N. Hess & Brother v. Jewell

Roberts, J., delivered the opinion of the Court. This appeal is from an order of the Circuit Court of Baltimore City sustaining certain exceptions to the auditor’s account distributing the assets of the estate of C. L. Gwinn & Company, who on the 5th of September, 1895, executed to Ferdinand C. Dugan a deed of trust for the benefit of its creditors. The appellants, at the date of said deed, were the lessors of the premises occupied by said company, which was indebted to the appellants in the sum of $314.37 for rent in arrears and unpaid. On the day after the execution of said deed the appellants issued a distress warrant to satisfy the rent in arrears, and caused the same to be levied upon sufficient property of said company then remaining upon the demised premises to pay their claim for rent and the costs of the distress.

On August 28th, 1895, the James Robertson Manufacturing Company obtained a judgment against the said Gwinn & Company, which was assigned to Patrick Kennedy. On the day of the entry of the judgment execution was issued thereon and laid in the hands of the sheriff, who, on the same day, seized the property, which was subsequently conveyed by said deed to said Dugan, trustee. The Court below did not assume jurisdiction of the trust until the 7th of September, 1895, the second day after the execution of said deed, and the day after said distress had been levied and eight days after the sheriff had levied on said property. On the 17th of January, 1896, certain employees of said Gwinn & Company filed their petition in the Court bélow, claiming they were under the provisions of sec. 15 of Article 47 of Code, entitled in the distribution of the property and estate of said company to have their claims for “ wages contracted not more than three months anterior to the execution of the deed of assignment” paid first in full out of such property, after payment of all proper costs, expenses, &c.

The deed of assignment by its express terms makes the same provision for employees and servants as that contained in section 15 of Article 47 of the Code. The auditor in stating his ²³⁷ account has allowed to the appellants the full amount of their claim for rent, and the balance remaining he has distributed ratably among said several employees of said Gwinn & Company. Kennedy, the assignee of said judgment, and certain of said employees having filed exceptions to the ratification of the account of the auditor, the Court below sustained the same and ordered that the several claims for wages, &c., under sec. 15, Art. 47, of the Code, are a preferred claim to all other claims filed, except the judgment lien of said Kennedy, under his execution and levy, which is directed to be paid in full, and further that the claim of the appellants for rent in arrear be disallowed. So that the only questions arising on this appeal relate solely to the respective legal priorities of the several claims hereinbefore mentioned.

It appears from the record that the day after the distress was levied it was agreed between the appellants and Dugan, trustee, that if they should establish their right to distrain, he, the trustee, would pay their claim due for rent and costs of the distress without further prosecution of the distraint proceedings. The record also shows that Kennedy, after he had issued execution on his judgment, and caused the sheriff to levy as aforesaid, agreed with Dugan, trustee, that he should sell all the property seized by the sheriff under said execution, reserving, however, a lien under said levy against the proceeds of sale in the hands of the trustee. Section 15 of Article 47 of the Code provides, “ that wages, &c., contracted more than three months anterior to the execution of an assignment, are first to be paid in full out of such property or estate after payment of the proper and legitimate costs, expenses, taxes and commissions, and are