Michigan National Bank v. Racine

Henderson, J., delivered the opinion of the Court. On November 14, 1962, the Michigan National Bank, a nonresident corporation, brought an attachment proceeding against the appellee, a resident of Baltimore City, doing business at E. Monument Street, upon a note and trust receipt covering the purchase of a home trailer. The short note alleged that the appellee had fraudulently sold the trailer without payment of his ²⁵² obligation to the plaintiff. An affidavit subsequently filed alleged that the defendant was about to remove his property from this State with intent to defraud creditors.

Two attachments were issued. Under the first one the sheriff seized a 1963 Mercury automobile owned by Racine and impounded it at Greenwood’s Garage. Under the second attachment, laid in the hands of a local bank, the garnishee confessed assets of $19.42. After a motion to quash and other pleadings, Judge Byrnes held a hearing on the merits and the case was submitted for his determination without a jury.

On March 13, 1963, he filed an opinion in which, among other things, he stated: “A full recital of the evidence produced at the hearing would serve no useful purpose. Suffice it to say that the defendant admitted the liability for the debt but denied the allegations of fraud. This court can find no evidence of fraudulent intent at the time the debt was incurred [citing Turner v. Spencer, 136 Md. 593 , and other cases], nor is there any direct evidence to support the allegation that the defendant removed his property with fraudulent intent.” He quashed the attachment but directed the clerk to enter a judgment nisi for the plaintiff in the short note case. The plaintiff filed a motion for new trial, in the attachment case only, alleging in addition to the usual grounds that there was evidence of constructive fraud and removal of “cash property” from the State.

About two months later the plaintiff filed a “supplemental motion for a new trial” alleging that the Court Reporter had informed it that his notes of the hearing of March 13 had been lost. After hearing, on June 13, 1963, Judge Byrnes stated that “after thoroughly reviewing the testimony in this case and reflecting upon the arguments in the motions for new trial the Court has concluded that the motion and supplemental motion must be denied.” On July 1, 1963, the Ford Motor Credit Company petitioned the court to direct that the Mercury automobile held at Greenwood’s Garage be turned over to it, reciting that it held a recorded conditional contract of sale covering the vehicle dated October 8, 1962, and that Racine had been in default under that contract since December, 1962. Another recital was that the plaintiff, Michigan National, “has acknowledged to Petitioner that it recognizes the priority of Petitioner’s claim to the ²⁵³ vehicle under its conditional sales contract.” An order nisi was served upon the plaintiff, but no answer was filed by it. On July 15, 1963, the plaintiff entered an appeal to this Court from “the order and judgment * * * of March 11, 1963 * * * quashing the attachment issued in the above case, and