Aikin v. Dunlap

Platt, J. delivered the opinion of the Court.

This is an action of indebitatus assumpsit, for money paid by the plaintiff to the use of the defendant, viz., to the collector of the customs of the district of New-York, as surety for the defendant, in three bonds to the United States, for duties on goods imported, &c.

The defendant pleads a discharge granted to him by the Recorder of the city of New-York, pursuant to the “ act for giving relief in cases of insolvency.’’

To this plea the plaintiff demurs, and the defendant joins in demurrer. Not deeming it necessary to the proper decision of this cause, I forbear to examine the questions which arise in regard to the form of action, (assumpsit instead of Debt,) and the want of proper averments in the declaration.

In support of the demurrer, the plaintiff relies on the provisions contained in the statute of the United States of the 2d of March, 1799, (5 Cong. 1 sess. ch. 128.ks. 65.) which enacts, that “ in all cases of insolvency, or where any estate in the hands of the executors or administrators or assignees, shall be insufficient to pay all the debts due from the deceased, the debt or debts due to the United States, on any such bond or bonds, (for payment of duties,) shall be first satisfied, &c and further, “ that if the principal in any bond which shall be given to the United Slates for duties on goods, &c. shall be insolvent, or if such principal being deceased, his or her estate and effects, which shall come to the hands of his or her executors, administrators, or assignees, shall be insufficient for the payment of his or her debts ; and if in either of the said cases, any surety on the said bond or bonds, or the executors, administrators, or assignees of such surety, shall pay to the United States, the money due upon such bond or bonds, such surety, his or her executors, administrators, or assignees, shall have and enjoy the like advantage, priority, or preference, for the recovery and receipt of the said moneys, out of the estate and effects of such insolvent, or deceased principal, as are reserved and secured to the United States ; and shall and may bring and maintain a suit, or suits, upon the said bond or bonds, in law or equity, in 1ns, her, or their own name or names, for the recovery of all moneys paid thereon.’’

On the argument of this cause, the counsel agitated the question, whether the United Stales are or can be concluded as to their right of action, by virtue of a discharge \o an insolvent debtor, under a law of one of the states of our confederacy ? In my judgment, that question does not arise upon the case now before us ; and the delicacy and importance of the subject forbid any extra-judicial opinion or discussion on that point. Admitting that the United States may rightfully claim exemption from the operation of state insolvent laws, as a rightiucident to our national sovereignty; and admitting, what is more questionable, that Congress can transfer to any private person that attribute of sovereignly ; yet, I think, there is no ground for the demurrer in the case now before us.

The act of congress before recited, neither asserts such a privilege for the United States, nor does it profess to confer it upon any private individual. That section invests a surety, who pays a custom-house bond for his principal, with “ the like advantage, priority, or preference, for the recovery and receipt of the said moneys out of the estate and effects of such insolvent or deceased principal, as are reserved and secured to the United States

What, then, is the advantage, priority, or preference, reserved and secured to the United States ; and which it was the object of that section to confer on the surety ? Looking at the whole section, I think it is plain, that it was intended to grant to the surety nothing more than the right of being “ first satisfied” out of the insolvent’s estate, and which in the former part of the section is expressly “ reserved and secured” to the United States.

So far from intending to protect the surety against a state -insolvent law, as a bar to his claim, the whole scope of the section contemplates a cessio bonorum of the insolvent debtor, either voluntary or compulsory, for the benefit of creditors ; and in that expectation, congress meant to give to the surety a preference over all other creditors, out of the estate of the insolvent in the hands of his assignees. The plaintiff, therefore, like every other private creditor, is concluded by the discharge from maintaining his suit against the insolvent debtor; and must seek his repiedy from the estate' in the hands of the assignees. Our insolvent act directs an equal distribution among creditors whose debts are discharged. Whether the preference given by the act of congress, is to control the . rule of distribution in our statute, is a question not immediately before us; but I incline to the opinion, that our law must be considered as subject to the paramount law of congress, so far as to give effect to the preference secured by that law. It cannot, I think, be doubted, that congress had a right to stipulate for such a preference, in their contracts for securing the public revenue; and if so, our insolvent law would be an act in violation of contracts ,* unless it be construed so as to give effect to that stipulation. But I think proper to add, that I fully concur in the opinion expressed by Ch. J. Blarshall, in the case of Fishery. Blight, ;(2 Cranch, 390. and note,) “ that no lien is created by that act of congress ; that it does not create a devastavit in the administration of effects; and would require notice, in order to bind the executor, or administrator, or assignee ”

For the reasons I have stated, and with these explanations, I am clearly of opinion, that the defendant is entitled to judgment on the demurrer.

Judgment for the defendant.