Frigidraft, Inc. v. Michel

Marbury, C. J., delivered the opinion of the Court. The appellant corporation was placed in receivership by an order of the Circuit Court of Baltimore City on April 14, 1951, on the application of the appellee Michel. This appellee was an unsecured creditor, claiming $112.70 on open account for printed matter ordered and delivered to the appellant. The bill of complaint alleged that the appellant was insolvent, but did not ask for a dissolution, and was not filed under Article 23, Sec. 97, of the Code.

The appellant filed an answer, admitting that the appellee was a creditor of the corporation, but only in the amount of $85.00, and denying that it was insolvent. Subsequently, Arthur Ross and Anna Ross, his wife, filed an intervening petition, repeating the allegation of insolvency, alleging that they had deposited with the appellant $415.00 “in trust” to reserve for them certain refrigeration equipment under a stipulation that if they were unable to obtain a beer license for their .proposed tavern, the deposit would be returned: Théy stated ⁵¹¹ in their petition that they were unable to obtain the license contemplated, and therefore were entitled to receive back the deposit, and had made demand for it. Testimony was taken, and the decree, after appointing a receiver, stated that in the event the appellant paid to Michel the amount of his claim, namely $112.70, and to the petitioners, Arthur and Anna Ross, the sum of $415.00 on or before ten days after date, and the costs of the proceeding, the receivership would be dismissed. From this decree the appeal was taken here.

It has been held by this court, and by courts in many other jurisdictions, that the aid of a receiver will not be extended to creditors who have not fully exhausted their remedies at law, whose rights rest merely upon alleged contracts not yet reduced to judgment, and who have acquired no liens upon the