Wolfsheimer v. Rivinus

Irving, J., delivered the opinion of the Court. The sole question in this case is, whether the reservation of a reasonable fee for the draughtsman of the deed, for its preparation, is such a preference in a deed for the benefit of creditors, as is forbidden by the Insolvent Act of 1884, ch. 295. The language of that Act is very general and covers every species of debt, and we see no escape from holding that the reservation made in this deed is within the prohibition of that Act. The debtor who was in failing circumstances, employed the draughtsman.

No one else could, for there was no trustee to do it until the deed was made. It was his debt or he could not charge his estate in the hands of a trustee, with its payment as he did do by the deed. He ought to have paid the draughtsman and left no debt outstanding for the service rendered, to be paid in full from his estate as a preference debt. The question turns entirely on the construction of the Act of Assembly, and, in determining what kind of debt is contemplated by and embraced in it, we find no occasion to cite authority in support of our view.

If this deed had never been executed, there can be no question that the draughtsman would have had a proper claim against his employer, notwithstanding the deed had never been executed. Its execution could not change the character of the claim unless there had been a special contract to that effect. The fee for preparing this deed was beyond question a debt of the grantor, and though created in an attempt to provide for his creditors, we find no warrant for excepting it from the operation of the Act. A majority of the Court thinking the order of the insolvent Court of Baltimore City appealed from Avas properly passed, the same will be affirmed.

Order affirmed. Judge Bryan delivered the following dissenting opinion, in which Judge Ritchie concurred: The deed of trust in this case was made by an insolvent merchant. The trustee is directed in the first instance, “to pay and disburse all the lawful expenses, costs and charges of executing, and carrying into effect this trust, including a reasonable fee for the. preparation of this deed, and for such legal advice and services as may be necessary for said trustee to procure and use in the trust and the management thereof;” and secondly, to “pay and satisfy the said debts due to the individual and firm creditors of the party of the first part, in manner and form as law and equity may determine their respective rights, pari passu, and without any preference or priority save what the law allows, and save that the wages of the clerks and employes of said party of the first part, shall be paid in full to the extent not forbidden by the insolvent laws of the State of Maryland.” It was held by the Court of Common Pleas that the deed created an illegal preference in securing the fee of the attorney who drew it, and that, consequently, it was void under the thirteenth section of the Act of 1884, ch. 295., The object of this section was to compel a ratable distribution of the property of insolvent merchants among their creditors, subject only to the trifling exceptions therein mentioned.