Cochrane v. Bridendolph

19 A. 604, 72 Md. 275, 1890 Md. LEXIS 21

• Court: Court of Appeals of Maryland
• Decided: April 18, 1890
• Status: Published

Opinion

Bryan, J.,

delivered the opinion of the Court.

Bridendolph and Richmond were permanent trustees in insolvency of Howell, who had been adjudicated an insolvent debtor. They sued Cochrane for money in his hands alleged to belong to the insolvent estate. The money was the proceeds of the sale of certain cattle which belonged to Howell, previously to the adjudication of insolvency ; but it was alleged by the defendant that he had become entitled to it by virtue of an agreement which is stated in the record with some variety of form. We shall, however, consider it under the aspects most favorable to the defendant, so as to give him the advantage of every hypothesis which the case may legitimately authorize. In the second bill of exceptions, it is stated that the defendant offered to prove that at a meeting of Howell and his creditors and the trustees, the creditors agreed for the sum of fifty per cent, of Howell’s indebtedness, paid in cash, and his real estate, that they would release the trustees and Howell, and that the agreement was to be in full of all claims against Howell, and a final settlement of all proceedings against him in the insolvent case, and that they knew that there was a surplus in the hands of the defendant, and agreed that he should retain it. By force of the statute these trustees were invested with the entire estate of the insolvent, subject, of course, to the legal exemptions ; they held it for the benefit of the creditors, among whom it was their duty to make distribution at the proper time, and in due proportions. But in the meantime, the creditors were not entitled to interfere with it in any way whatever. The statute did not authorize them to make any composition with the insolvent, or to release him in 'any degree from the obligation which the law imposed upon him to surrender to the trustees all his property except that portion within the statutory exemptions. Nor had the trustees a right to make any bargain with the insolvent which should relieve him from his legal duty. The statute, in the most explicit terms, requires the insolvent to surrender his property to the trustees-, and makes it the duty of the Court to enforce the surrender by fine and imprisonment. Code of 1888, Article 47, section 30. What, therefore, would be the significance of a contract made by the insolvent that he would do that which he was obliged to do ? and where would the trustees derive the authority to excuse him when he should do less ? If they could accept a part of his property in lieu of the whole, they could absolve him from obedience to the law.

But it is maintained that the Insolvent Court had approved a contract on this subject between the trustees . and Howell. Without stopping to inquire into the limits of the’ Court’s power in this regard, we will see what action it took on this subject. The trustees in insolvency filed their report in the Insolvent Court, in which they stated that Howell, having refused to deliver to them a large sum of money which he had in his possession, was committed to jail for contempt of Court, and the report then stated “that on the 22nd daj" of February, 1889, said Howell, through one J. William Shuck, agreed to turn over to your trustees a sum of money exceeding seven thousand dollars, it being fifty per cent, of his then ascertainable indebtedness, and provided your trustees would not sell his real estate for two years, and give him the opportunity of redeeming the same in the meantime by paying the remaining fifty cents, to which arrangement the creditors of said Howell then and there assented, it being further agreed that said Howell should pay half the costs of this case ; ” and that Howell, having purged his contempt, paid over to the trustees the sum of seven thousand and one hundred and sixty-six 91-100 dollars, and also deposited in the hands of Shuck four hundred dollars as security for one-half the costs of the case ; and that Lowndes and Percy proposed to buy all the real estate of Howell in Alleghany County, and that they had agreed to give Howell the opportunity of redeeming it within two years, according to the understanding with the trustees. The report further stated that it would be to the interest of the creditors to make the sale and have a speedy settlement, and that the creditors were willing that the sale should be made. The Insolvent Court ratified the sale to Lowndes and Percy. It certainly gave its approval to the action of the trustees, as stated in their report, and gave its sanction to the sale of the real estate on the proposed terms. But we see nothing in the report which purports that Howell was to be excused from surrendering his property to the trustees ; and we should require very clear proof before we could believe that a Court would permit a prisoner who was in custody for contempt, to haggle with it as to the terms on which he would obey the law. We have not followed the exceptions taken at the trial, but we have stated all the evidence tendered for the purpose of proving the supposed contract with the insolvent, both that which was admitted and that which was rejected, so that we might have a comiected view of the whole question. We see nothing which can discharge him from the obligations imposed upon him by the statute. It musí be mentioned that two days after Howell had paid to the trustees the money already mentioned, his wife relinquished her dower, in his real estate by deed to the trustees, stating in the deed that “ in order to facilitate the discharge by law of said Howell under the insolvent proceedings aforesaid from the payment of his debts ” she was willing to execute it. This deed, however, does not make the supposed contract either more or less effectual. The defendant’s prayer maintains as its hypothesis that the creditors and trustees agreed between themselves that they would accept the sum of fifty cents in cash on the debts due from Howell, and take the real estate to hold for two years as a.pledge that he would pay thte balance of his indebtedness, and it sets up this contract as the consideration for the release of the insolvent’s property. The defence is varievd in the third and fifth pleas, which were ruled bad on demurrer. The third plea avers that the several creditors of Howell agreed with him and the trustees that they would release Howell from all claims against him, &e., &c.; while in the fifth plea the contract is alleged to have been made between the defendant and the respective creditors and the trustees. In whatever way the contract may have been made, it is, in our opinion, invalid. The plaintiff’s prayers assumed that there was no contract which could he recognized, and were properly granted.

(Decided 18th April, 1890.)

Judgment affirmed.