Teackle v. Gibson

Mason, J., delivered the opinion of this court. Many grave and important questions have been discussed with much ability by counsel in the progress of their argument, which we think the exigencies of this • case do not require us to determine upon the present appeal. Whatever force there would have been in the suggestion, if made at the proper time, that a court of equity had no original jurisdiction over this case, it is now too late for us to entertain such an objection, inasmuch as none was taken, as required by the act of 1841, chap: 163, in the court below. By that act it is provided, that the defendant shall not, in the Court of Appeals, rely upon any objection to the jurisdiction of the court below, unless it appear by the record, that such objection was raised below. The appellant as permanent trustee in insolvency of Carey, Wethered and O’Donnell, on the 8th of December 1850, filed his bill in equity, making substantially the following case: that the firm above named became embarrassed in 1839; and being absolutely insolvent in the following year, with full knowledge of their condition, transferred large sums of money and other property, constituting nearly the whole assets of the firm, to several preferred creditors. That Gibson, the defendant, received of such assets more than $18,000, which sum exceeded his claim against the firm, and his liabilities for them; that at the time of the said transfer the film was utterly insolvent, and Gibson knew of such condition; that the several members of the firm applied for the benefit of the insolvent laws in 1841, and that the appellant became permanent trustee for all the parties, on the 23rd of October 1846; that Gibson [85] has never accounted for any of the assets which came into his hands, &e. Subsequently, by an amended bill, it was further alleged, that after the assignment to Gibson the insolvents made a deed to Hinldey and Woodward, dated September 24th, 1840, embracing the balance of their assets and property, and under which deed the grantees took possession of the books and papers of the firm. Upon a bill filed in equity by the permanent trustee to vacate this deed, a decree was passed 12th of July 1848, vacating the deed and transferring the property, books and papers of the insolvent, embraced by said deed, to the trustee. Prom these books he discovered, for the first time, the transfers above mentioned to the present defendant, and that he had no other means of ascertaining the fact. The prayers of the bill were for a discovery, an account, and for a delivery of the assets in the defendant’s possession to the complainant, and for general relief, &c. The defendant pleaded two pleas of limitation, namely: 1. That Hinkleywas appointed provisional trustee of Carey on the 12th of January 1841; and of Wethered on the 13th of August 1841; and Horsey became provisional trustee of O’Donnell on the 13th of July 1841; and that the cause of action accrued to Hinkley, as provisional trustee of Carey, Wethered & Co.; and to Horsey, as provisional trustee of O’Donnell, more than three years before bill filed, or before serving or suing out process, and also more than three years before the appointment of complainant as permanent trustee; nor did the defendant promise within three years before bill filed, or process served or issued, nor either when or since the provisional trustees were in office, to account or make satisfaction for any matters in the bill. 2. That the cause of action accrued to the complainant more than three years before bill filed, or before serving or suing out process; and defendant did not promise complainant to account for, or pay any thing for any matter charged in the bill. The conrt. overruled the first and sustained the second plea, and dismissed the bill. Both parties it seems appealed from this decision. [86] Without inquiring into the regularity of the appeal of the defendant, because of the circumstance that the decree was in his favor, the court is nevertheless of opinion, that all the advantages which he seeks under his appeal can be attained under the complainant’s appeal. The question presented upon the appeal regularly before us is, whether the decree dismissing the bill was properly passed ? and if either of the defendant’s pleas presents a good ground of defence to the case as made by the complainant’s bill, the decree must be affirmed, and it matters not upon which plea the court below based the dismissal of the bill. The second plea, in its connection with the amended bill, raises the question, in addition to the question of the general inapplicability of either plea to this particular transaction, whether the three years’ limitation began to ran from the appointment and qualification of the permanent trustee, or from the time the fact of the alleged fraudulent transfer to Gibson came to his knowledge ? This is a most important question, and one by no means free from difficulty, but as it does not enter into the first plea, and as the court have no difficulty in determining that that plea was improperly overruled, we are relieved from the necessity of deciding the question upon this appeal. It is not charged in the bill that the provisional trustees had no knowledge of this alleged fraudulent transaction. Indeed such a theory is expressly negatived by the fact that Hinldey, who was the provisional trastee of two of the three insolvents, was also one of the grantees of the deed, under which the possession of the books and papers of the insolvent firm passed to him, and from which knowledge of the transfer was to be acquired. The two remaining questions presented by the first plea, which we are required to determine, are, first, does the present proceeding disclose such a transaction or trust to which the plea of limitations would be inapplicable ? and if not, then, secondly, does the insolvent system of Baltimore city confer power upon the provisional trustee to sue in such a case as the present, and thereby bring him and the creditors he represents [87] williin the operation of the statute of limitations, which statute begins to run from the time the cause of action accrued, provided there is no disability existing at the time in the party entitled to sue ? It is certain upon the facts disclosed by the bill, that an action or actions at law would have been maintained by which the relief now sought couid have been fully secured, whether equity possesses concurrent jurisdiction or not. This being conceded, it has been settled by this court, that in all cases of concurrent jurisdiction, between courts of law and equity, the statute of limitations is equally obligatory in each court. Watkins vs. Harwood, 2 G. & J., 307. Dugan vs. Gittings, 3 Gill, 161. Hertle vs. Schwartze, 3 Md. Rep., 383. W'e think this principle disposes of the first objection taken to this plea of limitations. Next, as to the second point, namely, the right of the provisional trustee to sue. True it is, that the case of Kennedy vs. Boggs, 5 H. & G., 403, expressly decided, that the act of 1816, chap. 221, the act under which the local system of insolvency for Baltimore city was created, did not confer any power upon the provisional trustee to sue for the recovery of the property of the insolvent from third parties, and if the legislation upon this subject had rested here, we would have had no difficulty in sustaining the views of the appellant upon this point. But to meet a case like the present it would seem that the act of 1829, chap. 208, was enacted. By the third section of that act, in express terms, the right to the possession of all the property, &c., of the insolvent, is conferred upon the provisional trustee, with power “to use all legal means for the recovery thereof. ” Under this act there is no room-to doubt that there was full power in the provisional trustees to sue in this case as fully as the permanent trustee, and that limitations began to run against them from the time of their appointment and qualification as such, and when once commenced limitations continued to run against, also, die permanent trustee. For the reasons assigned we regard the plea of limitations as a flat bar to a recovery in this proceeding, and therefore affirm the decree. Decree affirmed.