Lindsay v. Stemper

Offutt, J., delivered the opinion of the Court. The question which these appeals were intended to present is whether one who' deposits money, as collateral security against loss, with a depositary which later became insolvent, is entitled to a priority over general creditors in the distribution of the insolvent estate, where the anticipated loss never occurred and the depositor is not indebted to the depositary. The record shows these facts: The Lambert Automobile Company was the agent for the sale and distribution of Hudson and Essex automobiles, parts, and accessories, in a territory which included the Dundalk district in Baltimore County, Maryland. On November 21st, 1932, it entered into a written contract with the Community Garage, Inc., under ²⁵⁹ which it granted to the garage company the non-exclusive right to sell Hudson and Essex automobiles and chassis, in certain territory, including the Dundalk district.

As a part of that agreement, the garage company, called the dealer, deposited with the distributor $250 to’ secure it against any loss which the distributor might suffer either through the failure of the dealer to perform its part of the contract, or from its failure to- pay any debt due by it to the distributor for the purchase of parts, accessories, or other supplies, or from the failure of the dealer to pay any other claims which the distributor might have against it. On December 8th, 1932, the distributor entered into a similar contract, with Joseph Stemper, trading as the Edgemere Garage, and in each instance the: deposit was made in accordance with the terms of the contract, and the funds so paid were deposited by the distributor with other- similar deposits in a bank and mingled with the general funds, of the distributor. On September 15th, 1932, the cash balance: of the distributor was $7,872.57, and on the same day it had accepted deposits which had not been repaid amounting to $8,350.26. On September 15th, 1932, on the petition of the Lambert Automobile- Company, George W. Lindsay was appointed a receiver for it, and later Eeuben Oppenheimer was appointed a co-receiver with him.

Why they were appointed receivers, what their powers, duties, and functions were, and whether the corporation was solvent or insolvent, does not appear from the record, which lacks many particulars necessary to any complete or intelligible statement of the facts involved in the question which the appeal is assumed to present. In that state of the record there is nothing before- this court upon which it can act. For it to assume-, in the: absence not only of proof but of allegations, that the corporation is insolvent, or that the receivers were appointed to wind up its affairs, would be pure speculation. It may be that it is insolvent, and that appellants were appointed to wind it up and distribute its assets, but if those- were the- facts it was the duty of the appellant to bring them to the attention of the court.

If the corporation was solvent, then the orders ²⁶⁰ appealed from were nugatory and harmless, because the payment of one debt by a solvent debtor cannot injure other creditors, and no question of preference or priority would rise. If it was insolvent, then the orders appealed from would affect the appellants because the priority allowed would diminish the dividend to the general creditors. But since the record fails to show whether it was solvent or insolvent, or what powers and duties were imposed upon the receivers by the decree, the appeal must be dismissed. It must also be dismissed for another reason.

The general rule is that a receiver is not entitled to' appeal from an order which merely affects the distribution of funds in his hands, since his duty is merely to hold such funds for the persons who may be entitled thereto', and not to take sides in controversies arising between claimants to said fund, where such Claims, if established, would not diminish the entire estate in his hands for distribution, but would merely affect the order or priority of the payment of such claims. That rule was changed by