By far the majority of court cases were over debt. Until the mid-1800’s banks were few, so most borrowing and lending was between private citizens. Cash-poor local economies relied on barter and credit among neighbors. Promissory notes secured individual loans, while book accounts tracked regular business interactions. When notes went unpaid or accounts didn’t balance, people used the courts to collect. Debt cases are full of details about rural and small town livelihoods and relationships. The stakes were higher than being branded a local deadbeat: for much of the 19th century a debtor could be imprisoned in Vermont.
Promissory notes usually covered transactions between individuals. But notes could also be sold and exchanged, forming a web of financial relationships. When one creditor called out an overdue note the whole system could crash. Notes were often paid in goods or services rather than cash. A winning plaintiff would receive a writ of execution for the amount of the debt plus court costs. The sheriff could attach the debtor’s property to turn over to the creditor, or to sell to generate payment.
An 1809 case illustrates both cascading debt and the effects of the despised 1807-1809 trade embargo with Great Britain and France. Hezekiah Smith of New Hampshire was pressed by Massachusetts creditors. He had given a note on a loan due from Ephraim Brewster of Vermont to Reuben Grout, who sued Brewster. Smith apologized to his friend for the lawsuit, lamenting that the embargo “has grabbed me so hard that the fraternal hug has nearly deprived me of breath.” The letter might have soothed hurt feelings, but it did not protect Brewster from Grout’s writ of execution, which sent him to the Danville jail.
Hiram Hubbard of Burke was evidently not the sort to take an IOU from. In 1829 he was jailed for an unpaid debt to Gideon Lamb. Orrin Hubbard paid Lamb and had him released, whereupon Hiram also failed to repay Orrin. In 1832 Orrin had the Caledonia sheriff seize and sell a hog, three sheep, 141 sap tubs, a sap holder, a kettle, an iron bar, a plow and two chains.
Book Accounts: A Cracked Canoe and Six Pine Logs
In 1839 a neighborly spat in Lamoille County made its way to the supreme court. Judah Ellis sued Jonathan Scott for book account debt, which auditor Levi Vilas described as items “accrued by way of neighborhood dealing between the parties during a time of 10 or 12 years. … [I]t was not the expectation of either of them … to receive from the other any pay therefrom except in like favors and services…” Ellis took offense over a borrowed canoe, and six pine logs his neighbor had cut from a downed tree. Scott had abandoned the canoe on shore after it began to fill up with water from a crack. Ellis insisted it was worth $4. Scott insisted it was worthless. Vilas believed neither man owed the other, but said if the court found otherwise, he would assess Scott $3.50. The court agreed there was no debt, but Judah Ellis refused to give in. He ended up with a cracked canoe and a $44.22 bill of costs when supreme court judge Stephen Royce affirmed the decision.
Debtors were often jailed in early Vermont. Caledonia County grand jurors, in their 1805 jail report, criticized the practice of permitting “the criminal and the honest debtor to become tenants and associates in one and the same apartment as prisoners.” Beginning in 1830, an insolvent debtor could take a poor debtors oath and be released. After 1838 there was no imprisonment for new debt, but that didn’t help a person with old debt. Gradually, the amount of property a poor debtor could keep expanded. The first bankruptcy law passed in 1876. Even jailed debtors were often granted “liberty of the gaol yard,” a large area that could encompass much of a town. This enabled debtors to have some hopes of earning money to discharge obligations.
A complicated debt dispute between Orrin Perkins and Horace Dana had landed Dana in the Orange County jail. In 1847, Perkins charged Dana with leaving the bounds of the jail yard. Dana denied it, saying he had only left when taken to court on a habeas corpus. He argued that an area known as the “chimney piece” had been informally recognized as part of the jail yard for 30 years. The jury agreed, and the supreme court under Judge Isaac Redfield affirmed their judgment. Dana may still have been in debt, but at least he was off the hook for $675.64 in court costs for the jail bond violation lawsuit.
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