Pitts Agricultural Works v. Smelser
Pitts Agricultural Works v. Smelser
Opinion of the Court
delivered the opinion of the Court.
This appeal involves the validity of an assignment by the Maryland Agricultural Company of Baltimore City to David P. Smelser, for the benefit of its creditors, and is similar to the case which will be found reported in this volume on page 464. The appellant being one of the creditors of the Agricultural Company instituted proceedings in the Superior Court of Baltimore City by way of attachment on original process against the appellee, upon the ground that said assignment, whilst valid on its face, was made with intent to defraud its creditors. The writ of attachment was laid in the hands of the appellee. The short note case was first tried, and resulted in a verdict and judgment for the appellant. The attachment was then tried and after the testimony on both sides had been closed, the appellant offered
.It is not contended by the appellant that the Maryland Agricultural Company was not justified by the then existing circumstances in making an assignment, or that the assignment made by it, is not fair and valid on its face ; but it is contended that the assignment though fair and valid on its face, yet is in fact a device or contrivance to compel the •creditors of the company to accept a compromise, and was made in pursuance of an agreement or understanding with the appellee, by which the company was to derive some advantage or benefit inconsistent with the legal rights and remedies of its creditors. It is conceded that the deed of assignment was not executed to the appellee until the company found itself in a position of inability to meet its obligations, when a deed was executed by it for the benefit of all its creditors without any preference or priority. The property of the corporation consisted of a large stock of implements and book accounts. On the day of the execution •of said deed, the appellee filed his bond with approved security, took possession of the property of the company, and ■thereafter applied by petition to the Circuit Court No. 2, ■of Baltimore City, to assume jurisdiction of the trust, and •obtained the usual orders from said Court and proceeded with the due execution of his trust The allegations of the .attachment were, ist, that the company had assigned, disposed and concealed its property to defraud its creditors ;
After a careful examination of the record, we have failed to discover the slightest evidence which legally tends to show that the appellee ever made, or that he has sought to make any compromise, either voluntary or involuntary, with the creditors of the corporation. The president, who is now antagonistic to the appellee’s administration of the trust, admits “ that there was no objection to the assignment on the part of any of the directors or stockholders ; and that his real object in making the assignment was to get out of the thing as easy as he could, and he wanted the creditors to have the benefit of the property that was there.” The president of .the company testifies that the appellee
It follows from what we have said that we find no error in the rulings of the Court below and therefore affirm the judgment.
Judgment affirmed with costs.
Reference
- Full Case Name
- THE PITTS AGRICULTURAL WORKS v. DAVID P. SMELSER, Garnishee of the MD. AGRICULTURAL CO.
- Cited By
- 2 cases
- Status
- Published
- Syllabus
- Assignment for Benefit of Creditors—Fraud—Attachment on Original Process. After a general assignment for the benefit of its creditors was made by a corporation, the plaintiff, a creditor, issued an attachment on original process to affect the funds in the hands of the trustee, upon the ground that the assignment, although valid on its face and for the equal benefit of all the creditors, was nevertheless fraudulent and void because designed to compel creditors to accept a compromisej and was made in pursuance of an agreement with the trustee to secure some benefit to the corporation. Held, upon the facts, that these allegations were not supported by the evidence and that the attachment could not be maintained. When the question is as to the validity of an assignment for the benefit of creditors executed by a corporation, evidence as to whether a certain officer of the corporation received a salary is irrelevant and inadmissible.