Frederick County Nat. Bank v. Shafer

Boyd, J., delivered the opinion of the Court. This case was virtually disposed of at the hearing, as it was announced then that we were of opinion a Court of Equity could not interfere on the facts set out in the bill. Further reflection and examination of the authorities have not in any wise changed our views, but have only strengthened the opinion we then had. The bill was filed in the Circuit Court for Frederick County, and alleges that the plaintiff is the holder of four promissory notes, subject to certain credits, signed by William E. Shafer, Daisy E. Shafer and Margaret Shafer, each being payable six months ⁵⁵ after date and all being due six months or more before the bill was filed.

It is alleged that there has been audited in No. 4785 Insolvencies, in the Circuit Court for Frederick County, to Daisy E. Shafer as a creditor of William, the sum of $439.53 ; that she is utterly insolvent, and has no property out of which plaintiff can make its claim; that the audit is about ready for ratification, and if the money is paid over to her, the plaintiff will be entirely without means of enforcing payment of its debts. The bill then prays for a decree directing the trustees in insolvency to' pay to the plaintiff the money audited to her, and that she may be enjoined from assigning, transferring or disposing of said sum of money and the claim upon which the allowance is made. A preliminary injunction was granted, and a demurrer interposed by Mrs. Shafer and her husband. Upon petition, leave was granted to amend the bill, which was done by alleging that since the injunction was issued, the audit had been ratified; that the plaintiff had on the 9th day of August, 1897, brought suit on the law side of the Court on the cause of action mentioned in the bill, and that the plaintiff is advised that even if not entitled to have the money paid over it, it is entitled to have the trustees in insolvency restrained from paying it over to Mrs. Shafer, and to have her enjoined from assigning, etc., the claim until the plaintiff’s right in the suit at law can be disposed of, as otherwise it will be remediless by reason of her insolvency.

The prayer for relief was amended 'so as to have the injunction in force, pending the determination of the law case as well as this case. After the amendment the demurrer was refiled, and having been sustained, the injunction was dissolved, and the bill dismissed. The claim of the plaintiff is purely a legal one, and it is simply a general creditor without a judgment to establish the indebtedness of the defendant or the amount due. There is no suggestion of fraud on the part of the defendants, or any of them.

That the plaintiff has no special right to this fund must be conceded, and it certainly is no ⁵⁶ more entitled to it than any other general creditor. It is possible that Mrs. Shafer intends to apply it, when she gets it, to the payment of some other debt, just as meritorious and binding on her as the notes of the plaintiff. Upon what principle could a Court of Equity prevent her. from doing so, if she saw proper to so use the money? The mere suggestion of such a result would seem to be enough to show that a Court of Equity neither has, nor ought to have any such powers.

If they could be exercised with reference to choses in action, why not prohibit the unfortunate debtor, who has no property but the house he lives in, or his household furniture, from transferring it until his creditors can obtain judgment at law against him. The owner is entitled to his property, and to the use of it, whether it be real estate, chattels, choses in action or money, and no Court has the right to lay hold of it, or interfere with his lawful use of it, simply to await the result of a suit at law. If it is an open question elsewhere, a reference to some of the decisions of this Court will show that it is not so in this State. In Uhl v. Dillon, 10 Md. 500 , the bill alleged that the defendant was indebted to the complainant in a specified sum; that he was disposing of his property and collecting the debts due him, and secreting the same with intent to defraud his creditors, and that he intended as soon .as he completed such sales and collections, to abscond, for the purpose of hindering, delaying and defrauding his creditors, but an injunction was refused.

The Court, through Bartol, J., said : “No authority has been shown to this Court, nor can any be produced, entitled to consideration, which sanctions the exercise of the high and extraordinary power of a Court of Chancery to interpose by writ of injunction, in a case like the one before us, restraining a debtor in the enjoyment and power of disposition of its property. The appellees (the complainants below) are merely general creditors of the appellant, who have not prosecuted