Martin v. Berry

37 Cal. 208
CourtCalifornia Supreme Court
DecidedJuly 1, 1869
StatusPublished
Cited by14 cases

This text of 37 Cal. 208 (Martin v. Berry) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Martin v. Berry, 37 Cal. 208 (Cal. 1869).

Opinion

By the Court, Sanderson, J. :

This was a motion to quash an execution upon the ground that the defendant had been discharged from all liability upon the judgment upon which it had been issued by a final decree in certain proceedings taken by him under the statute of this State for the relief of insolvents and the protection of creditors. The motion was denied in the Court below, and the defendant has appealed.

The affidavit and exhibits upon which the motion was made show that the judgment upon which the execution had been issued was rendered on the 17th of January, 1866, and that the proceedings under which the defendant claims to have been discharged from its payment were commenced on the 1st of May, 1867, and that the final decree therein was rendered on the 1st of July, 1867.

The only question presented for our consideration is as to the effect of the Act of Congress entitled “An Act to establish a uniform system of bankruptcy throughout the "United States,” of the 2d of March, 1867, upon the statute of this State, under which the defendant obtained his discharge.

By the eighth section of the first Article of the Federal Constitution power is granted to Congress “to establish uniform laws upon the subject of bankruptcies throughout the United States.” In respect to this and cognate provisions there was at first some conflict of opinion upon the question whether the power thereby granted was exclusive, but it was finally settled that it was not, upon the ground that there was nothing in the language itself or in the nature of the power which required that it should be exercised exclusively by Congress. The question arose in the case of Sturges v. Crowninshield, 4 Wheaton, 122. The case was an action of assumpsit, brought in the Circuit Court of Massachusetts, upon two promissory notes. The defendant pleaded a discharge under “An Act for the benefit of insolvent debtors and their creditors,” passed by the Legislature of New York [210]*210at a time when there was no Act of Congress upon the subject of bankruptcies, and it was held that the statute of New York was not repugnant to the Constitution of the United States, or, in other words, that the power over that subject was concurrent, and the several States might exercise the power so long as there was no conflicting legislation by Congress.

• The question arose again in the case of Ogden v. Saunders, 12 Wheaton, 213. That, also, was an action of assumpsit brought by a citizen of Kentucky against a citizen of Louisiana. Among the defenses pleaded was a certificate of discharge under an Act of the Legislature of the State of Kew York, of which State the defendant was a resident at the date of his acceptance of the hills of exchange in suit. One of the questions was, whether the law of Kew York was invalid as being repugnant to the Constitution of the United States. It was elaborately argued by very able counsel upon both sides, and it was again declared that the States were not prohibited from passing insolvent or bankrupt laws except when Congress has actually exercised its power upon the same subject, and the State laws conflict with those of Congress. (See, also, Blanchard v. Russell, 13 Mass. 12; Adams v. Story, 1 Paine’s C. C. 79.) This corollary follows: That all the State laws upon the subject become inoperative or suspended the moment the law of Congress takes effect, so far as all persons and cases which are within the purview of the latter are concerned. While there was some difference of opinion between the members of the Court in the case of Sturges v. Crowninshield upon other points, they were all agreed, as stated by Mr. Justice Story in Ex parte Eames, 2 Story, 326, “ That, when Congress did pass a Bankrupt Act, it was supreme, and that the State laws must yield to it, and could no longer operate upon persons or cases within the purview of such Act. The enactment of such an Act suspended the State laws on the same subject, and created a disability in the States to exercise powers of the like nature.”

It is claimed, however, on the part of the defendant, that [211]*211his proceedings under the State law were commenced prior to the date at which the Act of Congress took effect, and are, therefore, unaffected by the latter Act, although the assignment was not made and his discharge was not decreed until after it had taken effect.

If a State Court has acquired jurisdiction under a State j law of a case in insolvency, and is engaged in settling the I debts and distributing the assets of the insolvent before or at the date at which the Act of Congress upon the same subject takes effect, the State Court may, nevertheless, proceed with the case to its final conclusion, and its action in the matter will be as valid as if no law upon the subject had l been passed by Congress. This question arose in the case of Judd v. Ives, 4 Metcalf, 401, and was determined as just stated. In that connection, however, a further question arises as to when or at what stage in the proceedings the jurisdiction of the State Court attaches so as to exclude the case from the operation of the Act of Congress. Does it attach upon the filing of the petition, or at some subsequent] stage of the proceedings—at the completion of the publication of notice to creditors, or the appointment of the assignee, \ or the actual assignment and delivery of his property by the insolvent to the assignee? This must, necessarily, depend upon the terms of the State law. In.the case cited from Massachusetts, it was held that a case was not within the operation of the Act of Congress if it had been commenced before the Act of Congress took effect. But it must be observed that, under the Insolvent Law of Massachusetts, which was before the Court in that case (Supplement to the R. S. Mass., p. 84,) the Judge to whom the petition was presented was required to forthwith appoint, by warrant under his hand and seal, some suitable person as messenger to take possession of the estate of the insolvent, and the messenger was required to publish a notice to the effect that a warrant had issued against the estate of the insolvent, and that the payment of any debts and the delivery of any property belonging to such debtor, to him or for his use, and the [212]*212transfer of any property by him, were forbidden by law. Thus, at the very commencement, the debtor became divested of his property, and a qualified right thereto vested in the messenger, and it was for that reason that the Court fixed, upon the commencement of the proceedings as the point of time at which the jurisdiction of the State Court attached, so as to exclude the case from the operation of a Federal law going into effect thereafter. The Court said: “But we are nevertheless of opinion that this consequence of the Act is limited to cases instituted under the Insolvent Law subsequent to the period when the Bankrupt Law went into operation, and that it cannot supersede or suspend proceedings rightfully commenced under the Insolvent Act prior to the time of its going into operation. The counsel for the petitioner admits that it could not, if the property of the insolvent had been actually assigned prior to the first of February, when the Bankrupt Law went into operation; but he contends that, as the assignment in this case was not actually made until the seventh of February, the whole proceedings were suspended or superseded.

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Bluebook (online)
37 Cal. 208, Counsel Stack Legal Research, https://law.counselstack.com/opinion/martin-v-berry-cal-1869.