Mr,. Justice Miller
delivered the opinion of the court.
This is a writ of error to the Supreme Court of the State of Minnesota.
The principal point raised by the assignments of error is, that an act of the legislature of that State, approved March 7, 1881, c. 148,. Laws of 1881, p. 193, is repugnant to the Constitution of the United States so far as it affects citizens of States other than Minnesota. That statute provides that whenever the property of a debtor is seized by an attachment or execution against him he may make an assignment of all his property and estate, not exempt by law, for the equal benefit of all his creditors who shall file releases of their debts and claims, and his property shall be equitably distributed among such creditors.
This is the only assignment of error, with the exception of one other, which will be considered farther on, that, by any fair construction, can be said to come within the jurisdiction of this court, though others are set out in the brief of counsel, relative to fraud in the assignment made by the debtors in this instance, which raise no Federal question.
The facts may be briefly stated as follows: On the 31st day of December, 1883, J. H. Purdy & Co. brought a suit in the Fourth Judicial District Court of Hennepin County, in the State of Minnesota, against Axel B. Yan Norman and Gustave Yan Norman, partners, under the firm name of Yan Norman & Brother, and on the same day procured a writ of attachment to issue in that suit, which was levied upon a part of the goods of the defendants. On the same day that firm made a deed of assignment to' Charles 0. Bennett, the present defendant in error, reciting the issue and levy of this attachment, and assigning to him " all the lands, tenements, hereditaments and appurtenances, goods,- chattels, choses in action, claims, deynands, property and effects of every description," belonging to them wherever situated. The instrument also provided that the assignee was " to take possession of the property, and to sell and dispose of the same with all reasonable diligence, .and to convert the same into money; and, also, to collect all . such debts and demands hereby assigned as may be collectible, and with and out of the proceeds of such sales and collections to pay and discharge all the just and reasonable expenses, costs and charges of executing the assignment," including a reasonable compensation to the assignee for his services.
The assignment then directs the assignee to proceed as follows :
" To pay and discharge in full, if the residue of said proceeds'be sufficient for that purpose, all the debts and liabilities now due, or to become due, from said party of the first part to all their creditors who shall file releases of their debts and claims against the said party of the first part, as by law provided, together with all interest due, and to become due thereon ; and if the residue of said proceeds shall not be sufficient to pay said debts and liabilities and interest in full, then to. apply the same, so far as they will extend, to the payment of the said debts and liabilities and interest proportionably to their respective amounts, and in accordance with the statute in such case, made and provided; and if, after payment of all the costs, charges and expenses attending the execution of said trust, and the payment and discharge in full of all the said lawful debts owing by the said party .of the first part, there shall be any surplus of the said proceeds remaining in the hands of the party of the, second part, then to repay such surplus to the party of the first part, their executors, administrators, or assigns."
It appears that the goods and chattels mentioned in this deed of trust were, under its authority, delivered to Bennett, the assignee, or partly so, the sheriff having closed the doors of the store in which they were situated, at the time that Denny, the plaintiff in error, seized them by virtue of a Writ of attachment issued out of the Circuit Court of the United States for the District of Minnesota, of which he was marshal, in a suit brought by Lapp. & Flershem against the firm of Yán Norman & Brother. The latter action was also commenced on the 31st day of December, 1883. On January 21, 1884, after a refusal by the marshal to- deliver the goods, Bennett, the assignee, made application to the United States Circuit Court, to be made a party to the suit of Lapp •& Flershem against Yan Norman & Brothér, and prayed for the dissolution of the attachment issued in favor of the plaintiffs therein. The court, on February 18, 1884, made the following order: "First. That Charles C. Bennett, assignee, do have, and he is hereby given, leave to intervene ánd' become a party defendant herein. Second. That the motion to dissolve the attachment be, and the same is, hereby denied." Although the assignee was thus permitted to come in and be made a party, it is not shown that he ever did so,' or ever appeared in the case after that time.
There is no further-record in this case of -any proceedings in the Circuit Court of the United States, nor in the action of Purdy & Co. v. Van Norman & Brother, but the transcript then proceeds with the suit brought by the assignee against the marshal, Henry R. Denny, in the nature of trover and conversion, for damages on account of his unlawful-seizure of these same goods while they were in the hands of said assignee, and for a conversion of the same by his refusal to return them to plaintiff. This suit was decided in favor of Bennett, the assignee, in the lower court, by a verdict of a jury, and upon the judgment being carried by a writ of error to the Supreme Court of the State of Minnesota it was there affirmed. -In both of these courts the questions we have mentioned were raised by exceptions to the charge of the judge that the assignment was a valid one, and to the ruling that the decision of the Circuit Court of the United States on the motion to dissolve the attachment was not a bar to the present action by the assignee.
' The question of the invalidity of this Minnesota statute, as it. relates to the rights of creditors, is an interesting one. .The argument in favor of that proposition is twofold. First, that it impairs the obligation of contracts; and, second, that such a statute can have no extraterritorial operation, and oannot, therefore, be binding on creditors living in á different State from that of the debtor and of the situs of his property.
With regard to the first of these it may be conceded that, so far -as-ian attempt might be made to' apply this statute to contracts in existence before it was enacted, it would be liable to the objection raised,'and ^therefore in such, a case of no effect. But the doctrine has been long settled that statutes limiting the right of the creditor to enforce his claims against the property of the' debtor, which are in existence at the time the' contracts .are made, are not void, but are . within the legislative power of the States where the property and the debtor are to be found. The courts of the country abound in decisions of this class, exempting property, from execution and attachment, no limit having been fixed'to the amount — providing for a valuation at which alone, or generálLy two-'thirds of which, the property can be brought to a forced sale 'to discharge the debt — granting stays of execution after judgment, and in numerous ways holding that, as to contracts made after the passage of such laws, the legislative enact- ' inents regulating 'the rights of the, creditors in the enforcement of their claims are valid. These statutes, exempting the homestead of the debtor,, perhaps with many acres -of .land adjoining it, the bool^s and library of the professional man,.- the horse and buggy and surgical implements of the. physician, or the household furniture, horses, cows, and. other articles belonging to the debtor, have all'been held to be valid, without reference to the 'residence of the creditor, as applied to contracts made after their passage.
The principle is well stated in the case of Edwards v. Kearney, 96 U. S. 595, 603, in the following, language:
" The inhibition, of the Constitution is wholly prospective. The States may legislate as to contracts thereafter made,, as they may see fit. It is only those in existence when the hostile law is passed that are protected from its éffeet"."
See also Railroad Co. v. Rock, 4 Wall. 177 ; University v. People, 99 U. S. 309; Knox v. Exchange Bank, 12 Wall. 379.
The doctrine was very early announced in the case of Wales v. Stetson, 2 Mass. 143; and" in the separate opinion of Mr. Justice Story in Trustees of Dartmouth College v. Woodward, 4 Wheat. 518, 666, decided in 1819, it was suggested thát in a grant of a charter to a corporation a reservation of the right' to repeal it would be valid. This has been acted upon, and such action has been held in many cases to be valid.
The later case of Greenwood v. Freight Co., 105 U. S. 13, contains a review of this whole subject, so far as contracts are concerned.
No reason has been suggested why the legislature could not exempt all interests in landed estate from execution and salé under judgments against the owner, and perhaps all his personal property. However this may be, it is very certain that" the established construction of the Constitution of the United States against impairing the obligation of contracts requires that statutes of this class shall be construed to be parts of all contracts- made when they are in existence, and therefore cannot be held to impair their obligation.
The act in question in the present case does not exceed many of the class to which we have alluded in its effect in enabling the debtor to dispose of his property without regard to the ordinary judicial -proceedings to subject it to forced sale. The power is conceded, when not forbidden by the statutes of a State, to a failing debtor to make a general assignlnent of his property for the benefit of his creditors, as this one' does.' It is further admitted that in such an assignment, if there be nothing fraudulent otherwise, he can prefer some creditors over others, and that he can secure to some payment in. full, while he leaves others who will certainly get nothing out of his estate. When this is done, the creditors who are not provided for in the assignment, are left in a worse condition' than they are where it is done under the present Taw, because in the first instance they would certainly get nothing out of the debtor's property, though they would retain a right to proceed against him by a judgment and execution; while in the present case they have the option of pursuing that course, or of coming in with the other creditors, executing releases, and obtaining their share of the property assigned. Here, instead of naming the preferred creditors, the assignor gives his property to all who will execute a release of their claims against him. -Nobody is required by the statute to do so unless he thinks it is to his interest. The creditor who executes such a release gets his share of the property assigned, while the one who does not receives nothing, unless there may be a surplus left after the payment of the releasors; but he is not hindered or delayed in obtaining a judgment against the debtor, or in levying upon any other property, if such can be found, not conveyed by the instrument, or upon any afterwards acquired by the debtor. The latter remains liable, notwithstanding this statute and this assignment, as he always was, for the debt of the non-assenting creditor.
It is not easy, then, to see how this statute can be more complained of as impairing the obligation of contracts than the statutes of exemption which we have already mentioned, and the principles which lie at the' foundation of all voluntary assignments for the benefit of creditors with preferences that exhaust the fund assigned.
• But it is said in answer to this view of the subject that there is a clause in the instrument now before us directing that if there shall be a surplus after the payment in full of all the creditors who shall release the assignors, it shall be paid over to the latter. There are two answers to this. If that clause or provision is unlawful and violates .the laws of the State of .Minnesota, or the Constitution of the" United States, it can be rejected, and the- remainder of the assignment permitted to stand. The statute under which the assignment ifás made does not require that such surplus shall .be paid over to the debtors. The Supreme Court of that State lias held that such a fund -may be arrested, when proper'proceedings are had, before it gets to the debtor's hands; and, certainly, wherever that surplus may be found, and however it may be got at by any of the processes of law, it is liable to be taken by the non-releasing creditor. He can pursue all the remedies which the law gives him as against any fund, property, chose in action, or estate liable to the payment of his demand.
But it is said that this statute of Minnesota is void under the principles laid down by this court in the cases of Sturges v. Crowninshield, 4 Wheat. 122; Ogden v. Saunders, 12 Wheat. 213; Baldwin v. Hale, 1 Wall. 223, and Gilman v. Lockwood, 4 Wall. 409. The proposition lying at the foundation of all these decisions is, that a statute of a State, being without force ' in any other State, cannot discharge a debtor from a debt held by a citizen of such other State. One of the best statements of the doctrine is found in the following language used in the latest case on the subject, that of Gilman v. Lockwood, supra.
" State legislatures may pass insolvent laws, provided there be no act of Congress establishing a uniform system of bankruptcy conflicting with their provisions, and provided that the law itself be so framed that it does not impair the obligation of contracts. Certificates of discharge, .however, granted under such a law, cannot be pleaded in bar of an action brought by a citizen of another State in.the courts of the United States, or' of any other State than that where the discharge was obtained, unless it appear that the plaintiff proved his debt against the defendant's estate in insolvency, or in some manner became a party to the proceedings. Insolvent laws of one State cannot discharge -the contracts of citizens of other States; because such laws have no extraterritorial operation, and consequently the tribunal sitting under them, unless in cases where a citizen of such other State voluntarily becomes a party to the proceeding, has no jurisdiction of the cause."
This is conceived to be a clear and accurate presentation of the doctrine of the preceding cases, and it will be seen that the substance of the restrictive principle goes no farther'than to prohibit, or to make invalid, the discharge of a debt held by a citizen of another State than that where the court is sitting, who does not appear and take part, or is not otherwise brought within the jurisdiction of the court granting the discharge. In other words, whatever the court before whom such proceedings are had may do with regard to the disposition of the property of the debtor, it has no power to1 release him from the obligation of a contract which he owes to a resident of .another State, who is not personally subjected to the jurisdiction of the court. Any one who will take the trouble to examine all these cases will perceive that the objection to the extraterritorial operation of a state insolvent law is, that it cannot, like the bankrupt law passed by Congress under its constitutional grant of power, release all debtors from the obligation of the debt. The authority to deal with the property of the debtor within the State, so far as it does not impair the obligation of contracts, is conceded, but the power to-release him, which is one of the usual elements of all bankrupt laws, does not belong to the legislature where the creditor is not within the control' of the court.
The Minnesota statute makes no provision for any such release. The creditor who became such after the statute was passed cannot complain that the obligation of his contract is impaired, because the law was a part of the contract at the time he made it, nor can he say that his contract is destroyed and the debtor discharged from it, which is of the essence of a bankrupt law, because no such decree can be made by the court, neither does the.law have any such effect, though the obligation of the debtor to pay may be cancelled or discharged by the voluntary act of the creditor who makes such release for a consideration which to him seems to be sufficient.
The other assignment of error, pressed by counsel for plaintiff in error, that the proceedings in the Circuit Court of the United States, in relation to the dissolution of the attachment and Bennett's becoming a party to the suit there pending, are an estoppel of the claim now set up by' him, is not in our opinion entitled to much consideration. The- order of the court in relation to that matter, above quoted, merely gave leave to the assignee to become a party to that suit, at the same time overruling the other branch of the motion asking. for a dissolution of the attachment. It does not appear by the record that Bennett ever did make himself a party to that suit, and of course could be bound by no judgment rendered .in regard to it. Even if he can be supposed to be a party, so far as the motion to dissolve the. attachment is concerned, we concur with the Supreme Court of the State of Minnesota, Bennett v. Benny, 33 Minnesota, 530, in holding that " it was • merely a decision of a motion or summary application, which is not to be regarded in the light of res adjudicata, or as so far conclusive upon the parties as to prevent their drawing the same' matters in question again in the more regular form of an action." For this they cite the decisions of their own court.
In aid of this view of the subject we may also refer to.the opinion of Judge Nelson in deciding the motion to dissolve. After reciting the circumstances under which that motion was made, he said:
" It is by virtue of this seizure that the marshal holds the property. On this statement of the facts I shall not decide on this motion who has the better title and right to the possession of the property taken. . . . The writ of attachment properly issued in this suit against the debtor, and if the marshal has seized the property which belonged to Bennett, he is certainly liable'in an action of trespass for the damages thereby sustained." Lapp v. Van Norman, 19 Fed. Rep. 406. See Buck v. Colbath, 3 Wall. 334.
It is therefore clear that the order of the judge refusing to dissolve the attachment was not predicated upon any decision as to the right of the possession of the property, but that he' intended to leave the marshal liable to the present action, if the facts justified the. claim of the assignee. Apart from this, we are not at all satisfied that the effect of this action of the Circuit Court on the suit afterwards brought by the assignee in the state court is a question of Federal cognizance.- Its. decision, as shown by the opinion of Judge Nelson, was not based upon any law or principle of Federal jurisprudence, and must have rested upon the general rules which govern the con-elusiveness of former judicial proceedings when called in question in another case.
- The judgment of the Supreme Gourt of Minnesota is affirmed