Ogden v. Saunders - 25 U.S. 213 (1827)
U.S. Supreme Court
Ogden v. Saunders, 25 U.S. 12 Wheat. 213 213 (1827)
Ogden v. Saunders
25 U.S. (12 Wheat.) 213
A bankrupt or insolvent law of any state which discharges both the person of the debtor and his future acquisitions of property is not "a law impairing the obligation of contracts" so far as respects debts contracted subsequent to the passage of such law in those cases where the contract was made between citizens of the state under whose laws the discharge was obtained and in whose courts the discharge may be pleaded.
The power given to the United States by the Constitution, "to establish uniform laws on the subject of bankruptcies throughout the United States" is not exclusive of the right of the states to legislate on the same subject except when the power is actually in exercise by Congress and the laws of the state are in conflict with the law of the United States.
But when in the exercise of that power the states pass beyond their own limits and the rights of their own citizens and act upon the rights of citizens of other states, there arise a conflict of sovereign power and a collision with the judicial powers granted to the United States which render the exercise of such a power incompatible with the rights of other states and with the Constitution of the United States.
This was an action of assumpsit, brought in the court below
by the defendant in error, Saunders, a citizen of Kentucky, against the plaintiff in error, Ogden, a citizen of Louisiana. The plaintiff below declared upon certain bills of exchange drawn on the 30 September, 1806, by one Jordan, at Lexington, in the State of Kentucky, upon the defendant below, Ogden, in the City of New York, the defendant then being a citizen and resident of the State of New York, accepted by him at the City of New York and protested for nonpayment.
The defendant below pleaded several pleas, among which was a certificate of discharge under the act of the Legislature of the State of New York of April 3, 1801, for the relief of insolvent debtors, commonly called the Three-Fourths Act.
The jury found the facts in the form of a special verdict, on which the court rendered a judgment for the plaintiff below, and the cause was brought by writ of error before this Court.
The learned judges delivered their opinions as follows: