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Adams v. Storey.
his place of residence, or to the spot where the contract was to be performed. But even this security from imprisonment is now desired to be withdrawn from him, and this course of conduct is pressed on the Court, not on the footing of a series of adjudged cases from which there might be no escape; for none such are produced ; not because it will accord with the general sense of the commercial world; for that, it is believed, is directly opposed to it. Not because of any odious discriminations which are found in the insolvent law of this state, between territorial, or extra-territorial creditors; for they are placed on a perfect equality. Not because the interests of commerce will be advanced by it; for in such a state of things, none but men of the most enterprising character will dare to engage in it. Nor yet because other countries practise on this rule; for nothing resembling it is pretended to be in use in any other part of the globe. Nor is it to be believed that the Court of King's Bench itself, notwithstanding the solitary ease which has been produced as to a discharge abroad, would disregard a plea of bankruptcy by a British debtor, against the claim of any foreign creditor, whatever might be the place of contract or of payment.
The Court having already expressed its opinion on the inapplicability of the lex loci contractus to all cases of this kind, will only add, that this rule has performed its office, when a construction is given to the contract according to such law; but in case of inability to pay, a new state of things occurs, the only proper rule to govern which is, that care be taken to enforce an equal and fair distribution of an estate, under the laws of the country in which the debtor has his residence.
Insolvent laws have been harshly and not very correctly compared by the plaintiff's counsel, to laws authorizing the payment of a debt with one cent in the dollar, and in a way and at a time different from the agreement of the parties. They do no such thing; they afford a sanction to ng
Adams v. Storey
injustice; they violate no law human or divine; they leave the obligation of parties in full force; they create no inability, nor interfere between one who is able to pay, and his creditors : but when such inability intervenes, they step in and take care, or at least such is their object, that a complete surrender of the debtor's estate shall be made for the benefit of all his creditors; and when this is done, they compel the latter to observe towards him that mercy and forbearance which, in similar circumstances, they would wish and expect to have extended to themselves.
It seemed to be admitted on the argument, that if foreign creditors had been named in this act, they would have been barred. The Court thinks them as mueh bound by the general and comprehensive terms of this act, as if they had been specially designated. Enough has already been done in their favour, without clothing them with a prerogative not yet heard of; that of being exempt from every law, unless particularly named. Nor is this the ground on which these decisions go. It is, that a state has no right to pass laws to discharge its insolvent subjects from debts due abroad. But if the Court has erred in the principles which it has adopted, or in the application of them to foreign creditors in general, the plaintiffs have no right to complain ; for when a citizen of Massachusetts, where they reside, is imprisoned, at the suit of a citizen of this or any other state, he can, under the laws of that commonwealth, obtain his discharge, as to his person at least, without the creditor's consent; and such discharge is. regarded, as it ought to be, as binding on all the courts of that state.
Sitting, therefore, in the state which passed the insolvent act in question, and to which no constitutional objection appears, this Court is not sensible that it departs from a single adjudged case in England, or in this state, when it decides on the universal validity of a discharge obtained under it.
Adams v". Storey.
Upon the whole, this Court is of opinion, that the act of the 3d of April, 1811, is an insolvent, and not a bankrupt law that, if it be of the latter description, the several states have a right to pass bankrupt laws for themselves, until Congress shall establish a uniform system on the subject--that an insolvent act extending to past, as well as future debts, is not a law “impairing the obligation of contracts," within the meaning of the constitution--and that a federal Court, sitting within this state, is bound to support a discharge under such law, against the claim of a foreign creditor, although the debt due to him may have been contracted and made payable at his place of residence.
The present verdict must, therefore, be set aside, and a verdict and judgment entered for the defendant.
H. D. SEDGWICK and R. SEDGWICK for the plaintiffs.
Note. Since the question of the constitutionality of the state insolvent laws has been raised, the Supreme Court of the U.S. has settled the following prin. ciples, which are, of course, the law of the land.
In Sturges v. Crowninshield, which was decided at the February term, 1819, (4 Wheat. Rep. 122.) the Court held, that until the power to pass uniform laws on the subject of bankruptcies be exercised by Congress, the states are not for. hidden to pass a bankrupt law, provided it contains no principle which violates the 10th section of the first article of the constitution of the United States
That insolvent laws which discharge the person of the debtor, but leave bis obligation to pay in full force, are not repugnant to the 10th section
And that a discharge of a debtor under the act of the state of New York, of the 3d of April, 1811, from a contract made in New York before the passage of the law, tbe creditor then residing in Massachusetts, and not having proceeded to execution against the body of his debtor in New York, was void by the 10th section.
In M'Millan v. M'Neil, (4 Wheat. Rep. 209.) the debt was contracted in 1813, in South Carolina, the debtor and creditor both residing there, and the discharge was obtained in Louisiana, whither the debtor had removed, in 1815, under a law of the state, passed in 1808. The Court beld, that this case was not dis
Adams v. Storey.
tinguishable from that of Sturges v. Crowninshield; and that the circumstance of the state law, under which the debt was attempted to be discharged, having been passed before the debt was contracted, made no difference in the application of the principle.” It will be observed, that the Court do not notice the circumstance that the contract was made in South Carolina, where the parties then resided.
In The Farmers' and Mechanics' Bank of Pennsylvania v. Smith, (6 Wheat, Rep. 131.) the Court held, that a discharge obtained in Pennsylvania in September, 1812, under an act of that state, passed the 13th of March of the same year, from a contract made in Pennsylvania in 1811, the contracting parties at all those times being residents of that state, was void.
The case of a discharge under the law of a state, where the contract was made within the state, between residents of the state, and after the passage of the law, has not yet been decided. Such a case is, however, pending, and has been argued, and is held under advisement and for a further argument at the next term.
CIRCUIT COURT OF THE UNITED STATES,
NEW-YORK, SEPTEMBER TERM, 1817, AT NEW-YORK.
(Hon. BROCKHOLST LIVINGSTON, Associate Justice of the Str
THE AMIABLE Nancy.
The District Courts possessing all the powers of Courts of Admiralty, whe.
ther considered as instance or prize Courts, have jurisdiction of all cases of marine trespass or tort. If the master or crew of a privateer exceed their authority, and in the perfor
mance of legitimate acts commit an outrage, the owners are liable. Where a neutral vessel was plundered of her papers by a privateer, in conse
quence of which she was seized by another belligerent, and proceeded against as prize, but made a compromise with her captors and paid a ransom and costs : Holden, that the owners of the privateer were not liable for those items, (there being no privity to the compromise,) nor for any other injurious consequences flowing from the compromise. The rule of damages, in cases of marine trespass, is the full value of the pro
perty injured or destroyed. A claim for loss of voyage rejected, Vindictive damages not allowable against the owners of a privateer, for tres.
passes committed by the crew. Whether the owners are liable at all for trespasses on the person? Quere.
LIVINGSTON, J. This was a libel for damages in the District Court for the Southern District of New-York, by the owner of the schooner the Amiable Nancy and her cargo, and by the master, mate, supercargo, and one of the ma