1843

NELSON V. CARLAND.

of the power is limited to the principle on which | the English bankrupt system was founded; and to 218 that system the convention referred, when it adopted the clause above recited, for its definiton. That system provided, a proceeding by a a creditor against a debtor who was a trader; a distribution of a bankrupt's effects equally among his creditors; and a discharge of the debtor from his contracts upon obtaining the consent of a given rajority of his creditors. That it was a proceeding for the benefit of creditors: the whole system being Lunded on the principle that a trader who owed debts in various parts of the country, and was fraudulently making away with his property, instead of paying his debts with it, should have the property taken away and placed in the hands of trustees or other officers, with which his debts should be paid; and each of his creditors, whether present or absent, have his fair dividend; and that the bankrupt law of 1800 is a fair exposition of the constitutional provision.

Briefly: That a bankrupt law was one by which bonest creditors could force fraudulent debtors, who were traders, to surrender all their property, to pay ratably all their just debts; but that a law rade solely and entirely for the benefit of debtors, and which enabled them at their own election to Avoid their debts, was opposed to the whole intent, spirit, and object of a bankrupt law.

Istate thus much of the grounds on which my
brother judge's decree was founded from his
printed opinion, because this case has not been ar-
gued on part of the creditors; for whom no coun-
i appeared in this court, nor did there in the
art below, as I am informed. The accuracy,
dustry, and unquestioned ability of the District
Jedge, have, I do not doubt, brought forward the
best reasons that exist, in support of the judgment
be gave. The tenor, and true spirit, of the En-
tash bankrupt laws, such as they were when our
Federal Constitution was adopted, he has given;
and I agree with him, that the Act of 1841, in so far
as it permitted the debtor, at his own sole election,
to come into court and coerce an extinction of his
debts, and abrogation of his contracts, contrary to
the will of his creditors, was in violation of the
leading principles on which the English laws were
founded. Our law contemplated a proceeding by a
debtor against his creditors; provided the debtor
was insolvent; by the English law, the creditor
one could originate the proceeding; and it mat-
tered not whether the defendant was insolvent or
otherwise; if he did the fraudulent act, it made
in a bankrupt a fraudulent trader. Then by
e English laws, “a fraudulent trader" could only
be a bankrupt; with him as debtor; and with his
Creditors, could courts deal; and this at the election
if the creditors-the debtor having no election to
for distribution or for a discharge from his
debts. If the power conferred on Congress carries
ab it these restrictions, then the District Court
properly refused to discharge the applicant Klein,
because the act of Congress was unconstitutional
his case. But other and controlling considera-
tons enter into the construction of the power; it
is general and unlimited, it gives the unrestricted
authority to Congress over the entire subject, as
the Parliament of Great Britain had it; and as the
overeign States of this Union had it before the
fine when the Constitution was adopted. To go
farther: what was the power of the States on
the subject of bankruptcies? They could, and con-
stantly did, permit the debtor to come involuntari-
if and surrender his property, and ask a discharge
from his debts; the property was distributed gen-
rally among the creditors, and the debts of the
279) petitioner annulled. *Nor does the Consti-
tion prohibit the States from passing such laws;
New York, Pennsylvania, Louisiana, and others,
now have them in full operation. The insolvent
a of Pennsylvania are in substance, and to a
great extent in detail, similar to the Act of Con-
gress of 1841, and no doubt furnished some of the
that were incorporated into the act. That
Pennsylvania had power to pass these laws, no one
ever doubted, so far as she was not restricted by
the Constitution of the United States. The Su-
preme Court held, in the case of Ogden v. Saunders
Wheat., 313), that the States retained the power
and could exercise it by law, and that the law
would operate to discharge the contract between
destor and creditor; they being inhabitants of the
particular State at the date of the proceeding, if
the contract had been made there after passing the
a. In such case the parties contracted subject
to the law, and it entered into the contract. The

case of Boyle v. Zacharie and Turner (6 Peters, 636)
settled the contested question of power; and that
it remained with the States to this limited extent.
But the restrictions depend on general principles
of international law, and other parts of the Con-
which prohibits the
stitution; especially that
States from passing any law impairing the obliga-
tions of contracts; as will be seen by reference to
the leading case on the subject, of Sturges v.
Crowninshield (4 Wheat., 122). What the States
might do before the adoption of the Constitution,
may well be ascertained from what they now do
in virtue of their respective powers. They may
frame a bankrupt law in any form they see proper;
this has never been questioned so far as my knowl-
edge extends. The controversies in the Supreme
Court turned on the question, whether the C on-
stitution inhibited the States (there being no acts
of Congress opposed to it) from legislating on the
subject of bankruptcies; or, whether the power
was exclusive in Congress. In the State tribunals
the debtor comes involuntarily, and forces the
creditor to prove his debt or be barred. One not a
trader may apply: neither is the consent of the
creditors (or any portion of them) necessary to au-
thorize a discharge from the contracts of the debt-
or. So he may have no property to divide, and
many debts to annul, from which he seeks a dis-
charge, and from which he is discharged. These
powers clearly belonged to the State governments,
before Congress was invested with them; and this
was done without limitation.

The District Court relied confidently on the ground that Congress can pass no law violating contracts; and that the clause of the Constitution conferred no such authority, because the English bankrupt laws, by which the power is supposed to be restricted, only permitted the contract to be annulled at the election of four parts in five of the creditors in number and value; and therefore they annulled it by a new contract. This argument proceeds on the assumption, that a proceeding in bankruptcy can only be had, at the election of, and for the benefit of creditors; and that every material step is their joint act; to which the debtor is compelled to submit. For the present it will only be necessary to say, that one prominent reason why the power is given to Congress, was to secure to the people of the United States, as one people, a uniform law, by which a debtor might be discharged from the obligation of his contracts, and his future acquisitions exempted from bis previous engagements; that the rights of debtor and creditor, equally entered into the mind of the framers of the Constitution. The great [*280 object was to deprive the States of the dangerous power to abolish debts. Few provisions in the Constitution have had more beneficial consequences than this; and the kindred inhibition on the States that they should pass no law impairing the obligation of contracts.

The inhabitants of States producing largely must be creditors; the inhabitants of those that are consumers will be debtors; bankrupt laws of the latter States might ruin the produces and creditors, they having no interest or power in the government of the consuming States, and it being the interest of the latter to annul the debts of non-residents, no remedy would exist for the grossest oppression. No laws of relief would be more effectual in times of pressure by foreign creditors; nor more likely to be adopted. If one State adopted such a measure, it would furnish a fair occasion for others to do the same, on the plausible pretext of self-defense; others would be forced into a similar bad policy, until discredit and ruin would overspread the entire land, by an extinction of all debts; and a consequent prostration of morals, public and private, on the subject of contracts. This evil had to a certain extent occurred, and was fresh in the minds of the framers of the Constitution, and no doubt it would again occur in some of the States, but for the provisions under consideration standing in the way of abrogating the private contracts of non-residents.

But if Congress passed the law, it must be uniform throughout the United States; then the entire people are equally represented, and have the power to protect themselves against hasty and mistaken legislation by its repeal, if found oppressive in practice.

Legislation by Congress on the subject of bankruptcies is of much less consequence than its prohibition on part of the States. They can pass no law affecting a non-resident, because no jurisdiction exists of his person; they can impair no con

131

be, and the same is hereby remanded to the said Circuit Court, for such proceedings to be had therein as to law and justice may appertain.

Bankruptcy,

tract made out of the State, because it was not made subject to the State Insolvent Law. The power, as it stands restricted by the decision in Ogden v. Saunders, is almost harmless: those whom the State bankrupt law can most affect, have the popular vote in the State Legislature, and may repeal the law; the foreigner has little interest in its existence, as he cannot be affected by it, further than that the debtor may be deprived of his proper- *JOEL COLLINS, a Petitioner in [*282 ty. Another reason why Congress was vested with the power, was to prevent dangerous conflicts of jurisdiction among the States. A discharge in one Sovereignty from contracts is by the laws of nations not recognized as a discharge in another sovereignty, save on the grounds of comity: an assignee under the British bankrupt laws is not recognized in this country as owner of the debts of the bankrupt; and an attaching creditor,or the government may disregard a title set up by the foreign_assignee. (Harrison v. Sterry, 5 Cranch, 298.) The

States in this respect are foreign to each other, and would be little likely to extend comity to the discharge of each others; from which great confusion might follow, and much ill will.

In considering the question before me, I have not pretended to give a definition; but purposely avoided any attempt to define the mere word "bankruptcy." It is employed in the Constitution in the plural, and as part of an expression; "the subject of bankruptcies." The ideas attached to the word in this connection, are numerous and complicated; they form a subject of extensive and 281*1*complicated legislation; of this subject, Congress has general jurisdiction; and the true inquiry is: To what limits is that jurisdiction restricted? I hold, it extends to all cases where the law causes to be distributed the property of the debtor among his creditors; this is its least limit. Its greatest, is a discharge of the debtor from his contracts. And all intermediate legislation, affecting substance and form, but tending to further the great end of the subject-distribution and discharge are in the competency and discretion of Congress.

With the policy of a law, letting in all classes, others as well as traders; and permitting the bankrupt to come in voluntarily, and be discharged without the consent of his creditors, the courts have no concern; it belongs to the law-makers.

I have spoken of State bankrupt laws. I deem every State law a bankrupt law, in substance and fact, that causes to be distributed by a tribunal the property of a debtor among his creditors; and it is especially such if it causes the debtor to be discharged from his contacts within the limits prescribed by the case of Ogden v. Saunders. Such a law may be denominated an insolvent law; still it deals directly with the subject of bankruptcies, and is a bankrupt law, in the sense of the Constitution; and if Congress should pass a similar law, it would suspend the State law, while the act of Congress continued in force.

pe

This court deeming the Act of 1841 constitutional, it is ordered, that the decree of the District Court dismissing the proceeding be reversed, and the titioner (Klein) be discharged from his debts, and receive his certificate. The same order is directed in the case of Christopher Rhodes; dismissed also on constitutional grounds by the District Court.

In Re

v.

JAMES BLYTH, an Opposing Creditor.

[This case is similar to that of Nelson.]

ORDER.

THIS cause came on to be heard on the tran script of the record from the Circuit Court of the United States for the District of Kentucky, and on the points and questions on which the judges of the said Circuit Court were op posed in opinion, and was argued by counsel: on consideration whereof, it is now here ordered and adjudged by this court, that this cause be, and the same is hereby dismissed for the want of jurisdiction; and that this cause be, and the same is hereby remanded to the said Circuit Court, for such proceedings to be had therein as to law and justice may appertain.

WILLIAM TAYLOR ET AL., Appellants,

v.

GEORGE M. SAVAGE, Executor of SAMUEL
SAVAGE, Deceased, Defendant.

Removal of executors and appointment of admin-
istrator on same day-decree obtained in [.
S. Circuit Court-parties to appeal-execution
not issuable in case open to appeal, nor pending
appeal.

Where a decree is passed by the court below against an executor, being the defendant in a chancery suit, and before an appeal is prayed the execu tor is removed by a court of competent jurisdiction, and an administrator de bonis non with the will annexed, is appointed, all further proceedings, either by execution or appeal, are irregular, until the administrator be made a party to the suit.

If an execution be issued before the proper parties are thus made, it is unauthorized and void; and no right of property will pass by a sale under it. The administrator cannot obtain redress by application to this court, but must first be made a party in the court below. This may be done at the instance of either side.

After he is thus made a party, he may stay proceedings by giving bond, or the complainants may enforce the decree, if the bond be not filed in time. It is not clear that a complainant who has appealed from a decree in his favor, in the hope of obtaining a larger sum, can, pending the appeal, issue ex

CHARLES W. CASTLEMAN, a Petitioner ecution upon the decree of the court below.

THIS

in Bankruptcy.

[This case is similar to that of Nelson.]

ORDER.

HIS cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Kentucky, and on the points and questions on which the judges of the said Circuit Court were opposed in opinion, and which were certified to this court for its opinion, and was argued by counsel; on consideration whereof, it is now here ordered and adjudged by this court, that this cause

MR.

R. MOREHEAD, of counsel for the appel lee, moved the court for leave to give an ap peal bond in this case, which shall operate as a snpersedeas, and for leave to docket the cross appeal, and for such relief as may meet the case.

*He stated that Taylor had obtained [*283 a decree against Savage, executor of Savage, in the court below, for $5.000 and upwards; that the decree was actually rendered on the 29th day of November, 1842, but was entered as of the day before; that the complainant had ap pealed from this decree, and sent the record up to this court, where the case is now pending,

1843

the

TAYLOR V. SAVAGE.

that an appeal was also prayed and allowed on | petition of Vincent M. Benham, administrator part of the defendants; that this last-men- de bonis non, with the will annexed, of Samuel tioned appeal was not carried out, because, on Savage. the 28th day of November, the date of the decree, the Orphans' Court of Lauderdale County, in Alabama, removed Savage from his executorship, and appointed Vincent M. Benham administrator de bonis non with the will annexed; that, of course, Savage could not give boad to prosecute the appeal which had been Clowed him, and Benham lived at a distance from the court when the decree was rendered, and was ignorant of the said decree, and of the change made in the representative of the estate; that the complainants, notwithstanding their appeal, had taken out execution, which had been levied upon the property of the deceased, and & sale was about to take place; that among the subjects of said levy were some family negroes, who had been for several generations in the family, whom it would be especially painful to part with; that the complainants resided in Scotland and other foreign countries, so that there would be no chance to recover back the money, if the decree of the court below should be reversed.

It appears that a bill was filed by William Taylor and others, in the District Court of the United States for the Northern District of Alabama, against George M. Savage, executor of Samuel Savage, deceased, to which the defendant appeared and answered. Testimony was taken on both sides, and at the final hearing on the 28th of November, 1842, the court decreed that the complainants recover of the respondent, as executor of Samuel Savage, $5,212.92 and costs, to be levied of the goods and chattels, lands and tenements of the said Samuel Savage. On the same day the Orphans' Court of Lauderdale County, in the State of Alabama, having competent jurisdiction for that purpose, removed the said George M. Savage from his executorship, and appointed Vincent M. Benham, the petitioner above mentioned, administrator as aforesaid.

Under these circumstances he moved for leave todocket the cross-appeal, upon giving security, and for an order to quash the execution irregularly issued; and filed affidavits setting forth the facts stated above. He stated that he had not been able to find a precedent bearing upon the case, but argued to show that the petitioner was entitled to relief.

Mr. Crittenden, contra. If no precedent can be found, it is a strong gument against the motion. Distance of the residence of the complainants is no reason for relief, because one of the parties in every suit The must be the inhabitant of another State. execution is not here; nothing but an affidavit. The petitioner has other means of relief than by coming to this court. As to the hardship of 284*) *the case, twenty days were given be How to file the bond. Why did not the party Come in? It is said he lived at a distance. How far? When was he told of the decree? The The compapers are studiously ambiguous. pinants are not all foreigners; one of them is 1 citizen of Pennsylvania, and now in court. There is no irregularity in the execution.

Mr. Sergeant, in reply, and for the petitioner: If the papers are ambiguous, the other side uld have had them cleared up, because they have been led for some days.

This court has possession of the case by virtue of the appeal brought up on the other side. The United States Court and Orphans' Court sat in different places, and neither knew what the other did. After appeal, the case was not in the court below, because it was removed here, and the whole case brought up. The wrong has been done to the court itself; the party has been brought here to defend the appeal, and then execution is issued against him. The only case like this is in 7 Cranch, 278. The execution is not noticed on the record at all, and must have issued after the record was made

Mr. Chief Justice TANEY delivered the opin

ion of the court:

This case is brought before the court by the

Huntsville, where the District Court of the United States held its session, and Florence, where the Orphans' Court of Lauderdale County *was in session, were distant from each [*285 other between seventy and eighty miles; and the new administrator, Vincent M. Benham, does not appear to have known of the decree until some days after it was passed. At the time of the decree Harvey Dillahunty was attending to the suit in chancery as the attorney in fact of George M. Savage, the respondent, and two days afterwards, that is to say, on the 30th of November, 1842, in the name of the respondent, prayed an appeal; and the District Court, with the consent of the complainants, passed an order giving the said George M. Savage liberty to file an appeal bond at any time within twenty days from the adjournment of the court. the 2d of December, the complainants also appealed, and on the same day gave the usual bond to cover costs, which was duly approved; and the transcript of the record and proceedings had in the cause in the District Court have been transmitted to and docketed in this court in the names of the said Willian Taylor and others, complainants and appellants, against the said George M. Savage, executor of Samuel Savage, respondent and appellee.

On

The executor having been removed as afore said, no bond was executed by him nor by Vincent M. Benham, the administrator, within the time limited by the court; and therefore an execution was issued by the clerk of the District Court against the property of Samuel Savage, by virtue of which the marshal has seized the property of the said deceased, and is about to sell the same in order to satisfy the decree.

In this state of the proceedings, Benham, the administrator, has filed his petition at the present term, setting forth the facts as above inentioned, and offering to file a transcript of the proceeding on his part and to give security on his appeal, and praying that his bond may be approved by this court, and the execution issued by the complainants superseded until the appeal can be heard and decided in this court. Affidavits have been filed on both sides, but there is no conflict between them in any circumstance deemed material by the court; nor do they vary in any important particular from the statement contained in the petition.

183

Error,

. v.

SHUBAL TILLOTSON.

Practice-questions to be decided upon final hearing of cause, not to be considered on argument of special motion.

We are by no means prepared to say that a WILLIAM J. MINOR ET AL., Plaintiffs in complainant, after having appealed from a decree in his favor, can be permitted, pending the appeal, to carry into execution the decree which he is seeking to reverse in the appellate 286*] court, in order to obtain a *decree for a larger sum. But the relief asked for the petition cannot be granted, because there is no case legally in this court upon appeal of either party, upon which process can be issued. The decree in the Circuit Court is against George M. Savage, executor of the last will and testament of Samuel Savage, deceased. There was no other party respondent in the District Court, and the decree was passed against him in his representative character. Before the appeal was prayed on either side, he had ceased to be the representative of the estate of Samuel Savage, and had no control over it, nor any right to interfere with it by prosecuting or appearing to an appeal, or in any other manner.

By his removal from the office of executor, he was as completely separated from the business of the estate as if he had been dead, and had no right to appear in or be a party in this or any other court, to a suit which the law con fided to the representative of the deceased. No further proceedings, therefore, could be had on the decree in the District Court, until Benham, the administrator de bonis non, was made a party.

In this view of the subject it follows, 1. That the appeal of the complainants is not regularly before this court, and the irregularity cannot

be cured here unless the administrator volun

tarily appears to it. The case may, however, upon the application of the appellants, be re

manded to the District Court with leave to make the proper parties.

2. The execution issued on the decree was unauthorized and void, and no right of prop; erty will pass by a sale under it, if one should be made by the marshal.

3. The appeal of Benham, the administrator de bonis non, is also irregular; and the case cannot be brought here by him unless he is first made a party in the District Court.

But he may be made a party there, either upon his own application or that of the complain ants, according to the rules and practice in chancery proceedings. And when this has been done, the administrator may take an appeal; and upon giving bond within the time prescribed by law, all proceedings upon the decree will be stayed in the District Court, until the decision of this court shall be had in the premises. And if he fail to give the bond within the limited period, the complainants will then be entitled to process from the District Court, in order to enforce it. As the case 287*] *now stands, there is no suit here upon which this court can found any process to set aside the execution improperly issued, and the petition of Benham, the administrator, must be dismissed.

ORDER

On consideration of the petition of Vincent M. Benham, filed in this case, and of the arguments of counsel thereupon had, it is now here ordered by this court that the said petition be, and the same is hereby dismissed.

S. C. Aff'd-2 How., 395.

Cited-5 How., 261; 3 Wood. & M., 517.

Whether or not a record contains a bill of exceptions or statement of facts by the court, according to the practice of Louisiana, by which any quesform as to enable this court to decide upon it; and tion of law is brought up for revision in such a whether or not there is a mass of various and conflicting testimony in relation to facts, upon which no jurisdiction can be exercised upon a writ of error; are questions to be decided only upon the final hearing of the cause.

The court will not go into this inquiry upon a cause is taken up for argument. motion to dismiss the writ of error, before the

MR. WEBSTER, of counsel for the defend ant, moved to dismiss the writ of error in this case, for the following reasons:

1. Because this court has no jurisdiction on writs of error of any question apparent in this record.

2. Because the record does not show any question of law to have been decided in the court below, which this court can revise.

3. Because there is no question of law stated on the record by bill of exception; nor any special verdict, or agreed state of facts, or any unquestioned evidence of facts, on which any question of law can arise.

4. Because it does not appear whether any. or, if any, what matter of law was in dispute between the parties..

The action was brought to recover certain tracts of land. Two trials had been had, the verdict rendered on the first had been set aside by the court, and the judgment rendered on the second verdict reversed by this court.

*Another jury was impaneled to try [*288 the cause, June 11, 1839; and after the trial had proceeded for some time, the parties agreed that the whole case should be submitted to the court, on the facts and the law, and that the judge should state the facts as he should find them; that such statement might be regarded as a special verdict.

On the 10th April, 1840, the court rendered a general judgment for the defendant, without making any statement of facts whatever. And thereupon, the next day, April 11, 1840, the parties agreed that all documents, plans, depositions, evidence, and exhibits, read in the cause, should be taken for a statement of facts in the case. The whole mass, therefore, of various and conflicting evidence, mixed up with questions of law, if there be such ques tions, is submitted to the decision of the judges of this court. This is a form of exercising its appellate jurisdiction on writs of error which it is not supposed to be competent to this court to adopt. (2 Wheat., 363; 3 Peters, 410; 16 Peters, 169.)

Mr. Walker opposed the motion, and con tended that there were three questions of law in the case, and that the statement of the judge was adopted, by agreement, as a special verdict.

Mr. Chief Justice TANEY delivered the opin ion of the court:

This is a writ of error from the Circuit Court | *JAMES WILLIAMS, Plaintiff in [*290 of the United States for the Eastern District of Louisiana.

AN agreement in writing between the counsel, as well for the appellant as for the appellee, that the decree of the Circuit Court in this case shall be affirmed with legal damages and costs for the said Daniel, having been filed; it is thereupon considered and decreed by this court, that the decree of the said Circuit Court in this cause be, and the same is hereby affirmed, with costs and damages, at the rate of 6 per centum per annum, and also that the said appellee recover of the said appellant, the further sum of $125 for the costs of the transcript of the record in the Circuit Court according to the said agreement. | States.