[470] tified, she waived her right to object to his giv- [471] whole remained to the survivor under the orig-| Mr. Weatherford, and respecting which she tes- The Supreme Court of Arkansas and the Circuit Court of Desha County must have proceeded upon the conclusion that Buck and his wife held by moieties, in decreeing that, through their conveyance, Drake and Winfrey became the owners in fee, successively, of Buck's undivided half of the lands in question; and the decrees of these two courts to that effect, standing unreversed, would seem to be binding adjudications in favor of complainant's title. In the circuit court case Mrs. Buck sought and obtained a decree quieting her title to an undivided half, as between her and Buck's heirs and Drake, Buck's grantee, and holding a tax title to have been acquired for the benefit of Drake and herself, and she is to be held to have embraced her whole cause of action in one suit. In the supreme court case she had joined with Drake, in seeking relief as co-owners, against an execution sale of a parcel of the land, the rectification of a mistake in the deeds, and the vesting of title in herself and Drake, and the compelling Winfrey to accept title to the Drake half; and that relief was in substance accorded by the decree. Under such circumstances it cannot be denied that Hunt was justified in advancing his money upon the strength of the Drake, Winfrey title. Defendant Blackburn insists, however, in her answer, that the part she took in the litigation of these two cases was the result of misplaced confidence in her counsel, by whom she alleges she was deceived, misadvised and misled; that she was ignorant of her rights, and that she ought not to be held estopped in the premises; while at the same time it is objected, on her behalf, that her attorney, on the ground of privileged communications, should not be permitted to defend himself by testifying to the facts and circumstances under which he advised her and the advice which he actually gave. The rule which places the seal of secrecy upon communications between client and attorney is founded upon the necessity, in the interest and administration of justice, of the aid of persons having knowledge of the law and skilled in its practice, which assistance can only be safely and readily availed of when free from the consequences or the apprehension of disclosure. But the privilege is that of the client alone, and no rule prohibits the latter from divulging his own secrets. And if the client has voluntarily waived the privilege, it cannot be insisted on to close the mouth of the attorney. When Mrs. Blackburn entered upon a line of defense which involved what transpired between herself and But, apart from Weatherford's evidence, the testimony of Mrs. Blackburn and Drake, together with the documents in the case, fail to satisfy us that there was any deceit or misapprehension in the premises, or any advice given Mrs. Blackburn in fraud or in mistake of fact or law. Buck and his wife purchased the separate halves at different times, and with the intent of holding in moieties, and conveyed Buck's half to Drake, who paid therefor in good faith, and without actual notice. The second deed of Shepard was so drawn as to run directly to Buck and wife, and upon the language in which it was couched this claim is set up. And yet that second deed was given, on request of Drake's attorney, at the very time when Buck and his wife were conveying to Drake for valuable consideration. The injustice of allowing Mrs. Blackburn to insist, years afterwards, that by that deed she acquired an estate by entirety is too apparent to need comment. Nor could such deed devest the title which had once vested in her husband and herself by the former conveyance from the same grantor, nor alter its nat ure. The decree will be reversed and the cause remanded for further proceedings in conformity with this opinion. Decree reversed. HENRY R. DENNY, Piff. in Err., v. CHARLES C. BENNETT, Asssignce of A. (See 8. C. Reporter's ed. 489-503.) Statute impairing contracts-state law, when to enforce his claims against the property of his 2. The inhibition of the Constitution against im- 3. The established construction of the Constitu tion of the United States against impairing the [489] repugnant to the Constitution of the United States so far as it affects citizens of States other than Min nesota. 5. A statute of a State, being without force in any other State, cannot discharge a debtor from a debt held by a citizen of such other State who does not appear and take part in the proceedings, or is not otherwise brought within the jurisdiction of the court granting the discharge. 6. The decision of a motion or summary application is not to be regarded in the light of res judicata, or as so far conclusive upon the parties as to prevent their drawing the same matters in question again in the more regular form of an action. [No. 67.] Argued Nov. 8, 1888. Decided Nov. 26, 1888. 'N ERROR to the Supreme Court of the State of Minnesota, to review a judgment in favor of an assignee for benefit of creditors, for damage for conversion of the assigned property. Affirmed. The facts are stated in the opinion. Mr. C. D. O'Brien, for plaintiff in error: An assignment for the benefit of creditors can be attacked for the concurring fraud of the assignors and assignee. Locke, Attach. 522, § 240 and cases cited; Hutchinson v. Lord, Wis. 286: Bogert v. Phelps, 14 Wis, 95; Thayer v. Willet, 5 Bosw. 344, 354; Fallon v. McCunn, 7 Bosw. 141; Hall v. Stryker, 27 N.Y. 596, 600; Damon v. Bryant, 2 Pick. 411; Pratt v. Wheeler, 6 Gray, 520; Owen v. Dixon, 17 Conn. 492, 497, 498. The law itself is so framed that it does impair the obligation of contracts. Gilman v. Lockwood, 71 U. S. 4 Wall. 410 (18:432); Ogden v. Saunders, 25 U. S. 12 Wheat. 213 (6:606); Sturges v. Crowninshield, 17 U. S. 4 Wheat. 122 (4:529); Baldwin v. Hale, 68 U. S. 1 Wall. 223 (17:531). Mr. Ambrose N. Merrick, for defend ant in error: No federal question is involved. The constitutionality of the Minnesota Assignment or Bankrupt Act of 1881 has been sustained, not only by the Supreme Court of Minnesota, but also by the federal courts. Mather v. Nesbit, 13 Fed. Rep. 872; Weston v. Loyhed, 30 Minn. 222; Wendell v. Lebon, Id. 234; Sloane v. Chiniquy, 22 Fed. Rep. 213. This is a writ of error to the Supreme Court [491] of the State of Minnesota. The principal point raised by the assignments of error is that an Act of the Legislature of that State, approved March 7, 1881, chap. 148. is repugnant to the Constitution of the United States, so far as it affects citizens of States other than Minnesota. That statute provides that whenever the property of a debtor is seized by an attachment or execution against him he may make an assignment of all his property and estate not exempt by law for the equal benefit of all his creditors who shall file releases of their debts and claims, and his property shall be equitably distributed among such creditors. This is the only assignment of error (with the exception of one other, which will be considered farther on) that, by any fair construction, can be said to come within the jurisdiction of this court, though others are set out in the brief of counsel, relative to fraud in the assignment made by the debtors in this instance, which raise no federal question. The facts may be briefly stated as follows: on the 31st day of December, 1883, J. H. Purdy & Co. brought a suit in the Fourth Judicial District Court of Hennepin County, in the State of Minnesota, against Axel B. Van Norman and Gustave Van Norman, partners, under the firm name of Van Norman & Brother, and on the same day procured a writ of attachment to issue [492] in that suit, which was levied upon a part of the goods of the defendants. On the same day that firm made a deed of assignment to Charles C. Bennett, the present defendant in error, reciting the issue and levy of this attachment, and assigning to him "all the lands, tenements, hereditaments and appurtenances, goods, chattels, choses in action, claims, demands, property and effects of every description" belonging to them, wherever situated. The instrument also provided that the assignee was "to take possession of the property, and to sell and dispose of the same with all reasonable diligence, and to convert the same into money; and, also, to collect all such debts and demands hereby assigned as may be collectible, and with and out of the proceeds of such sales and collections to pay and discharge all the just and reasonable expenses, costs and charges of executing the assigument," including a reasonable compensation From the time of the execution and filing of the assignment by the Van Normans the prop-to the assignee for his services. erty was in custodia legis. Kingman v. Barton, 24 Minn. 295; Swart v. Thomas, 26 Minn. 143; Re Mann, 32 Minn. 60. Property in custodia legis could not be levied upon by the United States Marshal. Drake, Attach. §§ 251, 267, 5th ed.; Murfree, Sheriffs, § 269; Re Mann, 32 Minn. 60. The same contingency which would dissolve an attachment in the state court would also dissolve it under the federal laws. The assignment then directs the assignee to proceed as follows: "To pay and discharge in full, if the residue of said proceeds be sufficient for that purpose, all the debts and liabilities now due, or to become due, from said party of the first part to all their creditors who shall file releases of their debts and claims against the said party of the first part, as by law provided, together with all interest due, and to become due thereon; and if the residue of said proceeds shall not be sufficient to pay said debts and liabilities and interest in full, then to apply the same, so far as they will extend, to the payment of the said debts and liabilities and interest proportionably to their respective amounts, and in accordance with the statute in such case made and provided; and if, after payment of all the costs, charges and expenses attending the execution of said trust, and Mr. Justice Miller delivered the opinion of the payment and discharge in full of all the said the court: U. S. R. S. § 933; Mather v. Nesbit, 18 Fed. Rep. 872; Simon v. Mann, 33 Minn. 412; Wendell v. Lebon, 30 Minn. 240. The holding of the court that the defendant in error had mistaken his remedy in moving to dissolve the attachment is no bar to this action, Abbott, Tr. Ev. 830, § 11; Marsh v. Armstrong, 20 Minn. 81. lawful debts owing by the said party of the first part, there shall be any suplus of the said proceeds remaining in the hands of the party of the second part, then to repay such surplus to the party of the first part, their executors, ad ministrators, or assigns." It appears that the goods and chattels men493] tioned in this deed of trust were, under its authority, delivered to Bennett, the assignee, or partly so, the sheriff having closed the doors of the store in which they were situated, at the time that Denny, the plaintiff in error, seized them by virtue of a writ of attachment issued out of the Circuit Court of the United States for the District of Minnesota, of which he was marshal, in a suit brought by Lapp & Flershem against the firm of Van Norman & Brother. The latter action was also commenced on the 81st day of December, 1883. On January 21, 1884, after a refusal by the marshal to deliver the goods, Bennett, the assignee, made application in the United States Circuit Court to be made a party to the suit of Lapp & Flershem against Van Norman & Brother, and prayed for the dissolution of the attachment issued in favor of the plaintiffs therein. The court, on February 18, 1884, made the following order: "First. That Charles C. Bennett, assignee, do have, and he is hereby given, leave to intervene and become a party defendant herein. Second. That the motion to dissolve the attachment be, and the same is, hereby denied." Although the assignee was thus permitted to come in and be made a party, it is not shown that he ever did so, or ever appeared in the case after that time. [494] There is no further record in this case of any proceedings in the Circuit Court of the United States, nor in the action of Purdy & Co. v. Van Norman & Brother; but the transcript then proceeds with the suit brought by the assignee against the marshal, Henry R. Denny, in the nature of trover and conversion, for damages on account of his unlawful seizure of these same goods while they were in the hands of said assignee, and for a conversion of the same by his refusal to return them to plaintiff. This suit was decided in favor Bennett, the assignee, in the lower court, by a verdict of a jury; and upon the judgment being carried by a writ of error to the Supreme Court of the State of Minnesota it was there affirmed. In both of these courts the questions we have mentioned were raised by exceptions to the charge of the judge that the assignment was a valid one, and to the ruling that the decision of the Circuit Court of the United States on the motion to dissolve the attachment was not a bar to the present action by the assignee. case of no effect. But the doctrine has been long settled that statutes limiting the right of the creditor to enforce his claims against the property of the debtor, which are in existence at the time the contracts are made, are not void, but are within the legislative power of the States where the property and the debtor are to be found. The courts of the country abound in decisions of this class, exempting property from execution and attachment, no limit having been fixed to the amount-providing for a valuation at which alone, or generally two thirds of which, the property can be brought to a forced sale to discharge the debt-granting stays of execution after judgment, and in numerous ways holding that, as to contracts made after the passage of such laws, the legis lative enactments regulating the rights of the creditors in the enforcement of their claims are valid. These statutes, exempting the homestead of the debtor, perhaps with many acres of land adjoining it; the books and library of the professional man, the horse and buggy and surgical implements of the physician, or the household furniture, horses, cows and other articles belonging to the debtor, have all been held to be valid, without reference to the residence of the creditor, as applied to contracts made after their passage. The principle is well stated in the case of Edwards v. Kearzey, 96 U. S. 595 [24: 793] in the following language: "The inhibition of the Constitution is wholly prospective. The States may legislate as to contracts thereafter made, as they may see fit. It is only those in existence when the hostile law is passed that are protected from its effect." See also Mississippi & M. Railroad Company v. Rock, 71 U. S. 4 Wall 177 [18: 381]; Northwestern University v. People, 99 U. S. 309 [25: 387]; Knox v. Exchange Bank, 79 U. S. 12 Wall. 379 [20: 287, 414]. The doctrine was very early announced in the case of Wales v. Stetson, 2 Mass. 143; and in the separate opinion of Mr. Justice Story in Dartmouth College v. Woodward, 17 U. S. 4 Wheat. 518 [4: 629] decided in 1819, it was suggested that in a grant of a charter to a corporation a reservation of the right to repeal it would be valid. This has been acted upon, and such action has been held in many cases to be valid. The later case of Greenwood v. Union Freight Railroad Company, 105 U. S. 13 [26: 961] contains a review of this whole subject, so far as contracts are concerned. No reason has been suggested why the Legislature could not exempt all interests in landed The question of the invalidity of this Min- estate from execution and sale under judgnesota Statute, as it relates to the rights of ments against the owner, and perhaps all his creditors, is an interesting one. The argument personal property, However this may be, it in favor of that proposition is twofold: first, is very certain that the established construction that it impairs the obligation of contracts; and of the Constitution of the United States against second, that such a statute can have no extra-impairing the obligation of contracts requires territorial operation, aud cannot, therefore, be that statutes of this class shall be construed to binding on creditors living in a different State be parts of all contracts made when they are in from that of the debtor and of the situs of his existence, and therefore cannot be held to improperty. pair their obligation. With regard to the first of these it may be conceded that, so far as an attempt might be made to apply this statute to contracts in existence before it was enacted, it would be liable to the objection raised, and therefore in such a The Act in question in the present case does not exceed many of the class to which we have alluded in its effect in enabling the debtor to dispose of his property without regard to the ordinary judicial proceedings to subject it to [495] [496] [497] forced sale. The power is conceded, when not court in the cases of Sturges v. Crowninshield, It is not easy, then, to see how this statute can be more complained of as impairing the obligation of contracts than the statutes of exemption which we have already mentioned, and the principles which lie at the foundation of all voluntary assignments for the benefit of creditors with preferences that exhaust the fund assigned. But it is said in answer to this view of the subject that there is a clause in the instrument now before us directing that if there shall be a surplus after the payment in full of all the creditors who shall release the assignors it shall be paid over to the latter. There are two answers to this. If that clause or provision is unlawful and violates the laws of the State of Minnesota, or the Constitution of the United States, it can be rejected, and the remainder of the assignment permitted to stand. The statute under which the assignment was made does not require that such surplus shall be paid over to the debtors. The supreme court of that State has held that such a fund may be arrested when proper proceedings are had before it gets to the debtor's hands, and, certainly, wherever that surplus may be found, and however it may be got at by any of the processes of law, it is liable to be taken by the nonreleasing creditor. He can pursue all the remedies which the law gives him as against any fund, property, chose in action, or estate liable to the payment of his demand. But it is said that this Statute of Minnesota is void under the principles laid down by this "State Legislatures may pass insolvent laws, provided there be no Act of Congress establishing a uniform system of bankruptcy conflicting with their provisions, and provided that the law itself be so framed that it does not impair the obligation of contracts. Certificates of discharge, however, granted under such a law, cannot be pleaded in bar of an action brought by a citizen of another State in the Courts of the United States, or of any other State than that where the discharge was obtained, unless it appear that the plaintiff proved his debt against the defendant's estate in insolvency, or in some manner became a party to the proceedings. Insolvent laws of one State cannot discharge the contracts of citizens of other States; because such laws have no extraterritorial operation; and consequently the tribunal sitting under them, unless in cases where a citizen of such other State voluntarily becomes a party to the proceeding, has no jurisdiction of the cause.' This is conceived to be a clear and accurate presentation of the doctrine of the preceding cases, and it will be seen that the substance of the restrictive principle goes no farther that to prohibit or to make invalid the discharge of a debt held by a citizen of another State than that where the court is sitting, who does not appear and take part, or is not otherwise brought within the jurisdiction of the court [498] granting the discharge. In other words, whatever the court before whom such proceedings are had may do with regard to the disposition of the property of the debtor, it has no power to release him from the obligation of a contract which he owes to a resident of another State, who is not personally subjected to the jurisdiction of the court. Anyone who will take the trouble to examine all these cases will perceive that the objection to the extraterritorial operation of a state insolvent law is that it cannot, like the Bankrupt Law passed by Congress under its constitutional grant of power, release all debtors from the obligation of the debt. The authority to deal with the property of the debtor within the State, so far as it does not impair the obligation of contracts, is conceded; but the power to release him, which is one of the usual elements of all bankrupt laws, does not belong to the Legislature where the creditor is not within the control of the court. The Minnesota Statute makes no provision for any such release. The creditor who became such after the statute was passed cannot complain that the obligation of his contract is impaired, because the law was a part of the contract at the time he made it; nor can he say that his contract is destroyed and the debtor discharged from it, which is of the essence of a bankrupt law, because no such decree can Mr. Justice Harlan, dissenting: I cannot assent to a judgment of affirmance in this case. 1. The Statute of Minnesota of 1881, upon which the defendant in error rests his suit for damages, provides, among other things: "Whenever the property of any debtor is atThe other assignment of error, pressed by tached or levied upon by any officer, by virtue counsel for plaintiff in error, that the proceed- of any writ or process issued out of a court of ings in the Circuit Court of the United States, record of this State in favor of any creditor or in relation to the dissolution of the attachment garnishment made against any debtor, such and Bennett's becoming a party to the suit debtor may, within ten days after the levying there pending, are an estoppel of the claim of such attachment, process, or garnishment now set up by him, is not in our opinion entitled shall have been made, make an assignment of to much consideration. The order of the court all his property and estate, not exempt by law, in relation to that matter, above quoted, mere- for the equal benefit of all his creditors, in proly gave leave to the assignee to become a party portion to their respective valid claims, who to that suit, at the same time overruling the shall file releases of their debts and claims other branch of the motion asking for a disso- against such creditors as hereinafter provided lution of the attachment. It does not appear .. and, upon the making of such assign[499] by the record that Bennett ever did make him- ment, all attachments, levy or garnishment so self a party to that suit, and of course could be made shall be dissolved upon the appointment bound by no judgment rendered in regard to and qualification of an assignee or receiver; it. Even if he can be supposed to be a party, and thereupon the officers shall deliver the so far as the motion to dissolve the attachment property attached or levied upon to such asis concerned, we concur with the Supreme signee or receiver, unless the assignee shall, Court of the State of Minnesota (Bennett v. within five days after such assignment, file in Denny, 33 Minn. 530) in holding that "It was the office of the clerk of the court where such atmerely a decision of a motion or summary ap-tachment was issued or judgment was rendered plication, which is not to be regarded in the light of res adjudicata, or as so far conclusive upon the parties as to prevent their drawing the same matters in question again in the more regular form of an action." For this they cite the decisions of their own court. In aid of this view of the subject we may "It is by virtue of this seizure that the mar- It is therefore clear that the order of the The judgment of the Supreme Court of Minne- a notice of his intention to retain such attach- This statute did not operate to dissolve the A different construction is inadmissi' le upon other grounds. By the 10th section of the statute it is provided that "No creditor of any insolvent debtor shall receive any benefit under the provisions of this Act, or any payment of any share of the proceeds of the debtor's estate, unless he shall have first filed with the clerk of the district court, in consideration of the benefits of the provisions of this Act, a release to the debtor of all claims other than such as may be paid under the provisions of this Act, for the benefit of such debtor, and thereupon the court or judge may direct that judgment be [500] [501] |