Statement by Mr. Justice SHIRAS: On February 14, 1887, Charles H. Bolles and George F. Wilde, as surviving members of the firm of B. Collender & Co., filed a petition in insolvency in the insolvency court within and for the county of Suffolk, state of Massachusetts. On February 16, 1887, they filed in the same insolvency court a written proposal for composition with their copartnership creditors, under the so-called 'composition acts' of 1884 and 1885, and they therein proposed to pay 50 cents on the dollar of their debts in money. On February 24, 1887, the first meetings of creditors were held in both the ordinary insolvency proceedings, which were begun on February 14th, and in the composition proceedings, which were begun on February 16th; and William T. Eustis proved a claim on a promissory note for $16,000, dated January 1, 1880, and due on demand, and voted for assignees in the ordinary insolvency proceeding, but the record does not show that he proved his claim in the composition proceedings. On March 10, 1887, an adjourned hearing in the composition proceedings was held, in the insolvency court, to determine whether said proposal for composition should be confirmed; and Eustis appeared by counsel at said hearing, and opposed the confirmation of said proposal, and the granting of a discharge to said Bolles and Wilde, on the ground that the said composition acts were unconstitutional and void. Eustis also filed written objections to the discharge of the debtors, alleging that the composition acts, having been passed after the execution and delivery of the note held by Eustis, were in violation of that part of the constitution of the United States which forbids any state to pass a law impairing the obligation of contracts.
Bolles and Wilde, having filed in the insolvency court the written assent of a majority in number and value of their creditors who had proved their claims, and having deposited in court one-half the aggregate amount of their debts, were granted by the court, on March 31, 1887, certificates of discharge under and in pursuance of the composition acts. On May 14, 1887, Eustis received the sum of $8,020, being one-half the amount of his claim, and signed a receipt therefor, reciting that it was 'according to the composition confirmed by the court in the case.' All the other creditors of said Bolles and Wilde accepted the offer, and signed similar receipts.
Subsequently, in July, 1887, Eustis brought an action in the supreme judicial court against Bolles and Wilde, wherein he sought to recover the balance of his note remaining unpaid after the receipt of the one-half received under the insolvency proceedings. The defendants pleaded the proceedings in insolvency, their offer of composition, its acceptance by the majority in number and value of their creditors, their discharge, and the acceptance by Eustis of the amount coming to him under the offer of composition, and to this answer the plaintiff demurred. Subsequently, the death of William T. Eustis was suggested, and Isabel B. Eustis and Florence D. Eustis were permitted to appear and prosecute said action as executrices.
The trial court, which overruled the demurrer, made a finding of facts, and reported the case for the determination of the full court. The supreme judicial court was of opinion that Eustis, by accepting the benefit of the composition, had waived any right that he might otherwise have had to object to the validity of the composition statutes as impairing the obligation of contracts. 146 Mass. 413, 16 N. E. Rep. 286. Final judgment was entered for the defendants on November 26, 1889, and on January 29, 1890, a writ of error was allowed by the chief justice of the supreme judicial court to this court.
W. A. McLeod and Conrad Reno, for plaintiffs in error.
[Argument of Counsel from pages 364-366 intentionally omitted]
J. B. Richardson and E. B. Hale, for defendants in error.
Mr. Justice SHIRAS, after stating the case as above reported, delivered the opinion of the court.