Court Opinion

ID: 7895984
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:52:32.113804+00
Date Added: 2024-06-11T16:32:05.293323
License: Public Domain

Ritchie, J.,
delivered the opinion of the Court.
On the 29th day of December, 1880, Solomon B. Solomon and others, trading as B. L. Solomon’s Sons, filed their petition against the appellants, as co-partners, under the firm name of A. Sehiff & Company, to have them adjudicated insolvent under those sections of the Act of 1880, eh. 172, which relate to involuntary insolvency. The indebtedness of A. Sehiff & Co. is alleged to be $980.21, the price of goods and merchandise furnished them at various dates from the 1st day of November to the 9th day of December, inclusive, 1880, upon a credit of sixty days- There aro five allegations upon which the application is based. The first four of these impute acts of insolvency in general terms only; the fifth is specific, and accuses the respondents, being then insolvent, of having colluded with a certain Benjamin Weil, another of their creditors, to secure him by means of an attachment issued on the 17th day of December, 1880, and laid upon their stock in trade, an unlawful preference over their other creditors.
The answer of respondents admits the indebtedness, but also avers that no portion of the same was due and demandable at the time of the filing of said petition; denies their commission of any of the acts of insolvency generally alleged ; denies in detail the specific charge of collusion with Benjamin Weil in his issuing of said attachment, and in concluding, avers that the allegations of the petition “ are not sufficiently full, precise and distinct to sustain the proceedings instituted, and that they should not he declared insolvent for any cause in said petition alleged.”
On the 28th day of January, 1881, George Reubel, claiming to be a creditor of the firm of A. Sehiff & Oo., *580on their promissory note for $275.00, payable to his order with interest thirty days thereafter, also filed his petition in-the same Court to have the respondents adjudicated insolvents, making identically the five allegations, in form and substance, contained in the first petition, and adding another, which charges one member of the firm, Lewis Steigerwald, with having made, in fraud of his creditors, a conveyance of his interest in his deceased father’s estate.
The answer to this petition is similar to the former one, with the addition of a denial on the part of Steigerwald, of any fraud in the execution of the deed aforesaid.
The Court regarding the two petitions as involving substantially the same matter, of its own motion ordered their consolidation ; and one set of issues was submitted to the jnry. These issues, like the allegations, were six in number, and, excepting the last two, general in form, no particular facts being set out in any but the fifth, which related to the attachment proceedings by Weil, and the sixth, which referred to the execution of the deed by Steigerwald. The respondents, before the jury was sworn, excepted to the sufficiency of the allegations in both petitions. The objections to the first four being that they were vague and indefinite, to the fifth that the act of insolvency was alleged to have been committed by the defendants and each of them, to the sixth that an alleged individual act of insolvency on the part of Steigerwald could not be joined with allegations of acts of insolvency on the part of the firm, and also that the said act of Steigerwald was committed after the filing of the petition of Solomon ¡índ others.
There was some modification of these issues at the instance of the petitioners permitted by the Court, notwithstanding objection'made by the respondents. But as finally submitted they retained their indefinite character in not pointing out any specific facts or circumstances as constituting the acts of insolvency except in *581those connected with the attachment proceedings. The issues having been found against the respondents, the Court adjudged Albert Schiff and Lewis Steigerwald to be respectively, insolvent debtors within the meaning of the Act of Assembly.
In disposing of this case we do not deem it necessary to considei1 in detail the prayers that were offered or to set out any more of the record. The recital that we have made is not necessary to the determination of this appeal. We may rest it upon a single point alone, which we shall presently mention; but as the involuntary feature of our insolvent system is of recent, introduction, we deem it advisable to express our opinion upon the leading questions which arose upon that portion of the proceedings we, have detailed, because likely to be of frequent recurrence.
The first and fatal error in both the petitions, as we apprehend them, is that they are instituted against the respondents as members of a co-partnership. This Court has expressly decided that this cannot be done in a case disposed of at the present term: Armstrong, Calor & Co. vs. Martin & Marr, p. 397 ante. As this decision was subsequent to the filing of the petitions, the counsel were of course without the benefit, of our views in determining their course of procedure.
It is true there were no formal demurrers to the petitions on this ground. But even if it could be successfully contended that the point is not raised by the language of the answers and exceptions of the respondents, as the decision in the case just cited is based on the ground that our insolvent law makes no provision for partnerships as such, hut contemplates proceedings only against the debtor in person, an absence of jurisdiction is apparent in a case like the present of which the Court itself will take notice. Nor if, as was contended by appellees’ counsel, we could be convinced that the proceedings while referring *582to. acts of insolvency in relation to partnership matters, were instituted in fact against the respondents as individuals, still the joinder of two or more debtors in such an application would in our judgment he equally outside the contemplation of the Act of Assembly. .
It was suggested that an action of tort is analogous; but ending as that does in a simple judgment, where execution for the full sum lies equally against all the defendants, it does not carry with it the complex incidents and consequences of an insolvent proceeding. The latter is purely statutory, implying peculiar methods and their strict observance, and is marked by a procedure of various and successive "stages which would be greatly embarrassed by applying it at the same time to two, 'or more, insolvents (for if two may he joined there is no limit to the number,) whose indebtedness would not he identical, whose creditors would generally, if not always, differ in number and in the amount of their claims, and whose election of trustees would be attended by the confusion incident to then-different bases in these respects. A trustee for each debtor would be almost the inevitable result of such an election, if feasible at all. Each debtor’s estate, too, being unlike in quantity and nature, would then have to be disposed of and distributed separately by its particular trustee, having separate accounts to render and audit; or the attempt would have to be made to deal with the different pi-operties pf the various debtors in gross; a confusing process, if not of doubtful warrant in law. No such complications, we think, are contemplated by the statute. Great inconvenience, to say the least, would result from embracing a number of debtors in a common proceeding; and .the whole scope of our insolvent system as found in the statute ; its uniform use of the word .debtor, and the references in its provisions being, all predicated of the singular number, satisfies us that the design was to establish the simpler and more expeditious method of proceed*583ing against each insolvent debtor alone. See Gable, et al. vs. Scott, et al., 56 Md., 176.
But while we think the application must apply but to a single debtor, the Act expressly provides, on the other hand, that *• any one or more creditors, the aggregate of whose debts against the insolvent amount to at least the sum of two hundred and fifty dollars,” may file their petition against the debtor who has exposed himself to its provisions. This being so, and not pausing because unnecessary, to apply our observations in the present case, we see no impropriety in the Court’s consolidating proceedings under petitions in which the parties were competent to voluntarily unite;. provided the alleged acts of insolvency are the same, the same issues of fact are applicable, and the parties are not prejudiced by such a procedure. Such a course would be evidently promotive of dispatch, and the saving and apportionment of costs to those concerned in a common result.
As to the proposition embodied in the respondents’ first and. second prayers, that the verdict must be for the defendants, because the debts of the petitioning creditors were none of them actually due before the filing of their petitions, we agree with the Court below in not considering it sound. The right to proceed against the debtor arises when the act of insolvency is committed. The door would be opened wide to fraud, and the design of the law to secure the insolvent’s property for the injured creditor frustrated, if the latter were compelled to stand helplessly by and see it made away with because the time of payment of his claim, placed in the future in all probability upon the faith of this very property, had not fully matured. The relation of creditor is established when the obligation is contracted', and is not suspended till the date fixed for its discharge. Drake on Attachment, sec. 556; Stewart vs. West, 1 H. & J., 536. But we think this too well settled to need the citation of authorities.
*584In regard to the objection urged by respondents to some of the allegations and issues, heretofore indicated,, that they are vague and indefinite, we think it well taken.
Section 24 of the Act under consideration expressly requires, that “ The said petition shall allege the facts upon which the application is grounded.” The debtor ought not to be stigmatized as an insolvent, and his credit, and standing thus put in jeopardy, upon loose or general allegations. It would be a great injustice to put him to his defence upon broad and vague accusations merely.. He is entitled to as specific a statement of the acts by which it is asserted he has exposed himself to the summary proceedings and severe consequences of the insolvent law, as their nature will reasonably admit of. The imputation of insolvency or dishonesty, even if afterwards shown to be groundless, is calculated to work injury to-any citizen, and especially to members of the mercantile community, whose success largely depends upon their credit being above suspicion. Without the safeguard of' requiring the facts, to be set forth or indicated which constitute the alleged act of insolvency, the compulsory feature of the' statute would prove a dangerous and oppressive weapon in the hands of the rash or malicious. It is an elementary principle, that a defendant should be apprised of the nature of the charge or claim against him. He is thus enabled to prepare for his defence. And unless the issues of the trial are specific, there is no record by which he can be protected against a renewal of the action. It is not meant by these observations, that the allegations must be made with great minuteness of detail, or that the petitioner must establish every circumstance-embraced in his averment. This would be too stringent a requirement, and would often defeat the remedial purposes of the statute. A debtor seeking to fraudulently conceal or dispose of his property resorts to secrecy and artifice in effecting his purpose; and it would be difficult *585to trace all the steps, or discover all the facts, attending the perpetration of his fraud. But the allegations should "be sufficiently pointed to describe with substantial identification the material facts which justify the characterization of the act complained of, as au act of insolvency, in order that the defendant, the Court and the jury may he informed, in substance,' of the subject-matter of the-accusation and inquiry.
(Decided 9th February, 1882.)

Judgment reversed.