76 Md. 581 | Md. | 1893
delivered the opinion of the Court.
The demurrer to the bill of complaint in this case presents for the consideration of this Court, questions of more than ordinary interest and importance. The appellants on the .22nd of January, 1892, in their own right, and in behalf of all creditors becoming parties thereto, filed their bill in the Circuit Court of Baltimore City, for the purpose of setting aside two deeds, which were exact duplicates, and had been on the 14th of January, 1892, executed by Johns H. R. Nicholson, in his own right, and as surviving partner of the firm of J. J. Nicholson & Sons, to John M. Carter, and Matthew Iv. Aiken, trustees, for the benefit of the firm creditors of J. J. Nicholson & Sons, and the individual creditors of Johns H. R. Nicholson. The deeds on their face profess to convey to the trustees, all of the property and estate of Johns H. R. Nicholson, and also all the estate of the late firm of J. J. Nicholson & Sons. The bill seeks to have said deeds set aside as being void against creditors, and asks the appointment of a receiver to distribute the assets of said firm and of Johns J. R. Nicholson. The firm of J. J. Nicholson & Sons, composed of Johns H. R. Nicholson, and Andrew J. Nicholson, bankers doing-business in Baltimore City, was dissolved on the 5th of January, 1892, by the death of the said Andrew J. Nicholson. The surviving partner took possession of the firm’s assets, and continued the business. Shortly after
1. The first questions which suggest themselves to our consideration arise out of the execution of the two deeds which have been,assailed. It is contended by the
2. In this case a serious question attaches to the right to assign, which involves the right of a lunatic to execute a deed. The pleadings in the cause concede that Johns H. R. Nicholson, at the time of the execution of the two deeds, was,non compos mentis. It is contended on the part of the appellants that Colegate D. Owings’ Case, 1 Bland, 390, and Corrie’s Case, 2 Bland, 490, have determined, that the deed of a lunatic is not voidable, but absolutely void, and they cite Dexter vs. Hall, 15 Wall., 9, as affirming the doctrine of those cases. But we cannot concur in this view, nor has this Court ever so decided. The Supreme Court in passing upon the questions under consideration in Dexter vs. Hall, did not have before them the validity of a deed of conveyance, but of a power of attorney. Infants and lunatics stand very much upon the same plane, so far as Courts of equity are concerned, and it has been universally held that the power of attorney of an infant is absolutely void, and so the Supreme Court, in Dexter vs. Hall, held that the power of attorney of a lunatic was void, and rested their decision on the analogy existing between the rights of infants and those of lunatics, and says: “In fact we know no case of authority in which the-letter of attorney of either an infant or a lunatic has been held merely voidable." This they could not have said respecting deeds of conveyance, as the Reports of the State Court contain numerous decisions affirming the view that the deed of a lunatic is not void, but only voidable. The firm of J. J. Nicholson & Sons had been for a long series of years engaged in the business of banking in the City of Baltimore; a member of the firm having died, a dissolution of the partnership was the consequence. Business complications soon followed,
3. It is a contention of the appellees that none but privies in blood or in estate or in law, can assail a deed of the character in controversy here, which is sought to be impeached on the ground that the surviving partner was a lunatic at the time of the execution of the same, and that creditors do not stand in such relation to said conveyances as entitle them to file a bill in the nature of this proceeding. That their relation is purely contractual, and in no sense that of privies. Whilst the authorities incline to this view of the question in their application to deeds of persons 'non compos mentis conveying estates unaffected by the rights of creditors, we have, after careful examination, been able to find no case applying this doctrine in which the rights of creditors have been involved. But independently of all considerations save a just and proper regard for the rights of creditors, touching a deed, which professes to have been executed solely for the payment of their claims, and the protection of their rights, it would seem to be an anomaly, that privies in blood, or estate, or in law, should alone enjoy the privilege of inquiring in a Court of equity, where the rights of lunatics are especially cared for, whether a deed, which practically builds
4. We do not concur in the objection urged against these deeds by the appellants, which is set out in the sixth paragraph of said bill, to the effect that the said Johns H. R. Nicholson as surviving partner of J. J. Nicholson & Sons, “but not in his own right,” did on the 14th of January, 1892, execute said deeds which purport to convey to said trustees, their heirs, &c. all his, the said Johns H. R. Nicholson’s estate, &c. In Moody vs. Downs, 63 N. S., 50, the Court says, “an assignment for the benefit of ‘my’ creditors, by a surviving partner of all partnership and individual property, was considered as an assignment of partnership property for the benefit of partnership creditors, and of separate property for the' benefit of separate creditors, and held valid. ”
5. It is also claimed by the appellants that, in consequence of t.he execution of two deeds, neither deed vested the whole property in the trustees, and that it is
6. The appellants, in the thirteenth paragraph of their bill, allege that the said two deeds, dated on the 14th of January, 1892, were made with “intent” to delay, hinder and defraud the creditors of the said firm of J. J. Nicholson and Sons, and of the said Johns H. R. and Andrew J. Nicholson, individually, and are therefore void. It is contended by the appellees that the averment of the bill is only an inference and is not a fact, and that the demurrer does not admit the truth of the conclusion sought- to be drawn. We, however,
7. It is urged as an objection to the deeds that they do not convey all the property of the firm and of the individual partners, and, unless all such property has been conveyed, the deeds are void. In this case the two deeds “grant,” “convey,” and “assign ” unto John M. Carter, and Matthew K. Aiken, their executors, administrators, and assigns, all Ms, the said Johns H. R. Nicholson’s property and estate, real, personal and mixed, of whatever kind and wheresover situate, as also the property, estate, and assets whatsoever of the said firm of J. J. Nicholson and Sons, in trust, for the purposes therein set forth. Can there be any reasonable doubt as to what those deeds convey? Under the decisions of this Court, of numerous other State Courts, and of the Supreme Court of the United States, it has been repeatedly heldt hat: “ The doctrine that real estate purchased with the partnership funds, for its use, and on its account, is to be regarded in a Court of equity as the personal estate of the company, for all the purposes of the partnership, stands upon a familiar and just principle. It is the clear case of an implied or constructive trust, resulting from the relation which the partners bear to each other, and from the fact that the estate was brought into the firm, or purchased with the funds of the partnership, for the convenience and accommodation of the trade. For this reason, in whosesoever name the legal title may reside, the estate is held, in the eye of a Court of equity, for the use of the partners, as the cestuis que trust: and if a partner dies, the legal estate of which he was seized as a tenant in common, passes to his heirs or devisees, clothed with a similar trust, in favor of the surviving partners, until the purposes for which it was
We think the surviving partner in this case has conveyed to the trustees named, all of his individual estate and property, and all the property, estate and assets of his firm, and that the conveyance covers all the real estate held in the firm’s name, situate either in Baltimore City or County, including also all that which stood in the names of the individual partners, or either of them, which had been purchased with partnership funds; and' that a Court of equity will regard such real estate, for the purposes of the partnership, and between the partners and their creditors, as personal estate, for the payment of partnership debts, and the adjustment and winding up of the partnership concerns, subject however, in all respects, to the operation and effect of the provisions of the insolvent laws of the State.
8. The deeds assailed in this cause were executed on the 14th of January, 1892; the bill to set them aside was filed on the 22nd of the same month, and the said Johns H. R. Nicholson was, on the 24th of February, 1892, adjudicated an involuntary insolvent. The perma
The importance which properly attaches to the right of the creditors of the insolvent to elect the permanent trustee, subject to the approval of the Court, cannot well be overstated. The record of this appeal furnishes illustration of the correctness of the views herein expressed as to the propriety of allowing to the creditors of an insolvent the privilege of selecting, under the supervision of the Court, the person or persons in whom
Cause remanded for further proceedings under Art. 5, sec. 36, of the Code.