U.S. Supreme Court
Suydam v. Broadnax, 39 U.S. 14 Pet. 67 67 (1840)
Suydam v. Broadnax
39 U.S. (14 Pet.) 67
The plaintiffs, merchants of New York, instituted a suit in the Circuit Court of Alabama against the administrators of the drawer of a note, dated in New York and payable in New York. The act of the Assembly of Alabama provides that the estate of a deceased person which is declared to be insolvent shall be distributed by the executors or administrators according to the provisions of the statute, among the creditors and that no suit or action shall be commenced or sustained against any executor or administrator after the estate of the deceased has been represented as insolvent except in certain cases not of the description of that on which this suit was instituted. Held that the insolvency of the estate, judicially declared under the statute of Alabama, is not sufficient in law to abate a suit instituted in the circuit court of the United States by a citizen of another state against the representatives of a citizen of Alabama.
The exceptions in the sixth section of the law of Alabama in favor of debts contracted out of the state prevent the application of the statute or its operation in a case of a debt originating in and contracted by the deceased out of the State of Alabama.
A sovereign state, and one of the states of this Union, if the latter were not restrained by constitutional prohibitions, might, in virtue of sovereignty, act upon the contracts of its citizens, wherever made, and discharge them, by denying the right of action upon them in its own courts, but the validity of such contracts as were made out of the sovereignty or state would exist and continue everywhere else, according to the lex loci contractus.
The constitutional and legal rights of a citizen of the United States to sue in the circuit courts of the United States do not permit an act of insolvency, completely executed under the authority of a state, to be a good bar against a recovery upon a contract made in another state.
The eleventh section of the act to establish the judicial courts of the United States carries out the constitutional right of a citizen of one state to sue a citizen of another state in the circuit courts of the United States, and gives to the circuit courts "original cognizance, concurrent with the courts of the several states, of all suits of a civil nature at common law and in equity."
It was certainly intended to give to suitors, having a right to sue in
the circuit court, remedies coextensive with that right. These remedies would not be so if any proceedings under an act of state legislation to which the plaintiff was not a party, exempting a person of such state from suit, could be pleaded to abate a suit in the circuit court.
An action was instituted in the Circuit Court of Alabama by Henry A. Suydam and William Boyd against the defendants as administrators of David Newton on a promissory note given by him to the plaintiffs.
On the trial of the cause, the following questions arose on which the judges of the circuit court were divided, and the same were certified to this Court.
1st. Is the plea that the estate of the said decedent is insolvent sufficient in law to abate the said action?
2d. If the said plea be sufficient in law to abate said action, can the circuit court of the United States for the district aforesaid refer said cause for adjudication and final settlement to a board of commissioners chanroblesvirtualawlibrary
to be appointed by a county court in one of the counties in the State of Alabama in pursuance of an act of the Legislature of the said state? chanroblesvirtualawlibrary