Fouke v. Fleming

Eccleston, J., delivered the opinion of this court. In this case an attachment was issued, at the instance of theappellees, out of the Circuit court for Washington county, in March 1857, against Israel Russell, and was laid on two canal-boats. ⁴⁰³ The attachment being returned, Isaac Fouke, the appellant, appeared as claimant of the property attached, asserting his claim, under a deed made to him by said Russell, prior to the issuing of the attachment. At the trial, in support of his claim, the appellant offered the deed from Russell, bearing date the 30th of January 1857, for the two canal boats, and other articles of personal property. It was recorded in one of the land record hooks of Washington county, Maryland, on the day of its date, after it had been acknowledged by Russell, on the same day, before a justice of the peace of the State of Maryland, in and for Washington county: the signing, sealing and delivery of which deed were admitted by the plaintiff.

And, by agreement of the parties, the same was read to the jury, subject to all objections as to its admissibility and legal effect and validity, to be raised by prayers. It was agreed that, the debt, for which the attachment, issued, was due and owing before, and on the day of the date of the deed, and also at the time of the issuing of the attachment; that the writ of attachment states the correct, amount of such indebtedness; and further, that Israel Russell, the defendant, was, at the time of issuing the attachment, a resident and citizen of the State of Virginia. It was admitted that the property attached is the same, or part of the same, mentioned in the deed, and that the attachment proceedings were regular. At, the instance of the plaintiffs’ counsel the courCgavc the following instruction: “That, the said deed of assignment offered in evidence, and read as aforesaid, is void in law as against the plaintiffs, if the jury find, that the said Israel Russell, the assignor, was, at the time of making said assignment, indebted to the said plaintiffs on tiie claim for which the attachment, issued in this cause.” To the granting of this instruction the claimant, Fouke, excepted, and upon the rendition of the verdict and judgment against him, he appealed.

The question to be decided is, whether the deed from Russell to Fouke, transferred to the latter such a title to the pro ⁴⁰⁴ perty in dispute, as should have prevented a judgment of condemnation thereof, under the attachment; or in other words, whether the deed was void as against the appellees. They insist 'that it is, and in support of this position they rely upon the principles established by the following cases: Green & Trammell vs. Trieber, 3 Md. Rep., 11 . Sangston vs. Gaither, 3 Ibid., 40. Malcolm vs. Hodges, 8 Ibid., 418, and Inloes vs. American Exchange Bank, 11 Ibid., 173.

In Green & Trammell vs. Trieber, the grantor’s deed included all his property, and he was insolvent at the date of the deed. He “reserved to himself the possession and enjoyment of all his property for at least six, perhaps for twenty-four months, and, indeed, for an indefinite time, if the trustees should not think proper to sell, and none of the preferred creditors should require the sale to be made. He also reserved to himself the surplus, after payment of the claims of the assenting creditors, and of Brady, (whose assent was not required,) to the exclusion of all other creditors, who could, in no event, obtain any part of their claims by the provisions of the deed, and these benefits, confined as they were to such of the named creditors as might assent, were extended to them only on the condition that they would, while the debtor was using and enjoying the property, grant further time on their claims against him.” In Sangston vs. Gaither, the deed recited the indebtedness of the grantor to various firms and persons, and his desire to provide for paying the same. It conveyed the property, in trust,’^to be distributed to each creditor who should elect, within sixty days from the date of the deed, to come in and share in the trust, and should also file a sufficient release to the debtor, with the trustee, (and no other creditor whatsoever,) such a dividend of the assets as he should be found entitled to, in the proportion of the whole of the debts thereinbefore scheduled, to the whole amount of the nett assets.

And the deed also provided, that the dividends, or proportions which would have been payable to such creditors, if any, as should not have released, should be retained by the trustee in such distribution, and paid over to the grantor, leaving such ⁴⁰⁵ creditors to their ordinary legal remedy against him. The surplus, if any, “after paying the debts aforesaid,” was to be paid to the grantor. In that case it. did not plainly appear whether the deed was an assignment of all the debtor’s properly or not. And there, as in a former casej the court said, “that an assignment for the benefit of creditors, exacting releases as the condition on which they might participate in the fund, must transfer all the debtor’s estate.” Nevertheless there the deed exacted releases, and also reserved to the debtor the dividends of such creditors as might neglect or refuse to execute releases.

He likewise reserved to himself any surplus which might remain after satisfying the creditors named in the deed. See pages 46, 48 and 49 of 3 Md. Rep. In Malcolm vs. Hodges, the deed professed to convey all the estate and effects of the grantors, in trust for those of their creditors, who should, on or before a certain day, sign a release to the debtors, from all their individual and co-partnership liabilities to the said creditors. It was held, that such a deed “must not only convey all the property of the debtor, but must, in terms, dedicate the whole for the benefit of th© creditors, subject to such preferences as might be declared in the deed.

And there must not be any reservation to the debtor, express or implied.” Inasmuch as the deed expressly restricted the application of the trust funds for creditors, to those creditors only who might come in within a certain time and execute releases, and nothing being said in regard (o any surplus, the surplus, if any, would result, to the debtor. The deed was, therefore, considered void, because there was an implied reservation of such surplus to the grantor. In Inloes vs. American Exchange Bank, the provision which avoided the deed was that which gave the trustee power, at his discretion, to sell the property conveyed by the deed, consisting of a stock of goods in trade, “gradually in the manner and on the terms in which, in course of their business,” the grantors “-had sold and disposed of their merchandized In reference to the deed before us there is nothing from ⁴⁰⁶ which we can consider it to be a general assignment of all the grantor’s property, for the benefit of his creditors generally, or that he was in insolvent circumstances. It exacts no releases, nor does it reserve the property for his use and enjoyment, either for a short or long period of time, but gives authority to the trustee “to sell and dispose of the same at public or private sale, and upon such terms and notice as he may deem most expedient.” Instead of regarding this, (as insisted upon by the appellees,) a deed of trust or assignment for the creditors generally, of the grantor, it is, in our opinion, simply a deed of trust, or quasi mortgage, designed to secure the payment of a few specified debts due to the firm of Hartley & Brother, and to two individuals, Abraham Herr and Samuel B. Preston, and also to indemnify and save harmless Joseph L. Russell, and Jonathan Russell, as the sureties of the grantor for some of those debts.

In Green & Trammell, vs. Trieber, the court say: “We must observe the distinction between conveyances of the whole or a part of the debtor’s property, as a security for particular debts, on an agreement with the creditors for further time, and voluntary conveyances by debtors for the payment of their debts.” Believing this to be a conveyance, designed only “as a security for particular debts,” and not a voluntary conveyance by a debtor for the payment of his debts generally, and regarding it as a quasi mortgage, as has been previously said, we do not think that a reservation of the surplus to the grantor, after paying those particular debts, can render the deed void. Such a reservation will secure to the debtor nothing more than he would be entitled to in the case of a technical mortgage, if the mortgaged property should be sold for payment of the mortgage debts, leaving a surplus of proceeds of sale beyond the amount required to satisfy the mortgagees’ claims. Nor do we perceive in this conveyance any defect, making it void, upon the principles established by-the decisions in the cases referred td, and much relied upon by the counsel for the appellees, as showing this deed to be void. It differs, essentially, from each of the deeds held to be void in those cases. ⁴⁰⁷ The validity of the deed has been objected to, because the grantor was a citizen and resident of Virginia, at the date of it; because it was executed and acknowledged before a justice of the peace of the State of Maryland, in and for Washington county, and recorded in said county, the property included iu the instrument, and now in dispute, being then in that county.

The appellees say, this being personal property, and the grantor a resident of Virginia, the law of that State must prevail. But this cannot be true, when there is no proof of what is the law of Virginia on the subject; and, in the absence of such proof, we must be governed by our own law. The act of 1856, ch. 154, sec. 129, provides, that “A bill of sale, if acknowledged within the State, may be acknowledged before any one justice of the peace, or judge of the orphans court, of the county or city in which the vendor resides.” The next section says: “If acknowledged out of the State, before any officer authorized to take acknowledgments of deeds.” Section 131 says: “Bills of sale shall be recorded in the' county or city where the vendor or donor resides, within twenty days from the date.” Section 142 provides, that “Mortgages of personal property shall be acknowledged and recorded in the same manner as bills of sale.” Supposing the Maryland law to prevail, then the counsel for the appellees says, the instrument under consideration, if either a bill of sale or mortgage of personal property, it was neither acknowledged nor recorded, according to the requirements of the act just referred to. It was acknowledged and recorded in this State, but not in the county where the vendor, grantor or mortgagor resided, and could not be, because he' resided in Virginia.

This defect, it was contended, must render the instrument inoperative as against the attachment. The question presented is, if a citizen of a sister State, residing therein, having personal property in Maryland, and being here temporarily, executes and acknowledges a conveyance of the property in? the county where it is, at the time, and the conveyance is there recorded within twenty days from. ⁴⁰⁸ its date, is sucii an instrument valid as against an attaching creditor of the grantor, in the absence of any proof of the laws of the sister State, making the conveyance otherwise? We think it is. In saying this we must not be understood as holding, that if a citizen of this State were to acknowledge and have recorded a similar conveyance, in a county where he did not reside, it would be valid.

Sim and Lee’s Lessee vs. Deakins, 2 H. & McH., 46, was an ejectment for two tracts of land lying in Washington county. A deed for those lands, to the lessors of the plaintiff, from Jeremiah Warder,'of Philadelphia, was offered in evidence, it appeared to be acknowledged ini Cecil county,'Maryland, before two óf thé justices of Cecil county court. It was proved that Warder resided in Pennsylvania;'that he was personally present, and executed and ackhowledgéd the deed in Cecil county, before two magistrates of the said county’; and that the lands were in Washington county. The deed was objected to as hot having been acknowledged according to the adt of 1766, ch. 14.

The 2nd section of that act made provision for the acknowledgment of deeds in the Provincial Court, or before one of the . justices thereof, in the county court, or before two justices of the same county where the lands were. The 3rd section’ provided for cases where persons making deeds should live remote from the Provincial Court, or out of the county where’ the’lands were lying. And such persons were authorized to acknowledge the deeds in the county ^wherein he, she or'they, should reside.” The 4£h section provided for the case of non-residents, and Authorizing their deeds'to be acknowledged by letter of attorney. The counsel for the defendant contended, that the expression reside, used' in the act, meant where a person had his continual, ordináry or usual habitation.

That the grantor in the deed in question could not be considered as a resident of the’ county where the acknowledgment was made, but was merely a’ traveller from or to his usual place of residence. The plaintiffs’ counsel insisted, that’ the residence is equivo ⁴⁰⁹ cal, and might mean either a general or temporary residence, according to the subject matter. So that if the nature of the subject be such as to require a general or constant residence, then it should be expounded to mean such a residence. And, on the contrary, the subject being transient or of a temporary nature, it would require but a temporary residence.

It was also argued, that the resident of Pennsylvania, by merely coming into this State, gained a residence pro hoc vice, within the intent and meaning of the law. The General Court decided, that the deed and acknowledgment should be read in evidence to the jury, aod declared that it was sufficient in law to convey the lands