McColgan v. Hopkins

17 Md. 395 | Md. | 1861

Bartol, J.,

delivered the opinion of this court.

This is an action of replevin brought by the appellee against the appellant, to recover certain property formerly belonging to Francis Owens, under whom each party claims, the plaintiff as insolvent trustee, and the defendant under a deed of trust, from Owens.

The facts are set out in the agreed statement., (ante 39’6,) and the single question presented for decision is, whether, upon the facts stated, the deed to the appellant is void under our insolvent laws. The deed in its terms conveyed to the-trustee all the property of the grantor, for the benefit of his creditors, of whom McColgan was one;, by the deed the-debt of McColgan and certain others-enumerated were to be first paid in full, and the residue of the estate was dedicated to the payment of all the other creditors, “without priority or preference, further than the same might exist by law.”

According to repeated adjudications by this court, such a-deed cannot be impeached as fraudulent, either at the common law or under the statute of Elizabeth; nor did we understand the counsel for the appellee to assail it upon any other ground than- its supposed violation, of the provisions of the Act of 1834, ch. 193.

By the sixth section of that Act, an insolvent debtor is denied his discharge if it appear that he has conveyed, concealed or disposed of his property to defraud or delay his creditors, or prevent the same from being applied to the payment of his debts, or who has within one “year of the time of filing of his petition, by the conveyance, or assignment of his property, or debts or claims or payment of money, given an undue and improper preference to any of his creditors.”

By the seventh section it, is provided, “That any confession of judgment, and any conveyance or assignment made by. any insolvent under this Act, for the purpose of defrauding his creditors, or giving an undue preference, shall he void, and the property or thing conveyed or assigned shall vest in the trustee, and, that, all acts done by a petitioner before his application, when he shall have had no reasonable expectation of being exempted from liabilitjr or execution, on account of his debts or responsibilities, without petitioning for the benefit of the insolvent laws, shall be deemed to be'within the meaning and provision of this section.”

We do not construe these sections as avoiding bona fide assignments by debtors, merely because of preferences given to some creditors over others, or as denying the benefit of the Act to an insolvent petitioner, who has, within one year before his application, in good faith assigned property or paid money to some of his creditors in preference to others; such a construction would be fraught with the most mischievous consequences.

What is meant in the Act by an undue- and improper preference, is a preference given in contemplation of insolvency. According to our construction of the Act of 1854, in order to avoid the deed of trust in this case, (which must be treated as bona fide,) it would be necessary to show that it was made “when the grantor had no reasonable expectation of being exempted from liability or execution on account of his debts, without petitioning for the benefit of the insolvent laws.” This does not appear in the agreed statement of facts upon which the judgment of this court must depend.

The deed was made on the 26th day of July 1856, and on the 30th day of September thereafter, Owens, the grantor, petitioned for the benefit of the insolvent laws. What effect the proximity of time between the execution of the deed and the application for the benefit of the insolvent laws by Owens, might have upon a jury, or a chancery court, it is not necessary for us to determine. In the way in which this case comes before us, this court is compelled to confine itself to the statement of facts agreed bn, and is not authorised to draw any inferences of fact from those stated. Hysinger vs. Baltzell, 3 G. & J., 159. Vansant vs. Roberts, 3 Md. Rep., 119. The deed of the 26th of duly being a valid conveyance, vested in the appellant the whole title to the property described in the deed, for the purposes therein mentioned; the grantor, at the time of his application under the insolvent laws, had no estate or interest in it, which passed to his insolvent • trustee, except a claim to the surplus, after the purposes of the trust have been accomplished: such a remote contingent interest does not entitle the insolvent trustee to claim the possession of the. property, or vest in him the right to sell and dispose of it for the benefit of the creditors; none of the cases cited by the appellee’s counsel sustain such a proposition; unless the deed of trust be avoided, the conventional trustee is entitled to the possession of the property, and to dispose of it in conformity with the deed.

(Decided Oct. 29th, 1861.)

The judgment of the circuit court must be reversed, and, under the agreement in the cause, a judgment will be entered in this court for the appellant, de retomo habendo and costs.

Judgment reversed and judgment, for appellant.