Fouke v. Fleming

• Decision Date: 31 May 1859
• Citation: 13 Md. 392
• Parties: ISAAC D. FOUKE v. ANDREW J. FLEMING and JONATHAN E. DOUGLASS.
• Court: Maryland Court of Appeals

13 Md. 392

ISAAC D. FOUKE v. ANDREW J. FLEMING and JONATHAN E. DOUGLASS.

Court of Appeals of Maryland.

May 31, 1859

A deed conveying certain specified articles of personal property, to a trustee, with power to sell the same, and from the proceeds pay certain specified debts, and the residue to the grantor is a quasi mortgage, and not a voluntary assignment of all the grantor's property, for the benefit of his creditors generally.

In such a deed, the reservation of the surplus to the grantor, after paying the particular debts, does not render it void, as this gives to the debtor nothing more than he is entitled to in the case of a technical mortgage, nor is the validity of such a deed, in other respects, to be tested by the law applicable to voluntary conveyances by debtors, for the payment of their debts, exacting releases.

A citizen of Virginia, residing therein, having personal property in Maryland, and being here temporarily, may execute a conveyance of such property in the county where it is, at the time, and such a deed acknowledged and recorded agreeably to the laws of Maryland is valid against an attaching creditor of the grantor, in the absence of any proof of the laws of Virginia making it otherwise.

A temporary or transient residence by a citizen of another State, in a county of this State, where his personal property is, at the time, situated, is such a residence as amounts to a compliance with the provisions of the act of 1856, ch. 154, requiring bills of sale or mortgages, to be acknowledged and recorded in the county where the party executing the same resides.

No affidavit as to the consideration of a bill of sale or mortgage of personal property is now required such affidavits are expressly dispensed with, by the act of 1856, ch. 154, secs. 128 and 142, and the provisions of these sections are in no way repealed or affected by the act of 1856, ch. 113, passed on the same day.

Where the engrossed bill, and the published copy of a law correspond, this court cannot assume they are erroneous, and decide the law to be according to the evidence of the proceedings of the Legislature, as furnished by the journals of the two Houses.

An engrossed bill, according to the practice of our Legislature is examined by a committee of the house in which it originated, then assented to, as engrossed, by both Houses, and signed by the Governor, with the seal of State annexed, and this is better evidence of what a law is, than the journals of the two branches, each journal being kept and attested only, by the chief clerk of his particular branch.

APPEAL from the Circuit Court for Washington county.

Attachment on warrant, issued on the 6th of March 1857, at the instance of the appellees, against Israel Russell, a nonresident debtor. The claim stated in the writ is $629.41. The writ was laid on the 7th of March 1857, on two canal boats, as the property of the defendant Russell. The appellant, Fouke, came in and claimed the property under the following deed from Russell to him:

" This deed, made this 30th day of January, in the year 1857, by Israel Russell of Jefferson county, in the State of Virginia, witnesseth." It then recites Russell's indebtedness to H. Herr, of Jefferson county, Virginia, on two notes under seal, one for $200, and the other for $500, on both of which Joseph L. Russell and Jacob T. Russell, are his sureties, and also his indebtedness to Hartley & Brother, of Georgetown, in the District of Columbia, in the sum of $520.14, on a promissory note, on which Joseph L. Russell and Jonathan Russell, are his sureties, and also his indebtedness to S. B. Preston, of Frederick county, Maryland, in the sum of $150, upon an order accepted by him. It then proceeds: " And, whereas, the said Israel Russell, is anxious to pay and satisfy to the said Abraham Herr, Hartley & Brother, and Samuel B. Preston, and to indemnify and save harmless his said sureties, has proposed and agreed to assign the property hereinafter mentioned, unto Isaac Fouke, of Jefferson county, in the State of Virginia, in trust, for the payment of the aforesaid notes and indebtedness. Now, therefore, the said Israel Russell, doth grant unto the said Isaac Fouke, his executors, administrators and assigns, the following property, that is to say; canal boat ‘ James F. Essex’, with all the furniture, implements, apparatus, & c., belonging to the same; canal boat ‘ J. F. Wheatley,’ with all the furniture, apparatus, & c., belonging to the same; also one lot of fish tubs, about one hundred and twenty in number; also one lot of fish barrels about forty in number; also a lot of ropes, and block and tackle, and three lots of boat gears; which said property is situated in Washington county, State of Maryland. To have and to hold the said property above described and granted, to him the said Isaac Fouke, his executors, administrators and assigns, in trust, however, to sell and dispose of the same at public or private sale, and upon such terms and notice as he may deem most expedient; and it is hereby declared, that the said Isaac Fouke, shall stand possessed of the money arising from said sale or sales, upon trust, in the first place to the payment of all costs, charges and expenses, he may incur in the execution and creation of this trust, including a commission of five per cent. to himself as trustee; secondly, in trust that he shall apply the residue of said money, in payment and satisfaction of the several debts due to the said Abraham H. Herr, Hartley & Brother, and Samuel B. Preston, hereinbefore mentioned, pari passu and without any preference or priority of payment; and after the payment or satisfaction of the said debts, costs and expenses, then in trust, that he shall pay the surplus, if any, unto the said Israel Russell, his executors, administrators or assigns." The deed then contains a covenant, that Fouke " shall not be in any manner responsible for any accident, loss or deterioration of the said property, nor for any thing, except for the faithful application of the money which shall actually come into his hands, or for wilful and gross neglect," and also a covenant for further assurances and conveyances, " for the purpose of carrying out and effectuating the object and design of the aforesaid deed of trust."

This deed was acknowledged before a justice of the peace in and for Washington county, on the same day it was executed, and on the same day was recorded among the land records of Washington county, but there was no affidavit that the consideration therein set forth was true and bona fide.

Exception. In the trial of the case, upon issue made upon this claim of Fouke, certain admissions and agreements of facts were entered into, which are fully stated in the opinion of this court. The question in the case was as to the validity of this deed The court below, (PERRY J.,) granted an instruction to the jury, at the instance of the plaintiffs, (which is also stated in the opinion of this court,) to the effect, that the deed was void as against the plaintiffs, the creditors of Russell. To the granting of this prayer the claimant excepted, and appealed from the judgment of condemnation, on verdict in favor of the plaintiffs.

The cause was argued before LE GRAND, C. J., ECCLESTON and BARTOL, J.

A. K. Syester and Z. H. Clagett for the appellant.

The sole question in this case relates to the validity of the deed from Russell to Fouke, and the appellant insists upon its validity.

1st. Because it is a mere pledge or hypothecation of particular property to pay particular debts. This deed may be taken as a mortgage, created in the form of a deed of trust, to secure a debt and indemnify a surety. That deeds in this form have been held to be mortgages, see 15 New York Rep., 207, Curtis, et al., vs. Leavitt; 1 Selden, 547, King vs. Merchants Exchange Co.; 4 Watts & Sergt., 383, Ridgway vs. Stewart; 7 Watts & Sergt., 343, Manufacturers & Mechanics Bank vs. Bank of Pennsylvania; 3 Md. Rep., 82, Charles vs. Clagett. And the express reservation of the surplus is nothing more than the operation of the law would be without it; it is precisely what takes place in every mortgage.

2nd. Because this deed cannot, in any sense, be regarded as an assignment by a debtor in failing circumstances, for the benefit of creditors, and its invalidity cannot be tested by the rules applicable to such instruments. It has none of the marks of such an instrument; it does not say so, and there is nothing upon its face (beyond which we cannot look) to fix that character upon it. Its whole design, and its only object, is to secure the payment of a debt and to indemnify and save harmless certain sureties. It does not exact releases from the creditors, and does not profess to convey all the grantor's property, and is, in fact nothing more than the assignment of particular property to pay a particular debt, which it is the undoubted right of every debtor to do. All the authorities clearly establish a distinction between a general assignment by a man in failing circumstances, for the benefit of his creditors, and a particular assignment of specific property, for the benefit of particular creditors. This distinction is clearly recognized in the case of Green & Trammell vs. Trieber, 3 Md. Rep., 30, 31, 36, 38, and runs through all the Maryland cases cited by the appellee. See also 5 Term Rep., 420, Estwick vs. Caillaud. 10 Paige, 461, Dias vs. Bouchaud. 15 New York Rep., 126, 127. 4 Watts & Sergt., 383. 7 Watts & Sergt., 343. 3 Sumner, 345, United States vs. McLellan, et al. There is no badge of fraud in the case,-- nothing to show that the grantor was in insolvent circumstances, and the resulting trust, in favor of the grantor, is only what the law implies from...