Hills v. Carlton

AppletoN, C. J.

The question presented for determination is whether a discharge in insolvency granted by an insolvent court of this state to one of its citizens, is a .bar to an action brought by a citizen of another state in the courts of this state.

The plaintiffs were no parties to the proceedings before the insolvent court. Citizens of another state, it is not competent for the legislature of this state to pass any law suspending or discharging their right of action on a contract made with a citizen of this state. The insolvent laws of a state have no extraterritorial effect. They affect only contracts between citizens of the state by which they are enacted, as was tersely stated in Cook v. Moffat, 5 How. 295: "A certificate of discharge will not bar an action brought by a citizen of another state, on a contract with him.” Such was the conclusion of the court of this state, in Felch v. Bugbee, 48 Maine, 9, where this question is most carefully examined and conclusively determined. In Baldwin v. Hale, 1 Wall. 223, the case of Felch v. Bugbee, was cited, with approbation; the court then deciding that a discharge obtained under the insolvent law of one state, is not a bar to an action on a note given and payable in the same state; the party to whom the note was given having been and being of a different state, and- not having proved his debt against the defendant’s estate in insolvency, nor in any manner been a party to those proceedings. To the same effect is the decision in Guernsey v. Wood, 130 Mass. 503.

The counsel for. the defendant concedes that the debt is not absolutely discharged, but claims that by voluntarily submitting to the jurisdiction of. the court, tlm plaintiffs are barred by § 45 of the insolvent law, from enforcing it. But this debt not being discharged, they have an equal right to enforce the payment of their debt with other citizens having claims to be enforced. The courts in the cases cited, like the present, have held that a discharge shall not be á bar. An absolute discharge of a debt and a'prohibition against all remedies for its enforcement would seem to little differ in their consequences to the creditor. The discharge affords no defence to the plaintiffs’ claim. As was well said by Mr. Justice Clifford, in Baldwin v. Hale, 1 Wallace, 228, "unless’it be claimed that constitutional questions must always remain open, it must be conceded, we think, there are some things . . . which must be regarded as settled and forever closed,” and the question here raised is one of them. See also, Bedell v. Scruton, 54 Vermont, 493.

Bxceptions overruled.

Barrows, DaNfortii, Virgin, Peters and Svmonds, JJ., concurred.