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71 U.S. 409

Gilman v. Lockwood

Supreme Court of the United States

Decided December 1, 1866

Supreme Court of the United States · decided 1866-12

<p>Eiutoii to the Circuit Court of the United States for the District of Wisconsin. The case was a submitted one.</p>

1 counsel of record

Key passage — most relied on by later courts

““Insolvent laws of one stall' cannot discharge the contracts of citizens of other state's, because they have no extraterritorial operation, and, consequently, the tribunal sitting- under them, unless in cases where a citizen of such other state voluntarily becomes a party to the proceedings, has no legal jurisdiction in the case. Legal notice cannot be given, and consequently there can bo no obligation to appear, and of course there can be no legal default,””

quoted by 3 later decisions, including Denny v. Bennett, Brown v. Smart

Cited in Case Law’s definition of “insolvent laws”

Good law ✅— No negative treatment on recordhow we know

Reversed and remanded · 9–0 · Opinion by Nathan Clifford · Decided 1866-12

How this case has been cited

Cited by 36 later decisions (13 by the Supreme Court) — most recently November 1931 · most notably International Shoe Co. v. Pinkus (1929), Cole v. Cunningham (1890)

4 district · 15 state decisions — followed in 11 states

13018661870188018901900191019201930decided

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

View the full empirical analysis of this case →

¶1Certificates of discharge granted under insolvent laws passed by a State cannot be pleaded in bar of an action brought by a citizen of another State in the courts of the United States, or of any other State than that where the discharge was obtained, unless it appear that the plaintiff proved his debt against the defendant’s estate in insolvency, or in some manner became a party to the proceedings. Baldwin v. Hale, 1 Wallace, 223, and Baldwin v. Bank of Newbury, Id. 234, affirmed.

¶2Eiutoii to the Circuit Court of the United States for the District of Wisconsin. The case was a submitted one.

¶3*410Mr. Carpenter, by brief, for the plaintiff in error. No opposite counsel.

¶4Mr. Justice CLIFFORD

¶5delivered the opinion of file court.

¶6Amended plea of the defendant admitted, as the declaration alleged, that the plaintiff, when the note was made and delivered, was a citizen of the State of Few York; and that the defendant was a citizen of the State of Wisconsin, where the note is dated and was executed. Action was assumpsit to recover the amount of a certain promissory note, described in the notice of claim annexed to the declaration. Defendant pleaded his discharge in insolvency from all his debts prior to the commencement of the action under the insolvent laws of the State where he resides, and where the contract was executed between the parties. Plaintiff demurred specially to the plea, and the defendant joined in demurrer.

¶7Causes of demurrer shown were :

¶8First. That the plea tendered an immaterial issue.

¶9Second. That the insolvent court exceeded its jurisdiction in attempting to determine the rights of the plaintiff under this contract, as he was a citizen of another State, and never became a party to the proceedings in insolvency.

¶10Third. That the discharge in insolvency set up in defendant’s plea is nugatory, because the insolvent law of the State as to the plaintiff is unconstitutional and void.

¶11Circuit Court overruled the demurrer and rendered judgment for the defendant; whereupon the plaintiff sued out this writ of error and removed the cause into this court.

¶12State legislatures may pass insolvent laws, provided there be no act of Congress establishing a uniform system of bankruptcy conflicting with their provisions, and provided that the law itself be so framed that it does not impair the obligation of contracts. Certificates of discharge, however, granted under such a law, cannot be pleaded in bar of an action brought by a citizen of another State in the courts of the United States, or of any other State than that where *411the discharge was obtained, unless it appear that the plaintiff proved his debt against the defendant’s estate in insolvency, or in some manner became a party to the proceedings. Insolvent laws of one State cannot discharge the contracts of citizens of other States; because such laws have no extra territorial operation, and consequently the tribunal sitting under them, unless in cases where a citizen of such other State voluntarily becomes a party to the proceedings, has no jurisdiction of the case.*

¶13Unquestionably, the decision in those cases controls the present case, and renders further remarks upon the subject unnecessary. Demurrer should have been sustained.

¶14Judgment REVERSED with costs, and the cause remanded for further proceedings in conformity to the opinion of this court.

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