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obligation of a contract, though made and to be performed within the state, where it is a contract with a citizen of another state.”
In Donnelly v. Corbett, 7 N. Y. (3 Seld.) 500, 1852, the Court of Appeals of New York; in Felch v. Bugbee, 48 Me. 9, s. C.,
9 Am. Law Reg. (O. S.) 104, 1860, the Supreme Judicial Court of Maine; in Anderson v. Wheeler, 25 Conn. 607, the Supreme Court of Connecticut, and in Doe v. Puck, 5 Md. 1, the Supreme Court of Maryland, and there are other similar decisions, decided that the distinction taken in Scribner v. Fisher was unsound, and that state insolvent laws had no extra-territorial effect so as to operate upon the rights of citizens of other states.
But in Baldwin v. Hale, before cited, the Supreme Court of the United States, in 1863, in terms and by name declared Scribner v. Fisher to be in conflict with the settled rule of that court. Mr. Justice CLIFFORD, after reviewing the prior decisions and stating the points ruled, says: “But a majority of the court held in Scribner v. Fisher that if the contract was to be performed in the state where the discharge was obtained, it was a good defence to an action on the contract, although the plaintiff was a citizen of another state and had not in any manner become a party to the proceedings. Irrespective of authority it would be difficult, if not impossible, to sanction that doctrine. Insolvent systems of every kind partake of the character of a judicial investigation. Parties whose rights are to be affected are entitled to be heard, and in order to be heard they must first be notified. Common justice requires that no man shall be condemned without notice and an opportunity to make his defence. Courts of one state have no power to require citizens of other states to become parties to insolvent proceedings. * * * Insolvent laws of one state cannot discharge the contracts of citizens of other states, because they 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 proceeding, has no jurisdiction in the case. Legal notice cannot be given, and consequently there can be no obligation to appear, and, of course, there can be no legal default.”
Independent of its authoritative force, this decision and the grounds upon which it is placed, command unqualified approval. Certain it is, that it is the final and settled doctrine of the Supreme
Court of the United States, with respect to a question of which that tribunal is the ultimate arbiter.
Subsequently, the Supreme Court of Massachusetts, in Kelly v. Drury, 9 Allen 27, following the decision in Baldwin v. Hale, itself overruled Scribner v. Fisher.
The Supreme Court of the United States having thus settled that a citizen of another state cannot be affected by an insolvent discharge in the state in which the debtor resides, even though the contract was made and on its face is to be performed therein, that principle settles this case, and shows that the judgment of the District Court was erroneous on the undisputed facts before it.
Those facts were that the judgments sued on were rendered against the defendant in New York; that he afterwards removed to and became a citizen of Iowa; that both plaintiff and defendant were citizens of this state at the time when the judgments were assigned to the plaintiff, at the time the latter brought suit, and at the time the judgment was rendered which is now appealed from.
The discharge was no bar to the plaintiff's action, even though it be admitted that the defendant concluded to remain in New York, and in good faith applied for this discharge as a citizen of that state.
The assignment of the judgments to the plaintiff made him the owner of them and of the debts of which they were the record evidence. He was as much the owner as if they had been recovered in his name. Our statute recognises the plaintiff as the owner, and allows him to sue thereon in his own name. The defendant had notice of the assignment. He owed the debt, and owed it to the plaintiff. He could not afterwards pay to the assignor, or to any person but the plaintiff.
Both parties being citizens of Iowa, and the plaintiff having actually brought suit in Iowa to collect his debt, the plaintiff, though suing upon a New York judgment, was an Fowa creditor, and the defendant would have no more right, as against the plaintiff, subsequently and pending the action, to remove to New York, acquire a discharge which should be valid as against the plaintiff's action in Iowa, than if the defendant had never previously resided in New York, or had while residing there made the contract with the plaintiff at the time a resident of Iowa.
I need not stop to point out the injustice and unreasonableness
of holding that a debtor, pending an action against him, may change his residence, obtain an ex parte discharge, resume his residence in the state in which his creditor resides, and then be allowed to plead such discharge as an effectual bar to the plaintiff's action.
The court of no state could, in justice to its citizens, ever give its sanction to such a doctrine, unless it conceived that it was so bound down by authority that it could not unloose itself from its grasp.
The court below undoubtedly proceeded upon the idea of the Supreme Court in Massachusetts in Scribner v. Fisher, and counsel undoubtedly did not call its attention to the case of Baldwin v. Hale, since it is not referred to in their briefs in this court.
It was suggested on the argument that the court of New York would have control over judgments rendered in that state, and that the case was or might be different from what it would if the contracts on which the judgments were rendered had been transferred to the plaintiff, a resident of Iowa, and had never been reduced to judgment in New York.
The decisions in this court (Burtis v. Cook & Sargeant, 16 Iowa 194) treat a judgment rendered as a chose in action. It is a debt, or the record evidence of a debt. The plaintiff, as the assignee, has the same rights as if he had, while a citizen of Iowa, recovered judgment in his own name in New York. In that case it is plain that it could not be discharged against his assent, by a state insolvent proceeding. This suggestion comes right back to the point before discussed and which has been finally set at rest by Baldwin v. Hale, viz., that if the creditor is a non-resident of the state a discharge under a state law cannot affect him unless he voluntarily becomes a party to the proceeding, and this is the case irrespective of where the contract was entered into or was to be performed.
Place of making or place of performance is utterly immaterial in all cases where the creditor is not a citizen of the state granting the discharge. Citizenship of the parties, and not the place of the making or the place fixed for the performance of the contract, is the controlling element.
As the plaintiff was undoubtedly a citizen of Iowa at the time the defendant obtained his discharge in New York, it is not necessary to decide the question, so warmly debated by counsel, whether
the defendant did in fact acquire a residence in New York at the time he applied for relief under its insolvent laws. To my mind this is doubtful, but as the evidence is conflicting and by no means decisive, we ought not on this ground to disturb the judgment of his Honor below. This has made it necessary to dispose of the case on the assumption that the defendant was not a citizen of Iowa, but was a citizen of New York when he applied for his discharge.
Supreme Judicial Court of Maine.
ELBRIDGE W. ROBINSON v. WARREN WEEKS.
The contracts of infants are :-
(3). Voidable, at the infants' election, either during minority or within a reasonable time after attaining majority: including all executory agreements not for necessaries, and all executed contracts of this sort wherein the other party can be placed substantially in statu quo.
Mere receipts for money paid for stock in a petroleum company, being for no appreciable value, need not be returned by a rescinding infant before the commencement of his action for the recovery of money thus paid.
ASSUMPSIT for money paid for stock in an oil company.
The plaintiff was born October 31st 1845. On March 3d, and April 18th 1866, the plaintiff paid the defendant $200, and received therefor only two receipts, one signed by the defendant and the other by the defendant's agent, of the following tenor: "Received of E. W. Robinson, one hundred dollars for one-half of his share in the Mt. Vernon Land and Petroleum Co." On November 12th 1866, the plaintiff repudiated the contract, demanded of the defendant the money paid, and offered to assign to him all interest he might have in the company; but did not offer to return the receipts.
Kempton, for the plaintiff.
S. Belcher, for the defendant.
agent gave for the money which the plaintiff seeks to recover in this action, could be considered as certificates of petroleum stock, the action could not be maintained; for assuredly, if an infant has received anything which may have an intrinsic or a market value, by virtue of the contract which he claims to rescind, he must return it, if it is in existence and within his control after he becomes of age, before he can be permitted to reclaim the money paid for it. It is unnecessary, in this case, to define more carefully or precisely the limitations of this obligation on the part of a rescinding minor to return what he has received under the contract, or to consider further the effect of failure or inability to return anything which has such a value; for the plaintiff was of age and had the receipts in his possession when he claimed to rescind, but did not offer to return them.
But these receipts were of no appreciable value to any one except to the plaintiff as evidence of the fact that he had paid his money for the defendant's promise of a share in the Mt. Vernon Land and Petroleum Company. He never received any certificate of stock. The receipts gave him no legal interest in the company property if there was any.
At most they gave
him only a right to call upon the defendant for a share of the stock; and that right he renounced in writing as soon as he became of age, coupling with his renunciation an offer to assign over to defendant any interest which he might have in the company. The return of the scraps of paper on which the receipts were written was, under such circumstances, unnecessary.
The plaintiff was a minor when he made the agreement for the stock and paid the money. Making known his election to rescind the agreement and reclaim his money within a fortnight after he became of age and before he had received anything by way of consideration except these papers, he demands his money and brings this suit. Is there any good reason, upon principle or authority, why he should not provail ?
The defendant's position receives countenance from some passages in the text-books.
In Chitty on Contracts (6th Am. ed.) 154, we find the following: “An infant's right to elect whether he will avoid or confirm a contract entered into by him during his infancy, does not necessarily entitle him to recover back money which he has paid thereon. It is indeed a general rule that an infant cannot recover back