U.S. Supreme Court Farmers' & Merchants' Bank of Pennsylvania v. Smith, 19 U.S. 6 Wheat. 131 131 (1821)
Farmers' & Merchants' Bank of Pennsylvania v. Smith
19 U.S. (6 Wheat.) 131
ERROR TO THE SUPREME COURT
OF THE STATE OF PENNSYLVANIA
An act of a state legislature which discharges a debtor from all liability for debts contracted previous to his discharge on his surrendering his property for the benefit of his creditors is a law impairing the obligation of contracts within the meaning of the Constitution of the United States so far as it attempts to discharge the contract, and it makes no difference in such a case that the suit was brought in a state court of the state of which both the parties were citizens, where the contract was made and the discharge obtained, and where they continued to reside until the suit was brought.
This was an action of assumpsit brought by the plaintiffs in error in the Supreme Court of the Commonwealth of Pennsylvania against the defendant in error as endorser of a promissory note made at Philadelphia by one Edward Shoemaker on 6 June, 1811, for $2,500, payable in six months after date and endorsed by the defendant to the plaintiffs at the same place on the same day. The declaration was in the usual form, and the defendant pleaded that on 8 September, 1812, he was a citizen of the said commonwealth residing in the City and County of Philadelphia and having resided there for more than two years before that time, and that being such citizen and resident, he, the defendant, in conformity to the act of the
legislature of the said commonwealth passed on 13 March, 1812, entitled, "An act for the relief of insolvent debtors residing in the City and County of Philadelphia," did, on the said 8 September, 1812, at the City of Philadelphia aforesaid, present his petition to Charles Jared Ingersoll, &c.;, the commissioners appointed under and by virtue of said act, &c.;, in which petition he, the said petitioner, did state his belief that he was insolvent and did pray that he might be permitted to assign all his estate and property for the benefit of his creditors and be discharged by virtue of said act. Whereupon the said commissioners did appoint Mathew Randall, &c.;, to be curators, to whom the defendant did thereupon forthwith assign all his estate, real and personal, in conformity with the provisions of the said act. And the said commissioners did then and there appoint the second day of October, 1812, aforesaid, for the hearing the defendant and his creditors, of which due notice was given according to the provisions of the act aforesaid. Upon which day, &c.;, the said petitioner did exhibit a true account and list of all his creditors and moneys due and to become due and owing to them respectively by him, and also an inventory and account of his estate, real and personal, and of all interest of him, the said petitioner, either present or contingent, in anything of value and of all books, vouchers, and securities relating to the same. And thereupon the said Charles Jared Ingersoll, one of the said commissioners, did administer to him, the said petitioner, the oath required by the said law, which was duly
taken by him, the said petitioner, according to the requisition of the said law. And afterwards, &c.;, the said commissioners did assign to Chandler Price, &c.;, who were duly nominated and appointed assignees, all the estate, real and personal, of him the said petitioner or which was of him the said petitioner at the time of the provisional assignment so as aforesaid made to the curators aforesaid. And the said commissioners did appoint the 15th day of October then next for a second examination of him the said petitioner. Upon which second examination it appearing to the satisfaction of the said commissioners that the said petitioner had not concealed any part of his property, &c.;, and he, the said petitioner, having also in all other things conformed to the provisions of the said act, the said commissioners did then and there give to him, the said petitioner, a certificate under their hands and seals that he, the said petitioner, had in all things conformed to and was discharged by said act. The plea also averred that the cause of action arose in the City and County of Philadelphia from contracts made within the same, and that the plaintiffs and defendants were, at the time the said contracts were made and at the time the causes of action accrued and at the time the said act passed, citizens of the State of Pennsylvania, and still continued to be citizens thereof. To this plea there was a demurrer, and judgment being rendered thereon for the defendant, the cause was brought by writ of error to this Court.
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the Court that this case was not distinguishable from its former decisions on the same subject except by the circumstances that the defendant in the present case, was a citizen of the same state with the plaintiffs at the time the contract was made in that state and remained such at the time the suit was commenced in its courts.
But that these facts made no difference in the cases. The Constitution of the United States was made for the whole people of the Union, and is equally binding upon all the courts and all the citizens.
JUDGMENT. This cause came on to be heard on the transcript of the record of the Supreme Court for the Eastern District of the Commonwealth of Pennsylvania and was argued by counsel. On consideration whereof the Court is of opinion that the said Supreme Court for the Eastern District of the Commonwealth of Pennsylvania erred in giving judgment for the defendant on the demurrer of the plaintiffs to the plea of the said defendant. It is therefore adjudged and ordered that the judgment of the said Supreme Court for the Eastern District of the Commonwealth of Pennsylvania be and
the same is hereby reversed and annulled. And it is further ordered that the said cause be remanded to the said Supreme Court for the Eastern District of the Commonwealth of Pennsylvania with directions to enter judgment for the plaintiffs in the said court.