Case Name: Winchester, et al. vs. Brooke
Court: Court of Appeals of Maryland
Jurisdiction: Maryland
Decision Date: 1806-06
Citations: 2 H. & J. 1
Docket Number: 
Parties: Winchester, et al. vs. Brooke.
Judges: 
Reporter: Reports of cases argued and determined in the General Court and Court of Appeals of the State of Maryland, form 1800 ... [to 1826]
Volume: 2
Pages: 1–5

Head Matter:
Winchester, et al. vs. Brooke.
S. B. sold ami transferred to E S, 80 shore* of bank stock, anti took his notes therefor. Two days thereafter ÍS S.' became insolvent, and trails» ferretl all Ins property to trustees for the benefit of his creditors The trustees sold the stock, and received the. proceeds. On a bill filed by S B against E S, and the trustees, claimix>g to be paid the notes out of the proceeds of tin- sale of the stock, n preference o the other creditor*, it seems that he was not. entitled to such preference
When a prefer* ence is cbtimed by one of the c1 edi« tors, it should appear by the proceedings, that, there were other creditors whose claims are proved and allowed; also the amouii t of the "state and chums should appear, so as t o show the proportion which fk? ■NT.dilWj, claiming the preferences is entitled to, in case he had no rigrht to a preference,
Api-eai. from a decree of the Court of Chancery. The bill, filed, by the present appellee, stated that Brooke, the complainant, being possessed of and entitled to 80 shares of stock in the Bank of Columbia, and being desirous of disposing thereof, did, in May 1795, make application to Solomon, one of the defendants, who at that time acted as broker in Baltimore, to sell them for him. That Solomon informed Brooke be had a commission to purchase shares in the Bank of Columbia for a gentleman in Philadelphia, and that he would, and did purchase the shares of Brooke, for which Solomon agreed to give, and did give to bun, bis promissory notes for §2424, the one half payable in 26 days, and the other half payable in 28 days, and the shares were transferred by Brooke to Solomon. That Solomon, in 4 or 5 days after the date of the notes, became bankrupt, and on the 18th of May 1795, made and executed a deed of trust to Winchester, &c. the other defendants, of his effects and property, in trust, to be distributed among Ms creditors. That under and in virtue of the assignment, the assignees, Winchester, &c. lay claim to the 80 «hares, (Solomon not having disposed thereof for a fair ánd valuable consideration to any person whatever before Ms failure,) they alleging that the shares, or the nett pro-' ceeds thereof, must be applied equally among all the creditors of Solomon; although Brooke charges, that he hath an equitable lien on the shares, or the proceeds thereof, in preference to’imy other of the creditors of Solomon, the shares having been a fund created on the credit of the notes, and not having been since assigned to a purchaser for a valuable consideration, without notice of stcch equitable lien. That Brooke hath applied to the assignees, Winchester, &c-. who refuse to pay him the amount of the shares, or the value thereof, alleging that Brooke hath not any preference to the other creditors. Prayer, that the defendants bG compelled to pay to the complainant the said shares, or the value thereof, in preference of the other creditors of Solomon, and true and perfect answers make, &c. Also to account with and pay to the complainant the said shares, or the value and nett proceeds thereof, in satisfaction of the notes; and that the complainant may have such other remedy in the premises as the nature of his case doth or may require, &c.
The answer of TP inchester, &c. so far as is material; stated, that when Solomon executed the deed of trust t& them, he was insolvent, and owed large sums of money ta several persons, far exceeding the value of all the property and effects which he was interested in, or had any title to. That these defendants had no notice, at the execution of the deed, that Solomon was indebted to the complainant, or any other person, for the 80 shares. That these defendants, all of whom are the creditors of Solomon, did, in July 1799, sell the shares for ,§1613. That they are willing to pay to the complainant Ms proportion of all monies which they received in virtue of the deed, and have always been willing to pay the same; but the complainant has refused to make any application therefor. They insist that the complainant has no lien, either equitable or legal, on the shares, or the money arising from the sales thereof, for the payment of the notes, as the shares were legally transferred to Solomon, and by him to these defendants. They say, that they have been informed by Solomon, and. believe the fact to be, that Solomon purchased the shares en his account, and for his own bene&t and use.
The answer of Solomon is similar to the preceding answer. That at the time he executed the deed of trust, lie was indebted to a number of persons far exceeding the value of the property and effects to which he was entitled. That lie did not, inform the trastees, at the time he executed the deed, or at any time before, that he had not paid the complainant for the 80 shares. That after the execution of the deed lie did not interfere in the administration of his effects, but the same, since that period, ha* been under the entire and exclusive control of the trustees, That on the 18th of May 1795, and after the execution of the deed, he was arrested at. the suit of some of Ms creditor*, and confined in gaol in Palimiore; and that on the sue-seeding day the certificate of the transfer of the 80 shaves was received by the trustees, lie positively denies he ever told the complainant that he had a commission to purchase shares in the bank of Columbia, or io any other bank, tor a gentleman in Philadelphia, or any other place whatever, or that lie acted as a broker in making the con ■ tract with the complainant; but he expressly says, that ho purchased the shares on his own account, and for his own use and benefit. That the complainant, about 18 month5! after the purchase of the shaves, applied tc this defendant 10 sign an instrument of writing, stating that he had purchased the shares on commission, which he. refused to do.
7vMiinony. That the trustees of Solomon sold at auction 80 shares in the Bank of Cohnnliu, to John Mun - mekuijsen, on the 23d of July 1799, for S2480, which, after deducting duties and commission, amounted to g£413„ That Charles Lowndes, in May or June 1799, requested IkimiiekutfMi to purchase for him 80 shares in the Bank of Columbia, who purchased the same fur him for 31 dollars a share, amounting to 82480. 'that the slaves had been previously held by Lowndes in (rust for the trustee-! of Solomon. That the dividends had been paid to the trustees. That after the sale to Murmiclatymi, for the benefit of Lowndes, the shares were transferred to Lowndes. By the Auditors statement, the defendants are charged with the nett amount of the sales of the 80 shares at auction, 82413 00
Also with dividends received, and interest •feereon tothe32d of July 1799, 1184 14 i597 34
They were credited with 10 dollars paid on each of the, shares, to complete the payment j due to the bank on the shares; and also credited with the dividends and interest arising thereon'as charged, £,99
Balance due to complainant, £2697 85
Hanson, Chancellor, (24th of March 1803,) being of opinion that the complainant was entitled to payment of two notes, given to him by the defendant, Solomon, on account of eighty shares of Columbia bank stock, transferred by the complainant to Solomon, out of the nett proceeds arising from the sale of the bank stock, so far as the same would extend, in preference to the other credi • tors of Solomon — Decreed, that the defendants, Winchester, &c. pay to the complainant the sum of g2697 85 cents, the same being the amount of the dividends and nett proceeds of three fourth parts of the sales of the eighty bank shares, according to the statement thereof made by the auditor of this court, together with interest, till paid, from the service of this decree. That the complainant and defendants sustain the costs by them respectively expended in the prosecution and defence of this suit.
The chancellor does-not conceive that interest can be allowed, as proposed by the counsel, viz. from the 22d of July 1799 to the 24th of hi arch 1803. If it were allowed it must either be charged to the trustees, or must come out of the estate of the insolvent, to the prejudice of other creditors. The latter would be surely unreasonable, when it does not appear that the trustees have received interest. From this decree the defendants, Winchester, &c. appealed to this court,
The cause was argued before Chase, C!i. J. Tilghman, Polk, Buchanan, Nicholson and Gantt, J.
Harper, for the appellants,
cited and relied on Ellis vs. Huntt, 3 T. R. 464. Lickbarron vs. Mason, 2 T. R. 63. Barnes vs. Freeland, 6 T. R. 80. Green vs. Farmer, 4 Burr. 2214. Exparte Ockenden, 1 Atk. 235. Pollexfen vs. Moore, 3 Atk. 273. Walker vs. Preswick, 2 Ves. 622. 3 Roll. Ab. 92, pl. 1, 2, 6. Brennan vs. Current, Sayers Rep. 224. Com. Dig. tit. Agreement, (B. 3.) Bond vs. Kent, 2 Vern. 281. Fawell vs. Heelis, Ambl. 724. Grimes vs. French, 2 Atk. 141; And Walpole vs. Orford, 3 Ves. 416.
Shaaff, for the appellee,
referred to Ridgely vs. Carey, 4 Harr. & M'Hen. 167. He contended that the decree ol the chancellor might be supported by the allegations and proof, independently of the principle of lien, as it did not appear that any person, but the complainant, had a right to the proceeds arising from the sale of the stock.

Opinion:
Tilghman, J.
It is inconceivable how the chancellor could take the case up on the ground of preference.
The court of appeals were about to affirm-the decree of the court of chancery, inasmuch as it did not appear by the record that there were any other creditors but the complainant, whose claims had been proved and were allowed; nor had the trustees set forth the amount of the estate of Solomon, and the amount of the claims against the estate, so as to show the proportion which the complainant was entitled to, in case he was not entitled to a preference; but the counsel for the appellants
DISMISSED THE APPEAL.