Statement of the case.

In the Circuit Court of the United States, for the District of Virginia, at Richmond, November, 1799.

BANKS v. GReenleaf.*

G., a citizen of Maryland, gave his bond, in Virginia, to B., a citizen of Virginia, and afterwards, in Maryland, became a bankrupt by the laws of Maryland, under which he was duly discharged by the competent tribunal of Maryland under a general direction with respect to his creditors. This did not discharge him in a suit afterwards brought upon the bond in Virginia.

SOME years past, Greenleaf, a citizen of Maryland, became indebted, by bond given in Virginia, to Banks, a citizen and inhabitant of the State of Virginia. Afterwards, Greenleaf took the benefit of the bankrupt laws of Maryland; and being arrested for the foregoing debt in this court, he pleaded the discharge, under the bankrupt laws of Maryland, in bar of the claim. To this plea the plaintiff demurred; and the defendant joined in the demurrer.

Bennet Taylor, for the plaintiff, contended, that the plaintiff and defendant, not being citizens of the same State, the laws of Maryland did not bind the plaintiff. For the several States are sovereign and independent of each other, 2 Wash., 298, and therefore, the laws for one cannot, for transactions out of its limits, bind the citizens of another more than two unconnected countries can bind the subjects of each other. Co. Bank. Law, 243; Wythe's Ch. Decis., 133; James v. Allen, 1 Dall. Rep., 188.

Randolph, contra.

The discharge, under the bankrupt laws of Maryland, is a complete bar to the plaintiff's action. All countries make laws against absentees; and, if they are improper, it is a State and

* This report is taken from 6 Call's Virginia Reports, p. 271.

Opinion of the court.

not a judiciary question. Robinson v. Bland, 1 Black., 258, takes the distinction between local and general statutes, making the latter to be obligatory in other countries. But Solomon v. Ross, 1 Hen. Black., 131, is decisive; and proves the universal effect of bankrupt laws, with respect to personal actions, which is confirmed by Martin's Law of Nations, 104. There is no difference as to the obligation, whether it be a judiciary or legislative act of a foreign country. Besides, in this case, the Court of Chancery in Maryland has acted with regard to the creditors at large of the bankrupt; and so far as it may be called judicial.* The Articles of Cot.federation between the United States give the inhabitants of one State all the benefit of the other States; and if they took the conveniences they should sustain the inconveniences. This, necessarily, results from the reciprocal rights of citizens of different States, because they are all, as it were, citizens of each State. The case of Millar v. Hall, 1 Dall., 229, is expressly like this, and ought to govern it. The Constitution itself establishes the reciprocal respect due to laws of one State in another, and our doctrine is not repelled by the power of Congress to make bankrupt laws; because what we contend for only applies until Congress have acted on the subject. Cur. adv. vult.

WASHINGTON, J.-The principles laid down by Huberus, and universally acknowledged, are, that the laws of every government have force within the limits of the government, and are obligatory upon all who are within its bounds, whether subjects or temporary residents. They have no effect directly with the people of any other government, but, by the courtesy of nations, to be inferred from their tacit consent, the laws which are executed within the limits of any government are permitted to operate everywhere, provided they do not produce injury to the rights of such other government or its citizens. This principle is universally admitted among all civilized nations, and has

This was merely the order of the Chancellor with respect of the creditors in general of the bankrupt, and did not relate to this case in particular, nor was the petitioning or suing before him.

Opinion of the court.

grown out of mutual convenience which they experience from it. "For," says the same author, "nothing would be more inconvenient in the promiscuous intercourse and practice of mankind, than that what was valid by the laws of one place should be rendered of no effect elsewhere by a severity of law."

From these principles has arisen the doctrine admitted by all, that whoever makes a contract, in any particular place, is bound by the laws of that place as a temporary citizen.

So a will or conveyance of movable property, executed according to the forms prescribed by law where made, has effect in every country, though not consistent with the forms or ceremony there observed.

But there are certain exceptions from and modifications of these rules, some of which it may be proper to mention.

As if a person shall go into a foreign country to perform a particular act, with a view to elude the laws of his own country in fraudem legis.

So the effect of a contract, made in one place, will be allowed according to the laws of that country, if no inconvenience results therefrom to the citizens of the country where those laws are sought to be enforced, for the courtesy of nations could not be supposed to go so far as to admit the force of foreign laws to produce a prejudice to its citizens, to which they had, by wont of their own, submitted.

So if the law of a place where a contract is made be contrary to the laws of our own country, in which a contract is also made inconsistent with a contract made in another place, we should observe our own law rather than the foreign one.

Let us proceed to examine this case, according to these rules: The contract in question was made in Virginia, by a citizen of Maryland with a citizen of Virginia. The contract is, therefore, subject to the laws of Virginia; and the question is, whether the laws of a foreign country (if Maryland be such) discharging a contract, can be admitted here?

The rule is, that the laws of a foreign country prevail if not prejudicial to the country or its citizens, and this is merely gratuitous; but to admit them to prejudice its own citizens, would be a courtesy bordering on quixotism.

Opinion of the court.

No government would submit to it; no government can be presumed to have tacitly submitted to this.

But if the citizens go abroad and submit to their laws, as temporary subjects, they must be bound by them, though to their prejudice; if they make a contract there, the law of that country is to prevail.

In this case it would be a matter of choice; if the laws of that country give effect to the contract, he must submit to their laws which discharge it.

If a will or deed is made abroad, or matrimony contracted, all the consequences follow. But if the parties have never so submitted, no government would permit a citizen to be prejudiced by foreign laws.

Here are two conflicting laws. One giving validity to a contract, and governing it throughout to its discharge; and the other discharging it in a manner different from and in violation of the contract, and the appeal is made to our laws.

Which is to prevail? The rule is, magis est ut in tali conflictu, ut jus nostrum, quam jus alienum, servemus.

The contract in question obliges Greenleaf to pay Banks so much money. The law of Maryland says he may deliver himself by paying a part. If this be valid here, it would have been so if it had said he should deliver himself without paying any part.

These laws are contradictory to each other. What, then, says the law of nations upon this subject? That the law of the country where the contract is made shall prevail; and if the law of a foreign country be inconsistent with ours, ours shall prevail.

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I think the rule may safely be laid down, that if a foreigner come into our country, and there enter into a contract, the laws of his nor any other foreign country can, in our courts, received to control, alter, or discharge it, unless the parties, by some act of their own, submit to the laws of such foreign country.

Let us examine the cases which have been cited at the bar, and see whether they throw light upon this subject.

The first case which I shall notice is that of Warder v. Arell,

Opinion of the court.

in the Court of Appeals of this State, 2 Wash., 298. In that the contract was made in Pennsylvania, and discharged under the laws of that State.

That case lays down the rule as stated by Huberus, that the contract having been made in Pennsylvania, the laws of that State must govern, not as to the form, validity, or construction of the contract, but as to the discharge, for this was the only question. The expression of all the judges in that case are remarkably strong to prove that the ground on which the laws of Pennsylvania, operating to produce the discharge, prevailed, was, that the contract was made there.

Divisme v. Martin, Wythe's Decis., 133, was the case of British subjects altogether, but the Chancellor states generally that the remedy of an American creditor against the bankrupt would not have been affected by the transfer of the bankrupt's effects to the assignee under the English law.

Whether, if the contract has been made in England, he would have so decided, does not appear, nor was it necessary, since that was not the case before the court.

In James v. Allen, 1 Dal., 188, it does not appear where the contract was made. If in Pennsylvania, I concur in the decision. If in New Jersey, I do not; because in such a case, the decision would go too far, if I am correct in the principles before laid down.

Miller v. Hall, 1 Dall., 229, is obscurely reported, as to the state of the case, for it is doubtful whether the agreement, which is said to have been executed in Pennsylvania, was the one made by Miller and Hall with the owners of the goods, or the articles of copartnery between Miller and Hall. The suit, as I understand it, was brought by Miller to recover his proportion of the commission upon goods sold in Massachusetts; if it means the former, then unquestionably the cause of action arose in Massachusetts, and Hall had by no act of his submitted to the laws of Pennsylvania; if the latter, it might be a doubtful matter where it arose. The doctrine I admit is laid down very broad by the chief justice, and I do not know of any case which has gone so far as this.

Emory v. Grenough was decided before Judge Iredell, in the