POWER OVER NATURALIZATION AND BANKRUPTCY.
§ 1097. The next clause is, that congress "shall
have power to establish an uniform rule of naturalization, and uniform laws on
the subject of bankruptcies throughout the United States."
§ 1098. The propriety of confiding the
power to establish an uniform rule of naturalization to the national government
seems not to have occasioned any doubt or controversy in the convention. For
aught that appears on the journals, it was conceded without objection.
1 Under the confederation, the states
possessed the sole authority to exercise the power; and the dissimilarity of the
system in different states was generally admitted, as a prominent defect, and
laid the foundation of many delicate and intricate questions. As the free
inhabitants of each state were entitled to all the privileges and immunities of
citizens in all the other states, 2 it
followed, that a single state possessed the power of forcing into every other
state, with the enjoyment of every immunity and privilege, any alien, whom it
might choose to incorporate into its own society, however repugnant such
admission might be to their polity, conveniences, and even prejudices. In effect
every state possessed the power of naturalizing aliens in every other state; a
power as mischievous in its nature, as it was indiscreet in its actual exercise.
In one state, residence for a short time might, and did confer the rights of
citizenship. In others, qualifications of greater importance were required. An
alien, therefore, incapacitated for the possession of certain rights by the laws
of the latter, might, by a previous residence and naturalization in the former,
elude at pleasure all their salutary regulations for self-protection. Thus the
laws of a single state were preposterously rendered paramount to the laws of all
the others, even within their own jurisdiction. 3
And it has been remarked with equal truth and justice, that it was owing to mere
casualty, that the exercise of this power under the confederation did not
involve the Union in the most serious embarrassments. 4
There is great wisdom, therefore, in confiding to the national government the
power to establish a uniform rule of naturalization throughout the United
States. It is of the deepest interest to the whole Union to know, who are
entitled to enjoy the rights of citizens in each state, since they thereby, in
effect, become entitled to the rights of citizens in all the states. If aliens
might be admitted indiscriminately to enjoy all the rights of citizens at the
will of a single state, the Union might itself be endangered by an influx of
foreigners, hostile to its institutions, ignorant of its powers, and incapable
of a due estimate of its privileges.
§ 1099. It follows, from the very nature of
the power, that to be useful, it must be exclusive; for a concurrent power in
the states would bring back all the evils and embarrassments, which the uniform
rule of the constitution was designed to remedy. And, accordingly, though there
was a momentary hesitation, when the constitution first went into operation,
whether the power might not still be exercised by the states, subject only to
the control of congress, so far as the legislation of the latter extended, as
the supreme law; 5 yet the power is now
firmly established to be exclusive. 6
The Federalist, indeed, introduced this very case, as entirely clear, to
illustrate the doctrine of an exclusive power by implication, arising from the
repugnancy of a similar power in the states. "This power must necessarily
be exclusive," say the authors; "because, if each state had power to
prescribe a distinct rule, there could be no uniform rule." 7
§ 1100. The power to pass laws on the
subject of bankruptcies was not in the original draft of the constitution. The
original article was committed to a committee together with the following
proposition: "to establish uniform laws upon the subject of bankruptcies,
and respecting the damages arising on the protest of foreign bills or exchange."
The committee subsequently made a report in favour or incorporating the clause
on the subject or bankruptcies into the constitution; and it was adopted by a
vote or nine states against one. 8 The
brevity, with which this subject is treated by the Federalist, is quite
remarkable. The only passage in that elaborate commentary, in which the subject
is treated, is as follows: "The power of establishing uniform laws or
bankruptcy is so intimately connected with the regulation of commerce, and will
prevent so many frauds, where the parties or their property may lie, or be
removed into different states, that the expediency of it seems not likely to be
drawn in question." 9
§ 1101. The subject, however, deserves a
more exact consideration. Before the adoption of the constitution the states
severally possessed the exclusive right as matter belonging to their general
sovereignty, to pass laws upon the subject of bankruptcy and insolvency.
10 Without stopping at present to
consider, what is the precise meaning of each of these terms, as
contradistinguished from the other; it may be stated, that the general object of
all bankrupt and insolvent laws is, on the one hand, to secure to creditors an
appropriation of the property of their debtors pro tanto to the
discharge of their debts, whenever the latter are unable to discharge the whole
amount; and, on the other hand, to relieve unfortunate and honest debtors from
perpetual bondage to their creditors, either in the shape of unlimited
imprisonment to coerce payment of their debts, or of an absolute right to
appropriate and monopolize all their future earnings. The latter course
obviously destroys all encouragement to industry and enterprize on the part of
the unfortunate debtor, by taking from him all the just rewards of his labour,
and leaving him a miserable pittance, dependent upon the bounty or forbearance
of his creditors. The former is, if possible, more harsh, severe, and
indefensible. 11 It makes poverty and
misfortune, in themselves sufficiently heavy burthens, the subject or the
occasion of penalties and punishments. Imprisonment, as a civil remedy, admits
of no defence, except as it is used to coerce fraudulent debtors to yield up
their present property to their creditors, in discharge of their engagements.
But when the debtors have no property, or have yielded up the whole to their
creditors, to allow the latter at their mere pleasure to imprison them, is a
refinement in cruelty, and an indulgence of private passions, which could hardly
find apology in an enlightened despotism; and are utterly at war with all the
rights and duties of free governments. Such a system of legislation is as
unjust, as it is unfeeling. It is incompatible with the first precepts of
Christianity; and is a living reproach to the nations of christendom, carrying
them back to the worst ages of paganism. 12
One of the first duties of legislation, while it provides amply for the sacred
obligation of contracts, and the remedies to enforce them, certainly is, pari
passu, to relieve the unfortunate and meritorious debtor from a slavery of
mind and body, which cuts him off from, a fair enjoyment of the common benefits
of society, and robs his family of the fruits of his labour, and the benefits of
his paternal superintendence. A national government, which did not possess this
power of legislation, would be little worthy of the exalted functions of
guarding the happiness, and supporting the rights of a free people. It might
guard against political oppressions, only to render private oppressions more
intolerable, and more glaring.
§ 1102. But there are peculiar reasons,
independent of these general considerations, why the government of the United
States should be entrusted with this power. They result from the importance of
preserving harmony, promoting justice, and securing equality of rights and
remedies among the citizens of all the states. It is obvious, that if the power
is exclusively vested in the states, each one will be at liberty to frame such a
system of legislation upon the subject of bankruptcy and insolvency, as best
suits its own local interests, and pursuits. Under such circumstances no
uniformity of system or operations can be expected. One state may adopt a system
of general insolvency; another, a limited or temporary system; one may relieve
from the obligation of contracts; another only from imprisonment; another may
adopt a still more restrictive course of occasional relief; and another may
refuse to act in any manner upon the subject. The laws of one state may give
undue preferences to one class of creditors, as for instance, to creditors by
bond, or judgment; another may provide for an equality of debts, and a
pro ratâ without distinction among all. One may prefer creditors
living within the state to all living without; securing to the former an entire
priority of payment out of the assets. Another may, with a more liberal justice,
provide for the equal payment of all, at home and abroad, without favour or
preference. In short, diversities of almost infinite variety and object may be
introduced into the local system, which may work gross injustice and inequality,
and nourish feuds and discontents in neighbouring states. What is here stated,
is not purely speculative. It has occurred among the American states in the most
offensive forms, without any apparent reluctance or compunction on the part of
the offending state. There will always be found in every state a large mass of
politicians, who will deem it more safe to consult their own temporary interests
and popularity, by a narrow system of preferences, than to enlarge the
boundaries, so as to give to distant creditors a fair share of the fortune of a
ruined debtor. There can be no other adequate remedy, than giving a power to the
general government, to introduce and perpetuate a uniform system.
§ 1103. In the next place it is clear, that
no state can introduce any system, which shall extend beyond its own territorial
limits, and the persons, who are subject to its jurisdiction. Creditors residing
in other states cannot be bound by its laws; and debts contracted in other
states are beyond the reach of its legislation. It can neither discharge the
obligation of such contracts, nor touch the remedies, which relate to them in
any other jurisdiction. So that the most meritorious insolvent debtor will be
harassed by new suits, and new litigations, as often as he moves out of the
state boundaries. 14 His whole property
may be absorbed by his creditors residing in a single state, and he may be left
to the severe retributions of judicial process in every other state in the
Union. Among a people, whose general and commercial intercourse must be so
great, and so constantly increasing, as in the United States, this alone would
be a most enormous evil, and bear with peculiar severity upon all the commercial
states. Very few persons engaged in active business will be without debtors or
creditors in many states in the Union. The evil is incapable of being redressed
by the states. It can be adequately redressed only by the power of the Union.
One of the most pressing grievances, bearing upon commercial, manufacturing, and
agricultural interests at the present moment, is the total want of a general
system of bankruptcy. It is well known, that the power has lain dormant, except
for a short period, ever since the constitution was adopted; and the excellent
system, then put into operation, was repealed, before it had any fair trial,
upon grounds generally believed to be wholly beside its merits, and from causes
more easily understood, than deliberately vindicated. 15
§ 1104. In the next place, the power is
important in regard to foreign countries, and to our commercial credits and
intercourse with them. Unless the general government were invested with
authority to pass suitable laws, which should give reciprocity and equality in
cases of bankruptcies here, there would be danger, that the state legislation
might, by undue domestic preferences and favours, compel foreign countries to
retaliate; and instead of allowing creditors in the United States to partake an
equality of benefits in cases of bankruptcies, to postpone them to all others.
The existence of the power is, therefore, eminently useful; first, as a check
upon undue state legislation; and secondly, as a means of redressing any
grievances sustained by foreigners in commercial transactions.
§ 1105. It cannot but be matter of regret,
that a power so salutary should have hitherto remained (as has been already
intimated) a mere dead letter. It is extraordinary, that a commercial nation,
spreading its enterprise through the whole world, and possessing such an
infinitely varied, internal trade, reaching almost to every cottage in the most
distant states, should voluntarily surrender up a system, which has elsewhere
enjoyed such general favour, as the best security of creditors against fraud,
and the best protection of debtors against oppression.
§ 1106. What laws are to be deemed bankrupt
laws within the meaning of the constitution has been a matter of much forensic
discussion and argument. Attempts have been made to distinguish between bankrupt
laws and insolvent laws. For example, it has been said, that laws, which merely
liberate the person of the debtor, are insolvent laws, and those, which
discharge the contract, are bankrupt laws. But it would be very difficult to
sustain this distinction by any uniformity of laws at home or abroad. In some of
the states, laws, known as insolvent laws, discharge the person only; in others,
they discharge the contract. And if congress were to pass a bankrupt act, which
should discharge the person only of the bankrupt, and leave his future
acquisitions liable to his creditors, there would be great difficulty in saying,
that such an act was not in the sense of the constitution a bankrupt act, and so
within the power of congress. 16 Again;
it has been said, that insolvent laws act on imprisoned debtors only at their
own instance; and bankrupt laws only at the instance of creditors. But, however
true this may have been in past times, as the actual course of English
legislation, 17 it is not true, and
never was true, as a distinction in colonial legislation. In England it was an
accident in the system, and not a material ground to discriminate, who were to
be deemed in a legal sense insolvents, or bankrupts. And if an act of congress
should be passed, which should authorize a commission of bankruptcy to issue at
the instance of the debtor, no court would on this account be warranted in
saying, that the act was unconstitutional, and the commission a nullity.
18 It is believed, that no laws ever
were passed in America by the colonies or states, which had the technical
denomination of "bankrupt laws." But insolvent laws, quite
co-extensive with the English bankrupt system in their operations and objects,
have not been unfrequent in colonial and state legislation. No distinction was
ever practically, or even theoretically attempted to be made between
bankruptcies and insolvencies. And an historical review of the colonial and
state legislation will abundantly show, that a bankrupt law may contain those
regulations, which are generally found in insolvent laws; and that an insolvent
law may contain those, which are common to bankrupt laws. 19
§ 1107. The truth is, that the English
system of bankruptcy, as well as the name, was borrowed from the continental
jurisprudence, and derivatively from the Roman law. "We have fetched,"
says Lord Coke, "as well the name, as the wickedness of bankrupts, from
foreign nations; for banque in the French is mensa, and a
banquer or eschanger is mensarius; and route is a sign or mark,
as we say a cart route is the sign or mark, where the cart hath gone.
Metaphorically it is taken for him, that hath wasted his estate, and removed his
bank, so as there is left but a mention thereof. Some say it should be derived
from banque and rumpue, as he that hath broken his bank or
state. 20 Mr. Justice Blackstone
inclines strongly to this latter intimation, saying, that the word is derived
from the word
bancus, or banque, which signifies the table or counter of a
ruptus, broken; denoting thereby one, whose shop or place of trade is
broken and gone. It is observable, that the first statute against bankrupt, is
'against such persons, as do make bankrupt,' (34 Hen. 8, ch. 4,) which is a
literal translation of the French idiom, qui font banque route."
§ 1108. The system of discharging persons,
who were unable to pay their debts, was transferred from the Roman law into
continental jurisprudence at an early period. To the glory of Christianity let
it be said, that the law of cession (cessio bonorum) was introduced by
the Christian emperors of Rome, whereby, if a debtor ceded; or yielded up all
his property to his creditors, he was secured from being dragged to gaol, omni
quoque corporali cruciatu semoto; for as the emperor (Justinian) justly
observed, inhumanum erst spoliatum fortunis suis in solidum damnari;
22 a noble declaration, which the
American republics would do well to follow, and not merely to praise. Neither by
the Roman, nor the continental law, was the cessio bonorum confined to
traders, but it extended to all persons. It may be added, that the cessio
bonorum of the Roman law, and that, which at present prevails in most parts
of the continent of Europe, only exempted the debtor from imprisonment. It did
not release or discharge the debt, or exempt the future acquisitions of the
debtor from execution for the debt. The English statute, commonly called the "Lords'
Act," went no farther, than to discharge the debtor's person. And it may be
laid down, as the law of Germany, France, Holland, Scotland, and England, that
their insolvent laws are not more extensive in their operation, than the cessio
bonorum of the civil law. In some parts of Germany, we are informed by
Huberus and Heineccius, a cessio bonorum does not even work a discharge
of the debtor's person, and much less of his future effects. 23
But with a view to the advancement of commerce, and the benefit of creditors,
the systems, now commonly known by the name of "bankrupt laws," were
introduced; and allowed a proceeding to be had at the instance of the creditors
against an unwilling debtor, when he did not choose to yield up his property;
or, as it is phrased in our law, bankrupt laws were originally proceedings in
invitum. In the English system the bankrupt laws are limited to persons, who
are traders, or connected with matters of trade and commerce, as such persons
are peculiarly liable to accidental losses, and to an inability of paying their
debts without any fault of their own. 24
But this is a mere matter of policy, and by no means enters into the nature of
such laws. There is nothing in the nature, or reason of such laws to prevent
their being applied to any other class of unfortunate and meritorious debtors.
§ 1109. How far the power of congress to
pass uniform laws on the subject of bankruptcies supersedes the authority of
state legislation on the same subject, has been a matter of much elaborate
forensic discussion. It has been strenuously maintained by some learned minds,
that the power in congress is exclusive of that of the states; and, whether
exerted or not, it supersedes state legislation. 27
On the other hand, it has been maintained, that the power in congress is not
exclusive; that when congress has acted upon the subject, to the extent of the
national legislation the power of the states is controlled and limited; but when
unexerted, the states are at liberty to exercise the power in its full extent,
unless so far as they are controlled by other constitutional provisions. And
this latter opinion is now firmly established by judicial decisions.
28 As this doctrine seems now to have
obtained a general acquiescence, it does not seem necessary to review the
reasoning, on which the different opinions are founded; although, as a new
question, it is probably as much open to controversy, as any one, which has ever
given rise to judicial argumentation. But upon all such subjects it seems
desirable to adopt the sound practical maxim, Interest reipublicĉ, ut
finis sit litium.
§ 1110. It is, however, to be understood,
that although the states still retain the power to pass insolvent and bankrupt
laws, that power is not unlimited, as it was before the constitution. It does
not, as will be presently seen, extend to the passing of insolvent or bankrupt
acts, which shall discharge the obligation of antecedent contracts. It can
discharge such contracts only, as are made subsequently to the passing of such
acts, and such, as are made within the state between citizens of the same state.
It does not extend to contracts made with a citizen of another state within the
state, nor to any contracts made in other states. 29
1. Journ. of Convention, 220, 257. —
One of the grievances stated in the Declaration of Independence was, that the
king had endeavoured to prevent the population of the states by obstructing the
laws for naturalization of foreigners.
2. The Confederation, art. 4.
3. The Federalist, No. 42.
5. Collet v. Collet, 2 Dall. R.
294; United States v. Villato, 2 Dall. 270; Sergeant on Const. Law, ch.
28, [ch. 30, 2d. edit.]
6. See The Federalist, No. 32, 42; Chirac
v. Chirac, 2 Wheat. R. 259, 269; Rawle on the Const. ch. 9, p. 84, 85 to 88;
Houston v. Moore, 5 Wheat. R. 48, 49; Golden v. Prince, 3 Wash.
Cir. Ct. R. 313, 322; 1 Kent's Comm. Lect. 19, p. 397; 1 Tuck. Black. Comm. App.
255 to 259; 12 Wheat. R. 277, per. Johnson J.; but see Id. 307, per Thompson J.
- A question is often discussed under this head, how far a person has a right to
throw off his national allegiance, and to become time subject of another
country, without the consent of his native country. This is usually denominated
the right of expatriation. It is beside the purpose of these Commentaries to
enter into any consideration of this subject, as it does not properly belong to
any constitutional inquiry. It may be stated, however, that there is no
authority, which has affirmatively maintained the right, (unless provided for by
the laws of the particular country,) and there is a very strong current of
reasoning on the other side, independent of the known practice and claims of the
nations of modern Europe. See Rawle on the Constitution, ch. 9, p. 85 to 101;
Sergeant on Const. Law, oh. 98, [ch. 30.]; 2 Kent's Comm. Lect. 25, p. 35 to 42.
7. The Federalist, No. 32.
8. Journ. of Convention, 220, 305. 320,
9. The Federalists No. 42.
10. Sturgis v. Crowninshield, 4
Wheat. R. 122, 203, 204; Rawle on the Constitution, ch. 9, p. 101, 102.
11. See 1 Tuck. Black Comm. App. 259.
12. See 2 Black. Comm. 471, 472, 473.
See also 1 Tuck. Black. Comm. App. 259.
13. See Mr. Justice Johnson's Opinion in
Ogden v. Saunders, 12 Wheat. R. 274, 275.
14. 2 Kent's Comm. Lect. 37, p. 323,
324: Sergeant on Const. Law, ch. 28, [ch. 30;] Mr. Justice Johnson in 12 Wheat.
R. 273 to 275.
15. See the Debate on the Bankrupt Bill
in the House of Representatives in the winter session of 1818; Webster's
Speeches, p. 510, &c. — It is matter of regret, that the learned mind
of Mr. Chancellor Kent should have attached so much importance to a hasty, if
not a petulant, remark of Lord Eldon on this subject. There is no commercial
state in Europe, which has not, for a long period, possessed a system of
bankrupt or insolvent laws. England has had one for more than three centuries.
And at no time have the parliament or people shown any intention to abandon the
system. On the contrary, by recent acts of parliament, increased activity and
extent have been given to the bankrupt and insolvent laws. It is easy to
exaggerate the abuses of the system, and point out its defects in glowing
language. But the silent and potent influences of the system in its beneficent
operations are apt to be overlooked, and are rarely sufficiently studied. What
system of human legislation is not necessarily imperfect? Yet who would, on that
account, destroy the fabric of society? — 2 Kent's Comm. Lect. 37, p. 321
to 324, and note (b) id. (2d edit. p. 391, 392.)
16. Sturgis v. Crowninshield, 4
Wheat. R. 122, 194, 202.
17. It was not true in England at the
time of the American revolution; for under the insolvent act, commonly called
the "Lords' Act of 32 Geo. 2, ch. 28," the creditors of the insolvent
were equally with himself entitled to proceed to procure the benefit of the act
ex parte. See 3 Black. Comm. 416, and note 3 of Mr. Christian. The present
system of bankruptcy in England has been enlarged, so as now to include
voluntary and concerted cases of bankruptcy. And the insolvent system is applied
to all other imprisoned debtors, not within the bankrupt laws. See Petersdorft's
Bankrupt and Insolvent.
18. Sturgis v. Crowninshield, 4
Wheat. R. 122, 194.
19. Sturgis v. Crowninshield, 4
Wheat R. 122, 194, 198, 203; 2 Kent's Comm. Lect. 37, p. 321, &c.;
20. 4 Inst. ch. 63.
21. 2 Black. Comm. 472, note; Cooke's
Bankr. Laws, Introd. ch. 1.— The modern French phrase in the Code of
Commerce is la banqueroute. "Tout commerçant failli, &c.
est en etat de banqueroute." Art. 438.
22. 2 Black. Comm. 472, 473; Cod. Lib.
7, tit, 71, per totum, Ayliffe's Pandects, B. 4 tit. 14.
23. 1 Kent's Comm. Lect. 19, p. 336; 1
Domat, B. 4, tit. 5, § 1, 2.
24. 2 Black. Comm. 473, 474.
25. See Debate on the Bankr. Bill in the
House of Representatives, Feb. 1818, 4 Elliot's Debates, 282 to 284. —
Perhaps as satisfactory a description of a bankrupt law, as can be framed, is,
that it is a law for the benefit and relief of creditors and their debtors, in
cases, in which the latter are unable, or unwilling to pay their debts. And a
law on the subject of bankruptcies, in the sense of the constitution, is a law
making provisions for cases of persons failing to pay their debts. An amendment
was proposed by the state of New-York to the constitution at the time of
adopting it, that the power of passing uniform bankrupt laws should extend only
to merchants and other traders; but it did not meet general favour.
26. Journal of Convention, Supplement,
27. See Golden v. Prince, 3
Wash. Circ. R. 313; Ogden v. Saunders, 12 Wheat. R. 264, 267 to 270, per
Washington J. It is well known, that Mr. Justice Washington was not alone in the
Court in this opinion in the original case, (Sturgis v. Crowninshield, 4
Wheat. R. 122,) in which it was first decided.
28 Sturgis v. Crowninshield, 4
Wheat. R. 122, 191 to 196; Id. 198 to 202;
Ogden v. Saunders, 12 Wheat. R. 273, 275, 280, 306, 310, 314, 335, 369.
29. Ogden v. Saunders, 12 Wheat.
R. 122, 369; Boyle v. Zacharie, 6 Peters's R. 348; 2 Kent. Comm. Lect.
37, p. 323, 324; Sergeant on Const. Law, ch. 28, p. 309, [.ch. 30, p. 322;]
Rawle on the Constitution, ch. 9, p. 101, 102.
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