William Cook, Plaintiff In Error v. John Moffat and Joseph Curtis, Defendants In Error

• Decision Date: 01 January 1847
• Parties: WILLIAM G. COOK, PLAINTIFF IN ERROR, v. JOHN L. MOFFAT AND JOSEPH CURTIS, DEFENDANTS IN ERROR
• Court: U.S. Supreme Court

46 U.S. 295

5 How. 295

12 L.Ed. 159

WILLIAM G. COOK, PLAINTIFF IN ERROR, v. JOHN L. MOFFAT AND JOSEPH CURTIS, DEFENDANTS IN ERROR.

January Term, 1847

THIS case was brought up, by writ of error, from the Circuit Court of the United States for the District of Maryland.

Cook was a citizen of Maryland, and Moffat and Curtis were citizens of New York.

It was an action brought, in July, 1835, by Moffat and Curtis against Cook, upon the common money counts. Cook confessed judgment, subject to the opinion of the court upon the following case stated, namely:——

In Circuit Court of the United States, Fourth Circuit, District of Maryland.

John L. Moffat and Joseph Curtis, surviving partners of Jonathan Wilmarth, v. William G. Cook.

Statement of Facts. John L. Moffat, Joseph Curtis, and Jonathan Wilmarth (the last of whom is now deceased) were citizens of the State of New York and resident there, and partners trading under the name and firm of Wilmarth, Moffat, & Curtis, and the defendant was a citizen and resident of Maryland during the times when the contracts and transactions upon which this suit is founded, or which constitutes the causes of this action, were entered into and had and made between the said firm and said Cook.

That the course of dealing was, that Cook, the defendant, used to write to said firm, ordering such articles or goods as he wanted, and they, said firm, sent them to him, and charged the goods in

their books. In order to settle the account current from time to time, Cook sent to the said firm (usually by mail, sometimes, perhaps, otherwise) his note at six months, and these notes averaged $500 per month, and were punctually paid, for a time, in Baltimore. Cook at length became embarrassed, and wanted extensions, until he stopped payment entirely; being then indebted to said firm, on book account, $2,104 98

And owing 1 note, due 4th April, 1832, for 500 00

And owing 1 note, due 14th May, 1832, for 500 00

And owing 1 note, (do not know exactly when due), 416 02

And owing 1 note, due 2d June, 1832, for 500 00

And owing 1 note, due 30th June, 1832, for 500 00

And owing 1 note, due 1st July, 1832, for 800 00

And owing 1 note, due 13th August,1832, for 500 00

And owing 1 note, due 24th September, 1932, for 500 00

Total debt, $6,321 00

The above notes were remitted by Mr. Cook to said firm previously to March, 1832, when he stopped payment. On the 7th June following, his New York creditors generally agreed to give him time to pay, and the said firm of Wilmarth, Moffat, & Curtis, about that time, by arrangement made with Mr. Disosway, Cook's attorney in New York, gave time, and took Cook's three notes, drawn payable to the said firm, for the sums following, all dated 12th May, 1832, as the respective time as follows, viz.:——

One, 12 months after date, for........... $2,107 00

One, 15 months after date, for........... $2,107 00

One, 18 months after date, for........... $2,107 03

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$6,321 03

These notes were drawn and dated at Baltimore by Cook, and sent by him to his said attorney at New York, and there delivered by said attorney to the said firm; they were given for the amount of Cook's account, and the notes then had and held by said firm against Cook; the old notes being then given up to his attorney. These three notes and the consideration thereof, namely, the goods sold and delivered as aforesaid, constitute the ground of this action; the amount of the notes being the amount claimed. It is also admitted, that said Cook has applied for and obtained the benefit of the insolvent laws of Maryland since such notes fell due.

EDWARD HINKLEY, Attorney for Plaintiffs.

J. GLENN, for Defendant.

Upon the foregoing statement of facts, the plaintiffs pray for a general and unqualified judgment, notwithstanding the release of Cook, since the making of said notes, under the insolvent laws of Maryland; and the plaintiffs rely upon the cases of Ogden v Saunders, 12 Wheat., 213; Boyle v. Zacharie and Turner, 6 Pet., 634; Frey v. Kirk, 4 Gill. & J. (Md.), 509.

The circumstance of the notes being dated and made at Baltimore, in favor of citizens, at the time, of New York, does not make the contract a Maryland contract, any more than did the acceptance of bills of exchange by Mr. Ogden, in the State of New York, make such acceptance a New York contract, so as to be discharged by Mr. Ogden's release under the insolvent laws of that State.

The evidences of contracts made between citizens of different States cannot bear date in both the States of the respective parties. In the nature of things, and according to the course of business, they would bear date and be signed by one party only, in one of the States; most commonly in the State of the citizenship and residence of the party signing. And it would be immaterial in principle in which of the States it might bear date. It is a contract between citizens of different States at the time when made, and this is the fact and the principle which excludes it from the operation and effect of a release of the debtor under the insolvent laws of his State.

EDWARD HINKLEY, Attorney for Plaintiffs.

1. The defendant's attorney insists that the contract was to be performed in Maryland, and governed by the laws of Maryland, and that the judgment must be to exempt the future acquisitions of the defendant from execution.

2. That at all events the judgment must be so entered as to exempt the defendant's person from arrest.

J. GLENN, for Defendant.

Judgment for the Plaintiffs upon the Case stated.

Whereupon, all and singular the premises being seen, heard, and by the court here fully understood, for that it appears to the court, that the said John L. Moffat and Joseph Curtis are entitled to recover in the plea aforesaid. Therefore, it is considered by the court here, that the said John L. Moffat and Joseph Curtis recover against the said William G. Cook, as well the sum of twelve thousand dollars, current money, the damages in the declaration of the said John L. Moffat and Joseph Curtis mentioned, as the sum of seventeen dollars and twenty-five cents adjudged by the court here unto the said John L. Moffat and Joseph Curtis, on their assent, for their costs and charges by them about their suit in this behalf laid out and expended. And the said William G. Cook in mercy, &c.

Memorandum. Judgment rendered in this cause on this 21st day of April, 1836, for the damages laid in the declaration and costs of suit; the said damages to be released on payment of $7,335.57, with interest from 21st day of April, 1836, and costs of suit.

Memorandum. That no execution against the person of the defendant be issued in the above cause on said judgment without the leave of the court.

To review this judgment the case was brought up to this court.

The cause was argued by Mr. Mayer, and Mr. Johnson, for the plaintiff in error, and Mr. Hinkley, for the defendants in error.

Mr. Mayer entered into a critical analysis of all the opinions which had been given in this court on the subject of State insolvent laws, from all which he argued, that the philosophy of the law had never been settled; that, in consequence of the want of harmony in those opinions, the whole subject ought to be again reviewed. There was a difficulty in annexing a meaning to some terms in the constitution which were in themselves uncertain; such, for example, as the phrase, 'impairing the obligation of contracts.' This expression was supposed to include a prohibition to pass insolvent laws; and yet in Sturges v. Crowninshield, 4 Wheat., 122, it appeared to be conceded that a State might pass such laws, operating only upon its own citizens. It was also admitted, on all hands, that the United States could pass bankrupt laws, which dissolved a contract entirely. Now, if these laws were prohibited on account of their supposed dishonesty, it was unaccountable that a power to extend them over the whole nation should have been conferred upon Congress. Certainly laws do not become less mischievous by becoming more extensive. It would seem as if bankrupt laws were not considered as impairing the obligation of contracts. In the debates of 1787, they were spoken of as mere commercial regulations, like damages upon bills of exchange. Luther Martin says that the prohibition meant to exclude tender laws, and retrospective laws. All nations have bankrupt laws, and it is not surprising that the power to make them was given to Congress, as auxiliary to the general one of regulating commerce. These State laws only stay all judicial proceedings, like statutes of limitation. It will not do to say that statutes of limitation rest on a presumption that the debt has been paid, because where they apply to land there can be no such presumption.

In support of these and similar views he cited Secret Proceedings and Debates of the Convention, Yates's Notes, 70, 71, 246, 247; 3 Madison Papers, 1442, 1443, 1448, 1480, 1549, 1552, Federalist, 80th number; Story, Confl. of L., §§ 312, 395, 404, 422, 438.

Mr. Hinkley, for defendants in error.

It is understood that the question raised upon the statement of facts in this case was decided in the case of Ogden v. Saunders, 12 Wheat., 213.

It will be contended that the court cannot consistently with law and the constitution of the United States give an effect to State insolvent laws greater or more extensive than that given by the decision in that case.

The constitution is to be construed with reference to its general as well as to its particular intents.

The general government emanates from the people, and its powers are to be exercised directly upon them and for their benefit. McCulloh v. Maryland, 4 Wheat., 316; Cohens v. Virginia, 6 Id., 413.

Moreover the constitution is an agreement or compact between each individual of the people and all the rest, as well as between each one of the States and all the others.

The States, as to their sovereign and...