State Bankrupt and Insolvent Laws. tracted a debt there with another citizen of the | same state, removed to Pennsylvania, became a resident there, and took the benefit of the bankrupt law of Pennsylvania. Query, Whether he can plead his discharge to an action brought for the old debt. Emory v. Greenough, 3 Dall. 369. 73. Since the adoption of the constitution of the United States, a state has authority to pass a bankrupt law, provided such law does not impair the obligation of contracts, and provided there be no act of congress in force to establish a uniform system of bankruptcy, conflicting with such law. Sturges v. Crowninshield, 4 Wheat. 122; 4 Cond. Rep. 409. unaffected by the act of congress, except where they may apply to individual cases. Ibid. 82. An act of a state legislature, which dis charges a debtor from all liability for debts contracted previous to his discharge, on his sur rendering his property for the benefit of his creditors, is a law impairing the obligation of contracts within the meaning of the constitution of the United States, so far as it attempts to discharge the contract; and it makes no differ ence, in such a case, that the suit was brought in a state court of the state of which both the parties were citizens, where the contract was made, and the discharge was obtained, and where they continued to reside until the suit was brought. Farmers' and Mechanics' Bank v. Smith, 6 Wheat. 131; 5 Cond. Rep. 35. 74. The act of the legislature of the state of New York, passed on 3d of April, 1811, which not only liberates the person of the debtor, but discharges him from all liability for any debt 83. The states of the United States have a contracted previous to his discharge, on his sur- right to pass bankrupt laws, notwithstanding rendering his property in the manner it pre- the power granted to the general government by scribes, and so far as it attempts to discharge the constitution, to establish a uniform system the contract, is a law impairing the obligation of bankruptcy. Adams v. Storey, 1 Paine's C. of contracts, within the meaning of the consti- C. R. 97. tution of the United States, and is not a good plea in bar of an action brought upon such contract. lbid. 84. The act of April 3, 1811, passed by the legislature of New York, is an insolvent law, and not a bankrupt law. Ibid. 75. The line of partition between bankrupt 85. The discharge of a citizen from his debts, and insolvent laws is not so distinctly marked, under the insolvent laws of Rhode Island, is no as to enable any person to say with positive pre-discharge of a contract made, and to be exe cision, what belongs exclusively to the one, and not to the other class of laws. Ibid. 76. A bankrupt law may contain the regulations which are generally found in insolvent laws; and an insolvent law may contain those which are common to a bankrupt law. Ibid. 77. The right of the states of the United States to pass bankrupt laws, is not extinguished by the enactment of a uniform bankrupt law throughout the Union, by congress; it is only suspended. The repeal of that law cannot confer the power on the states, but it removes a disability to its exercise, which was created by the act of congress. lbid. 78. Wherever the terms on which a power is granted by the constitution to congress, or wherever the nature of the power itself requires that it should be exercised exclusively by congress, the subject is as exclusively taken away from the state legislatures, as if they had expressly been forbidden to act upon it. Ibid. 79. The power granted to congress, of establishing uniform laws on the subject of bankruptcies, is not of this description. Ibid. 80. Although the states may, until that power is exercised by congress, pass laws concerning bankrupts, yet they cannot, constitutionally, introduce into such laws a clause which discharges the obligations the bankrupt has entered into. Imprisonment of the debtor is no part of the contract, and he may be released from imprisonment without impairing its obligation. Ibid. 81. The sixty-first section of the act of congress of 1800, ch. 173, for establishing a uniform system of bankruptcy, does not confirm state insolvent laws containing a provision impairing the obligation of contracts, but merely leaves them to operate, so far as constitutionally they may, cuted, in a foreign country. The law of the place where a contract is made, is to govern as to its validity, nature, and construction: but the remedy in such contract is to be pursued according to the law of the place where the contract is made. Van Reimsdyk v. Kane's Ex'r., 1 Gallis. C. C. R. 371. 86. A state legislature cannot, by an insolvent law, suspend process in the courts of the United States, as to the citizens of the state. Babcock v. Weston, 1 Gallis. C. C. R. 168. 87. It would appear that but for the provisions of the constitution of the United States, a discharge from a debt by the insolvent laws of the state where the contract is made, and of which both parties are citizens, is good everywhere. Ibid. | 88. The insolvent act of Rhode Island ex. tends to discharge the party from debts and contracts not yet due; and the bar created thereby applies to the debt or contract, in whatever court it is sued. Sheiffelin v. Wheaton, 1 Gallis. C. C. R. 441. 89. The plaintiff below, a citizen of the state of Kentucky, instituted a suit against the defendant, a citizen of Louisiana, for the recovery of a debt incurred in 1808, and the defendant pleaded his discharge by the bankrupt law of Louisiana, in 1811; under which, according to the provisions of the law, "as well his person as his future effects," were for ever discharged "from all the claims of his creditors." Under this law, the plaintiff, whose debt was specified in the list of the defendant's creditors, received a dividend of ten per cent. on his debt, declared by the assignees of the defendant. Held, that the plaintiff, by voluntarily making himself a party to those proceedings, abandoned his extra State Bankrupt and Insolvent Laws. territorial immunity from the operation of the bankrupt law of Louisiana; and was bound by that law to the same extent to which the citizens of Louisiana were bound. Clay v. Smith, Peters, 411. 90. The judges of the supreme court, who were in the minority of the court upon the general question as to the constitutionality of state insolvent laws, concurred in the opinion of Mr. Justice Johnson, in the case of Ogden v. Saunders, 12 Wheat. 213. The opinion is, therefore, to be deemed the opinion of the other judges, who assented to that judgment. Whatever principles are established in that opinion, are to be considered no longer open for controversy, but the settled law of the court. Boyle v. Zacharie et al., 6 Peters, 348. repugnant to the constitution of the United States, and it makes no difference whether the law was passed before or after the debt was contracted. M'Millan v. M'Neill, 4 Wheat. 209; 4 Cond. Rep. 424. 96. A bankrupt or insolvent law of any state, which discharges both the person of the debtor and his acquisitions of property, is not "a law impairing the obligation of contracts," so far as respects debts contracted subsequent to the passage of such a law, in those cases where the contract was made between citizens of the state under whose laws the discharge was granted, and in whose courts the discharge may be pleaded. Ogden v. Saunders, 12 Wheat. 213; 6 Cond. Rep. 523. 97. The power given to congress by the con ject of bankruptcies throughout the United States," does not exclude the right of the states to legislate on the same subject, except when the power is actually exercised by congress, and the state laws are in conflict with those of congress. Ibid. 91. The effect of a discharge under an institution, "to establish uniform laws on the subsolvent law of a state, is at rest, so far as it depends on the antecedent decisions made by the supreme court. The ultimate opinion delivered by Mr. Justice Johnson, in the case of Ogden v. Saunders, 12 Wheat. 213, 258, was concurred in and adopted by the three judges who were in the minority on the general question of the constitutionality of state insolvent laws. So far then, as decisions upon the subject of state insolvent laws have been made by the supreme court, they are to be deemed final and conclusive. Ibid. 635. 92. The assignment under the insolvent law of Rhode Island, could only take effect from the time it was made. Until the court, in the exercise of their judgment, determine that the applicant is entitled to the benefit of the law, and in pursuance of its requisitions he assigns his property, the proceedings are inchoate, and do not relieve the party. It is the transfer which vests in the assignee the property of the insolvent for the benefit of his creditors. If before the judgment of the court the petitioner fail to prosecute his petition, or discontinue it, his person and property are liable to execution as though he had not applied for the benefit of the law. And if after the judgment of the court, he fail to assign his property, it will be liable to be taken by his creditors on execution. Hunter v. The U. S., 5 Peters, 173. 93. The property placed on the inventory of an insolvent, may be protected from execution while he prosecutes his petition; but this cannot exclude the claim of a creditor who obtains a judgment before assignment. Ibid. 94. The legislature of Ohio possessed full constitutional authority to pass laws whereby insolvent debtors should be released or protected from arrest or imprsonment of their persons, on any action for any debt or demand due by them. The right to imprison constitutes no part of the contract; and a discharge of the person of the party from imprisonment, does not impair the obligation of the contract, but leaves it in full force against his property and effects. Beers v. Haughton, 9 Peters, 329. 95. A state bankrupt or insolvent law, which not only liberates the person of the debtor, but discharges him from all liability for the debt, so far as it attempts to discharge the contract, is 98. But where, in the exercise of that power, the states pass beyond their own limits, and the rights of their own citizens, and act upon the citizens of other states, there arises a conflict of sovereign power, and a collision with the judicial powers granted to the United States, which renders the exercise of such a power incompatible with the rights of other states, and with the constitution of the United States. Ibid. 99. Every bankrupt or insolvent system in the world must partake of the character of a judicial investigation. Parties whose rights are affected are entitled to a hearing. Hence, every bankrupt or insolvent system professes to summon the creditors before some tribunal, to show cause against granting a discharge to the bankrupt. But on what principle can a citizen of another state be forced into the courts of a state for this investigation? The judgment to be passed is to prostrate his rights; and on the subject of those rights, the constitution exempts him from thẹ jurisdiction of the state tribunals, without regard to the place where the contract may originate. In the only tribunal to which he owes allegiance, the state insolvent law cannot be carried into effect; they have a law of their own on the subject, and a certificate of discharge under any other law would not be acknowledged as valid even in the courts of the state in which the court of the United States that grants it is held. Where is the reciprocity? Where the reason upon which the state courts can thus exercise a power over the suitors of that court, when that court possesses no such power over the suitors of the state courts? Ibid. 100. A discharge from the debt under the bankrupt law of the place of the contract is good in every other place, when pleaded as an extinction of the debt; but a like discharge, under the laws of any place where the contract was not made, cannot be so pleaded in the tribunals of any other nation. Le Roy v. Crowninshield, 2 Mason, 151. 101. Where the insolvent laws merely dis State Bankrupt and Insolvent Laws. given. Campbell et al. v. Claudius, 1 Peters' C, Č. R. 484. charge the person, leaving the effects, future as well as present, liable for the debts, the discharge cannot be pleaded as a bar to any action 109. Where the debt has been contracted and in a foreign court, because there is not a total, made payable out of the state, the circuit court but a partial extinction of the remedy. But will not discharge, on common bail, a defendant where the effects as well as person are dis-arrested for such debt, notwithstanding his discharged, as in cases of bankrupt laws, there the discharge is held a universal bar; and the reason is, that it extinguishes all remedy of every kind, and consequently, in a legal and exact sense, all right. Ibid. 102. Action was brought on a bill of exchange, drawn 10th of May, 1811, by the plaintiff, at St. Barts, on himself, in Philadelphia, and by him accepted, and afterwards regularly protested for non-payment. The defendant claimed to be discharged from this debt, by a law of the state of Pennsylvania, passed 13th of March, 1812, under which he had received a certificate, having conformed to the provisions of the law; and which law declares, that the certificate shall discharge such insolvent from all debts and demands due from him, or for which he was liable at the date of such certificate; and also from all contracts originating before the said date, though payable afterwards. Held, That the law of Pennsylvania of the 13th of March, 1812, is unconstitutional, because it impairs the obligation of a contract; and because congress have exclusively the power to pass a bankrupt law. Golden v. Prince, 3 Wash. C. C. R. 313. charge by the insolvent laws of the state in which such action is brought. Ibid. 110. The plaintiff sold to the defendant certain goods in Philadelphia, and at the same time delivered to him other goods to be disposed of at Havana, on account of the plaintiff. The defendant took all the goods to Havana, and there pledged them as a security for money advanced to him. On his return to Philadelphia, this suit was commenced against him. This action was on the case, but no declaration was filed. So it stood when a judgment was entered generally: afterwards, by an agreement between the par ties, the judgment was confessed on the record to be for a certain sum, and notes were taken for the amount, payable at distant periods, and execution stayed accordingly. After these arrangements were made, the defendant was duly discharged by the insolvent laws of Pennsylva nia; and after his discharge, the plaintiff filed his declaration in the suit in trover, and charged the defendant with a tortious conversion to his own use, of the goods in both invoices. The alleged tort was the pledging of the goods at Havana. By the court:-If, on these facts, the 103. The existence of a power in the states to plaintiff had originally an election to bring his pass bankrupt laws is not incompatible with the suit on the contracts, or for a tort, yet, as it powers delegated to congress for that purpose. clearly appears by the whole course of proceedThe exercise of the power of the states would ing, that he had proceeded upon the contracts, be suspended by its exercise by congress, and he cannot, by filing, under these circumstances, all state laws previously passed would be re-a declaration in trover, turn his suit into one for pealed by the passage of a bankrupt law by congress. Adams v. Storey, Paine's C. C. R. 79. 104. The provision of the constitution of the United States, that "no state shall pass any law impairing the obligation of contracts," does not apply to state insolvent laws. Ibid. 105. The defendant, while residing at Boston, Massachusetts, where the plaintiff resided, gave to the plaintiff several promissory notes, and afterwards removed to New York. He was discharged in New York, by the insolvent laws of that state, passed after the making of the notes. Held, his discharge was a good bar to the action. Ibid. 106. The defendant had been discharged by the insolvent laws of the state of Pennsylvania, from a debt contracted in the state; the court discharged him on common bail. Read v. Chapman, 1 Peters' C. C. R. 404. 107. The court refused to quash a writ of capias issued against the defendant for a debt contracted in the state, he having been discharged by the insolvent law; the proper relief is to discharge the defendant on common bail. Ibid. 108. On a rule to show cause why the defendant should not be discharged on common bail, he having been discharged under the insolvent laws of the state of Pennsylvania, evidence to show that the discharge had been unfairly and fraudulently obtained, cannot be a tort. The contract and promises having been made in Philadelphia, by persons resident here, and to be executed here, the rule for the exoneretur, the defendant having been discharged by the insolvent law of Pennsylvania, was made absolute. Thibault v. De Basavilbaso, 1 Baldwin's C. C. R. 14. 111. A discharge of a debtor under the insolvent law of Pennsylvania, does not protect him from arrest by a citizen of New York, for a debt payable in New York, or to a citizen of that state. Woodhull et al. v. Wagner, 1 Baldwin's C. C. R. 299. 112. Insolvent laws of a state have no effect beyond the limits thereof. Ibid. 300. 113. A state may pass a bankrupt law, if there is no act of congress in force establishing a uniform system of bankruptcy, and it does not impair the obligation of a contract. Ibid. 297. 114. State laws, discharging a person from his liability on contracts made previously to the law, are unconstitutional and void. Ibid. 115. It makes no difference whether the parties are citizens of the same or of different states. Ibid. 298. 116. The law is the same, whether the suit on the contract is in a state court or a court of the United States. Ibid. 300. 117. A contract may be discharged by a state law enacted before the contract was made. Ibid. 295. Foreign Bankrupt Laws.-Barratry. 118. The discharge of the person from imprisonment by a state law is valid, as imprisonment is a remedy to enforce the contract, but not a part of its obligation. Ibid. 297. 119. If the creditor makes himself a party to the proceedings, in a state court, on the discharge of the debtor under a state law, discharging both the person and property of the debtor, the discharge is valid as against him. Ibid. 301. 3. Foreign Bankrupt Laws. 120. The bankrupt law of a foreign country cannot operate a legal transfer of property in this country. Harrison v. Sterry et al., 5 Cranch, 289; 2 Cond. Rep. 260. 121. A discharge under a foreign bankrupt law is no bar to an action in the courts of this country. M'Millan v. M'Neill, 4 Wheat. 209; 4 Cond. Rep. 424. 3. To constitute barratry, the act must be fraudulent, and to the prejudice of the owners. If fraudulent, it is of course a criminal violation of the duty which the master owes to his employers: it is not essential it should be to the interest of the master; if it be so, it is evidence of fraud: so is gross negligence. If the question turn merely on the fraud, it will always be necessary to look at the motive. If it be to benefit the owner, it is an honest though mistaken one, and the act cannot be called barratry. The case of a wilful deviation, for the benefit of the owner, is an example which tests the truth of the prin ciple; for if it were made for the benefit of the marter, it would be barratry. Dederer v. Delaware Ins. Co., 2 Wash. C. C. R. 61. 4. The steamboat Lioness was insured on her voyage on the western waters, particularly from New Orleans to Natchitoches on the Red river, 122. The assignees of a bankrupt in England and elsewhere, "the Missouri and Upper Miscannot maintain an action at law in their own souri excepted," for twelve months. One of the name, against a debtor of the bankrupt in Vir- perils insured against was "fire." The vessel ginia; and the action is only maintainable in the was lost by the explosion of gunpowder. By the name of the bankrupt himself. Though the right court-A loss by fire, where the fire was directly to personal property may be regulated by the and immediately caused by the barratry of the laws of the domicil, as in the case of the bank-master and crew, as the efficient agents when rupt laws of England, and though the equitable rights of the assignees acquired under those laws will be respected in our courts, yet the right of action must be regulated by the law of the forum in which the suit is brought: and the transfer of a bankrupt's effects in England being an assignment merely by operation of law, and not by the act of the party, is not such an assignment of the legal title to the assignees as will enable them to maintain an action in their own name in the courts of Virginia. Blane v. Drummond, 1 Brockenb. C. C. R. 62. 123. A debt contracted in one country cannot be discharged by the bankrupt laws of another country. Green v. Sarmiento, 1 Peters' C. C. R. 74. 124. A discharge by the bankrupt law of a foreign country does not operate to pass the property in Pennsylvania, or discharge the person of a debtor here. Ogden et al. v. Gillingham et al., 1 Baldwin's C. C. R. 46. BARRATRY. the fire was communicated; and occasioned by the direct act and agency of the master and crew, intentionally done from a barratrous purpose, is not a loss within the policy, if barratry is not insured against. Waters v. The Merchants' Louisville Ins. Co., 11 Peters, 213. 5. If the master or crew should barratrously bore holes in the bottom of a vessel, and she should thereby be filled with water and sink, the loss would probably be deemed a loss by barratry, and not by the peril of the seas or of rivers, though the water should co-operate in producing the sinking. Ibid. 6. All the definitions in the English or American authorities agree as to the definition of barratry, to wit: that fraud must be a constituent in the act of barratry. The question seems to be between "dolus and culpa," which of those two words best conveys the sense of the law. The Patapsco Ins. Co. v. Coulter, 3 Peters, 230. 7. The British courts have adopted the safe and legal rule, in deciding that where the policy covers the risk of barratry, and fire is the proximate cause of the loss, they will not sustain the defence that negligence was the remote cause, and will hold the assurers liable for the loss Ibid. 236. 1. Where the general owner of a ship retains the possession, command, and navigation of the same, and contracts to carry a cargo on freight 8. The rule that a loss, the proximate cause for the voyage, the charterparty is to be consi- of which is a peril insured against, is a loss withdered as a mere affreightment, sounding in co-in the policy, although the remote cause may venant; and the freighter is not clothed with the be negligence of the master or mariners, has character of legal responsibility of ownership. been affirmed in several successive cases in the In such a case, the general owner is also owner English courts. Ibid. 237. for the voyage. Consequently, if he be master of the vessel, he is incapable of committing barratry. Marcardier v. The Chesapeake Ins. Co., 8 Cranch, 39; 3 Cond. Rep. 20. 2. Barratry is an act committed by the master or mariners of a ship, for some unlawful or fraudulent purpose, contrary to their duty to their owner, whereby the latter sustains an injury. Ibid. 9. To entitle the plaintiff to recover in an action on a policy of insurance, the loss must be occasioned by one of the perils insured against. The insured cannot recover for a loss by barratry unless the barratry produced the loss; but it is immaterial whether the loss so produced occurred during the continuance of the barratry or after wards. Swan v. The Union Ins. Co. of Maryland, 3 Wheat. 168; 4 Cond. Rep. 221. Bastardy and Illegitimacy.-Bills of Credit. BASTARDY AND ILLEGITIMACY. 1. The 19th section of the act of the legislature of the state of Virginia, passed in 1785, and which took effect on the 1st day of January, 1787, declared, that "where a man, having by a woman one or more children, shall afterwards intermarry with such woman, such child or children, if recognised by him, shall be thereby legitimated." This act was not retrospective in operation, so as to legitimate a child born before the passage of the act in 1785, and whose father had died in 1776, before the passage of the act; although in his will he had devised the whole of his property to his children and his wife, describing the children as his, and those of his wife. One of the children with whom his wife was pregnant when he had married her, while in his minority, obtained a warrant from the state of Virginia, for the military lands to which his father was entitled, and died during minority without heirs, and without locating the warrant. His mother had died before him. The court held, that the children born before the marriage, and before 1776, were not made legitimate by the act of 1785, and capable of taking the land, as the heirs of the son, born after the marriage. The land obtained under the military warrant was claimed by the parental uncle of the son, born after the marriage; and this claim was considered valid as against the illegitimate offspring of the grantor. Stevenson's Heirs v. Sullivant, 5 Wheat. 207; 4 Cond. Rep. 636. 2. There can be no doubt but that the section applied to bastardy in esse, at the time the law came into operation, as well as to those who might be thereafter born. But it would give the law a retrospective character, to construe it to apply to persons born before its passage, and not recognised by the father after it came into operation. Ibid. 3. The object of the legislature would seem to have been, in the eighteenth section of the law, to remove the impediment to the transmission of inheritable blood from the bastard in the descending line, and to give him a capacity to inherit in the ascending line, and through his mother. But although her bastard children are, in these respects, quasi legitimate, they are nevertheless, in all other respects, bastards, and as such they have and can have neither father, brothers, nor sisters. Ibid. 4. The presumption of law is in favour of the legitimacy of a child born in wedlock; but this presumption may be rebutted by other testimony. It is true, that a mere probability of non-access by the husband, is not sufficient to repel the presumption; but it is not necessary for the party objecting to the legitimacy, to prove that non-access was impossible. If the evidence places the non-access beyond all reasonable doubt, it is sufficient to repel the presumption of legitimacy. Stegal et al. v. Stegal's Adm'r. et al., 2 Brockenb. C. C. R. 256. 5. If a man marries a woman in such an advanced state of pregnacy that the situation of his wife must have been known to him, it must be considered as a recognition of the child afterwards born, as his own: any conduct of the husband after the birth, indicating a belief that the child is bis, is decisive. But if the marriage takes place where the pregnacy is probably unknown, where the acquaintance between the parties, most probably, commenced too late for the husband, according to the laws of gestation, to be the father of the child afterwards born; where the common opinion of the neighbourhood assigns the child to another man; when the boy grows up, not in the house of the husband of the woman, nor looking on him as a father. nor being considered as a son, the reputation of the woman is not good; these are all circumstances which go strongly to repel the presumption of legitimacy. A court of equity should direct an issue to try the fact of legitimacy, where such circumstances as above narrated, are supported by the depositions in the cause. Ibid. 6. The unsworn declarations of the mother, that her son, born six months after marriage, is the son of another man, are not admissible to prove his illegitimacy; and, a fortiori, the declarations of that man are not admissible. If their evidence is proper, their depositions should have been taken. Ibid. 7. The general report of the neighbourhood on the question of legitimacy, is not to be disregarded; but its weight depends on the circumstances of the case, on the remoteness of the time when the fact occurred, and the difficulty of producing any positive evidence respecting it. Ibid. BILLS OF CREDIT. 1. In its enlarged, and perhaps literal sense, the term "bill of credit," may comprehend any instrument by which a state engages to pay money at a future day; thus including a certifi cate given for money borrowed. But the language of the constitution itself, and the mischief to be prevented, equally limit the interpretation of the terms. The word "emit" is never employed in describing those contracts, by which a state binds itself to pay money at a future day for services actually received, or for money borrowed for present use. Nor are instruments executed for such purposes, in common lan guage, denominated "bills of credit." emit bills of credit," conveys to the mind the idea of issuing paper intended to circulate through the community, for its ordinary purposes, as money; which paper is redeemable at a future day. This is the sense in which the terms have always been understood. Craig et al. v. The State of Missouri, 4 Peters, 431. "To 2. The constitution considers the emission of bills of credit, and the enactment of tender laws, as distinct operations, independent of each other, which may be separately performed. Both are forbidden. To sustain the one, because it is not also the other; to say that bills of credit may be emitted, if they be not made a tender in payment of debts, is, in effect, to expunge that distinct independent prohibition, and |