Millar v. Hall

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RULE to shew cause why an Exoneretur should not be entered on the bail-piece.—The Defendant had obtained his discharge under the insolvent law in the State of Maryland, which law was enacted subsequent to the debt in question, and to the institution of this suit. It was stated, and allowed, that the money for which the action was brought, has been paid to Hall in Maryland, on account of goods sold and delivered upon a commission as the partner of Millar; but that the original agreement under which they acted in the sale of those goods was executed in Philadelphia, and that the proceeds belonged to merchants residing in Pennsylvania, where, consequently the payment was to be made. It was, likewise, admitted, that the Defendant was resident in, and subject of the laws of, Maryland, and that the Plaintiff was resident in, and subject to the laws of Pennsylvania: And it did not appear to the Court that the Plaintiff was returned as a creditor in the Defendant's schedule; nor was any notice of the time and place of surrender served upon him, though a general publication, of the Defendant's intention to take the benefit of the Insolvent law, was made, in the usual form, in the Baltimore Gazette.

Moylan, in shewing cause against the rule, argued, that according to the strict idea of a municipal law, it was limited in its operation of the jurisdiction of the state that made it; for jus civile est quod quisque sibi populus constituit; and to a free people particularly, it must appear unreasonable that there should be legislation where there is no representation. 2 Inst. 98. There are, however, he acknowledged, cafes in which an indirect effect if given to foreign statutes ​ in order to accomplish the rules of justice; as in the instance of contracts entered into in other countries, or of bargains which are unlawful in a foreign nation, of which both debtor and creditor are members and subjects. Prin. of Eq. 363. 1 Black. Rep. 234. 250. But still, in all these exceptions, the foreign statutes as such have no coercive authority extra territorium, but are received only by consent as far as they are necessary to justice.

He then contended from the facts, that the Defendant did not come within the principle of any of the cafes referred to, for, as the Plaintiff was not a subject of Maryland, it cannot be pretended that either by himself or his representatives, he has consented to the Defendant's discharge, or rather to the law, by which that discharge was authorized; that, as between the Plaintiff and Defendant, the place of the contract, which the law materially regards, was Philadelphia where the merchants to whom the money was, in fact, payable, resided; and that even if the contract has been made in Maryland, the Defendant would not be in a better condition on that account, as the law under which he was discharged, was enacted several years afterwards, and, therefore, could not have been in the contemplation of the parties in making their agreement.

He urged, likewise, the inconveniences that would attend the adverse doctrine, from a variety of considerations. Suppose there had been no bankrupt law in Pennsylvania, and that, in truth, our Legislature disapproved of it, yet, every debtors by going into Maryland and complying with the terms of their General Act, or, perhaps, by virtue of a special one, might obtain a certificate which, it is contended, would make laws for us, not only without her consent, but contrary to our interior policy. Again, if no other notice is required than an advertisement in a Maryland newspaper, which the citizens of Pennsylvania seldom read, the spoils may be shared among the creditors present, so the execution or the absent, who, at the fame time, have been guilty of no fault or negligence, but, if they had been apprized of the transaction, might have suggested such circumstances of fraud, as would prevent the granting the very certificate, which is set up as a conclusive bar to their just demands. In England the king is not bound by the bankrupt laws, 1 Atk. 303. and shall we be bound, who are not in any degree connected with the government that made them? If Maryland had given a preference to her own citizens in the distribution of an insolvent's, or a bankrupt's estate, ought we, who are strangers, to be affected by the certificate of discharge, though we derive no benefit from the surrender of property? Where, or how, is the line to be drawn? If, indeed, the certificate is to be universally operative, so ought the assignment of the bankrupt's estate to be, since the words of the bankrupt laws are in this respect, as comprehensive and forcible, as in that, and yet it is an established doctrine, that the assignment is only binding in the state in which the commission issues. Doug. 160. The act of ​

Maryland is an infolvent, and not a bankrupt law, as it works no extinguifhment of the debt, but leaves all future acquifitions of property liable to the creditors of the perfon difcharged: And in the cafe of James et al vs. Allen ant. 188. SHIPPEN, Preʃident determined that an infolvent law of New-Jerʃey was local in its terms, and local in its nature.

Ingerʃol, in fupport of the rule, having ftated that an Exquireiur(illegible text) might be entered without an actual furrender of the principal Barn. 194. 1 Com. Dig. 496. and proved that the Defendant had complied with the terms of the infolvent law of Maryland obferved, that imprifonment had been thought by very judicious writers, to be an act illegal in itfelf ; Burgeʃs on Inʃole and it feems,indeed, that the only reafonable juftification of it, is to compel a debtor to furrender all his effects for the benefit of his creditors. When that is done, it is not only unreafonable and unjuft, but, by the exprefs provifion of the Conʃt. oƒ Penn. § .8, independent of the doctrines founded on the common law, it is illegal to refrain a man's perfonal freedom.

He then contended, that from general principles, from pofitive authorities, arifing under the bankrupt laws of different countries, from the reafon of the thing, and from the mifchievous confequences of a contrary pofition, the difcharge of the Defendant in one ftate, ought to be fufficient to difcharge him in every ftate ; without this, perpetual imprifonment muft be the lot of every man who fails ; and all hope of retrieving his loffess by honeft and induftrious purfuits, will be cut off from the unfortunate bankrupt.

But a debt paid according to the law on a foreign country, though in a depreciated medium, has been decreed to be a fatisfaction ; and a ceʃʃio bonorum in Holland, which is a difcharge there, was decided to have the fame effect in England. Co. Bend. Law 60. 1.2. 115. 347. Green Bank . Law 131. 260. 2 Stra. 738. 1. Atk. 119. Brown Caʃes in Chan. 376. Thefe authorities apply here with additional force, under the fanction of the articles of Confederation, which declare, that ‘‘ full faith and credit fhall be given in each of

‘‘thefe ftates to the records, acts, and judicial proceedings of the

‘‘courts and magiftrates of every other ftate : And alfo, that,

‘‘ the free inhabitants of each of thefe ftates, fhall be entitled to all

‘‘ privileges and immunities of free citizens in the feveral ftates ; and

‘‘ the people of each ftate fhall have free ingrofs and regrefs to and

‘‘ from any other ftate.’’ See Art. 4.

the chief justice, after confideration, delivered the opinion of the Court.

M'KEAN, Chieƒ Juʃtice. − This comes before the Court on a motion for leave to enter an Exquireiur(illegible text)on the bail piece, upon this principle, that the defendant had been difcharged under an infolvent law of the ftate of Maryland, which is in the nature of a general bankrupt law. To this it has been objected, that the infolvent law by which the defendant has been difcharged, was made pending the action, and therefore, ought not to operate in the prefent cafe, even ​

1788.

if the laws of any particular country could be extended beyond the jurifdiction of that country, which has likewife been denied ; and, it is faid, that in order to give a binding force to laws, it is neceffary that the perfon to be affected fhould have confented to them either by himfelf, or his reprefentatives.

But, having confidered the principles of the law of nations, and the reciprocal obligation of the ftates under the articles of confederation , we are of opinion, that the act of affembly by which the Defendant has been difcharged, muft be confidered as a general bankrupt law, made for general purpofes, and equally advantageous to all his creditors. To execute, therefore, upon his perfon out of the ftate in which he has been difcharged, would be giving a fuperiority to fome creditors, and affording them a double fatisfaction–to wit, a proportionable dividend of his property there, and the imprifonment of his perfon here.–It is true, that the laws of a particular country, have in themʃelve no extra-territorial force, no coercive operation ; but by the confent of nations, they acquire an influence and obligation, and, in many inftances, become conclufive throughout the world. Acts of pardon, marriage, and divorce, made in one country, are received and binding in all countries. In the ftate of Delaware there is a law, a narrow and contracted one indeed, which obliges executors or adminiftrators to difcharge the debts due from the deceafed to his creditors within theʃtate, in preference to every other. This the executors is obliged to comply with, becaufe he is immediately under the coercion of the law which prefcribes it ; fo that the diftribution thus made, is certainly binding out of the ftate, and the law is in that refpect every where received ; for, it would be more unjuft to compel the executor who acted legally in his own ftate, to pay the money out of his pocket, than that the creditor fhould loofe the amount of his demand.

With refpect to the argument, that no perfon can be bound by laws to which he has not either directly or virtually confented, it muft be obferved that, though Mr. Millar, the plaintiff, was not a citizen of Maryland yet Mr. Hall was ; and he by the law in queftion has been obliged to transfer all his effects for the benefit of all his creditors. Having done this, we muft prefume that he has fairly done it, and therefore to permit the taking his perfon here, would be to attempt to compel him to perform an impoffibility, that is, to pay a debt after he has been deprived of every means of payment,– an attempt which would, at leaft, amount to perpetual imprifonment, unlefs the benevolence of his friends fhould interfere to difcharge the Plaintiff's account.

From the nature of the act then, it appears to be founded upon equitable grounds, for general and juft purpofes ; it ought therefore to be regarded in all other countries, and fhould enjoy that weight, in our decifions, which it naturally derives from general conveniency, expediency, juftice, and humanity. For, mutual conveniency, policy, the confent of nations, and the general principles of juftice, ​

form a code which pervades all nations, and muft be every where acknowledged and purfued.

Upon the whole, it is clear, that this tranfaction does not arife in fraudem legis and that extending the law of Maryland to its prefent object, will be in no degree derogatory to the independence and fovereignty of this ftate:–Therefore, let the exoneretur be entered.