Blondheim v. Moore

| Md. | Dec 15, 1857

Lead Opinion

Le Grand, C. J.,

delivered the opinion of this court.

The original and amended bills show these facts: that Blondheim, being heavily indebted and insolvent, on the 7th day of May 1857, executed a bill of sale of certain property therein specified, for the consideration of $3000, to Simon Goodman, and that on the 16th of June 1857, he executed a deed of trust to Rosenberg, of all his stock in trade, for the benefit of such of his creditors as should release him in ninety days, providing by the same, that the trustees should not be liable for any loss or deterioration, but what might be occasioned by his own wilful commission or neglect. ■

There were two bills filed, an original and an amended bill; the objects of both being the same, namely, to have declared fraudulent and void the conveyances made by Blondheim as made with the design to hinder, delay and defraud creditors, and also to procure an injunction and the appointment of a receiver. Injunction was granted and receiver appointed upon the original bill, and an injunction granted upon the amended bill.

Rosenberg failed to answer either bill, and Blondheim and Goodman failed to answer the amended bill. An appeal has been taken from the order passed on each bill. It is contended, on. the part of the appellees, that an appeal will not lie until after answer filed. This is undoubtedly the case under the decisions construing the act of 1835, ch. 380, and we think the law is ,not changed in this respect by the act of 1853, ch. 374. This latter act only provides the effect and consequence of an appeal, when taken from the orders specified in it, and a bond shall be given. It does not contemplate a change in the circumstances necessary preliminarily to an appeal under the act of 1835. If this be so, then the appeal of Blondheim, Goodman and Rosenberg, from the action of the court on the amended bill must be dismissed. This confines us to the case made by the original bill. But before we proceed to examine its averments, we shall state what we consider to be the operation of an appeal, under the act of 1853, ch. 374. We do this, because it is but proper the. profession should understand the views of the appellate court, in regard to a statute which is daily acted upon, affecting, as it does, most materially, the business of a commercial and manufacturing community. That act is as follows: — “That in all cases where an appeal is taken from an order of a court having equity jurisdiction, cither granting an injunction or appointing a receiver, or from an order refusing to dissolve an injunction, the operation of such an order shall not be stayed in any case, unless the party praying the appeal give bond, with se curity, to indemnify the other party from all loss and injury vyhich such party may sustain by reason of such appeal, and the staying of the operation of such order; such bond to be approved by the judge granting the injunction, or the clerk of the court where the proceedings are pending; and upon the giving of such bond, the appeal shall stay the operation of all such orders, in the same manner as appeals do from final decrees

It is not to be presumed that the legislature meant nothing by this act. To our minds, if the English language means anything, this act distinctly provides, that an appeal in the cases authorized by it, (where a bond is given,) “shall stay the operation of all such orders in the same manner as appeals do from final decrees.” What is this manner? It is nothing more than this, everything is stayed, suspended,’ until judgment shall be pronounced by the appellate tribunal; that is to say, the <eoperation” and “effect” of the injunction wholly and entirely ceases. Such was the effect and operation of an appeal, under the act of 1835, ch. 380, except in the case of an injunction to stay waste. The act of 1853 does away with the exception. If on appeal from an order granting an injunction, this court should affirm the order, and the thing on which the injunction was intended to operate should exist in specie, in the possession of the defendant, then the injunction is restored to its original vigor; or if the thing has been consumed or disposed of, then the complainant must proceed on the bond, which is given for the express purpose of indemnifying him “from all loss and injury” which he may sustain because pf the appeal. We are unable to. give any other meaning to the act. The objection that before the bond can be made available, practically, to the indemnification of the aggrieved party, the obligors may become insolvent, however true, can nevertheless have no weight in the construction of the act. It is an objection which would apply with equal force to any other bond. The act provides, that the bond shall be approved by the judge granting the order, and we are bound to assume this power will be exercised with every caution, and not until the court is fully certified of its sufficiency. If this does not guarantee indemnification to the party, then the failure is owing to the inadequacy of our legislation and the mutability of human affairs. The foresight of man is not competent to guard against all future contingencies. We may add, that when all things are calmly considered, perhaps it will be found that under our acts of Assembly, and the decisions thereon, the creditor has a very decided advantage over his debtor. He is permitted to state his own case in his own way, restrained only by his conscience, and upon such statement, if full enough, to break up the business of his debtor. If the latter appeal from the order, although his conscience has been probed, yet, he has no benefit from his own testimony; his case is tried and determined solely on that of his adversary. This, to say the least of it, does not look much like equality. To deny an appeal to the defendant, until he shall have answered the bill, and then to say, the answer shall not at all be looked to, is not without the appearance of trifling; it is to command an act, which, when performed, is to be taken as wholly void of value. The only reason we can imagine for such a procedure is, that it enables the complainant to “fish out” a case from the answer of the defendant, so as to furnish him with the aids necessary to alter his case if need be. It is a species of jugglery not altogether worthy of commendation. It is, however, the law, and we are bound by it.

The injunction was granted and the receiver appointed, on the application of the complainants, without notice to defendants, or a rule for them to show cause.

The material averments of the original bill, (the only one properly before us,) may be thus stated. It is alleged, that Blondheim, had purchased of the complainants, goods to the value of $>1183.83, no part of which amount he has paid, although, at the time of the filing of the bill, there was due of it §319.97; that he owes to other creditors large sums, amounting in the aggregate to twelve or fourteen thousand dollars; that Blondheim being so indebted, and hopelessly insolvent, he, on the 7th of May 1857, executed and delivered to Goodman a deed of certain furniture, together with the whole stock of ready made clothing, in store and dwelling No. 57, .Eufaw street, for the consideration, “as is pretended by the deed aforesaid, of three thousand dollars.” It further alleges and charges as follows, that the complainants “are informed and believe, that the said Simon Goodman came from Germany here, about twelve months ago, that since he came to this country he has been an employee; that he is the brother of the wife of said Hertz Blondheim; that when he came to this country he was without any considerable means with which to purchase the amount of goods, which, by the deed, he is said to have purchased for cash.” The bill continues, that the complainants are informed and believe that Goodman is an unmarried man; that the property is now, and has been since the making of the deed, in the possession of Blondheinj., and that he is selling and disposing of the same in the course of his business, and has been replacing the goods so sold therefrom, with others purchased on credit.

It is only necessary to refer to a few authorities, to exhibit the law applicable to a case like this. The Chancellor in the case of Clark, et al., vs. Ridgely, et al., 1 Md. Ch. Dec., 70; in the case of Thompson vs. Diffenderfer, Ibid., 489; and in the case of Walker's Adm'r, vs. House, 4 Md. Ch. Dec., 39, has brought together the leading decisions, wherein the doctrine applicable to the appointment of a receiver is clearly laid down. Without quoting, at large, from the cases referred to and approved by him, it is sufficient to say, thejT will be found to establish the following propositions: — 1st. That the power of appointment is a delicate one, and to be exercised with great circumspection. 2nd. That it must appear the claimant has a title to the property, and the court must be satisfied by affidavit., that a receiver is uecessary to preserve the property. 3rd. That there is no case in which the court appoints a receiver merely because the measure can do no'harm. 4th. That “fraud or imminent danger, if the intermediate,<possession should not be taken by the court, must be clearly proved;” and 5thly. That unless the necessity be of the most stringent character, the court will not appoint until the de-, fendant is first heard in response to the application.

This is really the meaning of the cases. Different judges employ different language to express their ideas, but they all mean the same thing; there must be fraud and imminent danger proved, in a case like the present.

Keeping .these limitations in view, let us enquire what are the evidences of fraud and imminent danger alleged in the bill? With the exception of the indebtedness to complainants, they profess a total ignorance of all the other facts. They say they are “informed" that. Goodman has been in this country but about a year; that they are “informed” he has been, during that time, an employee; that they are “informed” he is an unmarried man, and that since the making of the deed, Blondheim has been disposing of the goods in the store and replacing them with others. We are nowhere told from whence this information was obtained, nor when. The whole is left in doubt; the only fact which the bill alleges, (other than the amount of indebtedness,) of which proof is offered to test its accuracy, is, that the deed is fraudulent on its face; and this, by the deed itself, is shown not to be so. [t is on its face a valid instrument for a valid money consideration. On the whole we do not think this such a case of fraud, and imminent danger, as justified the court in granting the injunction, nor do we recognize it as one, (without notice to the defendants first having been given,) in which a receiver should have been appointed. We shall, therefore, in this case, reverse the order of the court below granting an injunction and appointing a receiver upon the original bill, and dismiss the appeal from the order granting the injunction upon the amended bill, because taken before answer filed to such bill. The cause will also be remanded for further proceedings.

Order reversed, and cause remanded.

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Dissenting Opinion

Tuck, J.

I dissent from so much of the court’s opinion as places a construction on the act of 1853, ch. 374.

I think the appeal does not remove the injunction out of the defendants’ way, so as to place him in the same condition, in reference to the property, as if the writ had not issued, but that it merely stays further proceedings, pending the appeal,- and leaves the property just where it was at the time of the appeal.

This I consider the effect of the last clause of the act, which limits the effect of such appeals, to that produced by an appeal from a final decree,-which, as I understand the law, arrests the execution of the decree, and does nothing more.

As to the other views expressed by the court, I concur in' the opinion, and, in the order of reversal.