Clarke v. Meixsell

Nelson, J., delivered the opinion of the court. ''.Phis case presents three questions for the consideration of the court: First, is the affidavit and the filing of a bond in attachment under the Act of 1864, ch. 306, conclusive and unexaminable, and is the defendant in such attachment precluded from inquiring into the truth of the affidavit upon which such attachment issues? Under the Act of 1795, ch. 56, there is no doubt that the affidavit of the creditor may be inquired into, and if untruthful, or in any other respect defective, the attachment may be quashed on motion, or gotten rid of on plea. Campbell v. Morris, 3 H. & McH. 553; Barr v. Perry, 3 Gill, 313; Lambden v. Bowie, 2 Md. 334. But is said the law is different under the Act of 1864, and the reason assigned is, that the fact of a debtor's absconding is an extrinsic fact which must [228] be proven to confer jurisdiction on the court, and if it be shown in contradiction to the affidavit of the creditor, that the debtor did not abscond, the court would have no rightful jurisdiction over him or his property. If this be so, and there is no doubt that it is so, is not the charge that a debtor fraudulently incurred an obligation, or contracted a debt, or that he had done such acts, or so demeaned himself as to furnish his creditor good reason to believe that he was about to assign or conceal his property, equally extrinsic facts, necessary to be proved to confer jurisdiction? We confess we cannot see the distinction between *the two Acts. We find nothing in the language of the Act of 1864, to warrant it. We think therefore that the truth of the statements of the affidavit of a creditor suing out an attachment under the Act of 1864, ch. 306, may he inquired into upon a motion to quash. The second question is, had the appellants the right to intervene in the attachment cause of Meixsell & Grafton? The complainants were creditors of Derr, and had recovered a judgment against him in the -Superior Court of Baltimore City, upon which an attachment by way of execution was issued and laid in the hands of Derr’s insolvent trustee, upon the funds arising from a sale of the property which had been attached in the attachment'cause of Meixsell & Grafton; they thereby acquired an interest in those funds and in their distribution. In Campbell v. Morris, 3 H. & McH. 552, which was a case of attachment, decided in the General Court of this State, in 1797, Judge Chase, delivering the opinion of the court, lays down the following principles: “ For any apparent defect in the proceedings before the court, the attachment may be quashed upon suggestion of such defect to the court, either by the defendant himself, or a third person claiming an interest in the property attached. Before the appearance of the defendant, which cannot be but upon giving bail, which will be a dissolution of the attachment, no evidence is admissible which relates to the merits of the dispute between the parties ; but the attachment being a summary proceeding, and not changing in its nature until there is an appearance with bail, every fact is cognizable by the court which will show the attachment issued irregularly.” We have shown that Clarke, Dodge & Co., the appellants, had an interest in the funds of Derr, in the hands of his trustee, and [229] in the distribution thereof; because supposing their attachment by way of execution should be postponed to the attachment of Meixsell & Grafton, yet they would have the second lien and would be entitled to any surplus after the payment of Meixsell & Grafton. What do they propose to intervene in the attachment *suit of Meixsell & Grafton for ? Not to offer evidence relating to the merits of the dispute between Meixsell & Grafton and Derr, but to show that the attachment was issued improvidently and irregularly, by reason of a fatal defect in the affidavit upon which it was based,' and that by reason of such defect in the affidavit, the court issued the attachment without jurisdiction. We think from the authority to which we have referred, and which has been repeatedly recognized by the Court of Appeals since, as sound law; (see Ranahan v. O’Neale, 6 G. & J. 298), the appellants had a right to intervene in the attachment case of Meixsell & Grafton. Our next duty is to inquire whether or not from the evidence in the cause, John P. Derr, the defendant in the attachment case of Meixsell & Grafton, fraudulently contracted the debt and incurred the obligation respecting which the attachment suit was brought? And whether or not Meixsell & Grafton had good reason to believe that the said Derr was about to assign, dispose of or conceal his property, or some portion thereof, with intent to defraud his creditors? Did Derr fraudulently contract the debt and incur the obligation for which he was sued? The testimony to sustain this charge is from Mr. McHenry Grafton, Mr. Meixsell and Mr. Hall. Mr. Grafton swears that, on or about the 6th of June, 1863, Derr purchased from the house of Meixsell & Grafton one thousand barrels of flour, for which he gave his promissory note at thirty days. The flour was sold to him with the understanding that he did not intend to draw for the amount he should sell it for, until the maturity of his note; that Derr g-ave as his reason for asking credit for the flour, that, by that time, he thought sterling exchange would be much higher. At first, they refused him the credit, as flour was a cash article, and it was only after the reason stated, as given by him, that the credit was given. So it seems that, because Derr thought sterling exchange would be higher, Meixsell & Grafton sold him one thousand barrels of flour on credit. Derr was mistaken, however, and sterling exchange did not rise, and 011 the [231] 6th of *July, 1863, when'his note to Meixsell & Grafton fell due, he was unable to meet it, and wrote the following note to Grafton : “ Grafton: Let me have your check for $6,000 until tomorrow. I have got to pay that note of yours due today, and haven’t the money. I will deposit in Mechanics’ Bank, and give you my check early tomorrow. Please give me the check and keep mum, as it won’t do to let my credit suffer at this juncture!” In compliance with this request, Meixsell & Grafton sent him their check for $6,000, and Derr paid their note. On the next morning, the 7th of July, 1863, Meixsell & Grafton sent to Derr for his check, as he had promised, and Derr sent them two checks for three thousand dollars each, drawn on the Mechanics’ Bank. One of them was deposited in the Citizens’ Bank and the other held at the' request of Derr. Derr admits'that he had no funds in the Mechanics’ Bank to meet these checks at the time they were’ issued, but he expected to meet them in the course of the day by borrowing from friends. On the afternoon of that day, about two or two and a half o’clock, intelligence of the fall of Vicksburg reached Baltimore, and Derr was bankrupt in means and in energy. This is the history of the contracting of the debt and incurring the obligation respecting which the action was brought. We think there was no fraud practiced or attempted in the purchase of the flour. Derr was a speculator, perhaps a wild and imprudent one; he had before been fortunate, and he §xpected to realize large profits on this flour by the rise in sterling exchange. Meixsell & Grafton knew that Derr was a speculator; they knew the danger of speculation at that time, when everything was uncertain; but they believed Derr would be successful, or they would not have sold him the flour on credit; they were all disappointed. As to the transactions in regard to the checks — here is where Derr’s troubles began; his note to Meixsell & Grafton fell due when he was without funds to meet it; to save his credit (he so told Grafton) he is compelled to borrow Meixsell & Grafton’s check. This was incurring no additional debt to *them; they got the money for their note, but leaving Derr still their debtor for $6,000. When he issued his checks to them on the Mechanics’ Bank, he expected to deposit in time to meet them, but the crash came and he was broken. He did not attempt to conceal his condition, but still [232] hoped to he able to struggle through his difficulties, and refused to give up for that reason. We think the proof not sufficient to show that there was fraud in contracting the debt and incurring the obligation respecting which this action was brought. Had Meixsell & Grafton good reason to believe that Derr was about to assign, dispose of, or conceal his property, or some portion thereof, with intent to defraud his creditors ? Derr swears positively he never designed to assign, dispose of, or conceal his property, or any part thereof, with intent to defraud his creditors. There is not an act of his, nor a declaration from which we think such an inference can be drawn. As to his speculations in gold, and the various transactions in regard to checks in different banks, and his defalcations in his dealings with the flour and tobacco merchants in the West, it would be a strained conclusion to say they were sufficient to induce the belief that he intended to conceal, assign, or dispose of his property to defraud his creditors. We think, from the evidence in this cause, there was no foundation for the affidavit, and that the attachment of Meixsell & Grafton must be quashed. Judgment reversed and attachment quashed.