Bowie, C. J.,’
delivered the opinion of this Court.
The appellee, as trustee under the insolvent laws, sued the appellant in trover for the conversion of certain goods and chattels, including wheat and oats and other perishable articles. The nar. contained two counts: in the first, the conversion was laid before the appellee’s appointment as trustee, but after the petition; in the second, the conversion was charged to have been after the appellee’s appointment. The appellant pleaded not guilty^ on -which issue was joined. Five bills of exceptions were taken by the appellant — four to the rulings of the Court excluding or admitting testimony, and the fifth to the rejection of a series of prayers renewing in another form the objection to the evidence raised in the third exception.
FTo point is presented on the first bill of exceptions by the appellant in his brief, and it is therefore unnecessary to notice it. The second bill of exceptions was taken to the sufficiency of evidence offered by the plaintiff and admitted by the Court below as secondary evidence of the execution, approval, and delivery of the bond of the plaintiff as trustee, and of the contents of this bond. The circumstances given in evidence, raised the presumption that the bond, if it required a stamp, had been executed and stamped, and diligent search having been made by the deputy clerk in the clerk’s office without finding the same, parol evidence was properly admitted of its contents. The fact that the bond has since been found without a stamp, does not in any manner impeach the propriety of the admission of parol proof, but shows only the fallibility of the best devised maxims of presumptive evidence.
The third and fifth bills of exception relate to the necessity of a revenue stamp, to the legal validity of the bond of the trustee in insolvency, and, consequently, to his capacity to sue, the appellant insisting the bond in [364]*364question is not within the exception “ of bonds required in legal proceedings” under the Act of Congress of the 1st June, 1862. In whatsoever view vra- regard these exceptions, we cannot find any ground for reversing the action of the Court upon them. If, as interpreted by the Court below, the bond is within the exception referred to, the ruling was right; if not, the affixing to a paper, setting forth the loss, &c., of the bond, during the trial, with the consent of the Court, the requisite revenue stamp, and cancelling it as the law required, and then filing said paper among the insolvent papers, where the bond should have been, was a substantial compliance with the provisions of the Acts of Congress, and gave the bond validity “ ab initio.”
The evidence embraced in the fourth hill of exceptions was offered to prove that Springer, the insolvent, was, prior to his application for the benefit of the insolvent laws, indebted to the defendant,'who was also liable as surety for him to a large amount, and that after the execution of the hill of sale, and before his application, all the property mentioned in the hill of sale and sued for by the plaintiff, was actually delivered to the defendant, to be held by him as security for the indebtedness of the insolvent to the defendant, and his liability as surety, and that before, and at the time of the insolvent’s application, the defendant was in possession of the property, exercising control over the same, by virtue of the said delivery.
This testimony established the relation of bailor and bailee between the insolvent and defendant, whose rights as such bailee were necessarily involved in the issue joined in the cause.
The liability of a defendant receiving property under such circumstances is modified by law. He is not absolutely responsible for its value. “ If the pawn be lost by casualty or unavoidable accident, or superior force, or [365]*365perishes from intrinsic defect or infirmity, the pawnee is not answerable, if the loss from such causes be duly made to appear, and no act was done or omitted to be done inconsistent with the pawnee’s duty, for he was only bound to bestow ordinary care and diligence. 2d Kent’s Com., 579. “ The pawnee may also sell without judicial process upon giving reasonable notice to the debtor to redeem. Ibid, 583. The pledge covers not only the debt, but the interest upon it and all necessary expenses that may have attended the possession of the pledge, and the lien may, by agreement, be created to extend to subsequent advances.
The appellee relying upon certain general expressions of this Court, in the case of Alexander vs. Ghiselin, 5 Gill, 178, and others cited by Chancellor Johnson, in 3 Md. Ch. Dec., 508, resists the admission of the evidence as incompetent for the purpose of showing a right to the possession of the property. The language used in those cases is to be construed in connection with the object of the suits and the condition of the property. In both, the property existed in specie, and the contest was chiefly about the distribution of the proceeds when sold; the right to make the sale was incidentally, but necessarily involved.
These cases should not be stretched beyond their proper bounds to control others dissimilar in circumstance and varying in principle.
The present is an action of trover for damages for the conversion of property. If the right of possession was immediately involved, there would still be room to doubt what, in that aspect was the meaning of the Court, in the case referred to, in using this language. “ The true construction, then, of the Act of 1805, and the supplementary Acts relating to insolvent debtors, requires the trustee to take into his possession all the estate and effects to which the insolvent had the right of possession at the [366]*366time of Ms application, and to sell, etc., and to pay off the liens and encumbrances thereon.
These goods were not in the custody of the law at the time the bailee’s rights attached ; they were delivered to him several months prior to the insolvent’s petition, and were in the bailee’s possession at the time of the petition. This case is not within the rule laid down in Buckey vs. Snouffer, 10 Md. Rep., 155. The “custodia legis” commences with the'petition ; all bona fide liens for a valuable consideration antecedently attached, must be respected in an action for the value of the property.
At common law goods pawned or pledged are not liable to be taken in execution in an action against the pledgor. The possession of the pledgee could not be disturbed, because the officer could acquire no greater interest in or control over the property than that possessed by the defendant, against whom he held the process of the Court. Marsh vs. Laurence, 4 Cow., 461 ; Scott vs. Scholey et al., 8 East., 467 ; Metcalf et al. vs. Scholey et al., 5 Bos. & Pull, 461.
In consequence of this, statutes have been passed in some of the States giving a right of execution against the pledgor’s interest, subject to the lien of the pledgee. Edwards on Bailments, 205. But this sale does not in any manner impair the right of the pledgee. The purchaser’s right of redemption is the same exactly, and dependent upon the same terms and conditions as that of the pledgor.
Free access — add to your briefcase to read the full text and ask questions with AI
Bowie, C. J.,’
delivered the opinion of this Court.
The appellee, as trustee under the insolvent laws, sued the appellant in trover for the conversion of certain goods and chattels, including wheat and oats and other perishable articles. The nar. contained two counts: in the first, the conversion was laid before the appellee’s appointment as trustee, but after the petition; in the second, the conversion was charged to have been after the appellee’s appointment. The appellant pleaded not guilty^ on -which issue was joined. Five bills of exceptions were taken by the appellant — four to the rulings of the Court excluding or admitting testimony, and the fifth to the rejection of a series of prayers renewing in another form the objection to the evidence raised in the third exception.
FTo point is presented on the first bill of exceptions by the appellant in his brief, and it is therefore unnecessary to notice it. The second bill of exceptions was taken to the sufficiency of evidence offered by the plaintiff and admitted by the Court below as secondary evidence of the execution, approval, and delivery of the bond of the plaintiff as trustee, and of the contents of this bond. The circumstances given in evidence, raised the presumption that the bond, if it required a stamp, had been executed and stamped, and diligent search having been made by the deputy clerk in the clerk’s office without finding the same, parol evidence was properly admitted of its contents. The fact that the bond has since been found without a stamp, does not in any manner impeach the propriety of the admission of parol proof, but shows only the fallibility of the best devised maxims of presumptive evidence.
The third and fifth bills of exception relate to the necessity of a revenue stamp, to the legal validity of the bond of the trustee in insolvency, and, consequently, to his capacity to sue, the appellant insisting the bond in [364]*364question is not within the exception “ of bonds required in legal proceedings” under the Act of Congress of the 1st June, 1862. In whatsoever view vra- regard these exceptions, we cannot find any ground for reversing the action of the Court upon them. If, as interpreted by the Court below, the bond is within the exception referred to, the ruling was right; if not, the affixing to a paper, setting forth the loss, &c., of the bond, during the trial, with the consent of the Court, the requisite revenue stamp, and cancelling it as the law required, and then filing said paper among the insolvent papers, where the bond should have been, was a substantial compliance with the provisions of the Acts of Congress, and gave the bond validity “ ab initio.”
The evidence embraced in the fourth hill of exceptions was offered to prove that Springer, the insolvent, was, prior to his application for the benefit of the insolvent laws, indebted to the defendant,'who was also liable as surety for him to a large amount, and that after the execution of the hill of sale, and before his application, all the property mentioned in the hill of sale and sued for by the plaintiff, was actually delivered to the defendant, to be held by him as security for the indebtedness of the insolvent to the defendant, and his liability as surety, and that before, and at the time of the insolvent’s application, the defendant was in possession of the property, exercising control over the same, by virtue of the said delivery.
This testimony established the relation of bailor and bailee between the insolvent and defendant, whose rights as such bailee were necessarily involved in the issue joined in the cause.
The liability of a defendant receiving property under such circumstances is modified by law. He is not absolutely responsible for its value. “ If the pawn be lost by casualty or unavoidable accident, or superior force, or [365]*365perishes from intrinsic defect or infirmity, the pawnee is not answerable, if the loss from such causes be duly made to appear, and no act was done or omitted to be done inconsistent with the pawnee’s duty, for he was only bound to bestow ordinary care and diligence. 2d Kent’s Com., 579. “ The pawnee may also sell without judicial process upon giving reasonable notice to the debtor to redeem. Ibid, 583. The pledge covers not only the debt, but the interest upon it and all necessary expenses that may have attended the possession of the pledge, and the lien may, by agreement, be created to extend to subsequent advances.
The appellee relying upon certain general expressions of this Court, in the case of Alexander vs. Ghiselin, 5 Gill, 178, and others cited by Chancellor Johnson, in 3 Md. Ch. Dec., 508, resists the admission of the evidence as incompetent for the purpose of showing a right to the possession of the property. The language used in those cases is to be construed in connection with the object of the suits and the condition of the property. In both, the property existed in specie, and the contest was chiefly about the distribution of the proceeds when sold; the right to make the sale was incidentally, but necessarily involved.
These cases should not be stretched beyond their proper bounds to control others dissimilar in circumstance and varying in principle.
The present is an action of trover for damages for the conversion of property. If the right of possession was immediately involved, there would still be room to doubt what, in that aspect was the meaning of the Court, in the case referred to, in using this language. “ The true construction, then, of the Act of 1805, and the supplementary Acts relating to insolvent debtors, requires the trustee to take into his possession all the estate and effects to which the insolvent had the right of possession at the [366]*366time of Ms application, and to sell, etc., and to pay off the liens and encumbrances thereon.
These goods were not in the custody of the law at the time the bailee’s rights attached ; they were delivered to him several months prior to the insolvent’s petition, and were in the bailee’s possession at the time of the petition. This case is not within the rule laid down in Buckey vs. Snouffer, 10 Md. Rep., 155. The “custodia legis” commences with the'petition ; all bona fide liens for a valuable consideration antecedently attached, must be respected in an action for the value of the property.
At common law goods pawned or pledged are not liable to be taken in execution in an action against the pledgor. The possession of the pledgee could not be disturbed, because the officer could acquire no greater interest in or control over the property than that possessed by the defendant, against whom he held the process of the Court. Marsh vs. Laurence, 4 Cow., 461 ; Scott vs. Scholey et al., 8 East., 467 ; Metcalf et al. vs. Scholey et al., 5 Bos. & Pull, 461.
In consequence of this, statutes have been passed in some of the States giving a right of execution against the pledgor’s interest, subject to the lien of the pledgee. Edwards on Bailments, 205. But this sale does not in any manner impair the right of the pledgee. The purchaser’s right of redemption is the same exactly, and dependent upon the same terms and conditions as that of the pledgor. “He is entitled to the possession of the goods on complying with the terms and conditions of the pledge ; and when these cannot be complied with until some future event has occurred, the pledge must of course be redelivered to the hands of the pledgee.” Ibid, 207. Thus the law stands, whilst the pledge remains “in statu quo.” Where the property has been unlawfully detained, or withheld, or converted or changed by the pledgee, corresponding rights and liabilities ensue. Although there is [367]*367a remedy in equity in certain cases, the usual recourse is to an action of replevin or trover. “ If the goods pledged have been wrongfully sold by the pledgee, a recovery may be had against him in a suit in the nature of an action on the case, or in assumpsit to recover the value of the property, and if the debt for which the pledge is deposited in security has not been paid, the pledgee may recover the amount by way of reduction of damages.” Stearns vs. Marsh, 4 Denio, 232 ; Jarvis, Adm’r, vs. Rogers, 15 Mass., 389 ; Bac. Abrid. Bailment.
The right of a pawnee creditor to the deduction of the amount of his claim against the trustee of an insolvent pawnor is demonstrated with great force of illustration and authority in the case of Receivers vs. The Patterson Gas Light Company, 3 Zabriskie, 291.
The general conclusion is thus announced : “ The rule pervades both bankrupt and insolvent laws founded on general principles of equity, that all cross demands, whether connected or independent, provided they be mutual, as between the bankrupt or the insolvent, and the creditor, shall be set-off, and the balance only shall bo deemed the indebtedness on one side or the other. The assignees take a bankrupt's property in the same condition, and subject to the same burthens, as the bankrupt himself held it. On the principle that they are not purchasers for a valuable consideration, but as voluntary assignees and personal representatives, and are therefore distinguished from particular assignees.”
This Court, in the late case of The Baltimore Marine Insurance Company vs. Dalrymple, (April Term, 1866, M.S.,) which ivas an action of trover by bailor vs. bailee, for the conversion of stock, said :
“ We consider it perfectly clear that the vieAv taken by the Court beloAV on the question of recoupment Avas correct ; and that in ascertaining the damages,- the amount of the debt due the defendant, to secure Avhich the stock [368]*368and other collaterals were pledged, ought to be deducted. The law is so expressly stated by Story in his work on Bailments, secs. 315, 349. It is supported by the authorities cited by him ; and is consistent with the general doctrine of recoupment established in modern cases and recognised by this Court in Abbott vs. Gatch, 13 Md. Rep., 314 ; Stewart vs. Rogers, &c., 19 Md. Rep., 117, 118.”
(Decided 28th June, 1867.)
The exclusion of the evidence offered in the appellant’s fourth bill of exceptions, deprived hini of the benefit of the right of recoupment in the estimation of damages by the jury,' and was therefore erroneous. The judgment of the Court below must therefore be reversed, and procedendo awarded'.
Judgment reversed and procedendo awarded.