Goodell v. His Creditors

Cummins, J.,

delivered tbe opinion of tbe court,

McBride, O. J., and Kelly, J., concurring.

Tbe petitioner, Goodell, filed bis petiton July 9, 1866, seeking tbe benefit of tbe insolvent debtor’s act.

To tbis petition two of bis creditors interpose a demurrer upon tbe ground that sucb petition does not set forth or show tbe nature of tbe debts from which tbe petitioner seeks to be discharged, nor tbe time when they were contracted, whether before or subsequent to tbe passage of tbe act referred to. Tbe cause was certified into tbis court for trial upon tbis demurrer by tbe district court of tbe second district.

Tbe petition contains a statement of but a few of tbe facts necessary to entitle a debtor to a discharge under tbe territorial insolvent law. It does not show when a single one of tbe debts sought to be barred by tbis proceeding was contracted. Tbis is absolutely necessary, for debts which existed at tbe time of tbe passage of tbis act can not be affected by any proceedings under it. A different rule would violate tbe constitutional inhibition against impairing tbe obligation of contracts.

It is firmly established by judicial decision that tbe states — and I will not now discuss tbe question whether there is any denial to or want of tbe same power in tbe territories — still retain tbe power to pass insolvent and bankrupt laws. But tbis power is not unlimited, as it was before tbe adoption of the federal constitution. It does not extend to tbe passing of insolvent or bankrupt acts which shall discharge the obligation of antecedent contracts. It can discharge such contracts only as are made or entered into subsequently to the passage of such acts. Therefore, a discharge under these statutes is no bar to an action on a contract existing at the time when the act went into operation. (2 Kent, 503.) And hence, in passing the territorial act under which this proceeding is instituted, it was attempted, at least, to comply with this fundamental law, as will be seen by reference to section 24, although it is somewhat ambiguous.

For the reason, then, that antecedent contracts can not be discharged, it becomes necessary in all cases that the petition should show the date of each debt. The omission of this, as in this case, is a failure to state material facts, without which an adjudication can not be had.

The demurrer is sustained, the cause remanded back, with leave to the petitioner to amend his petition if warranted by the facts.