3

be made subject to a federal bankrupt law;1 that the debtor himself may be authorized to apply for its benefits; 2 that a law which provides no discharge of contracts is constitutional; and that a method of discharge by composition may be provided, notwithstanding that the bankrupt law of England in 1787 possessed none of these features. Two of these provisions are found in the act of 1841, and all three in that of 1867, as amended in 1874; and there is but a single reported case, which was reversed by the appellate court, and two dissenting opinions by a single judge, which are opposed to these conclusions. The enormous number of cases in which no question was raised take for granted the constitutionality of such laws.

6

§ 3. Uniformity. The constitutional grant to pass uniform laws implies that a law which is not uniform will not be constitutional. The uniformity is to be territorial "throughout the United States." The point has been taken in argument that there must be a uniformity in the treatment of all bankrupts, so that no distinction can be made between traders and non-traders, or between natural persons and corporations; but no decision can be found to sustain this argument, and such discriminations have been made and silently sustained in the acts of 1841 and 1867.

The bankrupt

§ 4. Uniformity as applied to Exemptions. law of 1867 exempted from the operation of the assignment such property of the debtor as was exempted from legal process. by the law of his residence not exceeding the amount allowed in the several States in the year 1864. The laws of the several States were widely different from each other in the char

1 Klein's Case, 1 How. 277, note; Kunzler v. Kohaus, 5 Hill, 317; McCormick v. Pickering, 4 N. Y. 276; Re Silverman, 1 Sawyer, 410, Fed. Cas. No. 12,855.

2 Thompson v. Alger, 12 Met. 428; Keene v. Mould, 16 Ohio, 12; Rowan v. Holcomb, 16 Ohio, 463; Loud v. Pierce, 25 Me. 233; Cutter v. Folsom, 17 N. H. 139; State Bank v. Wilborn, 1 Eng. (Ark.) 35; Lalor v. Wattles, 3 Gilman,

8 Re Cal. Pac. R. R. Co., 3 Sawyer, 240, Fed. Cas. No. 2315.

Re Reiman, 7 Ben. 455, Fed. Cas. No. 11,673; affirmed, 7 Ben. 562, Fed. Cas. No. 11,675.

5 Re Klein, 2 N. Y. Leg. Obs. 185, Fed. Cas. No. 7866; reversed, s. c. 1 How. 277, note.

6 In Sackett v. Andross, 5 Hill, 327; McCormick v. Pickering, 4 N. Y. 276.

acter and amount of their exemptions. It was held, however, that the different effect which was given to assignments in different States by reason of the differing exemptions did not make the law unconstitutional. In 1870 the State of Virginia provided for much larger exemptions than had before obtained in that State. Congress in the year 1872 adopted by a general law the existing exemptions of the several States. The law of Virginia and some similar laws in other States. were pronounced unconstitutional in their application to antecedent debts.2 Then Congress passed an act purporting to give a construction to the act of 1872, and providing that the exemptions allowed by the constitutions and laws of the States respectively should be valid against debts contracted before the passage of such constitutions and laws, and against liens and judgments or decrees of any State court. Chief Justice Waite and several other judges held that this law was unconstitutional, while Judge Woods and several other judges held otherwise.5 The point has not been decided by the Supreme Court. The Chief Justice admitted arguendo the constitutionality of the act of 1867, upon the ground that by adopting the valid laws of the States it gave to creditors everything which they could have made available for the enforcement of their claims by any legal process; but held that when this principle was abandoned the operation of the law ceased to be uniform, because Congress undertook by its own authority to exempt in certain States property which could not lawfully be exempted in those States, and which was not exempted in others.

1 Re Appold, 1 N. B. R. 621, Fed. Cas. No. 499; Re Beckerford, 1 Dillon, 45, Fed. Cas. No. 1209; Re Jordan, 8 N. B. R. 180, Fed. Cas. No. 7514.

2 The Homestead Cases, 22 Gratt. 266; Jones v. Brandon, 48 Ga. 593; Gunn v. Barry, 15 Wall. 610.

See, for the history of these enactments, Darling v. Berry, 13 Fed. Rep. 659. 4 Re Deckert, 10 N. B. R. 1, Fed. Cas. No. 3728; Re Dillard, 9 N. B. R. 8, Fed. Cas. No. 3912; Re Kerr, 9 N. B. R. 566, Fed. Cas. No. 7729; Re Duerson,

13 N. B. R. 183, Fed. Cas. No. 4117; Re Shipman, 14 N. B. R. 570, Fed. Cas. No. 12,791; Bush v. Lester, 55 Ga. 579.

5 Re Smith, 2 Woods, 458, Fed. Cas. No. 12,996; Re Kean, 8 N. B. R. 367, Fed. Cas. No. 7630; Re Jordan, 8 N. B. R. 180, Fed. Cas. No. 7514; Re Everitt, 9 N. B. R. 90, Fed. Cas. No. 4579 Re Jordan, 10 N. B. R. 427, Fed. Cas. No. 7515; Darling v. Berry, 13 Fed. Rep. 659.

6 Re Deckert, 10 N. B. R. 1, Fed. Cas. No. 3728.

The argument on the other side may be given by some extracts from the opinion of Love, J.:1 "In my opinion, when a bankrupt, revenue, or naturalization law is made by its terms applicable alike to all the States of the Union without distinction or discrimination, it cannot be successfully questioned on the ground that it is not uniform, in the sense of the Constitution, merely because its operation or working may be wholly different in one State from another. The circumstances and conditions existing in the States of the Union are infinitely various. No law which human ingenuity could possibly frame would be uniform in the sense of operating equally or alike in the various States, with their different conditions and diversified interests." This he illustrates in several ways. He then maintains that the law of 1867, though wholly just to creditors, for the reason given by the Chief Justice, does not, in fact, operate uniformly; and concludes that the new law, being impartial in its terms, is valid.

§ 5. Uniformity of Construction. It was suggested in an argument of some length by a learned Chief Justice that the statute of 1841 was not uniform, because the mode of administration was summary, and there was no appeal to the Supreme Court upon many difficult questions of interpretation which were raised and might be decided diversely in the lower courts.2 This singular suggestion that a statute is not uniform if any of its terms are capable of two constructions, is not noticed in later cases; and the court in which it was made, soon after pronounced the law constitutional. 3

Congress

§ 6. Criminal Sanctions; United States v. Fox, has undoubted power to provide criminal sanctions as part of a bankrupt law. But that section of the act of 1867 which punished a person who, within three months before he became bankrupt, should obtain credit under the false color and pretence of carrying on business, with intent to defraud, was held to be beyond the power of Congress; because there was

1 Darling v. Berry, 13 Fed. Rep. 659, 667.

8 Cutter v. Folsom, 17 N. H. 139.

4 United States v. Fox, 95 U. S. 670,

2 Kittredge v. Warren, 14 N. H. 509, 672, per Field, J. 511, per Parker, C. J.

no reference in this clause of the law to an intent to become bankrupt, or in any way to affect creditors or the debtor in respect to a possible future bankruptcy. It was, therefore, an attempt to make that an offence against the United States, in a future contingency, which was not one when it was committed.1

§ 7. Power of Congress not exclusive. It was early held, in opposition to the opinion of some eminent judges, that the grant to Congress to pass bankrupt laws is not exclusive of a similar power in the States when Congress has not acted.2 Neither is the power concurrent; for when Congress has acted, the State laws, so far as they cover the same ground, are suspended.8

The first general law on the subject regulated this matter; 4 but in later statutes this has not been thought necessary.

§ 8. What Laws not suspended. It will be convenient to examine first what laws or parts of laws are not suspended. If certain classes of cases which might be included in a bankrupt law are purposely left untouched, the local laws may continue to deal with them. Such are cases under the poor debtor laws of the several States; for the bankrupt laws since 1800 have not attempted to deal with poor debtors, as such." So with persons whose total debts are less than the minimum required to give jurisdiction to the federal court. So with

1 United States v. Fox, 95 U. S. 670. See United States v. Clark, 1 Lowell, 402, Fed. Cas. No. 14,806. The former case overrules United States v. Pusey, 6 N. B. R. 284, Fed. Cas. No. 16,098.

2 See Story, Const., 5th ed., § 1114; Sturges . Crowninshield, 4 Wheat. 122; Ogden v. Saunders, 12 Wheat. 213; Clay r. Smith, 3 Pet. 411; Mather v. Bush, 16 Johns. 233.

5 Jordan v. Hall, 9 R. I. 218; Steelman v. Mattix, 36 N. J. 344.

6 Stat. 4 April, 1800, § 61, 2 Stat. 36; Shepardson's Appeal, 36 Conn. 23; Carter v. Sibley, 4 Met. 298, per Shaw, C. J.; Tobin v. Trump, 7 Phila. 123, per Thayer, J. [These cases seem inconsistent with those cited below. They do not apply to the act of 1898, which allows all debtors to file voluntary petitions, but extends the privileges of the bankrupt law to those creditors only who can prove that their debtor owes at least $1000. § 4, a & b. It is clear that Congress intended to cover the whole

3 See cases in notes infra and dicta in Sturges v. Crowninshield, 4 Wheat. 122; May v. Breed, 7 Cush. 15, at 40; Clarke v. Rosenda, 5 Rob. (La.) 27; Klein's Case, 1 How. 277, note. Stat. 4 April, 1800, § 61, 2 Stats. ground, and to refuse proceedings against the debtor who owed less than $1000.]

36.

the estates of persons who have died insolvent before action has been taken in bankruptcy. So of certain classes of corporations omitted from the operation of the bankrupt law.

§ 9. What Laws suspended. On the other hand, complete systems of bankruptcy, worked out through the courts, like those of Massachusetts, Maryland, California, Louisiana, and some other States, are held, by a great preponderance of authority, to be wholly suspended.2 Decisions in Connecticut, Kentucky, and North Carolina appear to hold that if the law in question is like the law of Congress, in its general scope, as most State laws are, since they meet the same needs by substantially similar remedies, it may be availed of in any particular case in which the courts of the United States have. not been applied to; or even when they cannot be applied to because the State law furnishes more acts of bankruptcy, or gives a longer time in which to file a petition.3 If this is the true meaning of those decisions, they are not sound. The question is not of harmony between two systems, but of a paramount authority establishing one of them. The States have no power to declare certain things to be acts of bankruptcy by persons included within the scope of the law of the United States, which Congress has not chosen to make such; nor to extend the time within which creditors may file a petition. It is held by all the courts that a discharge granted under a State law will be void, while an act of Congress is in force.4 The same argument will invalidate an adjudication of bankruptcy made

1 Durgin v. Coolidge, 3 Allen, 554; Frazer v. McDonald, 8 N. B. R. 237, Fed. Cas. No. 5073; Adams v. Terrell, 4 Fed. Rep. 796.

2 Ex parte Eames, 2 Story R. 322; Fed. Cas. No. 4237; Griswold v. Pratt, 9 Met. 16; Van Nostrand v. Carr, 30 Md. 128; Larrabee v. Talbott, 5 Gill, 426; Cassard v. Kroner, 4 N. B. R. 569; Re Reynolds, 8 R. I. 485; Barber v. Rodgers, 71 Penn. St. 362; Nesbit v. Greaves, 6 Watts & S. 120; Martin v. Berry, 37 Cal. 208; Fisk v. Montgomery, 21 La. An. 446. See Shryock v. Bashore, 13 N. B. R. 481, for an able review of

the doctrine, though the decision was wrong; s. c. on appeal, 15 N. B. R. 283, 82 Penn. St. 159; Sadler v. Immel, 15 Nev. 265.

8 Geery's Appeal, 43 Conn. 289; Ebersole v. Adams, 10 Bush, 83; Linthicum v. Fenley, 11 Bush, 131; Ziegenfuss' Case, 2 Iredell, 463.

4 Com. v. O'Hara, 6 Phila. 402; Tobin v. Trump, 7 Phila. 123; Chamberlain v. Perkins, 51 N. H. 336; Rowe v. Page, 54 N. H. 190; Lyman v. Bond, 130 Mass. 291; Shears v. Solhinger, 10 Abb. Pr. N. s. 287; Re Jacobs, 12 Abb. Pr. N. s. 273.