JOHN CLAY, PLAINTIFF IN ERROR
v.
ABRAHAM SMITH
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In this case, a Kentucky creditor sought to recover a debt from a Louisiana debtor who claimed discharge under Louisiana's state bankruptcy law in 1811, after voluntarily submitting to the state court proceedings and having his creditors vote for his release. The Supreme Court held that by voluntarily participating in the Louisiana state bankruptcy proceedings, the out-of-state creditor had waived his immunity from those proceedings and was bound by the state court's judgment discharging the debtor, thereby reversing the lower court's judgment in favor of the creditor.
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Mr Justice Johnson delivered the opinion of the Court;
This case comes up from the Louisiana district, by" writ of error, to reverse a judgment obtained ,there by Smith vs. Clay.
Smith, is a citizen of Kentucky; and Clay, of Louisiana; and the action was brought td recover a debt incurred in the year 1808.
Clay?s defence rests upon the validity of a discharge obtained in a court of the state, under a law?of-the state, in the year 1811. The plea sets out his petition to the court ; his surrender of his .effects; the schedule of his debts, in which Smith’s debt is specified, as also the payment to hirn of ten per cent, the ^dividend declared by the assignees of the bankrupt; and the judgment of the court, rendered in pursuance of the consent of more than a majority of his creditors in number and amount, that he be discharged, “as well his person as his future effects, from' all the claims of his creditors.” The language of the plea is, “ upon which said petition, the usual proceedings being had thereon, the said plaintiff and other creditors, and said defendant being parlies thereto, the said Supreme court by their final decree pronounced, in the premises, on the 15th of June *1811, declared the sáid defendant, as well his person as his subsequently acquired property and effects, for ever.released from all claims, debts, and demands,” &c. previously due.
This plea is demurred to, and thus the. question is raised, whether Smith, by voluntarily making himself party to such proceedings, has not abandoned his extra-territorial immunity from the operation of the bankrupt laws of Louisiana.
We are of opinion that he did; and was bound by the decision of the state cc art to the same extent to which the citizens of that state were bound.
Judgment reversed.
Case remanded, with instructions to enter judgment for defendant there. And in consequence of the death of Clay, while thé cause was held under.advisement, tha.t it be entered, nunc pro tunc, as on the first day of this term.
This cause came on to be heard on the transcript of the record from the district cour,t of the United States for the district of Louisiana, and Was argued hy counsel j on consideration whereof, it is ordered and adjudged by this court, that the judgment of the said district court in this cause be* and the same is hereby reversed, and that the cause be, and thé same is remanded to the said district court, with instructions to the said court to enter judgment for John Clay, the defendant in said court. And it is further ordered by the court,' that in consequence of the death of the said Clay, -while this cause was held under advisement, that judgment' be entered, nunc pro tunc, as on the first day of this term.
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Joseph Rosenheim & Co. v. Hinton V. Morrow, 37 Fla. 183 (Fla. 1896)…ting a dividend thereunder, the non-resident creditor subjects his claim to'the jurisdiction of the law, and is bound by the debtor’s discharge thereunder, so that his debt is barred thereby. Sturges vs. Crowninshield, 4 Wheat. 122 ; Clay vs. Smith, 3 Pet. 411 ; [*189] Baldwin vs. Hale, 1 Wall. 223; Denny vs. Bennett, 128 U. S. 489, 9 Sup. Ct. Rep. 134 ; Hawley vs. Hunt, 27 Iowa, 303, S. C. 1 Am. Rep. 273; Van Hook vs. Whitlock, 26 Wend. 43, S. C. 37 Am. Dec. 246 ; Springer vs. Foster, 2 Story (C. C.), 38…
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Eustis v. Bolles, 150 U.S. 361 (U.S. 1893)…ject it and [*369] rely upon his right to enforce his- debt against his debtors notwithstanding their discharge. In its discussion of this question the court below cited and claimed to follow the decision of this court in the case of Clay v. Smith, 3 Pet. 411, where..it was held that the plaintiff, by proving his debt and taking a dividend under the ' bankrupt laws of Louisiana, waived his right to object that the law did not constitutionally apply to his debt, he being a creditor residing in another Sta…
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Cole v. Cunningham, 133 U.S. 107 (U.S. 1890)…have no extra-territorial operation,, and the tribunal administering it would have no jurisdiction over citizens, of other States. . But this objection would not lie where such citizens had become parties to 4he proceedings. Hence in Clay v. Smith, 3 Pet. 411, it was held, where a citizen of Kentucky sued a citizen of Louisiana, and the defend- • ant pleaded his discharge by the bankrupt law of Louisiana, that the plaintiff, who had received a dividend on his debt deelared by the assignees of the defenda…
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