Glenn v. Williams

• Decision Date: 29 March 1883
• Citation: 60 Md. 93
• Parties: JOHN GLENN, Trustee, v. JOHN S. WILLIAMS and Herman Williams, trading as John S. Williams and Brother.
• Court: Maryland Court of Appeals

60 Md. 93

JOHN GLENN, Trustee, v. JOHN S. WILLIAMS and Herman Williams, trading as John S. Williams and Brother.

Court of Appeals of Maryland

March 29, 1883

Appeal from the Court of Common Pleas of Baltimore City.

The case is stated in the opinion of the court.

The cause was argued before Miller, Stone, Alvey, Robinson and Irving, JJ.

John Howard and Charles Marshall, for the appellant.

1. The creditors secured by the deed of trust, the surviving trustees in the deed, The National Express and Transportation Company, and the President and Board of Directors, were all formal parties, and duly before the Richmond Chancery Court by appearance, or due service of legal process; and for all the purposes of that suit, the stockholders were in legal effect, also fully, parties, and before the court; for the original stockholders, by their acceptance of the charter and the subsequent purchasers by becoming members, assented and agreed to the terms and conditions of the Act of incorporation, or articles of association, and the defendant stockholders, now before this court, with all the rest thereby expressly stipulated and agreed, (alike for the benefit and convenience of themselves and the public,) that they might and should, as the charter provided "contract, and be contracted with, sue and be sued, and implead and be impleaded," in respect of the corporate contracts, property and rights, collectively, in the name, and by the agency of the corporation, and thus, by agreement and representation, they became the parties to the Richmond suit, brought by the creditors to enforce their corporate contracts, and submitted themselves to the forum of the domicile of the corporation in which the suit was instituted, and the decree of December, 1880, was rendered, and are bound by that decree, precisely as if made formal parties, and personally served with process.

For while it is true, that no man is bound by a judgment or decree to which he is not a party or privy, and of which he has not had notice, yet it is equally true, that one may agree to be sued in any particular way or name, or by any mode of agency, and to receive notification of legal proceedings in any manner that his interests or convenience may require, and if so sued and notified, he is just as fully, and as firmly bound by all of the proceedings in the suit, as if he had entered into no such engagement, and were made a formal party and duly served with process and notified in person. Vallee v. Dumergue, 4 Exch. 289; Bank v. Harding, 67 E. C. L. 660; Bank v. Nias, 4 E. L. & Eq. 252; Copin v. Adamson, L. R. 9 Exch. 345; Rousillon v. Rousillon, L. R. 14 Ch. Div. 351, 371; Freeman on Judgments, secs. 177, 590; R. R. Co. v. Wheeler, 1 Black, 286; Muller v. Dows, 94 U.S. 444; Morawetz on Priv. Corp. sec. 619; Ogilvie v. Ins. Co. 22 How. 387; Hatch v. Dana, 101 U.S. 205; Stevens v. Fox, 83 N. Y.

313; Hall v. Ins. Co. 5 Gill, 484; Matthews v. Albert, 24 Md. 527; Weber v. Fickey, 52 Md. 500.

2. The decree was final and conclusive upon the merits, until reversed, as to all the matters then in controversy and thereby determined, and the Court of Common Pleas of Baltimore, and its jury, were not a court of appeal to review the decision of the Richmond Chancery Court. This would be true even were it the decree of a purely foreign court. Bank v. Niaz, 71 E. C. L. 717, 734, 738, and 4 E. L. & Eq. 252, (where it is best reported;) De Cosse Brissac v. Rathbone, 6 H. & N. 301; Vanquelin v. Bouard, 109 E. C. L. 341; Ricardo v. Garcias, 12 C. & F. 368; Martin v. Nicolls, 3 Sim. 459; Godard v. Gray, L. R. 6 Q. B. 137; Ellis v. McHenry, L. R. 6 C. P. 128; Scott v. Pilkington, 110 E. C. L. 41, and note, p. 44, et seq.; Story's Conflict of Laws, secs. 603-609.

But this is a decree of the court of a sister State, and by the Constitution of the United States, and the Act of Congress of 1790, stands upon the footing of a domestic decree--a decree of a court of record in Maryland-- and "is entitled to the same credit, validity and effect in every other court within the United States, which it had in the State where it was rendered; and whatever pleas would be good to a suit thereon in such State, and none others, can be pleaded in any other court within the United States. Hampton v. McConnell, 3 Wheat. 234. The Act of Congress is as follows: "The records and judicial proceedings, authenticated as aforesaid, shall have such faith and credit given to them in every court in the United States, as they have by law and usage in the courts of the State from whence the said records are, or shall be taken." Act, May 26, 1790, ch. 11; 2 Story on Constitution, secs. 1303-1313; Hampton v. McConnell, 3 Wheat. 234; MeElmoyle v. Cohen, 13 Pet. 312; Hopkins v. Lee, 6 Wheat. 109; Pennington v. Gibson, 16 How. 76; Clarke v. Day, 2 Leigh. 175; Kemp v. Mundel, 9 Leigh. 17; Wernwag v. Pawling, 5 G. & J. 500; Bank v. Bank, 7 Gill, 415.

In Virginia, where this decree was rendered, it is certainly conclusive on other tribunals until reversed, Cottom v. Cottom, 4 Rand. 192, and even if erroneous, could not be impeached collaterally, except for fraud, or want of jurisdiction. Lancaster v. Wilson, 27 Gratt. 624, 628, 630.

3. (a.) The matters thus concluded by the Richmond decree are, first, the debts due by the company. And the adjudication of these debts, as established claims against the company, is a sufficient answer to pleas five and six to the present action, raising the issues that the debts against the company were barred by limitations. But if that matter were open, it would be seen that in Virginia a debt secured by a deed of trust, or mortgage, is not subject to any Statute of Limitations, as to the trust fund dedicated to its payment. Smith v. R. R. Co. 33 Gratt. 619; Bowie v. Poor School Soc. 75 Va. 300.

It equally disposes of plea eleven, and of all other inquiries touching the indebtedness of the corporation, and the consideration upon which any particular claim was founded, its legality, sufficiency and justice.

(b.) The second matter concluded by the decree is the validity and construction of the deed of trust, with its priorities in favor of preferred creditors, whereby was established the assignment to the trustees of all the corporate assets, including the right to receive the unpaid subscriptions to the capital stock, but not the franchise or power to levy an assessment upon the same.

(c.) In the third place, the decree decided and concluded the question as to the right and duty of the court to levy a call upon the unpaid subscriptions, and in actually making the call, adjudicated and settled the question alike as to the necessity and amount of the call, and the further question whether the judicial power to make the call had not then been barred by the Statute of Limitations. The jurisdiction thus exercised is well established. Hatch v. Dana, 101 U.S. 193; Scovill v. Thayer, 105 U.S. 142.

That adjudication disposes of all pleas in the present action seeking to raise any of those issues, and among them pleas four and seven, which seek to raise issues as to the Statute of Limitations, touching the right of action by the trustees upon unpaid subscriptions; for in its construction of the charter and of the deed of trust, the court having held that no power passed to the trustees to make the call, and by itself having exercised the power, adjudicated that it had the right to do so, and at that time, and thus the Statute could only commence to run from the time a call was made, that is, from the date of the decree.

(d.) The remaining question decided by the decree was the power of the removal of the surviving trustees and the substitution of a new trustee in their stead, to execute the trusts of the deed. This power might well have been exercised under the ordinary jurisdiction of equity--1 Perry on Trusts, sec. 275; Ins. Co. v. Kaufman, 18 Wall. 154; Hall v. Bryan, 50 Md. 194, 210--but it was expressly authorized by statute, Va. Code, 1873, ch. 174, sec. 8, amended by Acts of 1874-5, page 423, in force when the deed was made and the decree entered, whereby in case of such substitution, by virtue of the statute, the substituted trustee was clothed with all the rights and powers of the original trustees. This statute was part of the contract and the means of its enforcement. Homestead Cases, 22 Gratt. 288; Roberts v.

Coke, 28 Gratt. 216, 217.

The statute reads as follows: "And in any case, when a trustee, and when there is more than one, all the trustees in any deed of trust shall have died, or removed beyond the limits of the State, or shall decline to accept the trust, or where, having accepted, it is in the opinion of the court, clearly for the benefit of the trust to allow the trustee to resign, having first made a final settlement of his accounts as such trustee, any person interested in the execution of the deed may apply, by motion, to the circuit, county, or corporation of any county, or corporation in which said deed is recorded, who may appoint a trustee or trustees, in the place of the trustee or trustees named therein, and the trustee or trustees so appointed, and accepting the same, shall be substituted to all the rights, powers, duties and responsibilities of the trustee named in the deed of trust."

Under this statute, the court designates the person to be substituted as trustee; but when the substitution is made, the trustee, by operation of law, takes under the deed of trust, and is authorized and empowered to execute the trusts prescribed, and among those express trusts is the right, duty and power to sue for the assets of the company. High on Receivers, secs. 211, 213.

Adjudication of this question by an actual substitution of the new trustees in the place of the old,...