Goodwin v. Selby

Robinson, C. J., delivered the opinion of the Court. The appellant, Goodwin, applied in the Circuit Court for Baltimore County, for the benefit of the insolvent laws, and on the 1st of December, 1890, he was, by the order of the Court, finally discharged. On the 26th September, 1892, more than tweniy-one months thereafter, a petition was filed by the appellee to rescind and annul the order of discharge, on the ground of fraud. The fraudulent acts specifically set forth in the petition are: First, the execution of a deed of trust by the insolvent within a year prior to his application for the benefit of the insolvent laws; and secondly, the confession of a judgment by him in favor of Herr Bros., when he was insolvent, and had no reasonable expectation of being exempted from liability on account of his debts, without petitioning for the benefit of the insolvent laws.

In addition to these specific fraudulent acts, the petition charges generally, that the insolvent had fraudulently conveyed and disposed of his property to delay, and defraud his creditors. Upon the petition issues were framed for trial by a jury, and this appeal is from an order of the Court overruling exceptions filed by the insolvent to these issues. There is no allegation that these fraudulent acts were unknovm to the petitioning creditor prior to the final dis ⁴⁴⁶ charge of the insolvent. On the contrary, the contention is that a creditor may at any time within two years after the final discharge of an insolvent, file allegations of fraud, and have issues framed thereon for trial by a jury, and, if such issues he found against the insolvent, the final order of discharge shall be annulled; and this, too, even though the creditor had knowledge of the fraud prior to the order of discharge, and did not file any objections to the discharge of the insolvent.

And in support of this contention, the appellee relies upon section 21 of Article 47 of the Code, which provides “that any creditor may file allegations of fraud at any time within two years after the final discharge of an insolvent, and have issues made thereon and tried by a jury, and if such issues be found against the insolvent, his discharge and release shall be annulled and rescinded.” Now, in construing this section, it must be borne in mind, that Courts do not derive the power to set aside judgments and decrees on the ground of fraud from statutory law. It is a power inherent in Courts, to be exercised according to well settled principles of law, and the object of the statute was for obvious reasons to limit the exercise of this power, in cases of insolvency, within a certain time after the final order of discharge. And in providing that a creditor may file allegations of fraud at any time within two years after the final order of discharge, the statute does not, it is true, in terms limit the exercise of this right to cases in which the creditor had no knowledge of the fraud prior to such discharge, yet it is a fundamental rule of law, that Courts will never strike out a judgment or annul a decree regularly entered, unless such judgment or decree was entered by surprise, fraud, or accident, or on some ground which appeals to the exercise of the equitable powers of the Court. And we cannot for a moment suppose that the' Legislature intended to except a final discharge in insol ⁴⁴⁷ vency from the operation of this salutary rule.

It can hardly be necessary to say, that a creditor has the fullest opportunity,