Owens v. Bowie

2 Md. 457

• Court: Court of Appeals of Maryland
• Decided: December 15, 1852
• Status: Published

Opinion

Eccleston, J..,.

delivered the opinion of the court.

The appellants- and Evan Evans, who has since died, sold and delivered goods to Osborn Sprigg, in the city of Washington, in the District of Columbia, for which a promissory note was executed in Maryland. In 1843 a judgment was obtained upon this note in Prince Georges county court, by the appellants and Evan Evans against Osborn Sprigg, on which judgment an attachment was issued the 1st of December 1846, and sometime after the 2nd day of that month, and prior to the' first Monday of April 1847, was laid in the hands of R. Bowie and R. W. Bowie, who wére summoned and appeared as garnishees.- Osborn Sprigg applied for the benefit of the insolvent laws on the 2nd of December 1846, on which day he conveyed all his property to C. C.- Magruder, his trustee, and was finally discharged on the first Monday of April .1847. When the attachment issued the garnishee, R. Bowie, owed to Sprigg more money than was sufficient to pay the claim of the plaintiffs. After the first Monday of April 1847, a large' portion of the debt due from R. Bowie was- paid to the trustee of the insolvent.- This debt was a judgment transferred by Robert W. Bowie to 0. Sprigg, which transfer was placed in the hands of his trustee on the 2nd of December 1846. The plaintiffs, Edward and John Owens, were citizens of the District of Columbia at the time of selling the goods, and so continued to be up to the issuing of this attachment. Evan Evans was likewise a citizen of said district when the sale was made, and resided there until his death.

In' argument two questions were presented:—1st. Allowing the original contract to have been made in the District of Columbia, and there to be fulfilled, notwithstanding the promissory note was executed in this State, and a judgment obtained upon that note in a Maryland court, the' plaintiffs being citizens of the District of Columbia and the defendant a citizen of this State, whether, by an attachment on that judgment levied upon the assets of Sprigg, after his petition for the benefit of the insolvent laws, the plaintiffs acquired any preference over domestic judgment creditors?

2nd. Conceding that the discharge of the insolvent did not impair the right of the non-resident creditors upon judgment in the State court, to obtain, by attachment or execution, a preference over domestic judgment creditors, did the appellants, under the circumstances of this case, acquire such a right to the funds attached by them, in consequence of the priority of their attachment, as gave them a preference over the attachments of the other non-resident creditors named in the agreement or statement of facts set out in the record?

In discussing the first question, we understood the argument on behalf of the appellee as conceding, that the contract on which the original judgment was founded, was to be considered as a District of Columbia contract. Any other view of the subject would be in conflict with the decisions in Frey vs. Kirk, 4 G. & J., 509; Boyle vs. Zacharie and Turner, 6 Pet. R., 643; Cook vs. Moffatt and Curtis, 5 How. R., 307; and Larrabee vs. Talbott, 5 Gill, 435. It was contended, however, that although in a suit upon such a contract, a discharge under our insolvent laws could not prevent the recovery of an absolute and unqualified judgment, yet when that is rendered in a court of this State, the original contract is thereby extinguished for all purposes, and the judgment is then a Maryland contract, and as such, subject to our insolvent laws.

Not only is the right to obtain an absolute judgment on a contract of this sort, in opposition to an insolvent discharge, fully and distinctly announced by the learned judge, in Larrabee vs. Talbott, at page 437; but the authority to placean execution under .such judgment upon any property of the insolvent debtor, to be found undistributed in the hands of his trustee, is also clearly stated. These principles, if admitted to be correct, sustain the claim of the present appellants. But it has been said by the appellee’s counsel, that there was no judgment in that case-, and the facts did not call for such a decision. Admitting this to be so, still if the doctrine advanced be correct, we should feel ourselves as much bound to yield' our assent as if the- decision had been made upon matters directly in issue. The principles alluded to are introduced by the judge, as having been- “settled by the adjudications of the Supreme Court,” and we can have no better authority, especially on questions arising under the constitution of the United States.

In Boyle vs. Zacharie and Turner, it was insisted on the part of the defence, that the contract on which the judgment was rendered, was a Maryland and not a Louisiana contract: it was held, however, to be the latter. In that case a judgment was obtained in this State in the circuit court of the United States, the plaintiffs being citizens of Louisiana. On the 23rd of December 1819, the suit was instituted. On the 31st of the same month, Boyle, the defendant, applied for the benefit of the insolvent laws of Maryland, and was eventually discharged. On the 1st of May 1821, judgment was confessed, and, by consent of parties, the following memorandum was entered of record: “The judgment subject to the legal operation of the defendant’s discharge under the insolvent laws of Maryland.” The judgment was once renewed by scire facias, and eventually a fi. fa. was issued and levied upon a ship belonging to Boyle. He then filed a bill for an injunction to prevent the sale of the ship. The principal ground relied upon was, that this property was exempted from the levy, by his discharge as an insolvent. The injunction was granted, but when the answer came in, it was dissolved and the bill dismissed, which decision the Supreme Court affirmed. Here we have a judgment obtained in Maryland, by non-residents, upon a Louisiana contract, enforced against a citizen of this State discharged by our insolvent laws.

In Woodhull and Davis, vs. Wagner, 1 Baldwin’s Rep., 296, a judgment was obtained in Pennsylvania, in the circuit court of the United States, upon a New York contract. The defendant was arrested under a ca. sa., and applied for his release, in consequence of having been discharged under the insolvent laws of Pennsylvania. The application was resisted, upon the ground that the debt was contracted in New York, upon which the discharge had no effect. This view being sustained by the court, the defendant was remanded to custody.

This question came before the present distinguished chief justice of the Supreme Court, in the case of White, Warner & Co., vs. Winn and Ross. The material facts may be found stated in Kettlewell vs. Stewart, 8 Gill, at page 499; then follows the opinion. For the present purpose it is sufficient to say, that the plaintiffs, who y?eje citizens of Pennsylvania, obtained a judgment in the eir.cuit .court of the United States in Maryland, against Jones, on the 1,5th of January 1847, who had applied for the benefit .of the insolvent laws. Upon this judgment an attachment was issued, and laid in the hands of Winn and Ross, who were the permanent trustees of Jones, the insolvent. The question being whether the plaintiffs were entitled to condemnation of the property under their attachment, the chief justice says, on page 501: “They may assert their remedy against property in the hands .of the permanent trustees, over which th,e insolvent had a control at the time of his application, and which, but for his application, might have been subjected to their execution.” B.ut th.e property attached did not belong to Jones at the time of his application.

On the 26th of October 1846, Jpn.es had .conveyed all his property to Winn and Ross in trust, to pay his .creditors, giving preference to such as should release him. This deed, the plaintiffs insisted, was void under the statute of 13 JEliz. The court, however, thought otherwise, but was of opinion, that under the facts admitted, the conveyance .created undue and improper preferences within the meaning of the act of 1834, ch. 203, and that the property thereby conveyed had vested in Winn and Ross, as permanent trustees of J.ones. It thus appears, that independently of our insolvent system the deed of October was valid. If then the plaintiffs thought proper to call to their aid the insolvent laws, for the purpose of invalidating the deed, they could only do so upon the terms of submitting to the distribution of the insolvent’s assets, according to the provisions of those laws. In speaking of the dilemma in which the plaintiffs were placed, the court say: “If they deny the validity of the proceedings on Jones’ application for the benefit of the insolvent laws, the deed will afford a sufficient protection against them. If they insist that the deed is avoided by the provisions of the insolvent laws, they must claim under the permanent trustees such interest only as by that law is awarded to them.” The result was that they were required to “elect to be non-suited, or to take a dividend of the funds in the hands of the trustees.”

The language first quoted, from page 501 of 8th Gill, fully sustains the position stated in Larrabee vs. Talbott, as likewise do the cases of Boyle vs. Zacharie and Turner, and Woodhull and Davis, vs. Wagner. But it has been most earnestly insisted, that these cases can have no influence on the question, because the judgments in them were obtained in the United States .courts, contending that there is a most important difference between those judgments and such as are rendered in the courts of the State. Admitting to the fullest extent that where the contracts were to have been paid or executed beyond the limits of this State, the judgments rendered thereon in the United States courts might be enforced against the property of insolvent defendants, regardless of our act of insolvency, but insisting that judgments under like circumstances in the State courts mnsi be subject to the insolvent laws of the State.

An examination of the authorities will show clearly, that no such distinction is recognized. How can it be otherwise? Whilst the courts of the general government will follow the decisions of the State tribunals in regard to State laws not unconstitutional, the State courts are bound by the adjudications of the Supreme Court, upon all questions arising under the constitution of the United States. The subject before us is of this latter description.

After commenting upon many decisions in regard to State insolvent laws, in summing up what may be considered the result of them, among other principles stated by Judge Baldwin in the 1st vol. of his reports, at page 301, is the following : “ That it makes no difference whether the suit is brought in a State court or the court of the United States; the rule is the same as to rendering judgment or issuing process.” Again, on page 302, the judge says, “the discharge of the defendant by the insolvent laws of Pennsylvania can have no operation on the contract or the remedies to enforce performance.”

In Cook vs. Moffatt et al., at page 308, the court say, “The constitution of the United States is the supreme law of the land, and binds every forum, -whether it derives its authority from a 'State or from the United States. When this court has declared State legislation to be in conflict with the constitution of the United States, and therefore void, the State tribunals are bound to conform to such decision. A bankrupt law which comes within this category cannot be pleaded as a discharge even in the forums of the State which enacted it.”

A decision of'our own court in Frey vs. Kirk, 4 G. & J., 520, is to the same effect. The contract in that case was to have -been performed in Pennsylvania, and the defendant’s discharge, under the insolvent laws of Maryland, was relied upon in defence, but to no effect. The opinion of the court shows, that in the argument it had been supposed a different constitutional rule operated in the United States courts from that which prevailed in the courts of the State where the debt- or is sued, and by whose laws he is discharged. Ogden and Saunders is considered as not sustaining such a position, and the court then say, “If it were otherwise we should feel some difficulty in sanctioning the doctrine, that a creditor, by pursuing his debtor by suit in the courts of the State granting the discharge, thereby stripped himself of any rights secured to him by the constitution of the United States, or in any manner waived them.”

These authorities we deem quite sufficient to show, that in regard to the right to levy upon property of an insolvent defendant by way of execution, there is no difference whether the judgment, on which the process is issued, be rendered in a State court or in a circuit court of the United States, where the plaintiff is a non-resident, and whose original claim was to have been executed beyond the limits of the State in which the judgment-was rendered and the defendant obtained his discharge as an insolvent. If this be true, then, to establish the right of the present plaintiffs to a judgment in their favor upon this attachment, it is only necessary to refer again to the cases of Woodhull and Davis vs. Wagner; White, Warner and Co., vs. Winn and Ross, and Boyle vs. Zacharie and Turner, in each of which a judgment was obtained in the circuit court of the United States, in the State where the defendant was discharged as an insolvent. In the first and third of these cases executions were issued and sustained, expressly upon the ground that the contracts were to have been performed out of the States where the defendants were discharged. The second case recognized the principle, that the plaintiffs might have attached property in the hands of the insolvent’s trustees, over which he had a control at the time of his application, and which would have been subject to their execution but for his application.

In opposition to these views, and in support of the doctrine contended for on behalf of the defendants, that the original contract is entirely extinguished by the judgment, and that the judgment is a Maryland contract, subject to our insolvent laws, reference has been made to the case of Green vs. Sarmiento, 3 Wash. C. C. Rep., 17. That was an action of debt, brought in Pennsylvania upon a judgment rendered in New York in 1797. The original contract was made at Teneriffe. In 1801 the defendant was discharged at Teneriffe as a bankrupt, which discharge he pleaded in defence. It was contended on the part of the plaintiff, that the original contract was completely extinguished by the judgment, and could not be noticed in reference to any question to which it might previously have given rise, and therefore the debt must be considered as having accrued under the judgment in New York. The court say, “This is certainly true, where the judgment is conclusive and unexaminable in a court of coordinate jurisdiction; nor do the court mean to intimate, that the rule would not be the same in a case where the judgment is only prima facie evidence of a debt. But since this latter point has. not been- considered, and' the court are1 prepared to give an opinion upon the great question which has been discussed, of the conclusiveness of a judgment of a State court in every other State of the Unipn, it is thought best to decide it now.” “The' great question,” whether the New York judgment was conclusive in Pennsylvania or not, being established in the affirmative, the' principle then adopted by the court seems to be, that whatever effect a bankrupt discharge at Teneriffe could have on the original contract if obtained prior to the judgment and pleaded in bar to an original suit upon the contract, yet, after the New York judgment, in the suit upon that in Pennsylvania, the discharge at Teneriffe could not avail the defendant. As a foreign discharge it could have no influence' upon the judgment, which was prior to it, and based upon a contract, which, at the time of its rendition^ was unaffected by bankruptcy. To allow the discharge to affect the contract, so as to defeat the judgment, would be to destroy its conclusive character, by allowing the defendant to go behind the judgment for the purpose of annulling it, when the facts show, that the judgment was obtained upon a valid contract, in full force at the time of its- rendition.

If the case of Green vs. Sarmiento is to be considered as establishing the doctrine, that a judgment so completely and entirely extinguishes the contract on which it is founded, that the judgment becomes the contract, and therefore the place of the judgment is-t.hepZace of the' contract; and that the orignal contract cannot be looked to as having any effect or influence upon the rights of the parties; a decision in Massachusetts, and several in New York, will be found directly in opposition.- D. T. Wendell's case, 19 Johns., 153; Betts vs. Bagley, 12 Pick., 572; Wyman vs. Mitchel, 1 Cowen, 316; Raymond vs. Merchant, 3 Cowen, 147; Johnson vs. Fitzhugh, 3 Barb., Ch. R., 360; Dresser vs. Brooks, 3 Barb., S. C. Rep., 429; Clark vs. Rowling, 3 Comstock's R., 216. Some of these cases have gone to the extent of allowing a defendant to look behind a judgment at the nature and place of the contract, for the purpose of availing himself of the benefit of an insolvent or bankrupt discharge,- under circumstances ■where the discharge could have no influence if the judgment was to be considered as the contract, in some of them the plaintiffs were permitted to do likewise, for the purpose of showing, that a discharge relied upon by the defendant could not relieve him, because the original contract was such as not to be affected by the discharge, although it would have discharged the judgment if that had been the contract.

We wish to be understood as referring to those cases with no other view but to show, that where there has been a judgment the original' contract may be looked at for a purpose not inconsistent with the validity of the judgment, but designed to Carry it into effect. On pages 480 and 481, of 12 Pick., Chief Justice Shaw says, “Although a judgment, to some purposes, is considered as a merger of the former, and as constituting a new' cause of action, yet, when' the essential rights of parties aré influenced by the nature of the original contract the court will look into the judgment for the purpose of ascertaining what the nature of such original contract was.” He refers to Wyman vs. Mitchell, 1 Cowen, 316, and adds, “Any other decision would carry the technical doctrine of merger to air inconvenient extent, and cause it to work injustice.” This' language of Judge Shaw is cited with approbation in 3 Barb., S. C. R., 450.

The cases in regard to how far a judgment will operate as a merger or an' extinguishment óf the original cause of action will be found collected and examined with much care by Judge Gridley, in Dresser vs. Brooks, already referred to. On page 447, he says, “That the original debt still exists in the judgment, and that the judgment is but the original debt in a new form.”

In Clark vs. Rowling, at page 320 of 3 Comstock’s Rep., the court admitted, that notes as evidence of an indebtedness were merged in the judgment, which, as a greater security, extinguished the lesser, but they did not assent to the proposition, that the judgment, to all intents, became a new debt, and so fully merged or extinguished the notes, that the court could not look behind the judgment for the purpose of protecting the defendants in an equity connected with the original contract. They say, “A judgment, instead of being regarded strictly as a new debt, is sometimes held to be merely the old debt in a new form, so as to prevent a technical merger from working injustice. And this exception to the doctrine contended for by the plaintiff, has obtained, especially in cases of insolvency and bankruptcy, for the protection as well of the creditor as the debtor, and has been applied impartially for the benefit of both.”

From the dissenting opinion of Ch. J. Bronson it will be seen, that his views on the subject of merger or extinguishment, to some extent, differ from those of a majority of the court. He thought the judgment in that case prevented the defendant from availing himself of his discharge as a bankrupt. The principles, however, which he recognizes are such as fully justify our views on the present occasion. On page 228 he holds, that a judgment on a note merges or extinguishes the note, so that another action could not be maintained upon it. But it is still undoubtedly true, “ that courts may sometimes look beyond the judgment to see for what cause it was recovered.” He admits this may be done for various purposes. The plaintiff may do so to secure his rights as a creditor against a fraudulent conveyance by the debtor, or as an answer to an insolvent or exemption law passed after the contract was made on which the judgment was recovered. But he says, “neither party can go behind the judgment for the purpose of attacking or impeaching it by pleading in a collateral action.”

It was argued by counsel, in Wyman vs. Mitchell, that the judgment merged the original debt, so that no suit could be maintained upon it. The judge having admitted the correctness of the general proposition, then says, “But I see no objection, in principle, to permitting an inquiry into the time of making the agreement and contract on which the first judgment was founded, for the purpose of taking the case out of the operation of the defendant’s discharge.” It is perfectly clear, that the court, in that case, did- not consider the original contract so completely extinguished by the judgment as to make the judgment a new debt in every respect. Had the judgment been regarded as a new debt, originating at the time of its rendition, the discharge of the defendant must necessarily have applied to such new debt, and discharged it. The result, however, was just the reverse. The court gave judgment in favor of the plaintiff, upon the ground that the original debt, which was the foundation of the first judgment, arose prior to the passage of the insolvent act, which they held to be void as to all such debts.

The case of The Bank of the United States vs. Merchants Bank of Baltimore, 7 Gill, 434, has been referred to as sustaining the decision in Green vs. Sarmiento, and affirming the principle contended for by the appellee. In 1836 a suit was instituted in Pennsylvania, upon an account, and judgment obtained on the 23rd of April 1842. On the same cause of action an attachment was issued in Maryland, on the 11th of September 1841. A judgment of condemnation in the attachment was resisted, because of the judgment in Pennsylvania, which, it was said, extinguished the original cause of action. This view of the subject was sanctioned by the Court of Appeals, and Green vs. Sarmiento was referred to as authority on this point. This decision adopts the principle, that a judgment so far extinguishes the original cause of action as to prevent a second judgment from being recovered upon it in another suit at law. It does not, however, as the appellee contends, decide that the contract is extinguished in every case for all purposes. If a bond is given, reciting it to be for the purchase money of land, and a judgment should be rendered upon it after the obligor had conveyed away all his interest in the land, and the obligee should exhaust all his remedies at law without obtaining payment of his claim, it cannot be doubted that he might file a bill in equity upon the bond, for the purpose of enforcing his vendor’s lien. The apparently comprehensive character of the language used in 3 Wash. R,, and 7 Gill, in regard tó the extinguishment of a contract by a judgment, cannot properly be considered as ex-eluding every exception to, or qualification of, the rule. The point actually decided in the latter case was, that the extinguishment prohibited a second judgment at law upon the original claim. The present is not a second suit on the original cause of action, but an attachment, or'in other words, an execution upon the judgment to compel payment.

It has been argued, that the two last mentioned cases are directly in conflict with that of Larrabee vs. Talbott. It cannot be supposed that the learned judge, who delivered the opinion in 7 Gill, so considered them, as he had prepared the opinion in Larrabee vs. Talbott, only one year before.

Assuming, however, that the decisions in 3 Wash. R., and 7 Gill, are to be considered as asserting the doctrine, that the judgment before us extinguished the original contract, and the judgment became a Maryland contract, subject to the insolvent laws of this State; nevertheless we cannot adopt the principle, because it is in direct opposition to Woodhull and Davis, vs. Wagner; White, Warner and Co., vs. Winn and Ross; Boyle vs. Zacharie and Turner; Larrabee vs. Talbott, and the Massachusetts arid New York cases referred to on th,e subject.

Whilst none of the cases cited from Massachusetts and New York deny that a judgment so merges the cause of action on which it is based that a subsequent suit cannot be maintained upon it, this, as a general principle, is expressly conceded in some of them. These cases, therefore, are not at variance with the real point decided in the Bank of the United States vs. Merchants Bank of Baltimore. And that case can only be considered as authoritatively adopting any doctrine supposed to have been decided in Green vs. Sarmiento, except that which is necessarily involved in the principle of merger or extinguishment, to the extent just stated.

So far as the present suit is concerned it is unnecessary to oppose the doctrine of Green vs. Sarmiento, supposing the real point there decided to be, that the New York judgment was so conclusive as to prevent the defendant from impeaching or invalidating the same, upon the ground, that the original contract was discharged by his discharge as a bankrupt, obtained after the rendition of the judgment.

When the present contract was entered into, the constitution of the United States protected it from being in any degree affected by insolvent proceedings in this State. This protection followed it into, and formed part of, the judgment. To sustain the views of the appellants there is no necessity to go behind the judgment for the purpose of impairing it in any respect, or to deny its conclusiveness, but just the reverse. To say that the insolvency of the defendant will not prevent a condemnation under the attachment, is to affirm the power of the original judgment, and afford to the plaintiffs the full benefit of the constitutional protection, to which they were entitled at the inception of the contract, and which remained unimpaired up to the rendition of the judgment.

The appellee admits, that upder such a contract as the one stated in the record, if a suit was pending in a Maryland .court, the constitution of the United States would prevent the defendant from setting up his discharge as an insolvent in bar of the plaintiff’s right to an absolute and unqualified judgment. But such a judgment, when obtained, wdll be subject to our insolvent laws. According to this theory, the constitution protects the foreign contract of a non-resident creditor, until there is a judgment upon it, and then the protection ceases. A very slender protection this. Certainly it is not such as we think the constitution intended, or such as the authorities we have cited sanction.

Glenn vs. Gill, 2 Md. R., 17 and 18, has been referred to as denying the right of the appellants to their attachment. There the attachments were laid in the hands of a receiver appointed by the chancellor, before either of the parties had applied for the benefit of the insolvent laws. Having understood that the circuit court of the United States for this district had decided that the funds in the hands of the same receiver could not be attached, and that this point had gone up to the Supreme Court, this court determined to follow that decision until it should be determined otherwise upon the appeal. The priorities of the respective claimants were not adjudicated upon, but left to be settled elsewhere, not conceiving the question regularly presented in that case. The chief justice who decided in the circuit court, that an attachment could not b.e laid in the hands of a receiver, we have already seen, held, in White, Warner and Co., vs. Winn and Ross, that property, belonging to an insolvent at the time of his application, might be levied upon in the hands of his trustee, under an attachment. Neither his opinion, therefore, in regard to the receiver, nor the decision of this court, based upon it, can be considered as a denial of the right of the appellants to a judgment in their favor. In -regard to such claimants, our insolvent laws are considered as nullities, and as the insolvent’s trustee acquires all his rights under those laws he can have no rights in opposition to those of the appellants.

The counsel for the appellee has pressed, with much earnestness, the following remark in Glenn vs. Gill: “Although in the case of Larrabee vs. Talbott, 5 Gill, 426, it was held, that a non-resident creditor might attach in the hands of a trustee of an insolvent any undistributed funds, we do not feel ourselves called upon to extend the principle any further than we are actually compelled.”

An unwillingness to extend the principle recognized in the last mentioned case, further than the court were bound to go, is not understood to be a denial of the authority of that decision, but that the doctrine contained in it is a hardship on domestic creditors, and therefore should be kept within the adjudications on the subject, If, in our opinion, the plaintiff’s claim is in accordance with the principle adopted in that case, and is sustained by the decision of Chief Justice Taney, there would be no inconsistency in giving judgment for the plaintiffs, although we might be unwilling to extend the doctrine further than we are bound to do.

Farmers Bank of Delaware, vs. Beaston, 7 G. & J., 428, has been relied upon for the purpose of showing, that an attachment cannot be levied upon property or assets in the hands of the trustee of an insolvent debtor. The language of the court is to that effect; but it is perfectly manifest, that such a question did not necessarily arise in the case. Receivers had been appointed by the circuit court of the United States in a case in equity, pending between the United States and the Elkton Bank. The suit before the court was an attachment by the Farmers Bank of Delaware against Beaston, as garnishee of the Elkton Bank. A judgment of condemnation was resisted for several reasons, among them, because the United States had acquired a preference in consequence of the insolvency of the Elkton Bank; and if no such priority existed, still the appointment of the receivers by the circuit court placed the debt due from the garnishee, so under the control of that court, as a court of equity, that it could not be taken in execution or attached. The receivers did not take possession of the assets generally, and they did not assume any control whatever over the claim in controversy. The court thought the law relating to sequestrators should apply to receivers, and then say, “If the sequestrators do not take possession, and a judgment creditor takes out execution, notwithstanding the sequestration awarded, there may be a levy under the execution.” It was also held, that there was no insolvency or bankruptcy. As there was no insolvency or bankruptcy, and no trustee of an insolvent or assignee of a bankrupt, and the appointment of the receivers, under the circumstances, was considered as presenting no obstacle in the way of the plaintiffs’ attachment, it is evident there was no necessity for deciding, that “money or effects in the hands of the assignee of the bankrupt, or the trustee of an insolvent debtor, cannot be attached.” Where this remark is made the court are discussing the question, how far the right of the attaching creditors was affected by the appointment of receivers, and their giving bond without further action on their part. So far as that case was concerned, it might have been settled just as it was, without even deciding whether funds or property, in the posession of a receiver, could be attached.

The right of a non-resident creditor to attach properly in the hands of an insolvent’s trustee, not necessarily arising in that case, it cannot be considered as a binding authority on the point, especially in direct opposition to Larrabee vs. Talbott, and White, Warner & Co., vs. Winn and Ross. We do not forget that a similar remark has been made in regard to the former of those two cases, so- far as relates to this particular subject. But the decision there, of the point directly in issue,- absolutely required- the adoption of the principle, that the State insolvent laws were null and void, as against non-resident creditors holding foreign dlaims.-

Proof was offered to show that when the goods'were transferred and delivered to the appellant, Larrabee, as agent for D. Berrien; Jr., & Co.-,-by Rogers and Frick,-they Were actually insolvent, and their'coridition knoWn'to D. Berrien', Jr., & Co., arid' that Rogers and Frick intended at that time to apply for the Benefit of the insolvent laws. By the' express' provisions'of those laws, such a transfer is declared to be absolutely void, and'the property to be vested in the' trustee, upon his appointment, as effectually as any property specified in the schedule of the insolvent, and yet the court held that transfer perfectly valid; because D. Berrien, Jr., & Co. Were citizens-of New York, having a contract there to be perforined. Speaking of'the effect of the constitution''of the United States upon State insolvent laws, the court make'large quotations from Cook vs. Moffatt and Curtis; among others, adopting the principle, that a State “has no constitutional power to inflict her insolvent laws on contracts- and persons riot within her limits.” See page 439 of 5 Gill. And again, on page 441, it is'said: “The true view of the case is; that the right of these creditors to obtain a preference over the other creditors of the insolvent, and the'privilege of the'debtors to give this preference, stands precisely as if these insolvent laws were not- to be found among the statutes' of the State.” Those laws are, therefore, to be regarded' as perfect nullities, entirely void-of any power to invalidate' such a transfer, and having no effect upon the rights of those creditors, notwithstanding the language of the statutes, uncontrolled by the constitution of the general government, would certainly have rendered such a transfer perfectly nugatory.' Thus it will be seen that the unconstitutionality of the insolvent laws, in reference to the claims of creditors under such circumstances, was necessarily involved in that case; and being about to decide in favor of the creditors claiming adversely to those laws, it would seem to be quite consistent for the court to hold, that such claimants might obtain in a Maryland court an absolute and unqualified judgment, and to levy their execution upon any property of the insolvent debtors remaining in the hands of their trustee. The recognition of which principle, sustains the claim of the appellants.

The rights of creditors of this description, acquired under attachment or trustee process, are elaborately discussed in 2 Woodbury and Min. Rep., 449, Perry Manufacturing Co. vs. Brown, et al. The decision of Judge Woodbury in that case, in the circuit court of the United States for Massachusetts, is in conflict with' Larrabee vs. Talbott, and White, Warner & Co., vs. Winn and Ross. There the proceedings in insolvency had commenced prior to the institution of the suit, in which it was claimed that a lien of preference had'been created by trustee process; because the plaintiffs were non-residents, having a claim to be performed out of the State of Massachusetts, and suing in the United States court. It was held that no lien was created, inasmuch as, by the proceedings under the insolvent laws of the State, the title to the property had passed from the control of the insolvent debtor. The doctrine of that case is, that the transfer of property under a State insolvent system, will prevent any subsequent lien from being acquired thereon by a non-resident creditor; but when he obtains a prior lien, it will be protected by acts of Congress and the constitution, and will not be superseded or discharged by the insolvent laws, nor is the suit or contract to be thus discharged. See page 472,'where it is also said: “The advantages belonging to the non-resident creditor thus suing, are not the creation of a lien in any different way, or to any extent different from a resident creditor; but the retention of one, when earliest created, and saving it, and the contract and suit from being discharged under the insolvent system, as they are discharged by it in the State courts, and the being able to attach any future earnings or property of the debtor, which the resident creditors cannot do after the insolvent proceedings in their own domestic tribunals.”

In denying to such creditors the right to acquire a lien, subsequently to an application for a discharge under insolvent laws, upon the grounds taken in that case, is not only in opposition to the two late cases so frequently referred to by us on this point, but is contrary t-o the decisions of the Supreme Court declaring such laws to be void, as against the creditors here spoken of. And especially is such a doctrine at variance with that class- of cases, by which it has been settled that if a creditor, whose claim is protected against insolvent proceedings, shall voluntarily make himself a party to, or claim under them, he-will, in all respects, become- subject to the laws by, which they are regulated.

By refusing the creditor the privilege of obtaining a lien upon the property of his debtor, after a transfer under his petition- as an insolvent, it will be necessary for the creditor, either to-abandon all claim to any payment out of the property to be distributed under- the petition, or else consent to take a dividend, and thereby relinquish his constitutional protection, so- that his debt will be discharged or released upon-the same terms-as if he were a domestic creditor. Such at least would be the-effect of claiming a dividend from the insolvent’s trustee, according to a number of adjudged cases. If it should be saidThat whilst Judge Woodbury holds the doctrine stated in relation to the inability of a non-resident creditoi;, to obtain a lien after the property has been conveyed by operation of law to the trustee of the insolvent debtor, his opinion must be considered as permitting the claimant to share in the distribution of the insolvent’s assets, without losing the right of claiming and enforcing the payment of the balance of his debt, out of any future earnings or property of the debtor. If this be the proper construction of the opinion,-it is objectionable, in that view, as being at variance with a principle well established by a number of decisions. See 1 Baldw. C. C. Rep., 301; 3 Peters, 411; 14 Peters, 75; 5 Gill, 441; and White, Warner & Co., vs. Winn and Ross. Yielding to what is considered the weight of authority, we must decide in favor of the appellants on the first question.

Having already said the proceedings under the insolvent laws are to be considered as inoperative, when coming in collision with the claim of the appellants, it matters not whether the attachment actually came into the hands of the sheriff, and was levied before or after the insolvent’s petition. And being levied before the attachments of the other non-resident creditors, the appellants are entitled to a decision in their favor on the second question, so far as any question may arise in reference to any claim on the part of the other attaching creditors, in reference to the same assets levied upon by the appellants.

We therefore reverse the judgment, and under the agreement filed a procedendo will be awarded.

We do not consider that under this record any of the cases mentioned in it, except the first, are regularly before us for decision, and therefore pronounce no judgments in them. .But the court below will have no difficulty, in applying the principles of this opinion to these cases under a similar state of facts.

Judgment reversed and procedendo awarded.