Union Bank of Georgetown v. Smith

24 F. Cas. 566, 4 D.C. 21, 4 Cranch 21, 1830 U.S. App. LEXIS 260
U.S. Circuit Court for the District of District of Columbia·Decided August 2, 1830·Published·Cited by 7 cases

Opinion

Ceanoi-i, C. J.,

delivered the opinion of the Court.

If I understand the argument in support of this defence, it is this: Every contract is to be expounded, and to have effect, according to the law of the place where, or'in reference to which, the contract was made. By the law of Virginia where this specialty contract with Thompson was made, it is entitled to priority of payment out of the effects of the deceased debtor. That those effects are to be administered according to-the law of the place of domicil of the debtor at the time of his death, although found in a jurisdiction where a different rule of administration prevails. That as all the rights in relation to personal property depend upon the law of the place of domicil of the owner, the effects here must either be transmitted to that place of domicil for distribution, or must be distributed here according to the laws of that place.

Therefore, either upon the ground that the priority of payment is a privilege annexed to, or is part of, the original contract, and therefore accompanies it wherever it is to be enforced; or upon the ground that the personal estate of the deceased is to be distributed, or disposed of, according to the law of the domicil, it is contended that this debt due by specialty, to the Virginia creditor, is entitled to priority of payment out of' the assets in the hands of the defendant.

The principal case cited in support of this defence, is Harvey v. Richards, 1 Mason, 381, decided by Judges Story and Davis, in the Circuit Court for the District of Massachusetts, in the year 1818; and this is relied upon, not for any point decided in the cause, but for certain dicta which fell from the learned judge who pronounced the opinion of the court.

In' page 421, Mr. Justice Story, speaking of the opinion of the [26] Supreme Judicial Court of Massachusetts, in the cases of Richards v. Dutch, and Dawes v. Boylston, in which that court had decided that the personal effects of a foreign testator, collected there, must be sent to the foreign tribunal for final settlement and distribution, says, “but no reasons.are given for this particular doctrine.” “ There is, too, a qualification of its doctrine in favor of creditors, the ground of which it would be most desirable to ascertain. Why should not legatees and distributees be entitled to recover out of the assets here, as well as creditors ? . It is true that legatees claim by the bounty of the testator ; but it is a legal right as fixed and vested as the right of a creditor ; and as to distributees the caséis still stronger; for that rests.not on the bounty of the intestate, but on the law of the land, which at the same time enables the creditor to receive his debt out of the assets, and the next of kin to claim the residue. If it be said that it belongs to the public policy of the country to sustain the claim for debts due to its citizens, it seems to me no less to belong to that policy to sustain any other claims of its citizens which are founded in justice and law. If it'be said that the assets are to be distributed by a foreign law, and it. is very difficult and laborious to learn what that law is, and to apply it correctly, the same objection applies to the payment of debts. The priority of debts, the order of payment, the marshalling of assets for this purpose, and the cases of insolvency, the "mode of proof as well as distribution, differ in different countries. And if, in case of debts, the court here is to apply, the lex domicilii, the same embarrassment will arise as in other cases of distribution to the next of kin. There is no more difficulty in the order of payment of legacies than of debts; and courts of law must, in these cases, ascertain and apply the foreign law, precisely as they do in other cases. I pressed the learned counsel for the defendant, at the argument for a solid ground on which to sustain the distinction in favor of creditors, either upon principles of national comity or public convenience, or substantial justice. I heard no vindication of it in either view. And cases may readily be imagined in which such a distinction might work injustice. Suppose that by the lex domicilii the debts are primarily a charge upon the realty, and not on the personal estate, shall the creditor here be permitted to exhaust the personal assets. here, when the succession to the real and personal estate may be different in the foreign country. Suppose the assets abroad and at home ■ have a different order of succession and distribution, shall the creditor here be permitted to defeat that order'?' If,not, then.the court here must apply the lex domicilii to protect the heirs, and must ascertain the nature and extent of that law; and if so, why not [27] proceed to distribute the property among those who are the cestuis que trust entitled to it ? ” And in page 423, he says, “ I confess myself unable to admit the distinction in favor of creditors, without admitting, at the same time, the like rights in favor of legatees and heirs ; nor have I been able to find that distinction sustained, or adverted to, in any other authorities.”

The argument, drawn from these expressions of the judge, is thisIt'is admitted on all hands that the surplus of a deceased foreigner’s movable goods, after payment of his debts, is to be distributed according to the law of "the domicil. The judge cannot perceive any reasons to distinguish between the case of dis-tributees and that of creditors. If there be , none, then the personal effects found here, if' insufficient to pay all his debts, must be apportioned among his creditors according to the law of his domicil, and not according to the laws in this country.

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Union Bank of Georgetown v. Smith, 24 F. Cas. 566, 4 D.C. 21, 4 Cranch 21, 1830 U.S. App. LEXIS 260 (circtddc 1830).

24 F. Cas. 566 (Union Bank of Georgetown v. Smith) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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