US SUPREME COURT DECISIONS

Z. and T. were merchants at New Orleans; B. was a resident merchant at Baltimore. B., in 1818, the owner of the ship Fabius, sent her to New Orleans, consigned to Z. and T., who procured a freight for her, and the ship having been attached for a debt due by B. in New Orleans, Z. and T., in order to release her, and enable her to proceed on her voyage, became security for the debt, and were obliged to pay the same by the judgment of a court in New Orleans. B., on being informed that Z. and T. had become security for his debt, approved of the same and promised to indemnify them for any loss they might sustain. On 23 December, 1819, Z and T. instituted a suit against B in the Circuit Court of Maryland for the recovery of the sum paid by them, and in the same month B. made application for the benefit of the insolvent act of Maryland, and received a discharge under the same. In May, 1821, a judgment was rendered by confession in the suit in favor of Z. and T. for $3,113. And by consent of the parties, a memorandum was entered of record: "This judgment is subject to the legal operation of the defendant's discharge under the insolvent laws of Maryland." By the Court:

"The sole effect of this agreement is to save to the party whatever rights he may claim from the legal operation of the insolvent laws of the State of Maryland. It neither admits their validity nor varies any rights of Z. and T., if they are entitled to them."

The agreement of B. to indemnify Z. and T. is not in contemplation of law a Maryland contract, but a Louisiana contract, by which B. undertook to pay the money, in the place where Z. and T. resided, and not in Maryland. The agreement of Z. and T. by which they procured the relief of the ship Fabius was within their authority as consignees of the ship.

Such a contract would be understood by all the parties to be a contract made in the place where the advance was to be made, and the payment, unless otherwise stipulated, would also be understood to be made there. The case would in this aspect fall directly within the authority of @ 16 U. S. 146.

The effect of a discharge under an insolvent law of a state is at rest so far as it depends on the antecedent decisions made by this Court. The ultimate opinion delivered by MR. JUSTICE JOHNSON in the case of @ 25 U. S. 258, was concurred in and adopted by the three judges who were in the minority on the general question of the constitutionality of state insolvent laws. So far, then, as decisions upon the subject of state insolvent laws have been made by this Court, they are to be deemed final and conclusive.

The bill filed by the appellant in the circuit court stated, among other matters, that certain persons at New Orleans, trading under the firm of Vincent, Nolte & Co. having attached chanrobles.com-red

Page 31 U. S. 636

a brig belonging to the plaintiff for a debt alleged by them to be due from said plaintiff, and which brig was consigned to the defendants, they the said defendants became security for the complainant on the said attachment, and the same having been ultimately decided against the complainant, the defendants paid the amount of the debt and expenses, amounting to $3,113.80. That on 31 December, 1819, the complainant obtained a final discharge under the insolvent laws of Maryland, and that afterwards, to-wit, at the May term, 1821, of the said circuit court, the defendants obtained a judgment against him for the said sum of $3,113.80, which judgment was entered upon the docket of said court, and agreed to be so received, subject to the legal operation of the discharge of the complainant under the said insolvent laws of Maryland. That execution had been sued out upon said judgment, and a writ of fieri facias had been placed in the hands of the marshal of the district, with directions to levy the same on property acquired by the complainant subsequently to his so obtaining his final discharge under the insolvent laws aforesaid, notwithstanding the said entry on the docket of its being confessed, and the confession being received, subject to the legal operation of the insolvent laws of Maryland. That besides the above facts, the defendants had also caused to be issued out of some court in Louisiana an attachment upon the same debt or claim against the complainant, and had laid the said attachment in the hands of persons indebted to the complainant in a large amount, which persons had refused to pay any part of the debts due by them to the complainant, in consequence of the laying of said attachment in their hands. The bill further stated that by the provisions of the insolvent laws of Maryland, the complainant was entitled to be protected in the enjoyment of all property acquired by him since the date of his discharge under the said insolvent laws except such as he might have acquired by gift, descent, or in his own right by bequest, devise, or in any course of distribution, and that he had not since his discharge aforesaid acquired any property in any of the modes thus specified. And further that no property whatever of which the complainant was possessed or to which he had any chanrobles.com-red

Page 31 U. S. 637

title could be lawfully taken in execution under the said judgment until a scire facias containing proper averments of the acquisition of property by him in someone of the above mentioned modes should be first issued and the facts found to be true either by confession or by verdict of a jury or otherwise according to law. And the bill prayed an injunction to be granted restraining and prohibiting the defendants from levying their execution, and the injunction to that effect was granted and served in due form.

The answer of the defendants, the appellees, stated that in the latter part of the year 1818, the complainant consigned to them at New Orleans a brig called the Fabius, and that they procured a freight for her to Liverpool; that after the cargo was actually laden on board of her, and she was about to sail, she was attached at the suit of Vincent, Nolte & Company, for a debt due to them by the complainant, and they, the defendants, and one Richard Relff, with a view to the benefit of the complainant, became security for the complainant and procured the release of the brig. The complainant approved of their acts, and undertook and promised to indemnify them for any loss they might sustain on his account. He afterwards gave the defendants a security for their liability on 1 May, 1819.

The contract of indemnity was as follows:

"I will see Messrs Zacharie & Turner paid whatever sum they have to pay Vincent, Nolte & Company on account of a bill drawn by them on Hugh Boyle for disbursements of the ship Mohawk, original bill amount, $5,451, of which the said Hugh Boyle paid $3,000; the balance, the said Hugh Boyle contends, is not due to Vincent, Nolte & Co. When decided ,it shall be paid."

"Baltimore, 1 May, 1810"

Hugh Boyle, the complainant, and Lemuel Taylor, soon after this circumstance, became insolvent, and the defendants afterwards paid to Vincent, Nolte & Company the sum of $3,113.80, the amount of the judgment obtained by them against the complainant.

The defendants further stated that they afterwards instituted chanrobles.com-red

Page 31 U. S. 638

a suit in the Circuit Court of the United States for the District of Maryland against the complainant, and obtained judgment against him for the amount so paid by them on his account, and proceeded thereon as stated in the complainant's bill. They say that the discharge of the complainant by the insolvent laws of the State of Maryland does not prevent their having the full benefit of the execution issued against the complainant's property, which has been acquired to a large amount since the discharge, all of which is liable for the payment of his debts.

The court granted the injunction as prayed for.

The answer admits the issuing of the attachments in New Orleans against the supposed property of the complainant, but states that the defendants in the same denied having any funds, and the proceedings were dismissed.

On 19 May, 1829, the cause was set down for final hearing in the circuit court, and after argument it was decreed that the injunction should be dissolved, and the complainant's bill was dismissed. From this decree the complainant appealed to this Court. chanrobles.com-red

Page 31 U. S. 641