Sherrill v. Hopkins

Curia, per Sutherland, J. The question, presented by this demurrer, is, whether a discharge, under our insolvent act, of April 3, 1801, which not only liberates the person of the debtor, but discharges him from all liability for the debt, is a good plea, in bar to a suit upon a bond, executed in this state, in 1806, the obligor and the obligee being, at the time of giving the bond, citizens and inhabitants of another state. Anterior to the cases of Sturges v. Crovminshield, and McMillan v. McNeil, in the Supreme Court of the United States,(c) the validity of such a discharge could not have been questioned, in this Court: for the case of Penniman v. Meigs,(d) goes the whole length of deciding, that a discharge, under the insolvent act of this state, is a bar to all [106] suits brought here, upon antecedent contracts, wherever made. In that case, the suit was brought upon a promissory note, given in the state of Connecticut, (it is to be presumed, by an inhabitant of Connecticut,) the payde, who was the plaintiff in the suit being an inhabitant of Rhode-Island. The discharge of the defendant, under our insolvent act, was, notwithstanding, held a good defence to the action. But the Jaw is undoubtedly changed, by the cases to which I have alluded; and it is now clearly settled, that a contract, made out of this state, between parties, not citizens or inhabi•tants of this state, cannot be discharged by our insolvent laws. To give to them that operation, it is held, would be to make them laws impairing the obligation of contracts. And the power of passing such laws being prohibited to the states, by the constitution of the United States, they are, of course, unconstitutional and invalid. This is the precise doctrine of the case of McMillan v. McNeil. There the parties to the contract were inhabitants of South-Carolina, and the contract was made there. McMillan, the debtor, subsequently removed to the state of Louisiana, where he. was duly discharged from all his debts, under an insolvent law of that state. To a suit, brought by McNeil, against him, upon the contract made in South-Carolina, he pleaded his discharge. Upon demurrer to the plea, the discharge was held invalid, on the grounds which have been stated. The case of Sturges v. Crowninshield, of Rosevelt v. Ce-bra,(e) and In the matter of Wendell,(f) determine, that a contract, between citizens of the same state, is not affected by a discharge of the debtor, under an insolvent law of that state, passed subsequent to l?te making of the contract. And, in Mather v. Bush,(g) this Court decided, that a discharge, under the insolvent act, of April 3d, 1811, was valid, in relation to all contracts made between citizens of this state, subsequent to the passage of that act. But what the effect of such a discharge would be, upon a contract made in this state, (after the passing of the act) between citizens of another state, has not been expressly decided: though, I [107] think, the reasoning and analogies to be drawn from the cases adverted to, go very far towards settling it. This Court, in Mather v. Bush, held, that the insolvent act did not impair the obligation of the contract; and that the discharge was, therefore, valid : because, the contract having been made between citizens of this state, after the passing of the law, “ was made under the law, and is presumed to have been made with reference to it ;■ and the parties are legally conusant of it at the time. The contract, in such case, is not impaired by the law, for the law is part of the -contract.” The same doctrine is held in Blanchard v. Russell,(h) and the same reason assigned ; though, in that case, only the debtor party to the contract, was an inhabitant of the state where the contract was made. In Smith v. Buchanan,(i) a discharge, under the insolvent law of Maryland, was held to be no bar to an action brought in England, by an English subject, upon a contract made in England, the other party to the contract being, at the time of making it, a citizen of the United States.- In Van Raugh v. Van Rrsdaln,(j) a discharge, under the insolvent laws of Pennsylvania, was held to be no bar to a suit brought by the endorsee, against the endorser, of a promissory note, the endorsement having been made in this state, and the endorsee being, at the time of the endorsement, an inhabitant of this stale, and the endorser and defendant an inhabitant of Pennsylvania. In all these cases; considerable importance seems to be attached to the circumstance, that one, or both of the parties, were inhabitants of the state or country where the contract was made. But, with great deference, it does appear to me, that all these cases stand upon a principle entirely independent of that circumstance. It is that of the lex loci contractus : that the law of the place where the contract is made, must govern the construction of the contract; and that, whether the parties to the contract are inhabitants of that place or not. The rule, I apprehend, is not founded upon the allegiance due from citizens or subjects to their respective governments, but upon the presumption of law. [108] that the parties to a contract are conusant of the laws of the country where the contract is made; that it is made with reference to those laws, and that they, therefore, form a part ^ie contract. That this is the principle of the rule, is evident, from the exceptions to it. For where it appears that the place of performance is different from the place of making the contract, then it is to be construed according to the law of the place where it is to be performed, though neither of the parties reside or owe any allegiance there.(k), In Robinson v. Bland,(l) a bill of exchange, drawn in France, but payable in England, for money won at gaming, in France, was held to be governed by the law of England, and, therefore, void ; and, upon the first argument of the case. Lord Mansfield intimated, that it made no difference whether the parties .to the contract were subjects of France, or Englishmen, resident there, (m) The same general principle is acknowledged in all the following cases : Melan v. Luke of Fitz James, 1 Bos. Pull. 138. Smith v. Smith, , 2 John. Rep. 235. Thompson v. Ketcham, 8 id. 189. Harrison v. Sterry, 5 Cranch, 289. Slocum v. Pomeroy, 6 Cranch, 221. Lanusse v. Barker, 3 Wheat. 101, 146. In Thompson v. Ketcham, it was held that parol proof was not admissible to shew that a note, made in Jamaica, was to be paid in Nem-York. The rule, therefore, upon this subject, is, that the law of' the place where the contract is made, is to control it, unless it appear, upon the face of the contract, that it was to be performed at some other place, or was made with reference to the laws of some other place: and the reason of the rule is, not-the allegiance due from the contracting parties to the government, where the contract is made, or is to be executed, but the supposed reference which every contract has to the laws of the state or country where it is made, or is to be executed, whether the parties are citizens oí that state or country, oy not. The bond, in this case, therefore, having been made in this state, and it not appearing, upon the face of it, that it was to be -paid elsewhere, is to be construed according to the law of this. [109] state. And having been made subsequent to the passing of the law, under which the defendant was discharged, by the established law of this state, as pronounced in Mather v. Bush, the discharge was no violation of the obligation of the contract, and is, therefore, valid. The plaintiff having failed to aver or shew what the law of Massachusetts is, we are to presume it to be the same with our own. The case of Thompson v. Ketcham, is precisely analagous, upon this point, to the case under consideration. The defendant, therefore, upon every ground, is entitled to judgment upon the demurrer. Judgment for the defendant.(n) Footnotes [(c)] 4 wheat'. 122>299 • [(d)] 9 Joh)U Re2‘325- [(e)] 17 John. Rep. 108. [(f)] 19 John. Rep. 153. [(g)] 16 John. Rep. 233. [(h)] ass. [(i)] 1 East,'6. [(j)] 3 Caines, [(k)] ] j^enzs’ Tit. 3,page26. Bmoryv^Grenaugh, 3 Dali, [(l)] lack, Rep. 258. [(m)] ™.) IJnd^ju C. 2 Burr, #07/. [(n)] Smith v. Mead, 3 Con. Rep. N. S. 253, S. P. and vid. also, Woodbridge v. Wright et al. id. 523, and Medbury v. Hopkins, id. 472.