Henry v. Kaufman

Bowie, C. J., delivered the opinion of this Court. The receiver in this case, as the agent of the Court, sold the property in dispute, before final decree, to prevent waste and loss, the proceeds being subject to the claims of the parties thereafter to he adjudged. Subsequently, the defendant, Henry, became an insolvent petitioner, and Bar-roll, the receiver, was appointed his permanent trustee. The order of the Court of Equity requiring him, as receiver, to bring the fund into Court, is now appealed from by him, on the ground that the case abated by the insolvency of Henry, and after the appointment of a permanent trustee, the fund passed ipso facto into the hands of Barroll, as trustee, and the jurisdiction of the Court of Equity ceased eo instanti.

In our opinion, the policy of the insolvent sj'-stem does not debar the Court in which the fund is found at tho moment of insolvency from taking all steps necessary to its preservation. It would make the law an instrument of fraud, if a receiver, by becoming trustee of an insolvent, could defy the authority of the Court from, which he received his appointment, and refuse to account for the funds committed to him as receiver. The order requiring the ¹⁰ money to be brought into Court does not conflict with the power of the Insolvent Court, but is ancillary to it. Being brought in, and the amount ascertained, an order to pay over to the insolvent trustee would follow as a matter of course.

Many of the cases cited show that the insolvent trustee asserted his claim to the fund by petition in the Court of Equity, to enjoin or prohibit the action of the trustee or officer of the latter Court, to the prejudice of the former. In the case of Glenn vs. Gill, the insolvent trustee filed his petition in the Court of Equity, in the cause in which the receiver was appointed, praying an order directing him to pay over and deliver to the trustee all the money and effects in his hands as receiver, which was directed to be done. The trustee did not attempt to recover the proceeds at law, or appropriate them without the order of the Court of Equity. When, in the subsequent case of Glenn, gar nishee, vs. the Boston and Sandwich Glass Company, it was held that these funds were liable to, attachment at the suit 'of a foreign creditor, although they had not actually come to the hands of the trustee at the time of the attachment laid ; it was because the Codrt of Appeals had, in two previous cases, ( 6 Gill, 404 , and 2 Md. Rep., 1 ,) declared there was no ground for the appointment of a receiver, and the