Lester v. Christalar

The facts appear from the opinion of the Court. 33v the Court. Daly, F. J. When the judgment was reversed, Kirkland, Mansfield & Hall,, the plaintiffs, were nonresidents of this State, raid at the time of the first publication of the defendant’s application to be discharged from his debts :h an insolvent, Mansfield was dead, Kirkland was a 'resident of the State of Ohio, and Hall was a resident of the State of Pennsylvania, and neither of the plaintiffs in the judgment united with the defendant in his application for a discharge, nor did either of them accept any dividend from his estate. The statute declares that the discharge shall exonerate the insolvent from debts founded upon contracts made within or to he executed within the State, or debts owing to persons resident within the State at the time of the first publication of the notice of the insolvent’s application, or persons not residing within this State who have united in his petition. or who shall accept a dividend from his estate. As the plaintiffs in the judgment did not reside in this State Mor unite in the defendant’s petition, nor accept any dividend -‘■■¡a his estate, it is very clear that they are not embraced in • i nor of these three latter provisions. It is suggested, how-"-■•--r, chat the judgment was a contract made within or to be MMcaAd within this State, and chat if comos'within the' pre- - ms provisions, It does not appear for what the judgment rendered, ¿and we canuo; say whether the debt or obliga- ‘ ‘"il which the law implies from the existence of the judgment M-id its foundation in contract or nut. In a certain sense a [30] judgment is to be deemed a contract. “ "Whatever,” says Blackstone, “ the law orders any one to payq that becomes instantly a debt which he hath beforehand contracted to discharge.” 3 Bl. Com. 158. I think it is at least very doubtful whether the contract implied from, the existence of a judgment, is contemplated by the statute when it refers to a contract made or to be executed in this State. But it is not necessary to pass upon that question, for the defendant’s discharge would not affect a debt due to persons who' were not residents of this State, when he made his application and obtained his discharge. It is now well settled that the insolvent laws of a State have no extra territorial effect, and will not operate to discharge a debt due to creditors who are not within its jurisdiction, unless they participated in the proceedings, either by uniting in the application for the insolvent’s discharge, or by accepting a dividend from his estate. Ogden v. Saunders, 12 Wheaton, 213; Sturges v. Crowningshield, 4 id. 122 ; McMillan v. McNeill, 4 id. 209 ; Hinckley v. Mareau, 3 Mason, 80 ; Clap v. Smith, 3 Peters, 411 ; Boyle v. Zacharue, 6 id. 34S ; Clay v. Moffat, 5 How. 295. The fact that Kirkland, Mansfield & Hill resorted to the Courts of this State, and obtained a judgment upon their claims against the defendant, was not such a submission or assent to the jurisdiction of this State as to entitle it to release, by a discharge under its insolvent laws, the debt or obligation created by the judgment This point was expressly determined in Watson v. Bourne, 10 Mass. 337. Justice Johnson, in Ogden v. Saunders, supra, questioned the soundness of this decision, and thought that there was little doubt but that the decision was wrong; but the same question came up for adjudication in this Court in Donnelly v. Corbett, afterwards affirmed, in the Court of Appeals, 3 Seld. 500.; and though great respect was due to the doubts expressed by so eminent a judge as Justice Johnson, this Court alter mature deliberation, decided in conformity with the decision of the Supreme Conn of Massachusetts. The point was directly involved, and the conclusion we arrived at was essential to support the judgment we rendered. The plaintiff, a resident‘of this Stale, sued the defendant Corbett, a resident of South, Carolina, in the Courts of South Carolina, upon a contract made in this State, but which was to be [31] performed in South Carolina. Having obtained a judgment, a c;l, ?a> was issued, upon which Corbett was imprisoned—and while in custody, he petitioned, as debtors charged in execuf-.ion are entitled to do by the laws of that State, for a general discharge from his debts, upou his surrendering up all his property for the benefit of his creditors, which discharge was granted. The plaintiff afterwards attached property belongin2 to Corbett in this State, and upon a bond given by him to release the attachment, an action was brought in this Court. We held that the discharge under the insolvent laws of South Carolina was no answer to the action ; that so far as these laws discharged him from imprisonment, they affected the remcdy only and were valid, hut that so far as they undertook to release or discharge the debt they were unconstitutional and void, and that no assent on the part of the plaintiff to the insolvent law of South Carolina, nor waiver of his constitutional immunity, could be implied from his bringing an action in that State, to enforce the payment of his debt. Upon all these propositions, the judgment of this Court was sustained by the Court of Appeals. Hie decision of Justice Bronson in the case of Parkinson v. Scovill (19 Wend. 150), to which our attention has been called, was before ns when our decision was rendered, hut we declined to follow it, as it was in conflict with the decision of the Supreme Court of the United States. In Donnelly v. Corbett, the debt was contracted in this State, so that the only distinction between that case and the present is that then the insolvent’s discharge of another State was pleaded in bar, while here the discharge was granted under the laws of our State; but that makes no difference. It was expressly decided in Clay v. Moffatt (5 How. 295), that where the Courts of the United States have declared a State law to be in conflict with the Constitution, and therefor declared void, the State tribunals are bound to conform to such decision; that an insolvent law which comes -within this category cannot he pleaded as a discharge, even in the forum of the State which enacted it, for that a State cannot inflict its insolvent laws on contracts and persons not within its limits. • As the judgment remained in full force, and had never been r-kasod by the discharge granted to the defendant, the plaint-if in this action, though a citizen of this State, could and did [32] acquire by the assignment, a valid and subsisting interest in it. This disposes of all the questions that have been discussed. The report of the referee should he affirmed.