McDougall v. Page. In this connection we refer to M'Menomy v. Murray, and remark that that case is reconcilable with Murray v. De Rottenham, only on the ground that in the former the chancellor was speaking of an absolute discharge, effective everywhere, as distinguished from a mere denial of remedy to foreign creditors in the courts of the country granting the discharge. In Pattison v. Wilbur, 10 R. I. 448, effect was given to an American certificate against foreign creditors, on the authority of Penniman v. Mergs, Murray v. De Rottenham, and In re Zarega, 4 Law Reporter, 480 (A. D. 1842), which last case we have not seen. But this court has held in Bedell v. Scruton, 54 Vt. 493, that a discharge under our insolvent law is no bar to a suit brought here for the enforcement of a debt contracted in this State by a person resident here to a person resident in New Hampshire, who did not prove his debt in insolvency, nor in any way become a party to the proceedings. And this is now the well-settled doctrine, even though the contract by its terms is to be performed in the State where the discharge is granted. Baldwin v. Hale, 1 Wall. 223; Kelly v. Drury, 9 Allen, 27. But it is said that these cases, and especially the cases in the Supreme Court of the United States, go upon constitutional rather than jurisdictional grounds. And this is true to some extent. But some of them do not discuss, and none of them exclude, the non-jurisdictional ground, while many of them go solely upon that ground. Thus in Baldwin v. Hale, “ Insolvent laws of one State cannot discharge the contracts of citizens of other States, because they have no extra-territorial operation, and consequently the tribunal sitting under them, unless in cases where a citizen of such other State voluntarily becomes a party to the proceedings, has no jurisdiction in the case. Legal notice cannot be given, and consequently there can be no legal default." In Bedell v. Scruton, this court said that it was a question of citizenship, and that State courts and State laws are powerless to affect the rights of non-resident creditors by any jurisdiction they may have or exercise over the person of the debtor or by any proceedings in rem affecting the debt. In Hawley v. Hunt, 27 Iowa, 303, Judge DILLON says: "A creditor cannot be compelled by a State of which he is not a citizen or resident to become a party to insolvency proceedings therein. Such proceedings are judicial in their nature, so that jurisdiction over the person of the creditor is McDougall v. Page. essential. Notice is requisite to jurisdiction in such cases, and can no more be given in insolvency proceedings than in personal actions when the party to be notified resides out of the State; and hence a discharge under a State insolvent law will not and cannot discharge a debt due to a citizen of another State, unless the latter appears and voluntarily submits to the jurisdiction of the court by becoming a party to the proceedings or claiming a dividend thereunder." In Pratt v. Chase, 44 N. Y. 597; s. c., 4 Am. Rep. 718, it is said that as to creditors of the insolvent who are not citizens of the same State where the discharge is granted, the want of binding force to defeat the obligation of a contract is founded upon want of jurisdiction over such creditors." The question of waiver of extra-territorial immunity by suing in the courts of this State, although not expressly ruled in Bedell v. Scruton, was directly involved in it, and that decision amounts to an absolute denial of any such waiver. But that question was expressly ruled in Soule v. Chase, 39 N. Y. 342, in these words : "The plaintiff in the case before us being a non-resident when the debt was incurred and when the insolvent proceedings were commenced, was not divested of his extra-territorial immunity by resorting to a court of this State, and the discharge is not available against him." HUNT, C. J., however dissented and said all there is to be said on the other side. In Kelley v. Drury, 9 Allen, 27, it is said: "This court has not been disposed to make any discrimination in favor of our citizens in proceedings against them in the State courts in distinction from proceedings in the courts of the United States." In a very recent case in Maine, Hills v. Carlton, 74 Me. 156, this point is ruled thus: "This debt not being discharged, the plaintiffs have an equal right to enforce the payment of their debt with other citizens having claims to enforce. The courts in the cases cited like the present have held that a discharge shall not be a bar. An absolute discharge of a debt, and a prohibition against all remedies for its enforcement, would seem to differ little in their consequences to the creditor. The discharge affords no defense to the plaintiff's claim." But it is said that while this may be true as to discharges granted under State insolvent laws, it is not true as to discharges granted under the National Bankrupt Act. But wherein lies the distinction in principle? But it is said that under the National Bankrupt Act all creditors, foreign as well as domestic, are to be notified. But of VOL. XLV-77 McDougall v. Page. what avail is notice to foreign creditors? They are beyond the jurisdiction, and out of reach of process. Are their debts to be invalidated by the judgment of a court that has neither jurisdiction of them nor of their debts? If so, upon what principle? Judge STORY, in Reimsdyk v. Kane, 1 Gal. 371, says: "The general rule is, that a discharge of a contract according to the lex loci contractus 18 good everywhere. The rule is founded upon public convenience and the comity of nations. It would seem to follow from the same principle that a discharge under the municipal laws of a foreign State should not affect the validity of such a contract." And he goes on to say: "I cannot but presume that the judicial tribunals of Rhode Island, in all cases where a different rule were not prescribed by their own legislature, would adopt the jus gentium as to the construction and validity of foreign contracts sought to be enforced by their process. If therefore the words of the act of insolvency do not necessarily extend, as I think they do not, to foreign contracts, I can entertain no doubt that they would adjudge them according to that equity which the usage of nations had settled and applied. I hold it to be a legitimate inference from doctrines already established, that a contract made in a foreign country, and to be governed and discharged by its laws, cannot be discharged by a mere regulation of another country to which the parties have not bound themselves to submit. * * A discharge under an insolvent act goes au fonds to the merits and not à l'ordre judiciaire to the process or remedy." The distinction as to the forum in which the party elects to institute his action may be very material in regard to all that is mere remedy. But when the question goes to the merits, the lex loci should govern, unless the lex fori expressly forbids it. The rule is thus stated in the very recent case of Pritchard v. Norton, 106 U. S. 124: "The principle is, that whatever relates to the remedy and constitutes part of the procedure is determined by the law of the forum, for matters of process must be uniform in the courts of the same country; but whatever goes to the substance of the obligation and affects the rights of the parties as growing out of the contract itself or inhering in it or attaching to it is governed by the law of the contract." There is no express prohibition in the law of this State nor of the United States forbidding the lex loci to govern, and we fail to see on what principle these cases should be excepted from the general rule. We think McDougall v. Page. the principle of the case in 54th Vt. and other similar cases is decisive of the cases before us in favor of the plaintiffs; that that principle is as applicable to a discharge in bankruptcy as to a discharge in insolvency. And this was the opinion of the late Chief Justice REDFIELD, as shown in his note to Baldwin v. Hale, 3 Am. Law Reg. (N. S.) 470, wherein he says: "The contrast between State insolvent laws and a general bankrupt law of the United States consists chiefly in this, that one is confined to the particular State, and the other operates throughout the Nation. And one residing without the State, having a claim against the debtor who has obtained his discharge under the insolvent laws of a State, stands in the same relation to the discharge that a foreign resident does to a discharge obtained under a general bankrupt law." We regard this as sound doctrine, and fully in accord with fundamental principles of the law, from which no departure should be made. Though this precise question does not appear to have been ruled by the Supreme Court of the United States, we think it safe to say that no decision of that court gives countenance to a contrary doctrine. Judge WHEELER has favored us with the statement of a case that came before Judge BLATCHFORD in the early part of 1878, which involved the question of jurisdiction over foreign creditors. A firm in New York was composed of residents of New York and a resident of Canada. The Canadian member was indebted to other residents of Canada, and the firm was indebted to residents of New York. The Canadian creditors came into New York and attached the property of the Canadian member of the firm there. Proceedings in bankruptcy were instituted against the firm in season to avoid the attachment, provided there could be an adjudication of bankruptcy, and such proceedings would reach the property of the individual partners as well as of the firm. U. S. Rev. Stats., § 5121. The Canadian creditors appeared and objected to an adjudication of bankruptcy of the firm, or of any more than the resident members of it, on the ground that there was no jurisdiction of the Canadian member. The resident creditors insisted that the court had jurisdiction of the firm as such, and of these Canadian creditors, because they had come into the jurisdiction and appeared as parties to the proceedings. To this latter claim it was replied that they did not appear to participate in the proceedings nor the avails thereof, but only to Clark v. Downing. object to having the property involved on which they had claims. Judge BLATCHFORD held that the court had no jurisdiction of the Canadian partner nor of the Canadian creditors, either on account of their coming into the jurisdiction to attach the property of that partner, or of their appearing as parties to the proceedings for the purpose of objecting to an adjudication that would involve the property they had attached, and the adjudication was limited accordingly. In the cases at bar, the court granting the discharge in bankruptcy had jurisdiction neither of the plaintiffs nor of their debts. The obligatory force of said debts therefore is in nowise impaired by said discharge in the country where they were contracted and payable. There is no express, and we think no implied, enactment, State or National, forbidding the courts of this State to afford the plaintiffs a remedy for the enforcement of their debts here. A discharge under bankrupt or insolvent laws, unlike the bar of statutes of limitations, goes to the merits and not to the process or remedy. The jus gentium privatum is, that contracts valid in the place where they are made and to be performed are to be held valid everywhere, by the tacit or implied assent of the parties (Pritchard v. Norton), a rule founded not only in the convenience but the necessities of nations. On what principle then shall we refuse these plaintiffs a remedy in our courts? Judgments reversed, and judgments on the reports for the plaintiffs. Judgment accordingly. ROYCE, C. J., and REDFIELD, J., dissented. A It may be an assault to strike a horse which another is driving.* SSAULT and battery. The head-note and opinion show the point. The defendant had judgment below. See State v. Martin (85 N. C. 508), 39 Am. Rep. 711, and note, 712. |