Court Opinion

ID: 6664750
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:05:17.662894+00
Date Added: 2024-06-11T16:00:18.288260
License: Public Domain

Magruder, J.,
delivered the opinion of this court.
With all the attention we have given to the matters disclosed in this record, we can discover no ground for a reversal of the chancellor’s decree.
The material facts fn the case, according, to our view of it, are these. The appellant is the permanent trustee of John L. and William L. Hammond, and in that character filed his bill of complaint in the court below, to obtain a decree, declaring to be fraudulent and void a payment of $5000, alleged in the original bill to have been made by those insolvents, to the Union Bank of Maryland, and by the amended bill to charge McCormick, (now deceased,) with this money, if the Union Bank of Maryland be not, (for the reasons'suggested,) liable therefor.
It appears that the two insolvents were in partnership in the year 1832, when a loan of $5000 was made to them by that bank. The note originally given by them was renewed, and the latter became due 22-25 of May, of that year. It was not paid at maturity, nor until the 25th June, when the same was paid to the bank by Me Cormick, he having been furnished with the means of paying it by the drawers.
McCormick induced the Bank to lend the money to the Hammonds, but did not endorse the note. By the terms of the agreement however, into which he entered with the bank, he was to pledge stock of that institution for the same. The *443note being paid off as stated in the record, this stock was released, and the note given up to McCormick.
This payment to the bank of the amount of its note, it is charged, was in fraud of the creditors of the insolvent, and in contravention of the intent and policy of the insolvent laws of the State. Because of this, it is insisted, that the complainant, as the trustee, is entitled to the relief which he asks. The chancellor said that he is not. In so saying did he err?
This court has repeatedly had occasion to say that, according to the common law, a debtor has a right, to prefer one creditor to others. It cannot then be pretended that the payment, admitted in these proceedings to have been made, is void, unless there be in our insolvent laws some clause which makes it so. We must take care in examining this case, to bear it in mind, that it isfor the legislature, and not for the court to judge, what shall be at any particular period, wrhat is called the policy of the insolvent system. Provisions whereby to guard against, fraud, in the acts of insolvents have varied from time to time, and none are ignorant that even intelligent and honest men, differ in this matter. Our province is jus dicere, (of the case under consideration,) and not jus facers. The court cannot create the offence, nor proportion the punishment to the offence, when the law makes the act done, to be an offence. A correct judge takes it for granted, that the wisdom of the law, (its constitutionality not being questioned,) is superior to his wisdom, and in deciding any question, especially one arising under our insolvent laws, (the provisions of which havebeen so frequently changed,) must take care to ascertain what the legislature, in its wisdom, made the law at the time when the act complained of was done, and not at any other time.
These remarks are intended as a brief answer to very many of the arguments which we heard pending the discussion of this case, all of which, (although entitled to grave consideration, when urged in the legislative hall,) seem out of place when addressed to this forum.
A few sentences, borrowed from Justice Story, in his work on equity jurisprudence, will furnish an answer to some other remarks which have been occasionally introduced. “It is not *444upon the feelings which a delicate and honorable man must experience, noy upon any notion of discretion, to prevent a voluntary gift, or other act of man, whereby he strips himself of his property, that courts of equity have deemed themselves at liberty to interpose in cases of this sort. They do not sit, or affect to sit, in judgment upon cases as custodes morum, enforcing the strict rules of mortality, but they do sit to enforce what has, not inaptly, been called technical morality. Courts of equity, therefore, will not set aside an act or contract, merely because a man of more honor would not have entered into it.”
There may be, it is true, “surrounding circumstances which ought to assist us in our judgment, but then we must not surround the case by too many circumstances; with circumstances which ought to have no influence upon our minds in settling the matters in issue. ’ ’ The question is not, of what number of unbecoming acts the defendants were guilty, but, whether in this act there was, according to the proof, any thing for which it is the duty of this court to say, that this payment to the bank, as stated, was forbidden by our insolvent laws, and because of this, the same sum is to be paid either by the bank or by McCormack, to the trustee, and to constitute a part of the general, fund, to be distributed in just proportions among the creditors.
Now it is not, and it is presumed cannot be denied, that until the act of 1834, ch. 293, “payments eo nomine, by an insolvent debtor, no matter what his views or expectations might be, were not declared fraudulent and void. It is also certain, that our courts cannot, in order to apply that act to their case, assume that law to have passed a few years sooner, or the insolvency of the Hammonds, and the act complained of, to have taken place a few years later, than was the case. He then Who asks us to condemn the act as fraudulent, and to declare that the'complainant is entitled to a decree, that the money be paid to him, must show the law, which without using the word payment, declares by a different word or phrase, the thing done (the payment of this note,) to be fraudulent and void. It is not an unreasonable belief, that this may be the only point in the very able arguments which have been made to us, in behalf of the appellants, which has not been satisfactorily demonstra*445ted. In this part of it however, there may be a defect, and possibly, this defect may have been discovered by the legislature, and have led to the act of 1836.
We all know that our insolvent laws were designed to prevent frauds and undue preferences, sometimes by depriving the insolvents of the relief which they sought, without affecting the right of the creditor who is preferred, and sometimes by making void the instrument which would secure the preference, without depriving the debtor of the relief which the insolvent system designs to give to every honest debtor, who applies for it. The question then, now is, whether there was in 1832, any act of Assembly of Maryland, which made void the payment here complained of, and of course entitles the complainant in this suit, to the money here in controversy ? Neither the researches of counsel, nor our recollections or labors, furnish the law which is wanted for this case.
The right to relief, it seems almost t.o be admitted, must be given, if given at, all, by the act of 1812, ch. 77, 1st sec., and 1816, ch. 21, sec. 6. But these acts of Assembly, although they avoid many acts, when done by an insolvent, yet do not include in the number, an actual payment of money bona fide due by him. All deeds, conveyances, transfers, assignments and sales, of any debts, rights, or claims, with a view, and under an expectation of being or becoming an insolvent debtor, and in order to give an undue and improper preference, are declared by the act of 1812, to be null and void. The act of 1.816, in declaring what acts it makes absolutely null and void, uses only the words, “'all deeds, conveyances, transfers, assignments or sales of any property, real, personal or mixed, or any debts, rights or claims, with a view,” &c. Now it is evident, that in neither of these acts of Assembly are payments, or any words or phrases significant thereof, to be found among the acts declared to be null and void. This may be a defect in the law. It may be as impolitic to allow debtors in failing circumstances to pay the debt in money, as to quiet the supposed demands of the creditors, in any of the ways forbidden. But this is a question only to be decided by the Legislature, just as to that department of the government, it may seem at *446any time most for the interest and well being of the community. The business of courts is to learn that will, from the words used by the Legislature; to make it known, and to interpret it faithfully, without any regard to the private notions of the judges, touching the policy of this or that provision.
It will at once be seen, by an examination of our insolvent system, that our Legislature has acted with great caution, in forbidding acts, which, in themselves, certainly are not criminal, (the security or payment of bona fide debts,) and in determining under what circumstances such acts shall be deemed unlawful. According to its notions of sound state policy, it would seem, that very many acts of debtors, in failing circumstances at the time, and who expected to become, and after-wards did become applicants for the benefit of our insolvent laws, might be prohibited, while, as yet, actual payments it would be unwise to forbid. Until 1836, there is manifest, in all our insolvent laws, a reluctance to interfere with the right of the creditor to demand, threaten to sue, sue for, or collect, an honest debt — a fondness for the old law maxim, which gives a preference, vigilantibus, and leaves it dormientibus, to suffer, if loss and injury to them, be the consequence of their negligence.
Yery many other points have been deliberately argued at the bar, but a decision of them is unnecessary in this case.
DECREE AFFIRMED.