Kerr v. Union Bank

Goldsboróúgh, L, delivered the opinion of this court. The appeal in this case was taken from a decree of the Superior court of Baltimore city, sitting in equity, by which the appellant was perpetually enjoined from prosecuting an action of trover, instituted in Baltimore county court oti the 28th day of April 1847, against the appellee, to recover damages [401] for the conversion of certain promissory notes claimed by the appellant under an assignment from one Edward M. Kerr, and which being demanded, the appellee refused to deliver up. The bill of complaint of the appellee alleges as an excuse for its refusal, that though it had no claim to the notes in question at the time of the demand of the appellant, yet, before then, it had received notice from George M. Gill, Esq., attorney for a certain Moses Potter, that he claimed these notes as receiver, appointed to settle up the affairs of the partnership of Edward M. Kerr & Co., and that they formed part of the partnership effects. The appellee alleges as a further execuse, that subsequent to the demand of the appellant, “an attachment upon judgment in a certain action in which Sampson Tams was plaintiff, and Edward M. Kerr was defendant, issued out of the Circuit court of the United States for the district of Maryland, and was laid in the hands of your orators and of George M. Gill and others, as garnishees of Edward M. Kerr, which proceeding is still pending.” The appellee alleges as a still further execuse for the noncompliance with the demand of the appellant, that Edward M. Kerr, his assignor, applied for the benefit of the insolvent laws of Maryland, on the 4th day of May 1847, and John Glenn, Esq., was appointed his permanent trustee, and claimed these notes of the appellee, in his capacity of trustee of said Kerr, on the ground, that the assignment of Edward M. Kerr, as above, to John 1). Kerr, was void under the insolvent laws of Maryland, as an undue preference by a debtor in failing circumstances and that the notes so assigned were partnership property. This case is in some measure divested of its complicated character as set forth in the appellee’s bill, by the admission of the parties, that “the attachment, of Sampson Tams, in said bill named, was finally disposed of before the filing of this bill, by a verdict and judgment against said Tams; and that in said attachment, said Tams did'not claim as against the complainant, or as against the defendant, John D. Kerr, the money or [402] notes mentioned in the bill, as claimed by the said defendant, John D. Kerr;” also by the fact, that the claim of George M. Gill, was decided adversely to him by the Court of Appeals, (2 Md. Rep., 1,) before the filing of the bill in this case, thus reducing the parties claimant, to the appellant, and John Glenn, trustee of Edward M. Kerr. It is for us to determine, from the allegations in the complainant’s bill, the defendant’s answer, and from the conduct of the appellee, whether it has such a standing in a court of equity, as to entitle it to require the contestants to interplead, and settle their respective claims to the notes involved in the action of trover, and to a perpetual injunction against the appellant, as granted by the decree from which this appeal is taken. This bill was originally filed in the high court of chancery, on the 4th day of August 1849, and subsequently removed to the Superior court of Baltimore city. And though John Glenn, Esq., was made defendant, as-well as the appellant, no subsequent process was sought by. the appellee to compel said Glenn to appear and defend his rights, and’he was permitted to disappear altogether from the cause, although a period of some four years intervened between the filing of the bill and his death. In the above interval, Mr. Glenn tacitly permitted the present contesting parties to litigate a question, in which, in his representative capacity, he was interested:—in fact he was in part the cause of.' the bill being filed, by setting up a claim to-the notes in question, leaving the appellee, as that party thought, no alternative but to seek the aid of a court of equity, to compel the respective claimants to interplead. We do not deem it inequitable to conclude, that Mr. Glenn, by this course of conduct, regarded his rights as substantially settled by the decision of the action of assumpsit, to which we shall hereafter refer. Though there may have been some plausible apprehension entertained by. the appellee, at the time the bill in this case was filed, that it would-be involved in a two-fold resppnsibiii [403] iy, yet before the time of the final decree, the cause of that apprehension, in our opinion, was substantially removed, and the equity, on which it relied, no longer existed. At the time of the institution of the action of trover, the appellant brought an action of assumpsit, to recover the sum of $574.18, which the appellee admitted to be in its hands, and to which it had no claim. The appellant claimed this fund under the very same assignment from Edward M. Kerr, which created the right of the appellant to claim the notes involved in this controversy. In the prosecution of the action of assumpsit, the appellee admits in its bill, “that John Glenn, Esq., trustee of Edward M. Kerr, as aforesaid, appeared for your orators and defended the case as his own, and that he has since taken an appeal to the Court of Appeals.” This relation between Mr. Glenn and the appellee, seriously affects the idea, that the appellee was desirous to maintain the position of an impartial stake-holder; on the contrary, we are compelled to say, that it exhibits evidence of a combination, which, in a case like this, a court of equity cannot sanction in view of the prayer of the bill. At the trial of the action of assumpsit in Baltimore county court, in which the appellant was plaintiff and the appellee was defendant, every legal objection to the right, of the plaintiff to recover was made, which could be made by the appellee to the action of trover, against which it now seeks relief; the bona Jides of the assignment from Edward M. Kerr, to the appellee; that it was voluntary and without consideiation; that the assignment was void, being made by Edward M. Kerr, with a view of becoming an insolvent debtor; that it gave to the assignee an undue and improper preference, and was a fraud on the insolvent laws, and for that reason was void. See the exceptions in the case of the Union Bank vs. Kerr, 7 Md. Rep., 88. As between the appellee and appellant, these questions were conclusively settled by the verdict and judgment, unless, and until, reversed on appeal. See 2 Smith’s Lead. Cases, 590; 4 Md. Rep., 165, At the time the bill in [404] this case was filed, that judgment was in full force, and before the final hearing, the same on appeal had been affirmed; see last case cited above. Reverting to the relation of John Glenn to this case, and considering the total neglect of the appellee to take any process against him, either by attachment, for want of appearance or answer, when, if the appellee had done so, and on failure of Glenn to appear and answer, it might have taken the bill pro confesso as to Glenn, and that would have been a tacit confession by him, that he had abandoned his claim upon the notes in question, and the complainant would have been entitled to a perpetual injunction against Glenn, and not against the appellant. See 2 Paige, 209. (Decided June 19th, 1862.) We cannot justify this neglect of the appellee, nor permit it to operate to the prejudice of the rights of the appellant. This course of conduct on the part of the appellees, taken in connection with the circumstances of the case, so far affects the equity of the bill, that, in our opinion, the complaint is divested of all merit; more especially as, by the perpetuation of the injunction against the appellant, he is effectually excluded from redress or relief in any way whatever. The position of a complainant, seeking relief in equity from conflicting claims by bill of interpleader, should be one of continuous impartiality. This position the appellee has wholly abandoned. If the facts and circumstances which have arisen since the filing of the bill, and to which we have adverted, could have been presented to the consideration of the Superior court by a supplemental answer, to be weighed at the final hearing, then the appellant is entitled to the benefit of .them, under the agreement of the parties. In view of the whole case, the decree of the Superior court from which this appeal is taken, was erroneous, and must be reversed. Decree reversed and bill dismissed, with costs to appellant.