THIS case came before the Court from the circuit court of the United States for the Maryland district. The action was instituted in the circuit court, on a bill of exchange, drawn on the 16th of March 1819, by the defendants, at Baltimore, on Stephen Dever at New Orleans, in favour of Rosewell L. Colt or order, of Baltimore, and by him indorsed, for value received, to the plaintiff, a citizen of New York.
A judgment was confessed by the defendants for $2,100, subject to the opinion of the court, upon a case stated; and which presented the question, whether the circuit court had jurisdiction in the case.
The defendants objected to the jurisdiction, on the ground that the bill was an inland, and not a foreign bill of exchange; and therefore, the defendants, and the drawee Rosewell L. Colt, being citizens of Maryland, although the bill was regularly in the hands of the plaintiff, as indorsee, who is a citizen of a different state, the circuit court had no cognizance of the claim.
The provision of the act of congress upon which the question arises, is in the 11th section of the 'act to establish the judicial powers of the courts of the United States,' passed September 24th, 1789. The words of the act are, 'nor shall any district or circuit court have cognizance of any suit to recover the contents of any promissory note, or other chose in action, in favour of an assignee; unless a suit might have been prosecuted in such court, to recover the said contents, if no assignment had been made; except in cases of foreign bills of exchange.'The judges of the circuit court divided in opinion on the question of jurisdiction, and ordered the record to be certified to this Court.
The case was argued by Mr Hoffman, for the defendants, no counsel appearing for the plaintiff.
He contended, 1. That in all cases of promissory notes, inland bills of exchange, and other choses in action, an assignee, or an indorsee, is incompetent to sue the maker in the courts of the United States, except where such suit might have been there prosecuted, had there been no assignment or indorsement; and that as the payee of this bill of exchange, when calling on the makers, must have resorted to the state tribunals, the indorsee must be referred to the same tribunals.
2. That this being a bill of exchange drawn within this union, and payable there, viz. between citizens of sister states, cannot be regarded as a foreign bill, within the sound interpretation of the 11th section of the judiciary act of 1789; but that it is an inland bill, which, like promissory notes, remains forever subject to state jurisdiction, though transferred to citizens of another state.
3. That congress did not design, by the exception contained in that section, to legislate in reference to citizens of the different states of this union, or to confer on the circuit courts a jurisdiction in regard to them, so as to comprehend in their favour as 'foreign bills,' those that should be drawn between citizens of sister states.
4. That congress used this expression in its popular sense, which, indeed, is the only one in which that body could have thus legislated; and that bills foreign to the union, viz. bills drawn in or on countries alien to the sovereignty of the United States, were the only foreign bills that either the policy, or the obvious meaning of the exception embraces.
5. That foreign countries, and foreign bills, are correlative expressions; whereas, no sister state is foreign to the union, nor is any sister state truly foreign to any other state of the union. Congress, therefore, when legislating in reference to jurisdiction, must have had that union and foreign states in its view; and designed to legislate under this exception only in reference to bills drawn in or on the union, but in or on any country other than one of the states of this union; they being in regard to the union itself one, and not foreign; and also, in regard to each other, not foreign either in a popular or strictly legal sense.
6. That the exception in regard to foreign bills was, perhaps. founded on the policy of extending to aliens, (who were most likely to become the holders of bills drawn here on foreign countries, or drawn in foreign countries on this) the benefit of the national tribunals; and was not designed to embrace citizens of different states, or to distinguish such bills from promissory notes, which remain with the state courts, though in the hands of citizens of different states. Such citizens, though bona fide indorsees, and for full value, being incompetent to sue makers in the federal courts, though they are competent to sue their own indorsers, because every indorsement is a new and independent contract, as between indorser and indorsee.
7. That the legal, no less than the popular understanding, has classed such bills under the head of inland; and that being the norma loquendi renders it highly probable that congress had no other bills in view, than such as are drawn in or on countries wholly foreign to the jurisdiction and sovereignty of this union.
8. That although most of the legislatures of the different states have allowed damages on the protest of bills drawn on sister states; yet nearly, without exception, the word 'inland' has been applied to such bills, and the word 'foreign' to those drawn in or on other countries.
For the popular and legal sense of the expression 'inland bills,' 4 Griffith's Law Register, 627. 699. 697. 799. 943. 1006. 1007. 1067. 1140.
9. The question is res nova in this Court, but has been the subject of judicial discussion in three instances, viz. in Millar vs. Hackley, 5 Johns. Rep. 375; and 1 S.C.. Const. Rep. 100; and in Lonsdale vs. Brown, 1821, before Mr Justice Washington(a).
Mr Hoffman stated that he was not informed, whether in this last case the point turned on the question of jurisdiction, or only on the necessity of protest, as was the case in two other cases. The case in New York holds such bills to be inland. But had the decisions in the state courts been uniformly otherwise, it is difficult to conceive how the states are to be regarded as foreign to each other in the national tribunals. A bill may well be foreign in the state courts, and inland in the federal courts; and the constitutionality of the very exception contained in the 11th section of the judiciary act, if designed to embrace within its jurisdiction bills between state and state, seems to have been doubted by Mr Justice Story in 1 Mason, 251. But if this point be waived, the only inquiry is as to the probable intention of congress; which, the plaintiff contends, was to embrace only such bills as are drawn between countries actually foreign to each other. Chancellor Kent, in his Commentaries, Vol. III. p. 63, inclines to the opinion that bills between the states of the union are foreign in all courts; but the point of protest appears to have mainly occupied the mind of the learned writer; and the question of jurisdiction, arising from the sound construction of the act of congress, does not specially claim his attention.
Mr Justice WASHINGTON delivered the opinion of the Court.
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