Boardman v. De Forest

Hosmer. Ch. J. The general principle stated to the jury, that a debt may be presumed to have been satisfied, when suffered to lie dormant for twenty years, if the forbearance is unexplained by facts, which destroy the reason of the rule, was unexceptionable. That they ought to infer a satisfaction of the debt in question, if there was an unexplained forbearance for the period above-mentioned, is a legal deduction from the preceding principle. The insolvency of a debtor, it was justly said in the charge of the judge at the trial, constitutes an impediment to the collection of a debt, and repels any presumption of payment from the omission of a demand, which must be nugatory. If, however, there are two joint debtors, one of whom is insolvent, and the other is not. there exists no impediment to the collection of a debt against them. So, if one of them is absent, and the other is not, there is nothing to hinder the demand of payment, or commencement of suit, and the creditor cannot truly say, that he was disabled from the prosecution of his claim. The absence of a debtor for a day, a week, or the ordinary term of a West India voyage, cannot be considered of that character and permanency as to constitute a disability to be taken into the account, in order to repel the presumption of payment from lapse of time. The solvency of John H. De Forest at all times, and his not having been absent within the principle explained, re — 9 — pel the objection of disability, supposed to arise from the incapacity and insolvency of the defendants. The plaintiffs, to annul the presumption of payment insisted on by the defendants, have principally relied upon the supposed fact, that in the year 1804, a part of their debt was paid, under the defendants’ act of insolvency. This claim admits of several satisfactory answers. The trustees were invested with a limited jurisdiction, restrained to the allowance of debts existing anterior to the first of April, 1799; but no debt of this description was ever exhibited to, or allowed by them. An action of book debt was brought by the plaintiffs against the defendants, as early as June, 1798, on which they recovered judgment, in November, 1799. Upon this judgment an execution issued, which was shewn to the trustees, and allowed by them as a claim against the defendants; and this is the only demand, that ever was exhibited. Now, this was a debt of record, which originated several months subsequent to the period, to which their jurisdiction was limited. Of consequence, the act of allowance by the trustees, was extrajudicial and void. Undoubtedly, the above-mentioned judgment was rendered on a debt, which existed before the 1st of April, 1799; but this debt was extinguished, by the judgment. The former debt by contract was changed and determined, by the voluntary procurement of a security of a higher nature. 1 Roll. Abr. 648. 70. 71. Rhodes v. Barnes, 1 Burr. 9. Pleasants v. Meng & al. 1 Dal. 380. Birch v. Sharland, 1 Term Rep. 715. It must be admitted, that when two persons are bound, jointly and severally, and the obligee has judgment against one of them, he may sue the other, and that as against him, the nature of the debt is not changed. Higgen's case, 6 Co. 46. But this rule is entirely inapplicable to the case under discussion, and is founded on the principle of transit in rem judicatam, which relates only to tire particular cause of action on which the judgment is recovered, operating as a change of remedy from its being of a higher nature. Drake v. Mitchell, 3 East, 251. 258. Hence, it is a decided point, that a judgment, in its effect, is limited to parties and privies, and cannot operate to change any other collateral, concurrent remedy, which the party may have. Chipman v. Martin, 13 Johns. Rep. 240. But the authority of the thing judged is conclusive, when the same thing is again demanded, for the same cause, in the same capacity, and between the same parties. Poth. Obligations, 278. Notwithstanding the above doctrine of merger by judgment, at common law, is — 10 — incontrovertibly established, under the English system of bankruptcy, a different doctrine, by way of exception, has been recognized. In Ambrose v. Clendon, 2 Stra. 1042. it was adjudged; that where a debt by simple contract existed before an act of bankruptcy, and one was afterwards secretly committed, and then a bond taken, it did not so far extinguish the simple contract, as to deprive the creditor of the right of petitioning for a commission. Bull. N. P. 41. Dawe & al. v. Holdsworth & al. Peake’s Rep. 64. This determination was founded on the equitable construction in favour of creditors, and on the necessity of the case. Discard this construction, and the commission of a secret act of bankruptcy, than which nothing is more common, would deprive the creditors of the bankrupt by simple contract, at the time of an act of bankruptcy committed, of their right to any part of his estate, if unwittingly they, without knowledge of the act of bankruptcy, should take a bond, or recover a judgment. But what is the analogy between this case and the one before the court? Here was a petition for an act of insolvency, to which the plaintiffs were parties, and after it had been granted, a few days only before the time, when, by the delivery up of their property, the insolvents would have right to their certificate of discharge, the plaintiffs, with full knowledge of the consequences, voluntarily elected to take judgment. What ground of equity, or of general policy, requires the adoption of a precedent founded on a different state of facts, and a departure from the established principles of the common law. There can be none, unless it be a correct postulate, that the creditors of an insolvent ought to be rescued from the anticipated and not in equitable result of their voluntary acts. I will merely subjoin the observation, on this head, that the provisions of the act of insolvency, relative to the suits then depending against the defendants, have no relevancy to this question. They are negative throughout, restraining only the attaching creditors from levying on the general property of the insolvents, and protecting the liens obtained by attachment from the claim of the trustees. If the plaintiffs’ claim had been within the jurisdiction of the trustees, and duly allowed by them, the presumption of payment would not be repelled. In the case of Jackson v. Fairbank, 2 H. Bla. 340. payment of a promissory note in part, by the bankrupt’s assignee, was considered as an acknwledgment of the debt by the bankrupt, which took the case out of the statute of limitations. It is very doubtful whether this would — 11 — now be recognized as the law of Westminster-Hall; and sure I am, that it is not sustainable on principle. The doctrine that the statute of limitations might be rebutted, by the acknowledgment of any other than the party to the contract, originated with the case of Whitcomb v. Whiting, Doug. 652. By that decision, it was held, than an acknowledgment by one joint maker of a promissory note, took it out of the statute of limitations, as one was considered to act as agent for the rest. This case was, to adopt the words of Lord Ellenborough, in Brandram v. Wharton, 1 Barnw. & Ald. 467. full of hardship; as a person jointly liable, with thirty or forty others, for a debt, which had been paid by one of them, who had lost the receipt given in proof of it, without knowledge of the fact, and by a random acknowledgment, might subject them all to the obligation of a debt barred by the statute. The case of Jackson v. Fairbank went further, and decided, that the acknowledgment of debt, by the assignees of one maker of a promissory note, took the case out of the law of limitation. This case in Brandram v. Wharton was shaken, and not regarded as an authority. It was said, by Lord Ellenborough, with whom Bailey, J. accorded, that he was not inclined to go beyond the case in Douglas, where the acknowledgment was by one of the parties bound, who could be called on for contribution. In Roosevelt v. Mark, 6 Johns. Ch. Rep. 266. 292. it was said, by the late learned Chancellor of the state of New-York, that it was a forced presumption, and hard and unjust, to consider the payment of a dividend, by the assignees of a bankrupt partner, as equivalent to an unqualified acknowledgment by the bankrupt, and promise to pay. The original debt might thus be kept continually on foot, while the party originally bound was wholly unconscious of any continuing obligation, and was constantly denying the debt, and repelling every presumption of a promise to pay. It is going unreasonably far to construe payment by assignees or trustees, who are not parties to the contract, or under any personal obligation to pay or contribute, as meaning more than it plainly imports, or as carrying with it sufficient evidence of a renewed personal promise of the original debtor to pay. Such special trusts were not created for any such purpose; and it is preventing the intention of the parties, and is plainly repugnant to the reason and equity of the trust, to make the ordinary execution of the trust the ground of a constructive new assumption of the debt, by the debtor. The language of the transaction would seem to be directly otherwise. Lord Eldon, — 12 — in ex parte Dewdney, 15 Ves. jun. 499. when alluding to the case of Jackson v. Fairbank, said, it could not be, that a creditor, who could not, from the effect of the statute of limitations, maintain an action against a solvent partner, might, by forcing a dividend from the assignees of the bankrupt partner, raise a new assumpsit, upon which he could sue the solvent partner. I am clearly of the same opinion; and that the execution of the trust, in this case, lays no foundation for a constructive promise, on the part of the defendants, whereby the statute of limitations, or the presumption of common law, in favour of the defendants, can be defeated. Were it an admitted legal truth, that the payment of part of the plaintiffs’ demand, by the trustees, would amount to an acknowledgment of debt, by the defendants, and of consequence, to a constructive promise, there would be no difference in the result of this case, as no payment was ever made by them. The money intended for the plaintiffs, remains, to this day, in the hands of Mr. Sturges, one of the trustees, never having been paid, nor, with the creditors’ assent, appropriated. The presumption of payment has been supposed, by the plaintiffs, to have been defeated, by the defendants’ certificate under the act of insolvency, which, it has been said, constituted a legal or actual obstruction to the collection of their debt. Had the plaintiffs’ demand been embraced, by the act of insolvency, there never has existed a legal or actual impediment to the enforcement of their claim. The act, so far as it regarded the extinguishment of debt, was unconstitutional and void. Sturges v. Crowningshield, 4 Wheat. Rep. 122. Mc Millan v. Mc Neill, 4 Wheat. Rep. 209. Farmers and Mechanics' Bank of Pennsylvania v. Smith, 6 Wheat. Rep. 131. Smith v. Mead, 3 Conn. Rep. 253. Medbury v Hopkins, 3 Conn. Rep. 472. Hammett & al. v. Anderson & al. 3 Conn. Rep. 304. The bodies of the insolvents alone were protected; and a general misunderstanding of the law, if it, in fact, existed, is an inadmissible supposition. Stow v. Converse, 3 Conn. Rep. 347. Ignorantia juris neminem excusat. If, however, the fact were granted, it would have no influence on the case under discussion. The decisions of the courts in this state, on a subject which involved the constitutionality of her laws, were not final; but to the supreme court of the United States there might always have been an appeal for the correction of every error. There was, then, no impediment, in law or fact, against the enforcement of the plaintiffs claim. Dunlop & Co. v. Ball. 2 Cranch 180. was de — 13 — cided on the existence of facts inapplicable to the case. In the state of Virginia, where that case arose, by the acts of their legislature, and the facts which there existed, the collection of British debts was strictly and literally impeded, from the year 1774, to the termination of the revolutionary war, in September, 1783, and afterwards to the year 1807. A part of this period was indispensible to make out a defence in the aforesaid case; and the legislative acts constituted an invincible obstruction to any proceeding; as there was, at that time, no revisionary tribunal, by which the unconstitutional acts of a sovereign state could be annulled. The case under discussion furnishes one ground of determination, so imperiously conclusive as to put the correctness of the decision, by the judge who tried the cause, beyond all question. Allowing the certificate of the trustees the full elect of extinguishing every claim within its purview, it was a bar to such debts only as existed anterior to the 1st of April, 1799. The debt on which the plaintiffs’ suit is founded, originated by a judgment rendered in the month of November, 1799; several months posterior to the time on which the defendants' certificate could have any operation. This claim has never been obstructed, for a moment, and always might have been enforced. What prevented the taking out of execution? What the commencing of an action of debt on judgment? I confidently answer, nothing. The way of recovery, from the time the judgment was rendered, until the presumption of payment arose, was ever open and unobstructed, and without the shadow of an impediment, in law or in fact. The proposition is too intuitively clear, to require either argument or illustration. The admission of Judge Humphrey's testimony, limited as it was to repelling the plaintiffs’ evidence, has not been objected to, in the argument, nor is it objectionable. A new trial ought not to be advised. Chapman, Brainard and Bristol, Js. were of the same opinion. Peters, J. dissented. New trial not to be granted.