Salters v. Tobias

3 Paige Ch. 338 | New York Court of Chancery | 1831

The Chancellob.

The principal question in this cause is as to the true construction of the insolvent act of Í813. If it required two thirds of all the domestic creditors to petition, in order to obtain a valid discharge from domestic debts, then the plea is defective, in form at least, in not averring that the petition was presented by the insolvent, in conjunction with so many of his creditors residing within the U. States, whose debts amounted to two thirds. The recital in the'discharge states the fact to be so ; but that is not sufficient, in a plea, to show that the recorder had jurisdiction. It is now perfectly well settled, that the plea must distinctly aver every fact which was necessary to give the officer jurisdiction in the first instance. It must show that the petition was presented in the proper county, and that two thirds of the creditors joined therein. Arid these essential requisites in the plea cannot be supplied by mere recitals in the discharge. (7 John. R. 75. 1 Cowen's R. 316. 3 Wendells R. 247. 6 Id. 433.) Whether it is also necessary to aver that the account of the creditors and the inventory of the estate, &c. were presented at the same túne, and that the affidavits of the petitioning creditors were annexed to the petition as required by the statute, is a question which I believe has never been judicially decided in this state. That question was distinctly raised by the counsel on the argument, but the view I have taken of the main question in this cause renders it unnecessary to decide it at this time. If the defendants think proper to set up this discharge as a defence in their answer, they will then have ail opportunity to set forth any matters, not inconsistent with the truth, to show that the recorder had jurisdiction, and that the discharge was valid.

It is not necessary for the court to enquire whether the tenth section of the act of February, 1817, (Laws, 4 vol. 45, b) Was intended to be declaratory of what the act of 1813 originally meant, or only to change the construction of it for the future. The case of Sturges v. Crowninshield, (4 Wheat. Rep. 122,) which has been decided since that time, settles conclusively, that the legislature could not pass any law giving greater facilities to the debtor in obtaining his discharge, which would impair the obligation of any contract then existing, or authorize a discharge from such contract in a case where such a discharge could not previously have been granted. (Matter of Wendell, 19 John. Rep. 153.) In England, where there is no constitutional limit to the powers of parliament, a declaratory law forms a new rule of decision, and is valid and binding upon the courts, not only as to cases which may subsequently occur, but also as to pre-existing and vested rights. But even there the courts will not give a statute a retrospective operation, so as to deprive a party of a vested right, unless the language of the law is so plain and explicit as to render it impossible to put any other construction upon it. In this country, where the legislative power is limited by written constitutions, declaratory laws, so far as they operate upon vested rights, can have no legal effect in depriving an individual of his rights, or to change the rule of construction as to a preexisting law. Courts will treat such laws with all the respect which is due to them as an expression of the opinions of the individual members of the legislature as to what the rule of law previously was. But beyond that they can have no binding effect; and if the judge is satisfied the legislative construction is wrong, he is bound to disregard it.

Taking the first section of the insolvent act of 1813, (1 R. L. 480,) by itself, the language there used seems to imply that no one but a resident of the United States could be a petitioning creditor of the insolvent, and that the amount due to such domestic petitioning creditors should amount to two thirds of all the debts owing by the insolvent, whether foreign or domestic. The language of that section is, that the insolvent, in conjunction with so many of his creditors, residing within the United States, or the attorney of any creditor whose principal resides without this state, and within the United States, whose debts amount to two thirds of all the money owing by such insolvent, may present a petition, &c. But by referring to the fifth section of the act, it is evident the legislature only intended that the debts signed off by domestic creditors should amount to two thirds of the debts of the insolvent due to creditors residing within the United States; for the officer is directed to grant the discharge, if he is satisfied of that fact. It is apparent, from the language used in the fourth and eighth sections of the act, that the legislature contemplated that foreign creditors might also become petitioners, with reference to a discharge of the insolvent from his debts due to foreign creditors. At that tune it was supposed the discharge might be valid as to debts contracted out of the state. And there is no doubt it would have been effectual to discharge the debtor from all debts contracted within this state after the passing of the act, although the creditor resided out of the United States at the time of presenting the petition; provided two thirds of all the debts, foreign as well as domestic, had been signed off.

In giving a construction to this act, it must be borne in mind that the legislature not only intended to reduce the proportion of the creditors, who were to join in the application, from three fourths to two thirds, but they also intended to adopt a new principle, by making a distinction between American and foreign creditors. It is possible that the framers of the act intended to permit domestic debts to be discharged upon the petition of foreign creditors, provided the aggregate amount of debts signed off amounted tó two thirds of all the debts of the insolvent. But statutes of this description which are intended to deprive the creditor of all remedy for the recovery of an honest debt, must be construed strictly, and should not be extended by implication beyond the fair and legitimate meaning of the terms used by the legislature. Construing the act of 1813 by this rule, I am bound to say that it required two thirds of all the domestic creditors to join in the petition, to authorize a discharge of the insolvent from his debts due to domestic creditors; and that the tenth section of the act of February, 1817, if it required a different construction, introduced a change in the law which could not affect the rights of creditors as to debts previously contracted.

It may be proper to observe that if the recitals in the discharge are correct, two thirds of all the debts owing by the insolvent were signed off by creditors residing within the United States. And although the discharge recites no express adjudication of the recorder as to that fact, the defendants may perhaps be able to remedy the defect, by proper averments in their answer, and by the introduction of other proof. Although the discharge is made evidence of - the facts therein contained, it is not the only evidence that can be received to show the regularity of the proceedings. And the omission to state in the discharge an act required by the statute to be done, cannot even raise a presumption that such act was not performed. (Per Woodworth, J. 20 John. Rep. 211.) In this case the discharge does recite that the recorder was satisfied that the insolvent had conformed in all things to the matters required of him by the act.

As the plea is defective, in form at least, it must be overruled, with costs; but without prejudice to the right of the defendants to insist upon the discharge, by way of defence, in their answer.