Miller, Mayhew & Co. v. Cumberland Cotton Factory

• Decision Date: 12 March 1867
• Citation: 26 Md. 478
• Parties: MILLER, MAYHEW & CO. v. THE CUMBERLAND COTTON FACTORY, Samuel M. Semmes, Thomas J. McKaig, Alpheus Beall and Others.
• Court: Maryland Court of Appeals

26 Md. 478

MILLER, MAYHEW & CO. v. THE CUMBERLAND COTTON FACTORY, Samuel M. Semmes, Thomas J. McKaig, Alpheus Beall and Others.

Court of Appeals of Maryland

March 12, 1867

Appeal from the Circuit Court for Allegany County.

This appeal was taken by the petitioners in the court below, from an order of said court, (Weisel, J.,) dismissing their petition, which prayed for the appointment of a receiver under the Acts of 1847, ch. 228, and 1852, ch. 229, to take charge of the affairs of the Cumberland Cotton Factory, and to enforce the lien to which they claimed to be entitled under said Acts, against certain personal property, which, at the time said lien attached, was the property of said factory, but had been since sold to the co-defendants of said Cotton Factory, at sheriff's sale, under executions upon certain judgments.The allegations of the petition and answers, and all the facts of the case are fully set out in the opinion of this court.

The cause was argued before BOWIE, C.J., and BARTOL and GOLDSBOROUGH, JJ.

Geo. A. Thurston for the appellants.

The petition of the complainants in this case was dismissed solely because the receiver was not appointed at the January term, 1858; the petition having been filed on the 19th of December, 1857, between it and the preceding October term 1857; the learned judge, who decided this case below being of opinion that the jurisdiction of the Circuit Court ceased with the January term, 1858.

To confine the jurisdiction of the court to so limited a period is not consonant with the spirit of these Acts of 1847 and 1852, and would operate in many cases with the greatest harshness, or frequently fail to effect their object.

Such construction would frequently deprive parties of the benefit of amendments, as the laws then stood; and as the same is codified, it is sufficiently, if not exactly similar, to the practice at law and in equity; for illustration, seeCode Public Gen. Laws, Art. 16, secs. 16, 17;Art. 75, secs. 23,24, etc.

The rules for the construction of statutes are also in direct opposition to the construction put on this statute by the order dismissing this petition.

One governing rule for such construction will be found in a decision of this court, not originating with this court, but fully approved by it, viz.: "Acts of Assembly made relative to the administration of justice are to be liberally construed for the attainment of that important object."Mitchell v. Mitchell,1 Gill, 66.

The power given to the creditors to insist on the action of the court, in so brief a period, conceding the word "shall," as used in the 4th section of the Act of 1847, requires the construction given to it, is a power given to be exercised for their benefit, and if so, can be waived if such plainly appears not to be for their benefit.In this case the appointment of a receiver at the instance of these complainants was useless, and could be of no avail, until it was determined that the personal property so sold and purchased by the other defendants was first liable to the lien of the complainants.The cotton factory had no other property but this; the statute provides for no summary mode of proceeding between one set of creditors and another.The appointment of a receiver, so far from being beneficial and remedial, would have been an useless expense, if this personal property could not be made first liable in the hands of the other defendants to the payment of the complainants' claim for raw cotton.

"In construing statutes, the real intent when ascertained will always prevail over the literal sense of the terms."The occasion and necessity of the law is to be looked to; to give the construction here sought would defeat the very object of the law, as applicable to this law.May and shall are frequently convertible terms, and when used in statutes conferring power are sometimes used for each other.The object here was not only to get a receiver appointed under the law, but, in the same suit, to determine what the receiver could take, when and before his appointment.The court will not appoint a receiver unless satisfied that there are special and peculiar circumstances requiring summary relief, and against the legal title, only in cases of fraud clearly proven and of imminent danger.Farleng v.Edwards, 3 Md. 99.Clarkv. Ridgely. 1 Md Ch. 90.

Here it might be said the statute fixes the necessary summary relief, but not against the parties, against whom the real relief is sought, and there are no circumstances alleged of imminent danger or fraud.

These cases are properly cognizable on the equity side of the court.This has not been the practice, though such may have sometimes occurred.The necessary steps to be taken, the peculiar relief sought and the mode in which it is to be sought are peculiarly according to the jurisdiction and practice in equity, viz., the appointment of a receiver, an officer known only to courts of equity.The duties and services to be performed and rendered by him, and the security he is to give, are similar to the duties and services of trustees and receivers, as known to courts of equity, as remediable and punishable there, and inquirable into there.

Again, the submission of the whole case is to the court or a judge in vacation, and it ought to be borne in mind that when this law of 1847 was passed, and up to the term succeeding the Constitution of 1850, our present circuit courts were county courts, presided over by three judges.

The proceeding is commenced by petition, and the defense brought to the notice of the court, in and by an answer thereto, and this, too, when our old system of pleading was in full use and practice.When an issue is made the court is to do what?Exercise a jurisdiction peculiarly belonging to equity, i. e., consider whether a receiver should not be appointed.

The issue thus made, as provided by the fourth section, 1847, "should be tried by the court of the county, or by any judge in vacation," excluding the submission to a jury to try the issues; whilst in all cases at law, as a general rule, either party has a right to insist upon a jury to try issues of fact where his life, liberty or property are jeopardized.

Although all the cotton (raw) was sold and delivered before October 1st, 1856, and the executions were not issued until November 5th, 1856, by reason of credits on which the cotton was sold, it only became payable for a short time before March 1st, 1857.All the personal property which, alone, the complainants could pursue under their statutory lien thereon was sold under said executions on December 20th, 1857, and taken possession of by the defendants, and remained in their possession until and long after this petition was filed; indeed, as the record shows, until now.

To have confined the petition solely to the appointment of a receiver for the Cumberland Cotton Factory would have been fruitless, and yet the lien was perfect under the Acts of Assembly.There was no mode of reaping any benefit from it, except by combining with the application for the appointment of a receiver, an application also requiring these defendants and purchasers to recognize and yield to the lien.No other proceeding, involving so little litigation and but one suit, could be devised.

The court should not have dismissed the petition, even though it had refused to appoint the receiver.The defendants and purchasers were regularly summoned into the court, they appeared and answered, evidence was taken establishing the right of the complainants to be first paid out of the cotton under the statutes, and if the court had even refused to appoint a receiver it had power and jurisdiction to grant other relief than the statutory relief.No objections were made to the proceedings, to the evidence or mode of taking it, etc.There was nothing which could interfere with another application for a receiver.But we contend that to appoint a receiver, until it was ascertained that the only effects he could receive were held by other partiesdefendants, and until the conflicting claims between complainants and these other defendants were determined, would have been useless.

The statute gives the lien clearly by secs. 2and3, (1847,) irrespective of the statutory mode of realizing it, by the appointment of a receiver.Lien is a matter of general equity jurisdiction.1 StoryEq. Jur. 506.The proceeding is entirely in rem. against other parties, as well as against the Cumberland Cotton Factory.These other parties had to be made partiesdefendants in the proceedings before their rights and possession under the sheriff's sale could be affected; and in making them parties a mode of proceeding had to be used which could properly bring them into court.They were in possession, claiming title to all the personal property which the complainants had a lien on.See2 StoryEq. Jur. sec. 1526. 1 Dan. Ch. Pr. 276, 249.

We claim a reversal of the decision, and a judgment of the Court of Appeals against the defendants, and such other relief as this court may deem within its power to grant in the way of relief to the complainants.

Thomas J. McKaig, Jr., for the appellees, argued:

That the appeal in this case must be dismissed, because the Act of 1847, ch. 228, and its supplement, confers a special and limited jurisdiction upon the Circuit Court, and makes no provision for an appeal to this court.

By the statute law of this State the present mode of appeal was substituted for the more expensive and inconvenient proceeding by writ of error, and unless by express provision of some Act of Assembly an appeal will not lie in any case upon the law or equity side of the Circuit Court in which a writ of error would not lie.Although the proceedings under this Act of...