Mechanics' & Farmers' Bank of Albany: Appeal from Probate , 31 Conn. 63 ( 1862 )

Dutton, J.

John T. Norton of Farmington assigned his property for the benefit of 1ns creditors. Commissioners were appointed, and the appellants presented a claim to them which was secured by a mortgage of real estate situated in Albany in the state of New York. As the law stood when the presentment was made, the appellants were entitled to have their whole claim allowed without any deduction for the security which they held in the state of New York, the property mortgaged not being a part of the assigned estate, and so not coming within the provisions of the 19th section of the insolvent act. While the allowance of the claim was pending before the commissioners, the legislature of this state passed an act extending the provisions of this section “ to any and all securities by mortgage or otherwise, held by any creditor for any claim presented by him against any estate in settlement under the provisions of said act.” Acts of 1861, chap. 67, p. 99. The commissioners then allowed the claim of the appellants, but reported the value of the security held by them, and thereupon the court of probate ordered a dividend on only the balance of their claim. This appeal was taken from this decree of the court of probate. During its pendency the act of 1862 was passed, making the provisions of the statute of 1861 more explicit, but excepting from its operation any estate then in progress of settlement, and then by a separate section repealing the act of 1861. Acts of 1862, ch. 54, p. 48.

It is now insisted by the appellants,

1. That the statute of 1861 does not apply to their claim.

2. That if it does apply, its operation would be to deprive them of vested rights, and that it is therefore unconstitutional.

3. That if it did, when enacted, apply to their claim, it has since been repealed, and they have been restored to their original rights.

As to the first claim, we think it clear that the commissioners had the right to estimate the value of the appellants’ mortgage, and that the judge of probate did right, supposing the law to be constitutional, in limiting the dividend to the balance. The appellants insist that this would be giving to the act a retrospective operation, which is contrary to the general policy of the law.

The question is one merely of construction. What is the fair import of the language of the statute ? It is urged that its meaning is the same as if it had read, “ any estate that shall hereafter be in settlement.” What propriety is there in interpolating these words ? The expression “ estate in settlement ” is not of itself ambiguous. The terms are broad enough to include estates then in settlement, as well as future ones. The presumption is that if the legislature had intended to limit the operation of these words, it would have done it by explicit language. Further, the apparent object of the law of 1861 was to supply an omission iri the law of 1853, and assuming for the purposes of this question that there was no constitutional objection in the way, why should not the law be made applicable to estates then in settlement ? The evil existed in those cases as much as it would in subsequent ones.

The appellants insist that this case comes within the principle laid down in the case of Plumb v. Sawyer, 21 Conn., 351. That case arose under a statute that provided that under certain circumstances real estate conveyed to a feme covert, should be held by her to her sole and separate use. The question was, whether this statute should apply to real estate which had been conveyed before the statute was passed. The court take the ground, that the statute ought not to be regarded as applying to conveyances already made, giving a new effect to such conveyances. The legislature could not have intended to interfere with the rights of parties where those rights had become already vested, and as the expression “ conveyed ” may apply only to future instruments, it ought to apply to them alone. In that case it was immaterial whether the law should be considered as applicable to past conveyances or not, for it could not be contended that the legislature could, by a mere statute, deprive a husband of a life estate in his wife’s land which had already accrued to him. There are however considerations arising from that statute itself, and from another passed at the same session, which lead to the conclusion that the former was not intended to apply to past conveyances. The language used is that the conveyances referred to “ shall be held ” — relating to future enjoyment and impliedly to future instruments. The court in giving their opinion in Plumb v. Sawyer, allude to the other statute, which regarded márried women, in which the legislature use the terms “ has been or shall be,” showing that they had in mind the distinction of past and future, and the inference is, that in the statute which they were construing, the future only was intended.

There is an obvious distinction between giving a new effect to already executed instruments, and regulating the future proceedings of courts. The main ground of objection in the present case is, that it 'is giving a retrospective operation to the statute. But this is an unfounded assumption. The statute does not, if applicable to estates in settlement at the time of its passage, affect any past proceedings. It merely directs what shall be thereafter done.

The only really important question in the case is yet to be considered. The construction of the statute, whether prospective or retrospective, is of little importance, provided its operation would be to impair vested rights. If the statute was clearly retrospective, and if the appellants have such vested rights as they claim, which would be unjustly affected, we should not hesitate to declare it unconstitutional. The appellants claim that by the deed of assignment they have a security to the extent of a dividend on the whole of their claim, as fully as if the debtor had convened a piece of property to a third person to secure his indebtedness to them. This claim is founded on a total misapprehension of an assignment for the benefit of creditors under the laws of this state. The object of the statute on the subject is to place all property so assigned in the custody of the law, to be disposed of according to law-Even the assignee in the conveyance has no vested right. He is the mere agent of the law. He is bound to comply with the orders of the judge of probate. He is liable to be removed, and then the title, without any act of his, passes to the trustee who is appointed in his place. If the debtor does not make an assignment voluntarily, he can, if actually insolvent, be compelled to go into insolvency. • The property is then by act of law vested in a trustee. His interests, rights and duties are the same as if he had received an assignment and proceeded under it. This shows beyond a question that such a trustee is the mere agent of the law. The debtor has no agency in the subsequent proceedings. Now it would hardly be claimed that any particular creditor has a vested interest in property so conveyed by law to a trustee. But it would be equally unreasonable to claim that there is any difference in a creditor’s rights, between the case of a debtor voluntarily making an assignment and that of his being driven into insolvency by his creditors. The law in both cases takes care of the interests of creditors, without requiring any thing to be done on their part except presenting and proving their claims. The statutes on the subject are strictly remedial, providing for the appropriation of the debtor’s property, on principles of equality and justice, among all his creditors. Where the law, out of mere regard to the rights of creditors and for the purpose of doing them equal justice, volunteers to aid them inv the collection of their debts, it would be most unreasonable to allow some of them to insist upon applying strict technical rules in their favor to the prejudice of others. The nature of the case does not admit of any such application. These laws are like all laws of a general character, liable to be changed from time to time to accomplish the object in view and subserve more fully the ends of justice.

The distinction between laws affecting vested rights and those varying remedies for enforcing such rights, is as well settled as any thing in the law. Remedial laws must necessarily be subject to the action of the legislature, even where they apply to antecedent rights, or great injustice would often be done. Otherwise the effect of hasty or injudicious legislation would, though highly injurious to the community, be irremediable. The present case furnishes an apt illustration. Suppose that this debtor, previous to 1853, when the insolvent act was passed, had owed a large number of his townsmen for labor and articles of food, to whom he had given no security, although in the possession of abundant property, in view of which they had given him credit; and suppose he had also at the same time owed 'this debt to the appellants, securing them with property in the state of New York, which they at the time regarded as sufficient to protect them from loás. Before the act of 1853 was passed he could, although insolvent, have secured his home creditors with his property here, doing equal justice to them and the appellants. Then the legislature interferes, and prescribes what alone he can do, but inconsiderately gives an undue advantage to the New York creditor. The legislature, from the best of motives, has undertaken to provide a new remedy for the evil of withdrawing property from the reach of creditors and an unequal distribution of it. It has by an oversight caused the injustice. Gan it not correct the error and rectify the evil ? Can it not amend such a remedial statute, so as to accomplish the beneficent object which it had in view ? The appellants proceed upon the ground that, as soon as the assignment was made, they had a right to such a portion of the assets as the settlement of the estate under the law as it then stood would give them. Let us see to what consequences this would lead. Any material change of the law, such as increasing the fees of the judge of probate, or of the commissioners, or allowing a greater sum for the support of the family, or a greater percentage to the debtor, or extending the time for exhibiting claims, would or might diminish this portion. Every change in the law would on this supposition make a distinction in the settlement of estates commenced before and after the passage of the law making such change. Such a principle applied to remedial laws would be intolerable. Every person therefore who makes a contract, or takes a conveyance, or becomes interested in one, is presumed to give his assent to such further remedial laws affecting his interests as the legislature may think proper to pass:

If there could be a serious doubt in the mind of any one that the statute in question is remedial, it must be removed by the consideration that it is repealable, and if repealed the creditor would be left without any means of enforcing his supposed vested rights. Of what use would it be to him, without any commissioners to allow his claim, or any authority in the judge of probate to declare a dividend, or to order it to be paid ?

It is especially just that the appellants should be governed by this rule. They are inhabitants of the state of New York, and as such have an advantage as to real estate situated there over the creditors here. The legislature of this state can not regulate the disposition of that property so as to give the home creditors an opportunity to share in it. When the creditors in that state therefore come into this to avail themselves of our laws, it is manifestly just that they should consent to be put on an equality with the citizens of this state. In the settlement of the estate of deceased persons, the courts of a state, not the place of domicil of the deceased, will not allow his assets found within the state to be withdrawn, to the prejudice of his creditors in that state. The creditors in the place of his domicil have at least an equal right to be protected against a priority in favor of foreign creditors.

The case of Hine v. Belden, 27 Conn., 384, furnishes a strong precedent in favor of the constitutionality of remedial statutes, and also as to applying them to proceedings pending at the time of the passage of the law. In that case the question was whether a statute, providing that all proceedings brought to obtain the forfeiture of liquors, under the act of 1854 for the suppression of intemperance, “ shall be held to be proceedings in rem, and shall be proceeded with as civil and not as criminal proceedings,” should affect a case previously brought and then pending. The justice before whom the suit was brought was absent on the return day. If it was a criminal suit no further proceedings could have been had. If it was a civil suit, the justice could within twenty days notify the parties and proceed as by adjournment. (Rev. Stat., tit. 5, § 73.) The statute was passed before the time for giving notice, if it was a civil suit, had passed. The justice gave the notice and proceeded to render judgment in the case. This court held that a case then pending was a case “ brought,” and that the statute made it a civil case, whether it was one before or not, and that proceedings thereafter had as in a civil •case were valid. In the case of Taylor v. Keeler, this court held recently, that the statute of 1859, regarding costs, applied to cases then pending. 30 Conn., 324. In all such cases a party would have certain privileges by virtue of an existing statute, which he would regard as valuable, and which he might lose by a repeal or alteration of the statute. These however are never regarded as vested rights. No jurist would deny that the law forbidding imprisonment for debt, discharged at once from gaol all debtors confined on execution, although the creditor would thereby be deprived, not only of that means of forcing the debtor to pay the debt, but also of the prospect of obtain ing the cost which he had incurred in the attempt. So a new statute of limitations may be made to apply to claims which would, by the law then existing, have a longer or shorter time to run. Even legal rights, when founded in the omission or mistake of officers of the law, as in the case of quieting acts, are subject to the action of the legislature. The principle which lies at the foundation of these cases, applies with peculiar force to cases where, as in the present one, the right claimed was a mere boon, which the party had no right to demand, and for which he parted with no valuable consideration.

The appellants claim still further, that if the law of 1861 was applicable to this estate, the law of 1862 restored their claim to its former condition.

We are satisfied, however, that this act does not affect this estate, as it was then in progress of settlement, and thei'e is an express proviso that the act shall not be applied to or affect such estates. This provision covers the second section, which repeals the law of 1861, as well as the first. The object of the whole law manifestly is to enlarge, and not contract, the provisions of the law of 1861.

We therefore advise the superior court that there is no error in the decree of the prohate court appealed from, and that it should be affirmed.

In this opinion the other judges concurred.