Peck v. Jenness

THIS case was brought up from the Superior Court of Judicature for the State of New Hampshire, by a writ of error, issued under the twenty-fifth section of the Judiciary Act.

Peck and Bellows were residents of the town of Walpole, in the county of Cheshire and State of New Hampshire. Jenness, Gage, and Company resided in Boston.

The facts in the case are sufficiently set forth in the opinion of the court.

It was argued by Mr. Goodrich, on behalf of the defendants in error.

C. B. Goodrich, for defendants in error

In October, 1842, the plaintiffs below sued out a process of attachment, upon which estate of the defendants below, real and personal, was attached. This process issues without the sanction of any judicial officer. It issues at the will of any one who assumes to be a creditor of the party against whom it issues. It is a proceeding in personam and in rem,-is available as the one or the other, as the party may elect.

The question for adjudication is whether the original plaintiffs can avail themselves of this process as a proceeding in rem. Howland, who is the several assignee of each of the original defendants, is in no proper sense a party to the record. He appears in the names of Peck and Bellows, and relies upon their rights. 5 Stat. at Large, 443, ch. 9, § 3.

Statutes operate upon property, contracts, or persons. The statutes of the United States and those of a State may operate upon the same property, the same contracts, the same persons. Their action is distinct in time, or in purpose, or both. The operation of the two jurisdictions, each within prescribed limits, is independent.

Courts of equity cannot, in this country, in all things, exercise the same power, to the same extent, as do courts of equity in England. Courts of the United States and those of the States have a different origin; their jurisdictions are for different purposes. The one court will exercise its control over the citizen, so as not to impair his ability to yield obedience to the other, when and where such obedience is due. The jurisdiction of the courts of the United States and of the several States can never rightfully come in collision; where the jurisdiction is concurrent, the one which first attaches will retain it. There are only two modes in which a suit rightfully instituted in a State court can be proceeded in, or controlled by, the courts of the United States; the one is by transfer, the other under the twenty-fifth section of the Judiciary Act. The courts of the United States are invested with the exclusive power of construction of the laws and treaties of the United States; courts of the several States construe the laws thereof; the construction of each, within its appropriate sphere, is obligatory upon the other.

When a statute of the United States adopts or engrafts upon itself a statute or law of one of the States, quoad the law adopted, the construction of such law, at the time of its adoption, by the highest judicial tribunal of the State whose law is adopted is also adopted. If this be not so, the same law, acting within the same territory and upon the same person, may mean one thing in one court-room, something else in another. A State law adopted by the laws of the United States does not cease to be a State law. The jurisdiction of the District Court of the United States, sitting in bankruptcy, over property, is coextensive with the effect produced by the decree of bankruptcy; which is to pass the property of the bankrupt, cum onere.

The judgment of the court below should be affirmed, and I submit,--

I. That the District Court of the United States for the District of New Hampshire acquired no jurisdiction of the several original petitions of Philip Peck and of William Bellows to be declared bankrupt, and its proceedings upon said several petitions are void. This is so, because the pleas do not aver or show that the petitions were verified by oath, without which oath and verification the petitions were nullities; because the pleas do not aver that the petitioners represented to said District Court that they owed debts not created in consequence of a defalcation as a public officer, or as executor, administrator, guardian, or while acting in any other judiciary character; because the pleas do not aver or exhibit the notice which was ordered, or which was published, of the time when the said several original applications to be declared bankrupt would be considered. 5 Laws U.S. 440, ch. 9, § 1; United States v. Marvin, 3 How. 620; Elliot v. Piersol, 1 Peters, 338; Ex parte Bollman, 4 Cranch, 93; Sharp v. Spier, 4 Hill, N. Y. 76; Sharp v. Johnson, 4 Hill, 92; Bank of Utica v. Rood, 4 Hill, 535; 2 Christian's Bank. Law, 20, 21, 22; Cooper on Bank. Sta. 165; Buckland v. Newsome, 1 Taunt. 477; Sackett v. Andros, 5 Hill, 330; Stephens v. Ely, 6 Hill, 608; Brereton v. Hull, 1 Denio, 75; Varnum v. Wheeler, 1 Denio, 331; Maples v. Burnside, 1 Denio, 332; Thatcher v. Powell, 6 Wheat. 119; Wilcox v. Jackson, 13 Peters, 511, 516, 517; Walden v. Craigg's Heirs, 14 Peters, 147; Hickey v. Stewart, 3 How. 762; Wheeler v. Townsend, 3 Wend. 247; Gordon v. Wilkinson, 8 D. & E. 507; 1 Chitty on Plead. 223; Owen on Bank. App. 25; Archbold on Bank. App. 9, and 97; Wyman v. Mitchell, 1 Cow. 316; Frary v. Dakin, 7 Johns. 75; Ex parte Balch, 3 McLean, 221; United States v. Clark, 8 Peters, 444, 445; Garland v. Davis, 4 How. 131.

II. The several rejoinders of the original defendants, and the matters therein set up, amount in law to a departure from their several pleas. 1 Chitty on Plead. 648.

III. The statute of the United States, in relation to bankruptcies, passed Aug. 19, 1841, as to all matters of liens and securities adopts the laws of the States respectively, and exempts from the operation of the decree of bankruptcy all property which, at the time of the decree, might be charged with any duty, lien, or security valid by the law of the State in which the duty, lien, or security might arise.

This position is sustained by the language of the act, and is in consonance with the uniform policy of the United States, which has been to adopt the laws, usages, and modes of proceeding of the several States so far as practicable. 1 Laws, 92, 1789, ch. 20, § 34; 1 Laws, 93, 1789, ch. 21, § 2; 1 Laws, 276, 1792, ch. 36, § 2; 4 Laws, 278, 1828, ch. 68, § 1; 4 Laws, 281, ch. 68, § 2; 1 Laws, 79, ch. 20, § 12; 2 Laws, 123, ch. 32, § 3; 1 Laws, 106, ch. 5; 5 Laws, 393, ch. 43, § 4; 5 Laws, 394, ch. 47, § 1; 5 Laws, 321, ch. 35; 5 Laws, 410, ch. 2, § 1.

An attachment on mesne process was known to the laws of the United States, as a lien and security, and recognized by its judiciary, prior to the bankrupt statute. 1 Laws, 602, ch. 75, § 16; 3 Laws, 33, ch. 16, § 28; 3 Laws, 83, ch. 56, § 6; 1 Laws, 594, ch. 71, § 15; United States v. Graves, 2 Brock. 381; Tyrell's Heirs v. Rountree, 1 McLean, 95; S.C.., 7 Peters, 464; Beaston v. Farmers' Bank of Delaware, 12 Peters, 102; Wallace v. McConnell, 13 Peters, 151.

I now recur to the position, that the bankrupt statute adopts liens which are so by the laws of the several States. Its correctness is evident from the proviso in the second section of the act, and from the fact that the act professes to pass only such property as the bankrupt might convey; the act gives him no new right of property, or power over it. Ex parte Christy, 3 How. 316, fully sustains the principle, in which the court say, 'There is no doubt that the liens, mortgages, and other securities within the purview of this proviso, so far as they are valid by the State laws, are not to be annulled, destroyed, or impaired under the proceedings in bankruptcy, but they are to be held of equal obligation and validity in the courts of the United States as they would be in the State court.' It is not necessary to ascertain what constitutes a lien at common law, in equity or admiralty, or in the civil law. The lien protected is such a one as is known to the law of the State in which the question arises. Savage v. Best, 3 How. 119; Norton v. Boyd, 3 How. 436. How will this court ascertain what constitutes a lien by the laws of New Hampshire? By a resort to the adjudication of its highest judicial tribunal; this course is in conformity with general principles and with the course of this court. Green v. Neal, 6 Peters, 295; Livingston v. Moore, 7 Peters, 542; Jackson v. Chew, 12 Wheat. 153; Shelby v. Guy, 11 Wheat. 361.

IV. An attachment on mesne process, on the 19th of August, 1841, and on the 10th of October, 1842, was a lien or security valid by the laws of the State of New Hampshire.

In support of this, I refer to the laws of New Hampshire, edition of 1830, pp. 58, 59, 101, 105, 106; to Kittridge v. Warren and Kittridge v. Emerson, in manuscript, not yet reported. These cases, and the authorities cited in them, exhibit the law of New Hampshire as it has been recognized from its early history. The principle is sustained by the courts of other States. Kilborn v. Lyman, 6 Met. 304; Hubbard v. Hamilton Bank, 7 Met. 342; ''Am. Ex. Bank v. Morris Canal Co., 6 Hill, N. Y. 367; Storm v. Waddell,'' 2 Sandford, Ch. R. 494; Davidson v. Clayland, 1 Harr. & Johns. 546. I refer, also, to an opinion of a distinguished jurist, Hon. Jeremiah Mason, which sustains the views submitted.

In opposition to the two last positions, Ex parte Foster, 2 Story, 131, is relied upon. I submit that the authorities relied upon in this case do not support the judgment pronounced. The cases mainly relied upon in Ex parte Foster are Atlas Bank v. Nahant Bank, 23 Pick. 488; ''Conard v. Atlantic Ins. Co., 1 Peters, 386, 441, 443; Giles v. Grover,'' 6 Bligh, 279. An examination of them will show that they sustain, so far as applicable, the views which I have presented; the case of Giles v. Grover proceeded entirely upon the ground of prerogative, and it was so regarded in a subsequent case. Godson v. Sanctuary, 1 Nev. & Mann. 52.

The case Ex parte Foster is not sustained by the reasons; our answer to them is complete. A statute lien is exactly what the statute makes it, and it derives no aid from the analogies of other liens. Several of the adjudications of this court, to which I have referred, are in opposition to the doctrines of Ex parte Foster.

V. Assuming that the bankrupt statute adopts the laws of the States respectively as to liens and securities, and that an attachment on mesne process, as recognized by the laws of New Hampshire, is regarded by such law as a valid lien or security, it results, ex necessitate, that a discharge of the bankrupt does not and cannot defeat a lien or security rightfully created and existing prior to any act of bankruptcy.

Assuming the third and fourth propositions as sound, the one now taken is a necessary deduction from them. It is sustained by the express terms of the proviso. It is so independent of the proviso. The decree of bankruptcy passes the property, and its effect cannot be enlarged or diminished by the discharge, or by a denial of the discharge, to the bankrupt. An attachment is of double aspect; it is a proceeding in personam and in rem; so far as it is in personam, the discharge is a protection; so far as it is in rem, the discharge cannot avail to destroy a right which the act protects. It is clearly competent for the court to render a judgment in rem, and thus uphold every part of the act. Wallace v. Blanchard, 3 N. H. 395; Chickering v. Greenleaf, 6 N. H. 51; Buxton v. Marden, 1 D. & E. 80; Steward v. Dunn, 11 Mees. & Welsby, 63; Newton v. Scott, 4 Mees. & Welsby, 434; S.C.., 10 Mees. & Welsby, 471. Whether the court of New Hampshire has power to render a conditional judgment where the law and justice require such judgment is a matter exclusively cognizable by that court.