Champneys v. Lyle

Tilghman C. J.

delivered the opinion of the court.

The plaintiff was bound as security for Richard Maris, in sundry bonds to the United States,,for duties on goods imported, dated 11th April 1801. The plaintiff paid those bonds, and Maris became a bankrupt. Two questions are now submitted to the court.

1. Whether that preference which was given to sureties in bonds for duties, by the 65th section of the act of Congress, “ to regulate the collection of duties on imports and tonnage, (March 1st 1799) was taken away by the act “ to establish an “ uniform system of bankruptcy throughout the United States.” {April 4th 1800.)

2. If such preference is not taken away, then, whether the plaintiff is entitled to recover interest subsequent to the date of the commission of bankruptcy.

The 65th section of the act to regulate the collection of duties &c. provides that in case of insolvency of the obligors, or in case of their death, and not leaving sufficient assets to pay all their debts, the debt due to the United States on bonds for duties, shall be first satisfied; and that if any surety in such bonds shall pay to the United States the money due thereon, “ he shall have and enjoy the like advantage, priority, and pre- “ ference, for the recovery and receipt of the said money, out “ of the estate and effects of such insolvent, or deceased principal, as are reserved and secured to the United States.”

The bankrupt law provides in general for the equal distribution of the bankrupt’s estate among his creditors, without any preference, except as to those creditors who had liens existing at the date of the act. But it is enacted by the 62d section, that nothing contained in that law “ should in any manner affect the “ right of preference to prior satisfaction of debts due to the “ United States, as secured or provided by any law theretofore “ passed.”

It would have been an act of such extreme injustice to take away from sureties in custom-house bonds, that preference which had been assured to them, and on the faith of which they became bound to the United States, that nothing but the clearest expressions could induce me to suppose that congress *332had such intention. And whatever is the construction of the bankrupt law with respect to bonds passed before its date, it must be the same as to bonds of subsequent date; for not the least distinction between them is to be found in the law. Now it appears to me, that the provision in the 62d section of the bankrupt law, that nothing- therein contained should affect the “ right of preference to prior satisfaction of debts due to the “ United States, as secured by any prior law,” may fairly be construed so as to preserve the -whole right of preference, touching these debts, whether that preference was given to the United States, or to sureties in the bonds. I am the more inclined to adopt such construction, because otherwise, not only would the United States be chargeable with the flagrant injustice I have mentioned, but with the absurdity of taking away the preference of sureties in case the principal became a bankrupt, but leaving it untouched when he died, not a bankrupt, but with an estate insufficient for the payment of all his debts. Besides, the general creditors of the bankrupt would derive but little advantage from the construction contended for; because the preference of the United States, is undoubtedly preserved, and they might and ought to call on the assignee for payment of the whole debt. Had congress thought, as has been suggested by the counsel for the defendants, that the preference of sureties was in its nature unjust, and perhaps not strictly warranted by the constitution, they surely ought to have openly abolished it altogether, (taking care that no injury should arise to those persons who had acted under the faith of an existing law) and not have made a partial repeal, in the obscure manner in which •it is said to have been effected by the bankrupt law.

I am therefore of opinion, that the bankrupt law did not repeal those provisions in former laws, which in cases of bankruptcy gave a preference to sureties in custom-house bonds.'

As to the second point, the 66th section of the act to regulate the collection of duties &c. enacts, that “ on all bonds on “ which suits shall be commenced, an interest shall be allowed “ at the rate of six per cent, per annum, from the time when the “ said bonds became due, until the payment thereof;” no distinction is made between suits brought by the United States, and by the sureties. Being of opinion then, that no part of the *333advantage given to sureties by this law is taken away by the bankrupt law, I must also be of opinion that the interest, which is part of that advantage, is recoverable in a suit brought by the surety against the assignees of the bankrupt.

Judgment for plaintiff.