Hugg et al. v. Augusta Insurance and Banking Co.

The third question is, assuming that the plaintiffs are entitled to recover, is the policy on the amount mentioned for one entire voyage round from Baltimore out, and home again ; and are the defendants entitled to deduct from the amount insured the freight earned in the voyage from Baltimore to Rio upon the outward cargo.

The policy provides, that the defendants, in consideration of $156.25, agree to insure the plaintiffs, &c., on freight of the bark Margaret Hugg, at and from Baltimore to Rio Janeiro and back to Havana or Matanzas, or a port in the United States, &c., to the amount of $5,000 upon all kinds of lawful goods, &c., beginning the adventure upon the said freight from and immediately following the laiding thereof aforesaid at Baltimore, and continuing the same until the said goods, wares, and merchandise shall be safely landed at the port aforesaid.

It is insisted, on the part of the defendants, that the voyage insured is one entire voyage from Baltimore out to Rio Janeiro, and then to Matanzas, or home; and that they are entitled to a deduction of the freight earned on the outward cargo from Baltimore to Rio.

The court are of the opinion, that, upon a true construction of the policy, the insurance was upon every successive cargo that was taken on board in the course of the voyage out and home, and is to be applied to the freight at risk at any time, whether on the outward or homeward passage. This was the construction given to these terms in a freight policy in Davy v. Hallett, 3 Čai. (N. Y.), 16, and The Columbian Ins. Co. v. Catlet, 12 Wheat., 383. The insurance was regarded as, in effect, covering freight upon separate voyages out and home, to the amount of the valuation; and in the former case the payment of double premium was deemed a pretty sure index to the intent of the parties that the policy should attach on the outward or homeward freight according to events, and was to be valid and operative as long as there was aliment to keep it alive. All the considerations urged in favor of this construction in the cases referred to apply with equal force to the policy in question.

The court direct, therefore, that it be certified to the Circuit Court, that, assuming the plaintiffs are entitled *611] to recover, the defendants are not entitled to deduct from the insured the freight earned on the voyage from Baltimore to Rio upon the outward cargo, as the policy is not for one entire voyage round from Baltimore out, and home.

Hugg et al. v. Augusta Insurance and Banking Co.

ORDER.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Maryland, and on the points and questions on which the judges of the said Circuit Court were opposed in opinion, and which were certified to this court for its opinion agreeably to the act of Congress in such case made and provided, and was argued by counsel. On consideration whereof, it is the opinion of this court,--1st. That, if the jury find that the jerked beef was a perishable article within the meaning of the policy, the defendants are not liable as for a total loss of the freight, unless it appears that there was a destruction in specie of the entire cargo, so that it had lost its orignal character at Nassau, the port of distress; or that a total destruction would have been inevitable from the damage received, if it had been reshipped before it could have arrived at Matanzas, the port of destination. 2d. If the jury find, that, from the condition of that portion of the cargo sold at Nassau, it was for the interest of the insured and insurers of the cargo, that it should have been so sold, and not transported to Matanzas, still, that the plaintiffs are not entitled to recover as for a total loss of freight, provided their own vessel could have been repaired in a reasonable time, and at a reasonable expense, so as to perform the voyage, or they could have procured another at Nassau, the port of distress, and have transshipped the portion sold in specie to the port of destination. And 3d. That, assuming the plaintiffs are entitled to recover, the defendants are not entitled to deduct from the insured the freight earned on the voyage from Baltimore to Rio upon the outward cargo, as the policy is not for one entire voyage round from Baltimore out, and home. Whereupon, it is now here ordered and adjudged, that it be so certified to the said Circuit Court.

VOL. VII.-41.

641

Peck et al. v. Jenness et al.

*PHILIP PECK AND WILLIAM BELLOWS, COPART*612] NERS, TRADING UNDER THE FIRM OF PHILIP PECK AND COMPANY, PLAINTIFFS IN ERROR, v. JOHN S. JENNESS, JOHN GAGE, AND JOHN E. LYON, TRADING UNDER THE NAME AND FIRM OF JENNESS, GAGE, AND COмPANY, DEFENDANTS IN ERROR.

The proviso of the second section of the bankrupt act passed on the 19th of August, 1841, preserves all liens which may be valid by the laws of the States respectively.1

In some of the States, attachments are issued on mesne process, by which the property seized is held to await the result of the suit. This constitutes a lien, which is saved by the proviso in the bankrupt act.

The various kinds of liens explained.

Therefore, where an attachment was issued and the defendants afterwards applied for the benefit of the bankrupt act, a plea of bankruptcy was not sufficient to prevent a judgment from being rendered condemning the property under attachment.2

The fourth section of the statute, if it stood alone, would make a plea of bankruptcy a good plea in bar in discharge of all debts; but if the whole statute be construed together, this is not the result.

A rejoinder, setting forth that the District Court of the United States had decided that the attachment was not a valid lien upon the property, was not a good rejoinder.

The District Court could not oust the State court of its jurisdiction, which had already attached.8

THIS case was brought up from the Superior Court of Judicature for the State of New Hampshire, by a writ of error, issued under the twenty-fifth section of the Judiciary Act.

Peck and Bellows were residents of the town of Walpole, in the county of Cheshire and State of New Hampshire. Jenness, Gage, and Company resided in Boston.

The facts in the case are sufficiently set forth in the opinion of the court.

It was argued by Mr. Goodrich, on behalf of the defendants in error.

C. B. Goodrich, for defendants in error

In October, 1842, the plaintiffs below sued out a process of attachment, upon which estate of the defendants below, real and personal, was attached. This process issues without the

1 CITED. Matter of Straus & Co., 61 How. (N. Y.) Pr., 248; Matter of Allen, 24 Hun (N. Y.), 412.

2 APPLIED. Goodsell v. Benson, 13 R. I., 254. CITED. Gibson v. Warden, 14 Wall., 248; Gilbert v. Lynch, 17 Blatchf., 405.

3 CITED. Riggs v. Johnson County, 6 Wall., 195; Evans v. Pack, 2 Flipp., 274; Hay v. Railroad Co., 4 Hughes, 352; Brown v. Newman, 66 Ala., 277 ; Anderson v. Anderson, 65 Ga., 523. See also Carroll v. Carroll, 16 How., 287.

Peck et al. v. Jenness et al.

sanction of any judicial officer. It issues at the will of any one who assumes to be a creditor of the party against whom it issues. It is a proceeding in personam and in rem,—is available as the one or the other, as the party may elect.

The question for adjudication is whether the original plaintiffs can avail themselves of this process as a proceeding in rem. Howland, who is the several assignee of each of the original defendants, is in no proper sense a party to the record. He appears in the names of Peck and Bellows, and relies upon their rights. 5 Stat. at L., 443, ch. 9, § 3. *Statutes operate upon property, contracts, or persons. The statutes of the United States and those of [*613 a State may operate upon the same property, the same contracts, the same persons. Their action is distinct in time, or in purpose, or both. The operation of the two jurisdictions, each within prescribed limits, is independent.

Courts of equity cannot, in this country, in all things, exercise the same power, to the same extent, as do courts of equity in England. Courts of the United States and those of the States have a different origin; their jurisdictions are for different purposes. The one court will exercise its control over the citizen, so as not to impair his ability to yield. obedience to the other, when and where such obedience is due. The jurisdiction of the courts of the United States and of the several States can never rightfully come in collision; where the jurisdiction is concurrent, the one which first attaches will retain it. There are only two modes in which a suit rightfully instituted in a State court can be proceeded in, or controlled by, the courts of the United States; the one is by transfer, the other under the twenty-fifth section of the Judiciary Act. The courts of the United States are invested with the exclusive power of construction of the laws and treaties of the United States; courts of the several States construe the laws thereof; the construction of each, within its appropriate sphere, is obligatory upon the other.

When a statute of the United States adopts or engrafts upon itself a statute or law of one of the States, quoad the law adopted, the construction of such law, at the time of its adoption, by the highest judicial tribunal of the State whose law is adopted is also adopted. If this be not so, the same law, acting within the same territory and upon the same person, may mean one thing in one court-room, something else in another. A State law adopted by the laws of the United States does not cease to be a State law. The jurisdiction of the District Court of the United States, sitting in bankruptcy, over property, is coextensive with the effect produced by the

Peck et al. v. Jenness et al.

decree of bankruptcy; which is to pass the property of the bankrupt, cum onere.

The judgment of the court below should be affirmed, and I submit,

I. That the District Court of the United States for the District of New Hampshire acquired no jurisdiction of the several original petitions of Philip Peck and of William Bellows to be declared bankrupt, and its proceedings upon said several petitions are void. This is so, because the pleas do not aver or show that the petitions were verified by oath, *without which oath and verification the petitions were *614] nullities; because the pleas do not aver that the petitioners represented to said District Court that they owed debts not created in consequence of a defalcation as a public officer, or as executor, administrator, guardian, or while acting in any other judiciary character; because the pleas do not aver or exhibit the notice which was ordered, or which was published, of the time when the said several original applications to be declared bankrupt would be considered. 5 Laws U. S., 440, ch. 7, § 1; United States v. Marvin, 3 How., 620 ; Elliott v. Piersol, 1 Pet., 338; Ex parte Bollman, 4 Cranch, 93; Sharp v. Spier, 4 Hill (N. Y.), 76; Sharp v. Johnson, Id., 92; Bank of Utica v. Rood, Id., 535; 2 Christian's Bank. Law, 20, 21, 22; Cooper on Bank. Sta., 165; Buckland v. Newsome, 1 Taunt., 477; Sackett v. Andros, 5 Hill (N. Y.), 330; Stephens v. Ely, 6 Id., 608; Brereton v. Hull, 1 Denio (N. Y.), 75; Varnum v. Wheeler, Id., 331; Maples v. Burnside, Id., 332; Thatcher v. Powell, 6 Wheat., 119; Wilcox v. Jackson, 13 Pet., 511, 516, 517; Walden v. Craigg's Heirs, 14 Pet., 147; Hickey v. Stewart, 3 How., 762; Wheeler v. Townsend, 3 Wend. (N. Y.), 247; Gordon v. Wilkinson, 8 T. R., 507; 1 Chitty on Plead., 223; Owen on Bank. App., 25; Archbold on Bank. App., 9, and 97; Wyman v. Mitchell, 1 Cow. (N. Y.), 316; Frary v. Dakin, 7 Johns. (N. Y.), 75; Ex parte Balch, 3 McLean, 221; United States v. Clark, 8 Pet., 444, 445; Garland v. Davis, 4 How., 131.

II. The several rejoinders of the original defendants, and the matters therein set up, amount in law to a departure from their several pleas. 1 Chitty on Plead., 648.

III. The statute of the United States, in relation to bankruptcies, passed Aug. 19, 1841, as to all matters of liens and securities adopts the laws of the States respectively, and exempts from the operation of the decree of bankruptcy all property which, at the time of the decree, might be charged with any duty, lien, or security valid by the law of the State 'n which the duty, lien, or security might arise.