Muhr v. Pinover

• Decision Date: 23 June 1887
• Citation: 10 A. 289,67 Md. 480
• Parties: MUHR AND OTHERS v. PINOVER, GARNISHEE, ETC.
• Court: Maryland Court of Appeals

10 A. 289

67 Md. 480

MUHR AND OTHERS v. PINOVER, GARNISHEE, ETC.

Court of Appeals of Maryland

June 23, 1887

Appeal from superior court, Baltimore city.

M R. Walter, for appellants.

M S. Weil, for appellee.

ROBINSON J.

The debtor in this case, being in failing circumstances, made an assignment of all his property, except so much thereof as is exempt by law from execution, for the benefit of his creditors; and the question is whether the reservation of property exempt from execution makes the assignment fraudulent and void as to creditors? If it does, it must be because such a reservation operates in some way "to hinder, delay, or defraud" the creditors of their just demands against the debtor. An assignor has no right, of course, to reserve any part of his property for the benefit of himself or his family, which by any process, at law or in equity, could be made liable for the payment of his debts. But when the law itself exempts certain property of the debtor from execution, property in regard to which the creditors can have no interest or concern, and which cannot be made subject to the payment of their demands, we do not see on what grounds the reservation of such property can be said to be in fraud of creditors. It certainly does not operate in any manner to delay, hinder, or defraud them of their rights, because it does not in any way interfere with their remedies, nor does it take from them any property of the assignor, which could be sold for the payment of their claim. This seems too plain for argument. To make such an assignment void there must be a reservation of property which could be made subject to the payment of the debts of the assignor. And with the exception of Sugg v. Tillman, 2 Swan, 208, and which was subsequently qualified by Farquharson v. McDonald, 2 Heisk. 404, the decisions in this country are uniform in regard to the question. Heckman v. Messinger, 49 Pa. St 465; Mulford v. Shirk, 26 Pa. St 473; Dow v. Platner, 16 N.Y. 562; Smith v. Mitchell, 12 Mich. 180; Brooks v. Nichols, 17 Mich. 38; Simpson v. Robert, 35 Ga. 180; Bank v. Cox, 6 Me. 395.

But then it is said the act of 1861 exempts the property of the debtor only from sale under execution, and makes no provision for the exemption of property under an assignment for the benefit of creditors. This may be so, but the act of 1861 was passed in pursuance of the state constitution, which provides that "laws shall be passed by the general assembly to protect from execution a reasonable amount of the property of the debtor, not exceeding in value the sum of five hundred dollars." The object of the law was to prevent a debtor from being stripped of all his property, and it ought to be liberally construed. As his property could be taken and sold only by way of execution, it provided in terms for the exemption in such cases. By the terms of the act, the debtor may select property to the value of $100, to be ascertained by three appraisers to be summoned and sworn by the officer levying the execution. And if the property cannot be divided so as to set apart a portion of it, of the value of $100, without loss and injury to all parties concerned, then the property is to be sold, and the debtor is to be awarded $100 of the proceeds of sale. Now, an assignee for the benefit of creditors is in equity a trustee for all parties in interest; and, although the act of 1861 makes no provision by means of which the property exempt may be ascertained under a voluntary assignment, yet we see no reason why this may not be done under the supervision of a court of equity, or application of the assignee or any other party in interest. No provision is made by the act, where the debtor applies for the benefit of the insolvent laws; and yet in such cases the exemption is made under the direction of the insolvent court construing the act of 1861, in connection with the provision in the constitution. It is clear, we think, the legislature meant to exempt, under all circumstances, the property of the debtor of the value of $100 from the claims and demands of his...