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purposes. There was no mercy to the estate. Nothing was less thought of than the object of the commission. As they were frequently conducted in the country, they were little more than stock in trade for the commissioners, the assignee, and the solicitor.”a
The respective states, as we have already seen, may pass bankrupt and insolvent laws. The power given to the United States to pass bankrupt laws, is not exclusive. This is now established by judicial decisions ;b and the exercise of the power residing in the states to pass bankrupt and insolvent laws does not impair, in the sense of the constitution, the obligation of contracts made posterior to the law. The discharge under a state law is no bar to a suit on a contract existing when the law was passed, nor to an action by a citizen of another state, in the courts of the United States, *or of any other state *393 than that where the discharge was obtained. The discharge under a state law will not discharge a debt due to a citizen of another state, who does not make himself a party to a proceeding under the law.d It will only op
• The English bankrupt system has been much improved by the statuto of 6 Geo. IV. ch. 16, which was the consolidation of all the previous statutes of bankruptcy, and by the act of 1 and 2 William IV. ch. 56. The improvements have, of course, given more simplicity and uniformity to the code, and rendered it in several respects more remedial. The system has been thoroughly illustrated by the treatises of Eden, Archbold and Warrand. On the other hand, the bankrupt law of Scotland is said to have attained great excellence, by a slow and gradual course of improvement, suggested in the course of practice, and with the aid of combined wisdom of lawyers of profound knowledge, and merchants of large views and great experience. Bell: Com. vol. i. p. 17. The French law of bankruptcy in the commercial code, is said, by M. Dupin, to be complained of equally by bankrupts and by their creditors.
b Soo supra, p. 390, note.
• The parties to a contract are supposed to make the contract in reference to the existing laws in relation to the subject matter, and the law itself becomes a part of the contract. Belcher ads. Commissioners of the Orphan House, 2 MCord's S. C. Rep. 23.
• Sturges v. Crowninshield, 4 Wheaton, 122. Ogden v. Saunders, 12 Ibid. 213. Braynard v. Marshall, 8 Pick. Rep. 194. Clay v. Sınith, 3
erate upon contracts made within the state between its own citizens, or suitors, subject to state power. The doctrine of the supreme court of the United States, in Ogden v. Saunders, is that a discharge under the bankrupt law of one country does not affect contracts made or to be executed in another. The municipal law of the state, is the law of the contract made and to be executed within the state, and travels with it wherever the parties to it may be found, unless it refers to the law of some other country, or be immoral, or contrary to the policy of the country where it is sought to be enforced. This was deemed to be a principle of universal law; and therefore the discharge of the contract, or of the party, by the bankrupt law of the country where the contract was made, is a discharge every where. There is not any bankrupt law, technically so called, existing in New-York; but
Peters' S. C. Rep. 411. 3 Story's Comm. Const. U. S.p. 252-256. Norton v. Cook, 9 Conn. Rep. 314. Pugh v. Bussel, 2 Blackf. Ind. Rep. 394. Woodhull v. Wagner, 1 Baldw. C. C. U. S. Rep. 296. Browne v. Stackpole, 9 N. H. Rep. 478. See, also, supra, vol. i. p. 422.
Ogden v. Saunders, 12 Wheaton, 213. See, also, Sturges v. Crowninshield, 4 Ibid. 122. M.Millan v. M`Neill, Ibid. 209. Lo Roy v. Crowninshield, 2 Mason's Rep. 161, 162. Pugh v. Bussel, 2 Blackf. Ind. Rep. 394. And see Comm. vol. i. p. 419_422. Lord Stair's Institutiones, vol. i. note a. p. 4. by I. S. More, the editor of the edition of 1832. This edition of that authoritative work of Lord Stair, is rendered very valuable by the notes and illustrations of the learned editor. It is equally well established, that the discharge of a contract by the law of a place where the contract was not made, or to be performed, will not be a discharge in any other country. In Phillips v. Allen, 8 Barnw. f. Cress. 477, the discharge of an insolvent debtor by a Scotch court, was held to be no defence to an action brought in England, by an English subject, for a debt contracted in England; but the rule would have been different if the creditor had come in for his dividend under the Scotch law, or the debt had been contracted in Scotland. The same rule was declared in Van Raugh v. Van Arsdale, 3 Caines' Rep. 154, and it has repeatedly been recognized in England and Scotland, as well as in this country. See Doug. Rep. 170. 1 H. Black's Rep. 693. 2 Ibid. 553. 1 East's Rep. 6. 11. 5 Ibid. 124. Lewis v. Owen, 4 Barnw. f. Ald. 654. 2 Bells Comm. 689—691. Woodhull v. Wagner, 1 Baldwin's C. C. U. S. Rep. 296. Van Hook v. Whitlock, 26 Wendell, 43.
there is a permanent insolvent law, enabling every debtor to be discharged from all his debts upon the terms and in the mode prescribed. The first general insolvent law of New York was passed in the year 1784, and alterations and amendments have from time to time been made, until the system attained all the consistency, provision and improvement, that the nature of the *394 subject easily admits.a
Insolvent laws prevail throughout the Union, and constitute a system of an important and interesting character and subject to diversified modifications, for the relief of the debtor. In the states of Maine, New Hampshire, Virginia and Kentucky, they are confined to the relief of debtors charged in execution. In New Jersey, Delaware, Maryland, Tennessee, North and South Carolina, Georgia,
a With respect to the operation, value, and policy of the general system of insolvent law, it is observed by the chancellor and judges of the supreme court of New-York, in a report made by them to the legislaturo January 220, 1819, in pursuance of a concurrent resolution of the two houses, that “judging from their former experience, and from observation in the course of their judicial duties, they were of opinion that the insolvent law was the source of a great deal of fraud and perjury. They were apprehensive that the evil was incurable, aud arose principally from the infirmity inherent in every such system. A permanent insolvent act, made expressly for the relief of the debtor, and held up daily to his view and temptation, had a powerful tendency to render him heedless in the creation of debt, and careless as to payment. It induced him to place his hopes of relief rather in contrivances for his discharge, than in increased and severe exertion to perform his duty. It held out an easy and tempt. ing mode of procuring an absolute release to the debtor from his debts ; and the system had been, and still was, and probably ever must be, from the very nature of it, productive of incalculable abuse, fraud, and perjury, and greatly injurious to the public morals.” See, on this subject, supra, vol. i. p. 419–422. It was stated by the chief justice, in giving the opinion of the supreme court of the United States, in Sturges v. Crowninshield, 4 Wheaton, 122, that the insolvent laws of most of the states only discharge the person of the debtor, and leave his obligation to pay, out of his future acquisitions, in full force. The insolvent act of Maryland, of 1774, subjected to the former debts of the insolvent, his future acquisitions by descent, gist, devise, bequest, or in a course of distribution. See 3 Harr. f Johns. 61. VOL. II.
Alabama, Mississippi and Illinois, the insolvent laws
extend to debtors in prison on mesne or final *395 *process. In Massachusetts, New-York, Connec
ticut, Rhode Island, Pennsylvania, Ohio, Indiana, Missouri, and Louisiana, they are still more extensive, and reach the debtor whether in or out of prison. The insolvent laws of New York enable the debtor, with the assent of two-thirds in value of his creditors, and on the due disclosure and surrender of his property, to be discharged from all his debts contracted within the state, subsequently to the passing of the insolvent act, and due at the time of the assignment of his property, or contracted before that time, though payable afterwards.b
• The statutes of Connecticut, Ohio, New-Jersey, Pennsylvania, Mic nois, North Carolina, Tennessee, Georgia and Missouri, for the relief of insoldent debtors, go only to discharge and exempt the person of the debtor from imprisonment. Statutes of Connecticut, 1838, p. 270. Statutes of Ohio, 1831. Statutes of Ilinois, 1833. R. L. of Missouri, 1835. Prince's Dig. of Statutes of Georgia. 2d edit. 1837, p. 287. 293. Purden's Dig. of Penn. Laws, 514. Elmer's Dig. 255. R. S. of Nero-Jersey, 1847, tit. 9. ch. 1, 2, 3, 4, contains the whole system of provisions for the relief of debtors. North Carolina R. S. vol. 1. 320. Statute Laws of Tennessee, p. 390. This is understood to be the limitation of insolvent laws in the greater number of the states. See supra, vol i. p. 420. The new insolvent law of Massachusetts, was passed in 1838, granting a complete discharge to debtors, whether in or out of prison, who comply with its provisions. The application for relief may be made by the debtor, or by certain of his creditors. It applies, of course, only to contracts made subsequent to its passage, and it resembles in several of its features, the U. S. bankrupt act of 1800, and appears to be cautiously and wisely digested. See infra, p. 522, note. In Vermont, it is even a constitutional provision that the debtor shall not be continued in prison, where there is not a strong presumption of fraud, after delivering up and assigning, bona fide, all his estate for the use of bis creditors.
• Laws of N. Y., April 12th, 1813; February 28th, 1817; February 20th, 1823; and April 9th, 1833. Under the English insolvent debtor's act, the discharged insolvent becomes liable to a surety, who pays for him, after his discharge, an annuity due before. Abbot v. Bruere, 5 Bingham, N. C. 598. The insolvent laws of New-York have been redigested and amended, by the N. Y. Revised Statutes, vol. ii. p. 15–23; but the insol. vent act of April 12th, 1813, is declared to be in force, although consolidated in the Revised Statates, vol. ii. p. 15–23. See N. Y. R. S., vol. iii. po
The creditor who raises objections to the insolvent's discharge, is entitled to have his allegations heard and determined by a jury. The insolvent is deprived of the benefit of a discharge, if, knowing of his insolvency, or in contemplation of it, he has made any assignment, sale, or transfer, either absolute or conditional, of any part of his estate, or has confessed judgment, or given any security with a view to give a preference for an antecedent debt to any creditor. The discharge applies to all debts founded upon contracts made within the state, or to be executed within it; and from debts due to persons resident within the state at the time of the publication of notice of the application for a discharge; or to persons not residing within the state, but who united in the petition for his discharge, or who accept a dividend from his estate. The discharge likewise applies to all liabilities incurred on contracts made after January 1st, 1830, by making or endorsing any promissory note or bill of exchange prior to his assignment, or incurred by reason of payments by any other party *to the paper, *396 made prior or subsequent to the assignment. The discharge likewise exonerates the insolvent from arrest and imprisonment thereafter, upon all debts existing prior to the assignment. Any fraud whatever, in relation
647. It appears notwithstanding that dictum of the revisers, that the general insolvent act of 1813, and all the acts amending the same are in force only in a very modified, if in any degree; for under the general repealing act, N. Y. R. S., vol. iii. p. 133. sec. 115, and Ibid. p. 154. sec. 549, so much of the insolvent act of 1813, and the acts amending it, as are not, and also that are, consolidated and re-enacted in the Revised Statutes, are repealed! The system has been improved by more effectual provisions against fraud and abuse.
• N. Y. Revised Statutes, vol. ii. p. 20. sec 24. By the laws of Louisiana, an insolvent debtor cannot give preference. Hodge 5. Morgan, 14 Martin's Louis. Rep. 61. By the insolvent act of Pennsylvania, of 16th Juno, 1836, the insolvent debtor is dep of the benefit of the act, if it appears that the insolvency arose from losses by gambling, or by the purchase of lottery tickets.