Taylor v. Mallory

Bryan, J., delivered the opinion of the Court. William S. Taylor, Jr., and T. Kell Bradford filed a bill in equity against Dwight D. Mallory, Oliver W. Miller, and Elizabeth H. Miller, his wife. It was alleged that Miller had made a deed of trust to John H. Handy for the benefit of his creditors, and that the complainants had become sureties on his bond for the faithful performance of his duties, and that the Circuit Court of Baltimore City, duly assumed jurisdiction of the administration of the trust. It was further alleged that, Mrs. Miller had filed certain fraudulent claims against the trust estate; and that she and her husband had employed Handy, the trustee, as their attorney to prosecute these fraudulent claims, and that he prosecuted them until 'the creditors who opposed them withdrew their objections and permitted an auditor’s account to be ratified and confirmed, which allowed them.

It was further alleged that the allowance of the claims and the order of the Court ratifying the auditor’s account with respect to them, were obtained by the fraud and collusion of Handy and Miller and his wife, for the purpose of defrauding the creditors of the said Miller and the complainants ; and that Handy failed to pay to Mrs. Miller the money allowed to her in the auditor’s account; and that, in a suit on the trustee’s bond against Handy and ³ the complainants a judgment was rendered against the defendants ; and that on appeal it was affirmed by the Court of Appeals; that the judgment was entered to the use of Mallory, and that he has brought suit against the complainants and the sureties on the appeal bond ; that Handy has departed from the State of Maryland and no longer resides therein. It was further alleged that Miller and wife had permitted Handy to take and use the trust funds and misappropriate them. The prayer of the bill was for an injunction to restrain the defendants and each of them from taking any steps, by suit or otherwise, to enforce the judgment against the complainants, and for general relief. The defendants demurred, and on hearing the bill was dismissed.

The complainants have appealed. The demurrer presents to us simply the question, whether the statements in the bill (supposing them to be true) entitle the complainants to relief in a Court of equity. Fraud is in direct antagonism to the objects for which Courts of justice are established. Whenever the law is unable to prevent or redress it, an instance is exhibited of imperfection in its powers and processes.

A large portion of the jurisdiction of equity consists in its power of dealing with frauds and their