Preston v. Horwitz

Fowler, J., delivered the opinion of the Court. The two parties who were alone interested in the transactions out of which these and other similar proceedings grew, are both dead, the one, Mr. Orville Horwitz, having died in the year 1887, and the other, Mr. John Ahern, who, although still living when this bill was filed, has since then departed this life. We say that the two persons we have just mentioned were the sole and original parties to the transactions which are the subject of this litigation, because the whole claim of the plaintiff is based upon the allegation that certain deeds made by Ahern to Horwitz in the years 1872, 1873 and 1875 are fraudulent and void as against Ahern, and therefore void as against his creditors who are represented in these proceedings by the plaintiff, who is Ahern’s substituted trustee in insolvency. In order to fairly present the question on which we think the fate of this bill depends, it will be necessary to state some of the conceded facts relating to the origin of the claims here set up, the manner in and the means by which they have been prosecuted.

It appears that Mr. Horwitz and Mr. Ahern had been for many years engaged in large real estate transactions inter sese, as well as with many other persons. Among the deeds executed at various times by the latter to the former are five conveyances, which are made the foundation of this bill, which was filed by the plaintiff as substituted trustee in insolvency of the late Mr. Ahern, for the purpose of setting aside the deeds just mentioned. The first of these deeds was made in February, 1872, the second in January, 1873, the third in July, 1874; the other two, one in February and the remaining one in September, 1875. Subsequent to the execution of the last of these conveyances Ahern became insolvent and Horwitz was appointed his trustee in insolvency by the Circuit Court for Baltimore County on the nth March, 1879.

It appears that Ahern’s assets were of little or no value, and the result was inactivity on the part of his creditors. But it was plainly their ¹⁶⁸ duty to be alert, and either themselves take steps to discover and collect the assets of the insolvent or require the trustee so to do. And especially was it their duty to act promptly if they had, as they had in this case, constructive notice of the alleged fraudulent conveyances by the insolvent to Horwitz before he became trustee. Ahern appears to have been finally discharged under the provision of the insolvent law on the 8th of August, 1879, an<f about eight years thereafter the trustee, Mr. Horwitz, died.

Nothing, however, was done by any of Ahern’s creditors until the 6th of April, 1892, when nearly thirteen years after the insolvent proceedings were instituted, and some five years after the death of the trustee, a petition was filed in the Circuit Court for Baltimore County in the names of William A. Fisher, trustee, and others, creditors of Ahern, asking for the appointment of another trustee in the place of the late Orville Horwitz. In compliance with these petitions, William Brand was appointed, and he subsequently filed a bill, of which the bill in this case is a copy, charging that all of the five deeds we have heretofore mentioned were fraudulent and void. On the 15th of June following the appointment of Mr. Brand as trustee the creditors who had asked for his appointment came into Court and in the most vigorous manner disclaimed and repudiated all allegations of fraud against Horwitz. The consequence was that the order appointing Mr. Brand was rescinded, and the bill he had filed was dismissed by order of his counsel.

Several months elapsed before any further steps were taken, when Mr. Ahern attempted to renew the litigation by retaining Mr. F. X. Ward, of the Baltimore bar, as his counsel. Up to this time Mr. Ahern had been acting as administrator of his wife, who had been returned in the insolvent proceedings as one, if not the largest of his creditors. His daughter, Mrs. Lawson, was now substituted in his place, and thus acted both in a representative capacity and as next of kin of her mother. With her father she visited Mr. Ward to consult him in regard to the claims she supposed ¹⁶⁹ she had against the estate of Orville Horwitz, but that attorney, after examining the merits of the case, advised his clients that they had no claim either at law or in equity.

It is to be regretted that this advice was not followed. However, Mr. Ahern determined, in spite of what would seem to have been insurmountable obstacles, to prosecute his claim to a successful termination. He, therefore, made a third attempt, and secured new counsel, who instituted proceedings.for the appointment of a new trustee in insolvency. The plaintiff in this case having been appointed such trustee, he filed his bill on the 8th January, 1894, which bill, as we have seen, is a copy of the one which was theretofore filed and dismissed by the former trustee, Mr. Brand.

It appears from the foregoing recital that these present proceedings were commenced more than twenty years after the execution of the first and second of said deeds, and almost twenty years after the making of the others, which are attacked by the bill. We have already stated that these conveyances were made in 1872, 1873 and 1875, and that Mr. Horwitz died in 1887. Therefore, he lived fifteen years after the first, and twelve years after the last of the deeds now questioned were made, and eight years after his alleged fraud in failing to return as part of the assets of Ahern’s insolvent estate the property conveyed by the deeds in question. But in addition to this it appears from the testimony of Mr. Ahern himself that during the life of Mr. Horwitz, the former made demands upon the latter, as would seem