Teackle v. Crosby

Eccleston, 3., delivered the opinion of this court. The Act of 1854, ch. 193, sec. 1, authorises an insolvent to make application, as such, by a petition stating his insolvency, and offering to deliver up, for the benefit of his creditors, all his property, real and personal, and “exhibiting therewith a schedule of his property, and a list of the debts due from and owing to him, with the names of his debtors and creditors, all verified by affidavit,” &c., &c. Edward Higgins filed his application for the benefit of the insolvent law, on the 30th of March 1858, and on the same day, the commissioner of insolvents, for the city of Baltimore, appointed St. George W. Teackle trustee, who gave a bond as such, which was approved, and received from the insolvent a deed of all his property. The trustee also filed the usual certificate, that he had received from the insolvent all his property and evidences of debt mentioned in his schedule. Subsequently, on the 2ist of April 1858, the appellees, as creditors of Higgins, filed their petition, charging, that he had filed his petition for the benefit of the insolvent law, but had not “exhibited therewith,” as required bylaw, “a schedule of his property, and a list of the debts due from and owing to him, with the names of his debtors and creditors, all verified by affidavit.” The appellees, in their petition, also objected [21] to the appointment, of Mr. Tcackle as trustee; and prayed that the proceedings of the commissioner, and the appointment of the trustee, might be annulled and revoked, and the petition of Higgins be dismissed. After the trustee had put in his answer, the court passed an order rescinding the appointment of the trustee, upon the ground of its having been prematurely made. By the same order, the application of Higgins was remanded to the commissioner, who was ordered and directed to appoint a trustee as if sufficient schedules and lists had been originally filed; provided Higgins should file full and sufficient schedules of his debts and credits, with full and sufficient lists of his debtors and creditors, under oath, and as far as he could ascertain the same, but not otherwise. Prom this order the trustee has appealed. Higgins certainly failed to comply with the provisions of the Act, and his failure to do so ought to debar him from obtaining a release from his debts until he does comply with the requirements of the statute. Such, we think, was the design of the law, but we cannot suppose it ever was intended that such a failure on his part, should have the effect of rescinding the appointment of his trustee. It is, manifestly, one of the main objects of the insolvent system to have the property of the applicant placed, promptly and securely, in the hands of a trustee, to be converted into money and distributed amongst the creditors as speedily as practicable. IÍ be is to be removed, merely because of the insolvent’s non-compliance with the law, in the particulars mentioned, and no other trustee is to be appointed until the insolvent does comply, it will be allowing his misconduct to prejudice, delay and hinder the creditors, without any neglect or fault on their part, or that of the trustee. An interpretation of the law producing such consequences could not have been intended by the Legislature, nor would it be calculated to insure a compliance with its provisions. But a more reasonable interpretation, and much more likely to have the requirements of the Act complied with, would be to retain the trustee, and at the same time deny to the applicant a final discharge until he does comply. [22] The appellees, in their petition, also urged, as a reason for removing the trustee, that he “did not represent any of the creditors, but was counsel for the applicant.” This, where, in other respects, the trustee is an unexceptionable person, cannot be a sufficient ground for rescinding the appointment, and ordering another trustee to be appointed only when the insolvent shall have “filed full and sufficient schedules of his debts and credits, with full and sufficient lists of his debtors and creditors, under oath.” From what has been said, it will be seen, that we concur with the judge below in regard to so much of the order appealed from, as remanded the case to the commissioner for the purpose of giving the insolvent an opportunity of complying with the provisions of the Act of 1854. But we think the said order is erroneous, because it rescinded the appointment of the trustee. The decision will, therefore, be affirmed in part and reversed in part, with costs to the appellant, and the cause will be remanded, so that the principles announced in this opinion may be carried into effect. One of the points presented by the counsel for the appellants is, “That the trustee has no right to appeal in this case, not being ‘interested’ in the sense of the statute.” To sustain this view reference is made to Rachel Colvin’s Estate, 3 Md. Ch. Dec., 302. Ellicott vs. Warford, 4 Md. Rep., 85. Salmon, Trustee of Boon, vs. Pierson, 8 Md. Rep., 297. In the first two of these cases the decisions were, that a receiver in chancery had no right to appeal from an order discharging him. In both cases the nature of his office is spoken of. In 4 Md. Rep., the court say: “The appointment of a receiver does not determine any right, or affect the title of either party, in any manner whatever. He is the officer of the court, and truly the hand of the court. His holding is the holding of the court from him from whom the possession was taken. He is appointed on behalf of all the parties, and not of the plaintiff, or of one of the defendants only. His appointment is not to oust any party of his right of the possession of the property, but merely to retain it for the benefit of the [23] party who may ultimately appear to be entitled to it. And when that is ascertained the receiver will be considered as his receiver.” in 3 Md. Ch. Dec., it is said: “The court must act by its officers and agents, and there is as much propriety in calling the court the representative of any of the parties to the cause, as its agents and oilicers, who derive their authority from the court, and are removable at its discretion.” The 2nd section of the Act of 1.854, declares expressly, that all the properly, of every description, of the insolvent, “the necessary wearing apparel and bedding of himself and family, or such property as may by law be exempted from execution, excepted,” shall vest in the trustee. He, therefore, is not merely a receiver holding possession of the property, as the hand of the court, but the title is actually vested in him, in trust for the use and benefit of the creditors generally, although they may not appear to be parties to the proceedings in which he is appointed. A decision which denies to a receiver the right to appeal from an order discharging him does not necessarily warrant the conclusion, that the present appeal cannot be sustained. In 8 Md. Rep., the claim of the appellee, against the insolvent estate was allowed by the auditor. The trustee excepted, which exception was overruled, and the court allowed the claim. The appeal of the trustee, from this decision, was dismissed upon the ground that the relation of the trustee to the estate did not authorize him to object to the claims of creditors, who might, if they pleased, litigate, inter sese, as actors, in reference to the same subject matter. The question there under consideration was, whether the claim of a creditor had been properly allowed in the distribution of the assets of the estate? Tn such a case, this court decided, the trustee could not appeal. It is there said, however, “If he has an interest, as trustee, in reference to his allowance for commissions and expenses, or as creditor of the insolvent, he has an equal right, with others, to object, to the distribution and to appeal.” If he may appeal where a distribution injuriously affects his interests, “in reference to his allowance for commissions,” he [24] surely ought to be entitled to appeal from an order which erroneously rescinds his appointment, thereby depriving him of his trusteeship entirely. (Decided June 16th, 1859.) Salmon, Trustee of Boon, vs. Pierson, was an appeal under the Act of 1849, ch. 88, which the court held to embrace only, “persons aggrieved by the action of the court below.” The present case comes before us under the 20th section of the Act of 1854, which provides, “That,any person interested may appeal from the decision of the court on any question under this act.” This appeal presents a ques- • <Hon arising under that Act, and we think the trustee is interested in the decision thereof. Affirmed in part, and reversed in part, with costs to the appellant; and cause remanded for further proceedings. LeGrand, C. J., dissented.