Hyde v. Ellery

• Decision Date: 09 July 1862
• Citation: Hyde v. Ellery, 18 Md. 496 (Md. 1862)
• Parties: SAMUEL N. HYDE, JOSHUA S. INLOES and others, v. GEORGE H. ELLERY and others.
• Court: Maryland Court of Appeals

18 Md. 496

SAMUEL N. HYDE, JOSHUA S. INLOES and others, v. GEORGE H. ELLERY and others.

Court of Appeals of Maryland.

July 9, 1862

A bill charged that one of the defendants, by false representations as to his solvency and mercantile character, induced the complainant and other merchants in New York, to sell to him on credit, a large amount of goods, and that the other defendants also imposed upon the complainants by false and fraudulent representations, and by a fraudulent combination between them and the purchaser, for the purpose of defrauding the complainants, and securing their own antecedent debts obtained, a short time after the purchase, a transfer of the goods from the purchaser to them, and had placed them in the hands of auctioneers to be sold at auction; that the several crediters were unable to use their remedy by replevin, except as to a very small amount of goods because of intermixture and change of marks, rendering it impossible for each to select and identify his goods, and asked for the transfer to be set aside, and for an injunction to restrain the sale.HELD:

1st.That the difficulty of tracing out and identifying the goods, and the multiplicity of suits necessary to get possession of them, after being scattered into numberless hands by a sale at auction, makes it a case for a court of equity to interfere by injunction, to prevent a multiplicity of suits.

2nd.The relief sought being to set aside a fraudulent transfer of the goods, made to delay, hinder and defraud, creditors, the injunction was necessary as ancillary to that relief.

Upon appeal from an order granting an injunction, the propriety of the order must be determined upon the merits of the bill, without reference to the answers.

APPEAL from the Circuit Court for Baltimore City.

Appeal, after answer filed from an order of the court below (KREBS, J.) granting an injunction, upon a bill filed September 23rd, 1859, by the appellees against the appellant.The allegations of this bill are sufficiently stated in the opinion of this court.

The cause was argued before BARTOL, GOLDSBOROUGH and COCHRAN, J.

P. M'Laughlin, for the appellants:--The bill makes no case for an injunction.There is no allegation of irreparable loss from the insolvency of Inloes & Co., or Hoffmans & Co., in whose possession the goods were at the time of filing the bill, or any other ground of irreparable injury, without which an injunction will not in such a case issue.The injury may be irreparable, either from the nature of the property injured, or from want of responsibility on the part of the person committing it.But the mere allegation that irremediable damage, or irreparable mischief, will ensue, is not sufficient.To satisfy the conscience of the court, the acts must be stated to show that the apprehension of injury is well founded.But here the remedy at law is adequate, and equity has, therefore, no jurisdiction.There are no sufficient allegations of fraud in the bill, even if fraud alone, without irreparable injury, would authorize an injunction.But there must be both fraud and irreparable injury:--there is no case to be found in Maryland where an injunction has issued upon a charge of fraud alone.In support of these views, see13 Price, 327, Izard vs. Colbron;3 Green'sCh. Rep., 449, Kerlin vs. West;3 Paige, 213, Hart vs. Mayor, & c.;9 G. & J., 468, Amelung vs. Seekamp;2 Md. Ch. Dec., 9, O'Brien vs. Gibbons;4 Gill, 34, Hamilton vs. Ely;3 Md. Rep., 489, Young's Case;11 Md. Rep., 365, Blondheim vs. Moore;Ibid., 376, Rosenberg, et al., vs. Moore;16 Md. Rep., 85, Lewis vs. Levy;17 Md. Rep., 310, State vs Jarrett & Harwood.

I. N. Steele, for the appellees:--The counsel for the appellants misapprehend the grounds on which the jurisdiction of equity is asked for in this case, and his authorities do not apply.Courts of equity have no jurisdiction in cases of trespass and nuisance, except where the remedy cannot be reached by a court of law, and then the only remedy sought is an injunction.But, in this case, the principal relief sought by the bill, being the setting aside of a transfer of personal property made to delay, hinder and defraud the creditors of the grantor, the injunction was necessary as ancillary to that relief; without it any useful jurisdiction of the court over the question of the validity of the transfer would be virtually defeated.The difficulty of tracing out and identifying the goods, their actual consumption and destruction by use, and the multiplicity of proceedings which would be necessary to get possession of them after they were scattered into numberless hands by a sale, make it obvious, that a sale of the goods would render a subsequent decree vacating the transfer a mere nullity.Even in a case of a fraudulent conveyance of real estate, courts of equity prohibit the defendant from selling the property until the question of the alleged fraud is disposed of.This case falls within the operation of Art. 16, sec. 35, of the Code, which makes it unnecessary for the creditor to obtain a judgment in order to vacate a conveyance, contract, or other act, as fraudulent against creditors.The creditor is entitled to the same remedy as if he had obtained a lien by judgment and execution.In support of these views and as fully sustaining the jurisdiction of the court, to grant, and the propriety of granting this injunction, see1 Wat. Eden on Inj., 35, 36;2 Johns. Ch. Rep., 202, Roberts vs. Anderson;Ibid., 144, Wiggins vs. Armstrong;9 Paige, 297, Bogert vs. Haight;10 Paige, 502, New vs. Bame;1 Md. Ch. Dec., 87, Brown vs. Stewart;2 Md. Ch. Dec., 537, Allen vs. Burke;4 Gill, 475, Geiger vs. Green;4 Gill, 105, Ricketts vs. Ricketts;12 Md. Rep., 1, Parsons vs. Hughes;Story'sEq., secs. 905 to 908, 954;16 Md. Rep., 77, Rich vs. Levy;7 Gill, 366, Richards vs. Swan;14 Md. Rep., 356, Hubbard vs. Hubbard;10 Md. Rep., 500, Uhl vs. Dillon.

OPINION

GOLDSBOROUGH, J.

The appeal in this case is taken from an order of the Circuit court for Baltimore city, granting an injunction on the bill of complaint of the appellees, and the rightful exercise of chancery jurisdiction in granting the injunction is to be determined upon the merits of the bill, without reference to the answers of the appellants, filed subsequent to the order.10 Md. Rep., 96.The appellees allege, that the appellant, Hyde, by a series of misrepresentations as to his solvency and mercantile character, induced them and other merchants in New York, to extend to him credit for a large amount of goods.That they were also imposed on by the statements of Francis Inloes, one of the firm of Inloes &amp Co., whose representations were false and fraudulent, and...