Mackintosh v. Corner

Alvey, J., delivered the opinion of the Court. This is an appeal from a judgment of condemnation in an attachment proceeding, wherein the appellant made claim to the property attached, as trustee for the benefit of the creditors of the defendant, by virtue of a deed of trust executed on the 11th of February, 1860. The deed is one that conveys all the property of the debtor, and provides for creditors generally, after the payment of the trust expenses, and all lien debts, giving preference to those only who will release the debtor within a given time. Such deed, by the 13th section of Article 48 of the Code, is declared valid, and is not liable to be set aside either at the suit of any insolvent trustee, or at the suit of any creditor. The preference given is such as is not only allowed by statute, but by [606] the common law; it being well settled that a debtor in embarrassed circumstances may prefer one creditor to another; and the exaction of a release is but a condition upon which such preference is made. But with regard to the deed in this case, it is suposed that because there is no affidavit appended to it of the bona fides of the consideration, it is therefore void as to the personal property, as against creditors, under th£ 51st section of the 24th Article of the Code. That, however, is a mistake. The requirement of the affidavit is only in those cases of transfer of personal property contemplated by the 39th section of the same Article, where the vendor, mortgagor or donor shall remain in possession of the property conveyed, and the conveyance is adverse to the creditors generally of the grantor. The affidavit in such case being required for the protection of creditors, and bona fide purchasers without notice, there could be no reason in requiring it to a conveyance like the present. In cases of this character the consideration for the. assignment is the preexisting obligation to pay debts gener-/ ally, and there needs no proof of its bona fides or sufficiency, and is not therefore within the meaning and intent of the law. As against the trustee, claiming for the benefit of all the creditors, certainly no creditor of the grantor can allege himself to be prejudiced by the want of the affidavit. The deed is for his benefit, in common with all the other creditors; and although preferences are made in the order and priority of payment, no particular creditor is concluded by taking under the assignment from impeaching any of the debts attempted to be secured by it, and showing fraud and collusion in such of them as may stand in his way and the pa/ment of which would operate to his prejudice. Hence, if it be true as alleged in this case, that the prior mortgage debts are collusive and fraudulent, and should not therefore be paid, it will be competent to the appellees, and others in like position, to show such fraud and collusion, and thus defeat those claims as against the trust fund arising under [607] the assignment. But it by no means follows that because some of the preferred debts may be fraudulent, and therefore void, that the assignment itself, intended as it is for the benefit of all the creditors, should be declared a nullity. Some of the debts claiming priority of payment may be founded in fraud, and still the general assignment be good as to all debts that are bona fide. Indeed, it is the duty of the trustee under such an assignment, as it is the duty of an insolvent trustee, to resist and defeat all claims founded in fraud, and which would operate to the prejudice of bona fide creditors; it not being supposed that the trustee accepts such a trust except for real and bona fide creditors. That such an assignment as the present is not within the meaning of the 51st section of the 24th Article of the Code, in regard to the affidavit, has been recently decided by this Court, in the case of Hoopes vs. Knell, 31 Md., 550; and as the instrument has been regularly executed, acknowledged, and recorded in due time to be effective to convey title to personal property as well as real, the personal effects thereby embraced were not subject to attachment and condemnation, at the suit of the appellees, creditors of the grantor at the time of making the assignment, and therefore the judgment appealed from is erroneous; the question of the particular errors upon which such judgment is founded being presented to this Court by the prayers which were granted or refused by the Court below. The first and second prayers of the appellees, which were granted, were both clearly erroneous. The first is based upon the theory that the deed of assignment is intrinsically void for the want of the affidavit; and the second is founded upon the equally fallacious theory that such an assignment could operate to hinder and delay creditors, within the Statute of 13 Elizabeth. The first, second and fifth prayers of the appellant, which were rejected, were all correct as applicable to this case and should have been granted. [608] (Decided 2d February, 1871.) But, notwithstanding, the errors committed by the Court below in reference to these several prayers, and to the rulings in regard to all of which the appellant excepted, it is contended, that because he did not also except to the ruling of the Court in granting the appellees’ fifth prayer, whereby the jury were instructed to disregard the deed of assignment as evidence, so far as it concerned the personal property, the appellant is to be taken as having acquiesced in that ruling, and is therefore precluded from claiming a reversal of the judgment for the errors committed in ruling upon the other prayers, predicated of the assignment as in evidence. To this proposition, however, we cannot accede. It is no doubt true, if it appears that a party has conceded the correctness of an instruction, or a proposition of law, and the case has been tried in accordance with it, he will not be heard in this Court to controvert what he has admitted and made the rule of decision in the Court below. But such is not the condition of this case. Here, it is true, the appellant does not appear to have excepted to the granting of the fifth prayer of the appellees, but it is equally true that it nowhere appears that he conceded the correctness of the Court’s ruling in that respect. And though a party may not except to all the rulings in which there is error, it is not to be said that he shall therefore be denied the benefit of the exceptions that he does take. It is very clear that if the appellees’ first and second prayers had been rejected, and' the first and second of the appellant’s granted, the fifth prayer of the appellees could not have been ruled as it was by the Court below. The granting of that prayer was, therefore, but the result of the errors of which the appellant complains, and for which he is clearly entitled to have the judgment of the Court below reversed. Judgment reversed.