Reed v. Vaughan

Scott, J., delivered the opinion of the court. This cause involves the force and effect of a certificate in bankruptcy, under the laws of the U. States. The precise question is, whether a certificate, relied on as a defence against the debt due by the bankrupt, the creditor can impeach by pleading facts which show, that the court, by which the certificate was granted, had no jurisdiction of the application for a discharge, even though the facts may appear upon the face of the record which gives the court jurisdiction. The courts of the U. States, though possessing a limited jurisdiction, yet, in the intendment of law, stand upon the same footing as courts of record of general jurisdiction. All the presumptions which are indulged in favor of superior tribunals of general jurisdiction, are equally extended to the courts of the United States. In pleading a judgment or decree of one of those courts, there is no more necessity for showing the facts which confer jurisdiction, than in a plea of judgment of the highest tribunal known to the law. Their judgment cannot be impeached for irregularity or error in a collateral proceeding; they can only be vacated on motion, in the courts in which they a^e rendered, or reversed for error in an appellate jurisdiction. The bankrupt act makes the proceedings in bankruptcy records. The fourth section of that act prescribes, that the discharge and certificate, when duly granted, shall, in all courts of justice, be deemed a full and complete discharge of all debts, &c., and shall, and may be pleaded as a full and complete bar to all suits brought in any court of jurisdiction whatever, and the same shall be conclusive evidence, of itself, in favor of such bankrupt, unless the same shall be impeached for fraud, or some wilful concealment, by him, of his property, &c. If it is competent for Congress to enact bankrupt laws, the force and effect of a discharge and certificate under the laws, may be declared by such enactment. When the statute declares, that a certificate shall be conclusive, of itself, in favor of a bankrupt, unless impeached for fraud, it is equivalent to saying, that nothing, in impeachment of the certificate, shall be pleaded but fraud. The expression of one cause, for its avoidence, is an exclusion of all others. If the words “duly granted” authorize an enquiry into the facts which give jurisdiction to the court granting the certificate, then the law enacts the solecism, that a writing may be impeached, but if it is not overthrown in the attempt, then it shall be conclusive. This is a strange sort of conclusiveness. What avail is the conclusiveness to the party, if he is only to have the effect of it after an unsuccessful effort to avoid his instrument? But what authority is there in the law for limiting the [142] enquiry, under the words “duly granted,” to the facts on which jurisdiction is founded? If it authorizes an investigation into one, it equally authorizes an investigation into all matters in which there may have been irregularity; so the law, in effect, is repealed, and an instrument which is made conclusive evidence of itself, is only allowed its effect after it has successfully resisted all efforts to overthrow it. This view of the effect of a certificate, is not unsupported by authority. In the case of Rowan vs. Holcomb, 16 Ohio Rep. 463, it was held, that it was not necessary that the certificate should be pleaded, with all the facts- and proceedings necessary to give the court jurisdiction. Thatit is a complete bar to all suits for a debt embraced within it,. unless impeached for fraud. The case in 5 Hill’s Reports, is disregarded, and the court say, “we do not hold the district court of the United States to be a court of local, limited jurisdiction, in such sense that to give validity to its orders or decrees, as a plea in bar, that it is necessary in the plea to allege all the facts and proceedings necessary to confer jurisdiction. The district court is a court of record, created under the powers of the constitution of the United States, having jurisdiction in matters of bankruptcy by act of Congress. Matters of bankruptcy, by the act, are conferred upon the district court, as part of its general jurisdiction; and on principle, its orders of final discharge may be plead, precisely as the judgments and decrees of any court of general jurisdiction.” So, in the case of White vs. How and others, 3 McLean 291, the objection was, that the plea did not set out the proceedings under which the bankruptcy was decreed. It was held that the plea was good — that it was not necessary to set out more than the certificate and discharge duly authenticated. The law makes these evidence, and conclusive evidence, unless impeached for fraud. In the case of Ingalls vs. Savage, 3 Barr 227, it was determined, that the discharge and certificate are a complete bar when pleaded, unless avoided for fraud. The court says, “the path is thus plainly and distinctly marked for courts, and it would be useless and unwise to wonder either to the right or to the left.” The cases in New York have been examined, and they seem to be founded on principles, not in accordance with the received law upon this subject. It would seem to be a rule, established in the jurisprudence of that State, “that the jurisdiction of a court, whether of general or limited jurisdiction, may be enquired, into, although the record of the judgment states facts, giving it jurisdiction. No court nor officer can acquire jurisdiction by the mere assertion of it, or falsely alleging the existence of facts on which the jurisdiction depends.” Harrington v. People, 6 Barbour 607. How many of the proposition, [143] outside of that State, would not be willing to endorse this principle, and as its influence has operated in producing the decisions relied on, those decisions cannot receive the sanction of courts which deny the principles on which they are founded. The case of Sackett vs. An-dross, 5 Hill’s Rep., which is mostly relied on, is decided without reference to the provisions of the bankrupt law, in relation to the effect of discharges. In the case of Ruckman vs. Cuvell, 1 Comstock 505, the opinion of a single judge is expressed. In Stephens vs. Ely, 6 Hill 607, the opinion of the court is delivered by Nelson, and he kindly refers the pleader to the forms under the insolvent laws before officers in the country, as guides in impeaching the decrees of a court of general jurisdiction. The distinction, taken by the judge, between cases of voluntary and involuntary bankruptcy under the act, it seems is difficult to be maintained. The- Congress of the United States had the power to pass the voluntary clause of the bankrupt law. Its authority to do so, has been sustained by the supreme court of the United States. If there is power to pass such a clause, then a power exists to declare the force and effect under it. Now if the law gives the same effect to the certificate, whether obtained under the voluntary or involuntary provisions, and it is admitted to be conclusive and unimpeachable when given under the involuntary clause; on what principle, then, can it be impeached when granted under the voluntary clause? The asserting of such a distinction seems like giving up the controversy. The point made, as to the manner of serving the execution, cannot be maintained. This was a proceeding in chancery, and the rules established in relation to the preparation of causes for this court, in trials at common law, have never been regarded as applicable to proceedings in chancery. The conflict of laws in the references, relate to foreign judgments. The other judges concurring herein, the injunction is perpetuated.