Clarke v. Meixsell

• Decision Date: 24 June 1868
• Citation: Clarke v. Meixsell, 29 Md. 221 (Md. 1868)
• Parties: LUTHER C. CLARKE, EDWARD DODGE, JOHN D. MAXWELL and others, trading as CLARKE, DODGE & CO. v. JOSEPH H. MEIXSELL and MCHENRY GRAFTON, trading as MEIXSELL & GRAFTON, and others.
• Court: Maryland Supreme Court

29 Md. 221

LUTHER C. CLARKE, EDWARD DODGE, JOHN D. MAXWELL and others, trading as CLARKE, DODGE & CO. v. JOSEPH H. MEIXSELL and MCHENRY GRAFTON, trading as MEIXSELL & GRAFTON, and others.

Court of Appeals of Maryland

June 24, 1868

APPEAL from the Superior Court of Baltimore City.

On the 29th of March, 1864, the appellees sued out an attachment in the Superior Court of Baltimore City, against John P. Derr making oath under the Act of 1864, ch. 306, that the said Derr was bona fide indebted to them in the sum of six thousand dollars over and above all discounts, and that they "had good reason to believe that the said Derr, the defendant, was about to assign, dispose of, or conceal his property, or some portion thereof, with intent to defraud his creditors; and that the said Derr fraudulently contracted the debt and incurred the obligation respecting which the action was brought." At the same time they filed, as their causes of action, two checks payable to their order for $3,000 each, drawn by Derr on the Mechanics' Bank of Baltimore, and they gave the requisite bond. On the same day the sheriff, in virtue of the attachment, seized two houses the property of the defendant, and upon the return day of the writ, made due return of his proceedings. The defendant appeared by B. F. Horwitz, Esq., counsel, but did not move to dissolve the attachment, and a judgment of condemnation nisi was entered. On the 31st of March, 1864, Derr made application for the benefit of the insolvent laws of Maryland. B. F. Horwitz, Esq., was appointed trustee for the benefit of his creditors. In that capacity, he appeared in Court on the 2d of June, 1864, and moved that the judgment of condemnation nisi, which had been entered should be stricken out, and the attachment itself quashed. The motion to quash was afterwards withdrawn; but the motion to strike out the judgment nisi was renewed; and by consent said judgment was stricken out, and proceedings in the cause were stayed until further order.

Subsequently to these acts of the trustee, the appellants appeared in Court, and by petition, filed in the cause on the 22d September, 1865, set forth that they were creditors of Derr and non-residents, being citizens of New York; that they had obtained a judgment against Derr, and had thereon issued an attachment, by way of execution, against him, and which had been laid in the hands of Mr. Horwitz, as garnishee, who, in his answer, to the interrogatories to him propounded admitted that he had in his hands as trustee, $7,125.40 arising from the sale of Derr's property, but set up, as an objection against their attachment, the pendency of the attachment of Meixsell & Grafton; the appellants therefore prayed that the said attachment should be quashed, for the following reasons:

1. Because Meixsell & Grafton had not good reason to believe, that Derr was, at the time of the issuing of the attachment in this case, about to assign, dispose of, or conceal his property, or some portion thereof, with intent to defraud his creditors.

2. Because the said Derr did not fraudulently contract the debt, and incur the obligation, respecting which said action was brought.

3. Because of defects, apparent on the face of the papers.

4. Because of irregularities, defects and omissions in the proceedings.

5. Because of a failure to comply with the provisions of the Code and the Acts of Assembly in relation to attachments.

By agreement a commission was issued and a good deal of testimony taken thereunder. After hearing, the motion to quash, was overruled. From this decision the present appeal was taken.

The cause was argued before BARTOL, C.J., NELSON, BRENT and ALVEY, J.

Thomas M. Lanahan and Wm. Henry Norris, for the appellants:

It is supposed by the appellees that the attachment Act of 1864, ch. 306, made the affidavit conclusive and unexaminable. If the Act had so proposed, it would be unconstitutional under the provisions of the Maryland Bill of Rights, and Constitution existing in 1864. Sec. 5 of Art. 12, Const. of 1864. But the Act had no such purpose, but expressly subjected the new remedy to the same principles which had been established as to the interpretation of prior attachment statutes. Act of 1864, ch. 306, sec. 44.

It had always been the rule and practice, that the affidavit should be examinable, whether as relating to the existence and amount of the debt, and all other necessary facts, to bring a case within the statutory requirements, as to jurisdiction. Barr vs. Perry, 3 Gill, 319 to 327; Ranahan vs. O'Neal, 6 G. & J., 301-2; Carson vs. White, 6 Gill, 26; Gover vs. Barnes, 15 Md. Rep., 579; Lamden vs. Bowie, 2 Md. Rep., 334; Howard, et al. vs. Oppenheimer, 25 Md. Rep., 350.

Had the appellants a right to intervene in the attachment cause, which had been ordered to be stayed, to show that it had been issued without the existence of the required facts, and should be quashed as an impediment to their recovery against the insolvent trustee, Mr. Horwitz? They were creditors of Derr, residing in the State of New York, to whom Derr was indebted on a New York contract, and were not to be affected in their remedy by the insolvent application of Derr, or any assignment of his effects, in pursuance of the insolvent law. Glenn, Garn. of Kerr, vs. Boston and Sandwich Glass Co., 7 Md. Rep., 295-6; Larrabee vs. Talbott, 5 Gill, 426; Evans vs. Sprigg, 2 Md. Rep., 457.

These authorities certainly show that the appellants had greater right to Derr's assets than the insolvent trustee, Mr. Horwitz. Yet the Court below allowed him to intervene and cause the action to be stayed, and refused the right of intervention to the appellants as strangers to the cause. There are no strangers in a proceeding in rem, when the persons have interests to be affected; and the attachment process is a proceeding in rem. Carson vs. White, 6 Gill, 26; Cockey vs. Milne's Lessee, 16 Md. Rep., 206; Ranahan vs. O'Neale, 6 G. & J., 301-2; Farmers' Bank of Delaware vs. Beaston, 7 G. & J., 429; Starkie's Evidence, by Sharswood, 339, ( top,) 371-379, (marg.;) Union Bank vs. Kerr, 7 Md. Rep., 88; Drake on Attach., (New Ed.,) sec. 175.

The facts in the case did not authorize the attachment of Meixsell & Grafton against Derr. They fail to show that he fraudulently contracted the debt for which the attachment was issued. Nor had Meixsell & Grafton good reason to believe that Derr was about to assign, dispose of, or conceal his proprty, or some portion thereof, with intent to defraud his creditors.

John M. Frazier and William Schley, for the appellees:

The fact that the appellants are non-resident creditors, can have no possible influence upon the decision of the motion to quash. The appellees do not claim under the insolvent laws. They claim, notwithstanding the insolvent laws, the benefit of a lien validly acquired, by the pursuit of a legal remedy provided by law. And, as between them and the appellants, the question is precisely the same, as it would be, if the appellants were domestic creditors; or, as it would be, if Derr had not applied for the benefit of the insolvent laws.

The effect of the application upon the rights of the appellees was merely to put the property of the insolvent into the hands of the trustee in such right and plight as the insolvent himself held it at the time of his application; and subject of course, upon general principles of law to all validly acquired liens. The Legislature, nevertheless, from abundant caution has provided specially for this very case. Code of Public General Laws, Art. 48, sec. 10.

The application for the benefit of the insolvent laws did not destroy the lien created by the issuing and levy of the attachment; and even if, as between the trustee and the appellees, the latter had been even more seriously interferred with, still, as between the parties now before the Court, the insolvent laws cannot be regarded for any purpose whatever. The appellants, as non-resident creditors, of course, could not be deprived of any right by those laws; and they cannot acquire any new or better right as between them and a domestic creditor, by invoking the aid of those laws indirectly in their favor, by setting them up as lessening the remedies of such domestic creditor, or as impairing his lien. As between the parties now before the Court, the case is the same as if there were no insolvent law.

The proceedings in this case being under the Act of 1864, ch. 306, the Court acquired jurisdiction presently and effectually, on filing the affidavit, and giving an approved bond. (Section 41.) The Act gives a new and apparently a very harsh remedy. It is in the nature of an execution before judgment. But it was plainly the intention of the Legislature, in passing this Act, to give a new and prompt remedy to the creditor, on the responsibility of his affidavit and bond. If, then, jurisdiction attached, upon giving bond and making the affidavit, the case cannot be tried upon motion. The appellees are entitled to a trial before a jury on issues properly joined.

In a case of attachment against a non-resident or an absconding debtor, the jurisdiction depends on an extrinsic fact; and this extrinsic fact is triable on motion to quash. If the debtor, sued as a non-resident, is really a citizen, the case is not within the provisions of our attachment laws. So, in the case of a person sued as an absconding debtor, if, in fact, he did not abscond, then the Court has no rightful jurisdiction over him or his property. Code of Public General Laws, Art. 10, secs. 1, 2 and 3.

John M. Frazier and William Schley, for the appellees:

Upon levying the attachment of the appellees, a lien was created in their favor, and that lien stands unaffected by the subsequent...