Thomson v. Albert

Eccleston, J., delivered the-opinion of this court. By a report filed on the 28th of November 1854, the special auditor, having, shown how he ascertained the balance of estate for general distribution amongst all the creditors of Samuel Jones, Jr., proceeds with his report as follows: "He has then stated account J, between the estate of Samuel Jones, Jr., and the trustees, in which the balance, shown in hand by account H, is appropriated to the payment of dividends on all claims allowed. He has assumed, for the purposes of this account, that -claims No. 29, No. 77, No. 78 and No. 115, are not entitled to the preferences insisted on by the exceptions of the claimants, filed on the eighth of March 1852. And lastly, at the instance of the solicitor for those claimants, he has stated an account I£, between the estate and the trustees, in which he has allowed the full amount of ■claims No. 29, 77, and 78, reduced by the dividend allowed thereon by account G, and the full amount of claim No. 115, reduced by the dividend allowed thereon by account H, and the balance has been distributed amongst the remaining ■creditors.” On the 14th of December 1854, the following exception was filed.

"Laurence Thomson and Henry G. Jacobsen, partners, as Laurence Thomson &- Co., Francis Forman,-John Land-street and Son, Charles R. Pearce, surviving partner of Bill-head & Pearce (said Birkhead having departed this life) except to the special auditor’s accounts reported to this •court, of the 28th of November 1854, save only the account K, so far as those accounts deny to your exceptants, as 'creditors of Samuel Jones, Jr., the preference granted to them for their respective claims (as described in the deed) under the deed of trust from said Jones to Winn and Ross, and -they insist that ■said account K should be adopted, and finally confirmed by ²⁸¹ this court in behalf of the several claims of these exceptants respectively as creditors aforesaid, as acceding to them respectively the preferences aforesaid.” The day after, tile court ordered, “'That (except as to the preferences allowed to claims Nos. 29, 77, 78 and 115, which preferences are hereby reserved for further consideration and order) the within account he and is hereby ratified and confirmed, and the trustees are directed to apply the fund accordingly, with a due proportion of interest received.” On the 25th of November 1855, J. Hopkins, Bro. & Co., and Hopkins, Bro. & Co., excepted to the auditor’s account X, because of the preferences allowed therein to the four claims above mentioned. Similar exceptions to the same account, were filed by other creditors, on the 19ih of October 1857. After argument by counsel in relation to the auditor’s report of the 28i,h of November 1854, the exceptions thereto, and the oilier proceedings, the court passed an order on the 7th of November 1857, in and by which “It is ordered, that the auditor’s account J, filed as part of said report, be and the same is hereby ratified and confirmed, and the proceeds be distributed accordingly, and that all exceptions in the cause, and all other accounts of the auditor, inconsistent with this order, be and the same are hereby overruled.” From this order the present appeal has been taken by the parties, whose claims are Nos. 29, 77, 78 and 115. In the exception filed by these parties, on the 14th of December 1834, they base their right, to insist upon the payment of their claims in full, upon the deed of trust.

Their objections to the accounts reported by the auditor are, “So far as those accounts deny to your exceptants, as creditors of Samuel Jones, Jr., the preference granted to them for their respective claims (as described in the deed) under the deed of trust from said Jones to Winn and Ross.” And they insist that account, K, “'as acceding to them, respectively, the preferences aforesaid,” should be ratified by the court. The claim thus based upon the deed is the first point or question considered by the judge below. He mentions the ²⁸² fact that this deed had been declared void by the highest judicial tribunal of the State, upon the appeal from the order of the chancellor, continuing the injunction which he had granted; which order was affirmed by the Court of Appeals. He then refers to the proceedings subsequently occurring in the cause, and concludes that, as the Court of Appeals had declared the deed void, that should be regarded as the law of this case, and these claimants can set tip no right under the deed.

To this view of the subject we yield our assent. The deed being void, upon the ground stated, it is not necessary to decide whether it should be considered void under the provisions of our insolvent laws. And the proceeds of the estate of Samuel Jones, Jr., are therefore to be distributed amongst his creditors as being in the hands of his trustees in insolvency, without any regard to the deed of trust declared to be void. Admitting the deed to be void, the appellants’ counsel insists that independently of the deed, thej? are entitled to the preference claimed by them; because their claims are for money lent without security, for short periods and without interest; which claims, under and by virtue of a general usage among merchants in Baltimore, should be reimbursed or provided for, in preference and priority to other debts, where the debtor may prove unable to pay his'debts in full.

It may be true that such usage has been acquiesced in, to the extent of sanctioning preferences of this kind, when conventional arrangements or settlements have been made, between a merchant, in embarrassed circumstances, and his creditors generally. But we have not been convinced that there is a general usage, which, per se, creates such a lien or preference upon the estate of an insolvent debtor, as should be enforced