brought in the court of Massachusetts ; and one question was, whether the discharge was a good bar. The supreme court held, that it was ; and Parsons, Ch. J. in pronouncing the opinion of the court, thus speaks :- “ When the contract was originally made, the parties were both citizens and inhabitants of Rhode-Island.-The contract was there made ; and there to be performed. The laws of Rhode-Island, therefore, gave effect to the contract; and by those laws must the legal operation of it be determined. When, therefore, the defendant was discharged from the contract, lege loci, the promisee was hound by that discharge, as he was a party to the laws of that state, and assenting to their operation. But if, when the contract was made, the promisee had not been a citizen of Rhode-Island, he would not have been bound by the laws of it, in any other state ; and holding this note at the time of the discharge, he might afterwards maintain an action upon it. in the courts of the state.” These appear to be sound legal positions, and hardly need support. They were laid down after argument, deliberation and advisement. Mr. Justice Johnson, in the case of Ogden v. Saunders (page 362-3.) quotes this decision with approbation. Chief Justice Spencer, in Mather & al. v. Bush, 16 Johns. Rep. 249, 250. recognizes the doctrine, and adds, that the position is universally recognized in courts of justice. Huberus (vol. 2. b. 1.-tit. 3.) in a very learned disquisition on the effect of the lex loci contractus, lays down the proposition, that by the courtesy of nations, whatever laws are carried into execution within the limits of any government, are considered as having the same effect every where, so far as they do not occasion a prejudice to the rights of other governments, or their citizens. It is not pretended, that the law of New-York in question is subject to the exception stated by Huberus, at the close of his position.

With these views of this much agitated question, I am satisfied, that the matter of the defence, if correctly pleaded, would be a bar to the plaintiff’s action upon the note ; but on account of the defects in the plea, the judgment of the superior court must be affirmed.

Hosmer, Ch. J. and Brainard, and Lanman Js. were of the same opinion.