Manahan v. Sammon

Eccleston, J., delivered the opinion of this court. The appellants filed their bill in this case on the 19th of June 1851, praying a decree for the sale of certain real estate for the payment of a debt due them by T. Samrnon, under a mortgage executed by him, on the 17th of September 1850; and likewise praying an injunction to restrain G. A. Thurston, as trustee of G. S. Greene, an insolvent petitioner, from sell: ing the property, or intermeddling therewith in any manner. The property was originally purchased by G. S. Greene, of Wm. Chisholm, executor of Mary Ann O’Neill, and he gave his notes to secure a portion of the purchase money. On these notes Chisholm obtained judgments against Greene in 1843, and issued writs of fien facias upon them in 1844, which were levied on the real estate in controversy. The sheriff returned the writs as levied and on hand for want of buyers. On these fi. fas. writs of venditioni exponas were issued, on the 25th of February 1847, and on the 5th of May following the property was sold under these writs to Thomas Samrnon, by N. Bruce, as sheriff. On the 14th of Jánuary 1847, George S. Greene became a petitioner for the benefit of the insolvent laws, and G. A. Thurston was appointed and qualified as his trustee. The insolvent papers were returned in the usual manner and filed by the clerk, on the 24th of January 1847. The injunction was granted in the first instance; and after-wards dissolved. From the last order this appeal is taken. The important question necessary to be decided is, whether the sale by the sheriff passed any title to Samrnon? It has been very correctly said, that judicial sales are al — 471 — ways favored by courts. That a purchaser under an execution upon a judgment subsequently reversed will, nevertheless, hold a valid title to the property; and that the result will be the same where a sale is made under a ft. fa., issued more than three years after the date of the judgment, without being revived by a sci. fa., unless the sale is set aside by some proceeding on the part of the defendant in that particular case. Such a title cannot be rendered nugatory in any collateral proceeding. These titles, however, have been sustained, upon the ground that the proceedings under which, they were obtained were not void but only voidable, in consequence of irregularity merely. Miles vs. Knott, 12 G. & J., 452, 453. Jackson vs. Robins, 16 Johns., 575, 576. In such cases the matter of irregularity in the process has been the important question, not whether the title of the defendant in the execution, at the time of sale, was such as could be sold under the writ.- -But in the present instance there is no dispute as to the regularity of the judgment, nor any allegation of irregularity in regard to the time' or manner of issuing, levying or returning the. ft. fas., or that the writs of vendi. were at all defective in any matter of form. The objection here is, that before the sale took place, the insolvent application of Greene had transferred to his trustee the sole and exclusive right of selling the property, notwithstanding the outstanding ft. fas. previously levied. And this doctrine is fully sustained by the decision in Alexander, et al., vs. Ghiselin, et al., 5 Gill, 179. There the right of a sheriff to sell under a ft. fa., actually levied before the insolvent’s petition, was expressly denied; and the authority of the trustee to make the sale as clearly asserted. This being so, the sheriff, Bruce, under the writs of vendi. in his hands, had no more power to sell the property than an execution against A would have given him to sell the property of B. No matter how perfect the judgment and ft. fa. against A might be, a sale of B’s estate under it would be nugatory and void. But this case is said not to be affected by that of Alexander vs. Ghiselin, because there no sale was made, whilst here — 472 — there was; and the trustee stood by -without making any objection, from 5th of May 1847 until the year 1851. Now,’ according to the doctrine of that case, no one but the trustee of an insolvent has a right to sell the insolvent’s property. And every one is presumed to know such to be the law. Here, too, the insolvent papers being filed before the sale, and therefore being matters of record, Sammon is to be considered as having knowledge'of Greene’s application. Under these circumstances Sammon took no title by the sale, and the •silence of the trustee, (a mere representative of the creditors,) could give him no title. It has also been insisted that there is an essential difference between this case and the one reported in 5 Gill, 179, inasmuch as there the fi. fa. was issued and levied before the petition, and the sale prevented by injunction; and here the fi.fas. being levied prior to the application, writs of vendi. were subsequently issued.- Those writs having been issued by a court of general jurisdiction, commanding the sheriff, after the insolvent’s petition, to make sale of the property specifically named in the writs, it is contended, gave the officer such power to sell, that the purchaser acquired rights' under his sale which cannot now be resisted successfully by the trustee. This, as a legal proposition, we cannot assent to. We have seen that the fight to sell under the fi. fas. was taken away by the petition of the insolvent, and the appointment of his trustee. If so, the writs of vendi., whether issued before or after the application, could not restore the right. A vendi. confers no power on a sheriff which he did not possess under the fi.fa. The former only commands and' requires him to do what he could have done under the latter. The fi fa. is the effective writ. He could sell under it after a levy, without a vendi. Clerk vs. Withers, Ld. Raym., 1072. 2 Tidd’s Pr., 1013, (new ed.) 1 B. & A., 230. In Clark vs. Belmear, 1 G. & J., 448, the Court of Appeals say : “The fieri facias is the effective writ in these cases, it not only authorises the sheriff to seize, but to sell;' very different is the office of a venditioni exponas. That confers no new power to the sheriff; it — 473 — does not authorise him to do any act that he might not have done under the fieri facias. It is only a mandatory writ, and directs him to carry the fieri facias into effect, by selling the lands taken in execution under it, and when the lands are sold, the return to the venditioni relates to, and in legal effect becomes part of, the return to the fieri facias. ” The 7th section of the act of 1805, chapter 110, provides, that, no judgment to be entered after the insolvent’s application shall be a lien on his real property, nor shall any process against his real or personal property have any effect thereon, except writs of fieri facias, actually and bona fide levied before such application. And the decision in Alexander vs. Ghiselin being, that even such a levy under a fi. fa. confers no authority on the sheriff to sell, but that the trustee is the officer having the exclusive power to make a sale, it would be a strange construction to say, a vendió could divest the authority of the trustee, and transfer it to the sheriff; especially when the act declares: “Nor shall any process against his real or personal property have any effect thereon, except writs of fieri facias actually and bona fide levied before such application. ’’ And the construction, as to the exception in regard to s. fi.fa. so levied, is, that the plaintiff in such writ will have his lien so far protected, as to have the right to claim payment thereof out of the proceeds of the property, when sold by the trustee. Of course, a ft. fa. issued before, and levied after, the application, and one issued after, can have no effect upon the property. As the only exception made in favor of any species of process, even to the extent of creating a lien, without giving authority to sell, is that of a fi.fa. levied before the petition; with what sort of propriety can it be supposed that a vendH., which is dependent upon it for all its power and efficacy, can give the right to sell, simply because it issued after the application 1 The appellants’ counsel objected to the validity of the deed from the insolvent to his trustee, because it was not acknowledged before the proper officer; and also because it has not been recorded. The first objection he eventually abandoned, and properly so. The last need not be noticed, for the reason that — 474 — we think the property of an insolvent is transferred, by law, to his trustee, if the deed is defective. This principle has been recognised in- the case of Waters vs. Dashiell, 1 Md. Rep., 472, and we feel no disposition to change our views on the subject. But it is contended, that if the objection to the deed for not being properly recorded cannot be sustained, still, under the act of 1827, ch. 70, sec. 8, Sammon took a good title, by virtue of the sheriff’s sale to him. It is said the property in controversy if included at all in the deed, is so defectively described that it cannot pass by the conveyance. Assuming, then, this property is to be considered as if not mentioned in the deed, the appellants claim that, by the act of 1827, the sale made to Sammon was valid. But here, likewise, we have the authority of Waters vs. Dashiell for saying, if the property was not included in the conveyance, the sheriff had no authority to sell. The construction there given to that act was designed to make it harmonize with the principles established in Alexander vs. Ghiselin, so as to render the different portions of the insolvent system uniform, and not to have one part inconsistent with another. The interpretation put upon-the act of 1805, ch. 110, in the last mentioned case, fully justifies that given in Waters vs. Dashiell, in regard to- the act of 1827, ch. 70. By this last decision the lien of the creditor, who finds out property which the insolvent has failed to include in his deed or schedule, and has not delivered over to the trustee, but may have intentionally concealed, is protected in his lien, precisely to the same extent which an execution creditor is, whose fi. fa. has been levied before the application. And this lien right is a fair compensation for the vigilance and activity displayed in searching out the concealéd property. In regard to the effective operation of the transfer of property to the trustee by the insolvent’s application, in addition to what has already been said, see the strong language used in 5 Gill, 178 to 180; and also in the case of Somerville vs. Brown, 5 Gill, 425. From what- has been said, it follows as a necessary consequence, that Sammon took no title under the sheriff’s sale; of — 475 — course he could convey none by the mortgage which he gave. “The complainants are, therefore, not entitled to the relief prayed for, and we are compelled, reluctantly, to affirm the order dissolving the injunction, and to dismiss the bill. The case is a hard one, and if we had the authority to grant relief, we should do so with great cheerfulness. But the assets in insolvency are not to be distributed in a court of equity. That duty is to be performed by the comt having exclusive jurisdiction over cases of insolvency. However, nothing is here said which denies to that tribunal the right, when disposing of the proceeds of this property, after a sale by the trustee, to substitute the purchaser at the sheriff’s sale, or those claiming under him, in the place of the creditor whose lien may have been paid by the proceeds of sale under the executions. Order affirmed, and bill dismissed.