Smith ex rel. Robertson v. Union Bank of Georgetown

ERROR to the circuit court of the district of Columbia, for the county of Washington.

This case came before the circuit court on the following case agreed.

'Samuel Robertson, a native of the state of Maryland, a purser in the navy of the United States, and as such purser, for several years before his death, stationed and domiciliated at Norfolk, in the state of Virginia, died, in the year 182, at Bedford, in Pennsylvania, intestate, insolvent; whither he had gone on a visit for the benefit of his health. He was at the time of his death indebted to the plaintiffs, residing in the district of Columbia, on simple contract, not under seal, entered into here in the sum of twenty-two hundred and twenty-eight dollars, with legal interest thereon from the 3d November 1818 till paid; which sum of money and interest still remain due and unpaid: and the said Robertson, at the time of his death, was also indebted to Thompson, residing in Virginia, upon contracts and bonds under seal, entered into in the state of Virginia, in a sum exceeding the whole amount of assets in the hands of the defendant, as administrator as aforesaid. The said Robertson, at the time of his death, was possessed of personal assets in Washington county, in this district. The defendant, Clement Smith, took out letters of administration upon his estate in this county, and has collected in this county, and now holds in his hands as administrator, the sum of eight thousand three hundred and ninety dollars one and a half cents.

'The plaintiffs claim a dividend of the assets, according to the laws of administration in force in this county. The defendant resists payment upon the ground of the debt due to said Thompson, who claims a priority as creditor upon the said sealed contracts, and that the assets must be paid away to the creditors pursuant to the laws in force in Virginia. If the court are of opinion that the assets are to be administered, as to creditors, according to the laws in force in this county, then judgment to be entered for the plaintiffs for the amount of their debt aforesaid, to bind assets in the hands of defendant, C. Smith, the administrator: if otherwise, then judgment of non pross.'

Upon this case the circuit court gave judgment for the plaintiff; and the defendant prosecuted this writ of error.

The case was argued by Mr Coxe and Mr Lear, for the plaintiff in error; and by Mr Key and Mr Dunlop for the defendants.

For the plaintiff in error it was stated, that the whole question in the case is, whether the law of the place, where the funds for distribution are found at the decease of the intestate, or the law of the domicil shall regulate and govern the distribution of these effects.

For the plaintiff in error it was contended, that the law upon this question has been settled in England and in the United States; and the principle so established is, that the law of the domicil is to govern. It is therefore according to the law of Virginia, where by the case stated the intestate had his domicil, that the administrator, the plaintiff, must pay the debts of the intestate. The funds in the hands of the administrator are the moneys received from the treasury of the United States, for a debt due to Robertson, as a purser in the navy; the same being the balance of his accounts as settled at the treasury.

This question is to be settled by a reference to adjudged cases, and a careful investigation of what has been decided; rather than by an argument upon general principles. It is important that the rule shall be settled; the whole community is interested in its being fixed and determined; and the case now before the court affords an occasion for its final decision.

It is contended that the decisions of the courts of equity have uniformly sustained the principle, that the law of the domicil governs the distribution. The cases arranged chronologically are: Ambler, 25, decided in 1774; Ambler, 415, decided in 1762; 2 Ves. Sep. 35, decided 1750; 2 Bos. and Pull, 229, decided in 1790; 1 Hen. Black. 665, decided in 1791; 2 Hen. Black. 402, decided in 1795; 5 Ves. Jun. 750, decided in 1800.

The following cases show that the courts of England sustain the law of the domicil in bankrupt cases in other countries against their own attachment laws. 1 Hen. Black. 131 and 132. In these cases, English creditors attached debts due in England to one who was a bankrupt in Holland, and the attachments were not sustained. So also in Hunter vs. Potts, 4 Durnford and East. 182, a bankruptcy in Rhode Island was held to vest in the assignees a debt due to the bankrupt in England

The following cases upon this point have been decided in the United States: 1 Mason's Rep. 410; 8 Mass. Rep. 506; 11 Mass. Rep. 256.

The case of Harvey vs. Richards, 1 Mason, 410, is considered as establishing the principle claimed by the plaintiff in error. The question in that case was, whether the circuit court of Massachusetts district, on its chancery side, had power to decide whether the fund in Massachusetts should be sent to India to be distributed; or should be distributed, by that court according to the law of India.

The other American cases are Harrison vs. Sherry, 5 Cranch, 289; 2 Peters's Cond. Rep. 260; Dixon's Executors vs. Ramsay's Executors, 3 Cranch, 323; 1 Peters's Cond. Rep. 547; The Adeline, 9 Cranch's Rep. 244; 3 Peters's Cond. Rep. 397; The Star, 3 Wheat. 74; The Mary and Susan, 1 Wheat. 66, 56; 3 Peters's Cond. Rep. 480; 4 Mass. Rep. 318; 1 Binney, 336. Also cited, 6 Bro. Parl. Cases, 550, 577; Cooper's Equity Plead. 123; 3 Eden's Chan. Rep. 210; 11 Mass. Rep. 256, 257; 2 Haggard's Rep. 59.

It is admitted, in some of the cases cited, that the courtesy of nations requires the adoption of this principle. If this is so between foreign states, there is a much stronger policy for its adoption between our own states.

It is asked, may not the law of distribution of Virginia be considered as part of the contract? It is with a view to the laws of the country in which all contracts are entered into, that their obligations are assumed; and for which the parties look for the effect and the extent of the contracts they enter into.

The counsel for the plaintiff in error also contended, that personal property has no situs, but follows the domicil of the party entitled to it. This is not a new principle; but is recognised to the full extent in the cases cited from 1 Mason, 381; and 3 Cranch, 323.

Mr Key and Mr Dunlop, for the defendants in error.

They stated that this is a case of a foreign creditor coming into our courts, under the lex loci of the contract, or of the domicil, and claiming to take out of the jurisdiction of the court the whole effects of a deceased debtor, domiciled abroad: although there are creditors here, for debts contracted here; and the effects are found here, and are in the course of administration. The municipal law is against this claim; and it is to be sustained by national comity, which is to overthrow our own laws, and destroy rights derived under them; and make our own courts subservient to this injustice.

1. Does the lex loci contractus authorize the claim in this case?

It is admitted that contracts are to be expounded according to the law of the place where they are made; but it is equally true, that the remedy for the breach of such a contract is regulated by the lex fori.

The priority of payment claimed for the Virginia creditors is not of the essence of the contract; but is collateral and contingent, depending on the death of the debtor, and exists only when the debtor is insolvent. This is the view of the law expressed by the chief justice of this court, in the case of Harrison vs. Sterry, 5 Cranch, 289. In Maryland no such priority is given, and the law of the forum must govern.

2. It is said, that the lex loci domicilii is to decide this case; that personal effects have no situs, and follow the person; and that this principle is founded on the law and practice of nations. The general rule may be in favour of the position of the plaintiff in error, but when its application would affect the rights of a third person, ascertained and secured to him by the laws of his country, and which are in opposition to the foreign law, they do not prevail: when there is such a conflict, the domestic laws, and not those which are foreign, will operate, Fonb. Equity, 444. No case can be found to sustain a principle of a different character. Potter vs. Brown, 5 East, 131. Hunter vs. Potter, 4 Term Rep. 183. 1 Hen. Black. 696. 2 Hen. Black. 402. 4 Johns. Rep. 478, 479, 488, 471, 472.

It was also contended that the laws of foreign domicil never have been applied to the payment of debts. They only govern the surplus remaining after the debts of the intestate have been fully paid. They operate on what he had a right to dispose of in his life time; and that being left at his death, comity gives the disposal of this to the laws of his country. As to the surplus after the payment of the debts, the country where the goods are found have no interest in its distribution. The rights of its citizens cannot be affected by its appropriation, and it is but proper that it should be given up to the lex loci rei sitae.

Legatees and distributees claim from the bounty of their testator or the intestate; and the laws which governed their benefactor should regulate their rights and claims. He is supposed to have known those laws, and to have intended they should operate on his property. But creditors do not stand in the same relation to those laws. Their rights are to look to their own laws, and to their own courts, by which their contracts shall be construed and enforced; and for the appropriation and distribution of the funds which shall be within the power of their laws. It is inquired, would the bond debt of the Virginia creditor be a bar to a suit by the Union Bank against Robertson, if he were alive? Would it dissolve an attachment laid on his effects here?

The administrator of Robertson may be obliged to bring suits here for the recovery of debts due to the estate; and under what law shall he proceed? Why shall not the same rule apply in prosecuting a suit, which prevails in defending it.

There is no conflict of laws in this case. The Virginia statute of distribution is the English statute. Was the English statute ever extended to any other country than England, but by express adoption? The statute of Virginia applies to different persons, and to a different state of things from that of Maryland; and therefore there is no conflict. Cited, 2 Fonb. 444. Huberus, B. 1. Tit. 3, sec. 9. 5 East, 131. Willison v. Watkins, 3 Peters, 43. 2 Harris and Johns. 224. 4 Mass. Rep. 318. 11 Mass. Rep. 256, 264. 6 Binney, 361. 2 Kent's Com. 344. 3 Caines, 154. 1 Har. and M'Hen. 236. Beawes' Lex. Merc. 499. Insolvent Law of Maryland of 1798, chap. 101, sect. 2, 3. 4 Johns. C. R. 460. 1 Johns. C. R. 118.

Mr Justice JOHNSON delivered the opinion of the Court.