Henry v. Kaufman

Bowie, C. J., delivered the opinion of this Court. The receiver in this case, as the agent of the Court, sold the property in dispute, before final decree, to prevent waste and loss, the proceeds being subject to the claims of the parties thereafter to he adjudged. Subsequently, the defendant, Henry, became an insolvent petitioner, and Bar-roll, the receiver, was appointed his permanent trustee. The order of the Court of Equity requiring him, as receiver, to bring the fund into Court, is now appealed from by him, on the ground that the case abated by the insolvency of Henry, and after the appointment of a permanent trustee, the fund passed ipso facto into the hands of Barroll, as trustee, and the jurisdiction of the Court of Equity ceased eo instanti. In our opinion, the policy of the insolvent sj'-stem does not debar the Court in which the fund is found at tho moment of insolvency from taking all steps necessary to its preservation. It would make the law an instrument of fraud, if a receiver, by becoming trustee of an insolvent, could defy the authority of the Court from, which he received his appointment, and refuse to account for the funds committed to him as receiver. The order requiring the [10] money to be brought into Court does not conflict with the power of the Insolvent Court, but is ancillary to it. Being brought in, and the amount ascertained, an order to pay over to the insolvent trustee would follow as a matter of course. Many of the cases cited show that the insolvent trustee asserted his claim to the fund by petition in the Court of Equity, to enjoin or prohibit the action of the trustee or officer of the latter Court, to the prejudice of the former. In the case of Glenn vs. Gill, the insolvent trustee filed his petition in the Court of Equity, in the cause in which the receiver was appointed, praying an order directing him to pay over and deliver to the trustee all the money and effects in his hands as receiver, which was directed to be done. The trustee did not attempt to recover the proceeds at law, or appropriate them without the order of the Court of Equity. When, in the subsequent case of Glenn, garnishee, vs. the Boston and Sandwich Glass Company, it was held that these funds were liable to, attachment at the suit 'of a foreign creditor, although they had not actually come to the hands of the trustee at the time of the attachment laid ; it was because the Codrt of Appeals had, in two previous cases, (6 Gill, 404, and 2 Md. Rep., 1,) declared there was no ground for the appointment of a receiver, and the funds were improperly in his hands. Hence the possession of the receiver was held to be the possession of the trustee — 2 Md. Rep., 19. 7 Md. Rep., 294, 296; such a petition not giving jurisdiction to the Court of Equity, but recognizing its authority to pass orders necessary for the transfer of the .fund from one jurisdiction to another. If the Court of Equity has power to that extent, it must have the power to require the money to be brought in, otherwise their proper officer could not be discharged, or fixed in his liability. Suppose the receiver and trustee were different persons, [11] and not one and the same, as in the present case. The former, as such, would not he authorized to pay over the funds to the latter without the order of the Court hy which he was appointed. If he refused, the Court of Equity only would have such summary control over him as could compel him to obey. Otherwise, the insolvent trustee must proceed hy action at law on the receiver’s bond, the breach of which could not he alleged without a previous order of the Court of Equity to pay over, and his refusal. (Decided February 14th, 1866.) This fund was in the custody of the Court of Equity, hy which the receiver was appointed ; its aggregate was undetermined. The order appealed from reserves the question of the liability of the receiver for interest, which had or might have accrued on the funds in his hands. Until this liability was determined the receiver was not functus officio, and his appointment hy the Insolvent Court did not release him from responsibility to the Court of Equity for the faithful discharge of his trust as receiver. We think, therefore, without disturbing any of the preceding decisions of this Court, that the power of the Court of Equity in this instance is ancillary to the jurisdiction of the Insolvent Court, and invoked for the protection of the fund which may he properly within the jurisdiction of the latter, for distribution. The conclusion arrived at above, makes it unnecessary to dispose of the motion to dismiss the appeal. It is well settled that ordinarily no appeal will lie from an order requiring a trustee or receiver to bring money into Court; such orders rest in the discretion of the Court, and where they determine no right are not the subject of review on appeal. Wheeler vs. Stone, 4 Gill, 38. Ellicott vs. Warford, 4 Md. Rep., 80. And without recognizing the right of appeal in such cases, we will affirm the order below and remand the cause, for such further proceedings as the case may require. Order affirmed and cause remanded.