Wanamaker v. Bowes , 36 Md. 42 ( 1872 )

Bartol, C. J.,

delivered the opinion of the Court.

The appellee, plaintiff below, claimed title to certain goods and chattels, consisting of a stock of goods 'in a store, with the furniture and store fixtures, under a bill of sale, by way of mortgage, executed on the 24th day of June, 1869, by J. H. Smith. The mortgage contained a provision entitling the mortgagor to retain possession of the property until default, which could not occur until the 24th day of June, 1870, that being the date fixed for the payment of the first instalment of the debt secured by the mortgage.

On the 19th day of October, 1869, the appellant sued out an attachment, under the Act of 1864, ch. 306, against Smith, and caused the same to be laid on the property conveyed by tho mortgage, and the same was seized by the sheriff and sold; and this suit was instituted by the appellee to recover damages for the alleged illegal seizure.

The declaration contains three counts: the first is in case, counting on the plaintiff’s ■’ title under the mortgage; the second is in trespass de bonis asportatis, and the third in trover.

The Court below, at the instance of defendant, granted by consent an instruction to the jury which denied to the plaintiff the right to recover upon either the second or third counts of the declaration; the recovery was therefore exclusively upon the first count.

The first exception taken by the defendant was to the ruling of the Circuit Court, declaring the bond which had been given under the Act of 1864, for the purpose of obtaining the attachment, to be void, and tho attachment proceeding illegal; and that the defendant had no right to offer evidence to impeach the bill of sale as fradulent against creditors.

There can be no doubt of the insufficiency of the bond. It was, perhaps, intended as the bond of John Wanamaker (the attaching creditor) as principal, and of Wm. H. Wanamaker and Robert Cathcart as his sureties; but John is in no respect bound; for in the body of the instrument it is declared to be the obligation of William H., and in the recital he is called the “ above bounden William H.”

By the second resolution in Combe’s case, 9 Coke, 76, b, it was resolved that “ when any has authority as attorney to do any act, he ought to do it in his name who gives the authority; for he appoints the attorney to be in his place, and to represent his person; and therefore the attorney cannot do it in his own name, nor as his proper act, but in the name, and as the act of him who gives the authority.” And such is the law at this day with respect to deeds and other instruments under seal, except in so far as the same has been altered by the provisions of the Code, which have no application here. Frontin vs. Small, 2 L. Raymond, 1418 ; Harper vs. Hampton, 1 H. & J., 622, 709 ; Lessee of Clarke vs. Courtney, 5 Peters, 318, 349.

Affixed to the bond are the name and seal of John, put there by William H., but it does not appear that he had lawful authority to bind his principal, it being conceded in the argument that the authority under which he claimed to act was verbal merely; it is not therefore the bond of John. Nor is William H. bound as principal, for it is expressly stated that he and Robert Cathcart bind themselves as sureties, and a party cannot be both principal and surety in the same obligation. This distinguishes this case from Stewart vs. Katz, 30 Md., 334.

The bond being invalid, it follows that the attachment was “ illegal and void,” for so it is declared by the Act of 1864, section 41.

The defendant thus being without the protection of valid legal process, was it competent for him to impeach the bill of sale as fraudulent, as against the creditors of Smith the mortgagor ? It is objected that it is not competent for him to do so, because he had not obtained any lien by judgment and execution, or other valid judicial process; and a number of authorities have been cited to show that in order to entitle a creditor to impeach a deed as fraudulent under the statute, it is necessary for him first to obtain a judgment, or other lien, upon the property conveyed by the deed. This general proposition is supported by the case of Birely and Holtz vs. Stanley, 5 G. & J., 433, 452, and has long been the recognized law of this State.

By the Act of 1835, now embodied in the Code, Art. 16, section 35, it is provided that a creditor may maintain a bill in equity to set aside a fraudulent deed without having first obtained a judgment at law upon his demand. This provision has materially enlarged the-rights of creditors and extended their remedies; but it is by its terms confined to proceedings in Courts of Equity, and cannot be construed as changing the rights of the parties in a case like this. The general rules of law must apply. The defendant not having acquired a lien by attachment, or other valid legal process, cannot, merely because he is a creditor of the mortgagor, be permitted, in defense of an action for wrongfully and illegally seizing the goods, to impeach the mortgage as fraudulent against creditors. As between the parties to the mortgage, it is a good and valid conveyance; and third parties cannot impeach it at law, unless they have a lien upon the property; a-mere creditor of the mortgagor having no jus in rem, cannot be heard to set up this defense either as a bar to the suit or in mitigation of damages. We therefore affirm the ruling of the Circuit Court in the first bill of exceptions.

The .second bill of exceptions was taken to the refusal of the Circuit Court to permit the defendant to prove in mitigation of damages, that at the time of the seizure under the attachment, there was rent in arrear due upon the promises occupied by the mortgagor, in which the goods were, amounting to $1,048; that after the seizure by the sheriff and before the removal of the goods, there were filed with the sheriff, by the landlord, notices and affidavits of such rent in arrear, and that the sheriff in pursuance of such notices, and of an order of Court passed in the attachment case, paid' over to the landlord the amount of rent so in arrear, out of the proceeds of the sales of the property seized.

The defendant was without the protection of valid legal process, and being a wrongdoer “he could not appropriate the property wrongfully seized either to pay a debt due to himself, or to any other creditor, except by the consent of the debtor or by the sanction of the law;” and therefore, if the rent had been voluntarily paid by the defendant or by the sheriff, (who was a co-trespasser,) the defendant could not be allowed for such payment in mitigation of damages. This proposition is supported by all the authorities. Sowell vs. Champion, 6 Ad. & E., 407, (33 E. C. L., 92;) Gillard vs. Brittan, 8 Mee. & W., 576; White vs. Binstead, 76 E. C. L., 303; Attach vs. Bramwell, 41 L. J., 146, (C. Law, 1863.) Many other cases might be cited, both English and American, to the same effect. The law is so correctly stated in Addison on Torts, 543, 664, 665.

Bat it is equally clear, both upon reason and authority, that if after the illegal seizure, the goods had been taken out of the hands of the defendant by legal process, as by execution at the suit of another; or if a distress had been actually levied thereon for rent in arrear, and the goods, or some of them, taken thereunder, such fact could be given in evidence in mitigation of damages. While the general rule is that for the wrongful taking and conversion of the plaintiff’s goods, the measure of compensation. is the value of the goods, and the wrongdoer will not be allowed voluntarily to appropriate the proceeds to the payment of the plaintiff’s debts, or in any other way apply them voluntarily to his use without his consent; and claim thereby to reduce the amount of his liability. Yet if without the agency or act of the defendant, the goods have been by operation and judgment of law applied to the use of the plaintiff, his damages resulting from the unlawful act will be pro tanto diminished. In 2 Greenleaf on Evidence, sec. 276, the author, speaking of the measure of damages in actions of trover says: “If the plaintiff has himself recovered the property, or it has been restored to him and accepted, the actual injury occasioned by the conversion, including the expenses of the recovery, will form the measure of damages; and if the property in whole or in part has been applied in payment of the plaintiff’s debt, or otherwise to his use, this may be considered by the jury as diminishing the injury and consequently the damages.” There are some cases which support this last proposition; but taken in its broad unqualified terms, as stated by the author, it is not in accordance with the general current of authority. The distinction is between cases where the property, or its proceeds have been voluntarily appropriated by the defendant to' the payment of the plaintiff’s debt, or otherwise to his use, and those in which they have been so applied by judgment or operation of law, as by legal process instituted by a third person. In the latter case this fact may be proved in mitigation of damages. The cases on this point are collected in 2 Greenleaf’s Evidence, sec. 635 a. (n. 2.)

The decision of this exception therefore turns upon the question of the effect of the proceedings by the landlord, and of the Court’s order under which the sheriff paid the rent.

In Thomson vs. Balt. & Susq. Steam Co., 33 Md., 312, it was decided that an attachment on warrant was not an execution within the meaning of VIII Anne, ch. 14, section 1, and consequently that the sheriff, who had seized goods under such attachment, was not liable to the landlord for so doing. But the goods being sold by the Court’s order under the attachment, it was held that the landlord’s remedy was to go into Court and claim the payment of the rent in arrear out of the proceeds ; and that he would be entitled to precedence by reason of his quasi lien on the goods. In this case the landlord resorted to that remedy, and the rent in arrear was paid; not by the voluntary act of the sheriff or of the defendant, but by the Court’s order. It is true that the proceedings in attachment, being irregular, the landlord might have disregarded them, and instituted his distress, but he was not bound to do so; finding the goods in the custody of the sheriff, under color of legal process, he was not bound to determine for himself the question of the validity of the attachment, nor was he responsible for any errors or defects in the proceedings; and' having resorted to his remedy by filing his claim in Court duly authenticated, and obtained satisfaction, so far as the question before us is concei’ned, the case stands as if the landlord had proceeded by distraint to recover the rent in arrear.

The property was to that extent appropriated to the use of the plaintiff in satisfaction of a debt for which it was liable, not by the voluntary act of the defendant, and it is reasonable and just that the measure of recovery in this suit should be diminished pro tanto. In our opinion therefore the evidence stated in the second bill of exceptions ought to have been admitted..

The third bill of exceptions brings before us the prayers.

The first prayer of the plaintiff and the second and seventh ■ of the defendant, have been disposed of in deciding the first exception; they relate to the question of bona fides of the mortgage, which we have said it was not competent for the defendant to impeach, being a mere creditor of the mortgagor without any lien upon the property. We affirm the action of the Circuit Court. upon these prayers. In our opinion there was no error in rejecting the third, fourth, fifth and sixth prayers of the defendant. There was no evidence in the case to support the proposition that the goods embraced in the mortgage were intermingled and confused with other goods so that they could not be distinguished, upon due care and inquiry which it was the duty of the officer and the defend- • ant to make.

The second prayer of the plaintiff and the eighth of the defendant relate to the measure of damages. By the former, which was granted, the jury were instructed that they “were entitled to give punitive damages,” We think this was error, as was said in Moore, et al. vs. Schultz, 31 Md., 423, “ordinarily in actions of this character, the plaintiff is entitled to recover, if there be no circumstances of aggravation, the value of the goods taken with interest to the time of trial.” “But if the trespass be committed in a wanton and aggravated manner, indicating malice, or a disregard of the rights of others, and the circumstances of the case afford no justification,” exemplary or punitive damages may be allowed.

The same rule is well stated in Selden vs. Cashman, 20 Cal., 56, and in Rose vs. Story, 1 Barr, (Pa.,) 191, 197. In this case there is no evidence of wanton or 'malicious wrong on he part of the defendant, he was in the pursuit of his legal remedy under the statute, and through inadvertence, failed to comply with the prerequisites of the law, and thus became liable to this suit, but there is nothing in the facts or cilcumstances of the case to subject him to punitive damages. We therefore think the Circuit Court erred in leaving to the jury the discretion to give punitive damages.

(Decided 16th May, 1872.)

It is stated in the third bill of exceptions, “ that the defendant proved that no part of the proceeds of the goods seized and sold under the attachment was paid over to him, but that the whole.net proceeds were paid to Emil! Sutro, the assignee in bankruptcy of said Smith,” (the mortgagor.) Ko question was raised in the Court below upon this evidence, either as it might affect the right of the defendant to impeach the bill of sale as fraudulent under the Bankrupt Law, or as affecting the measure of damages; it has however been called to our attention by the notes of counsel filed since the argument. Without expressing any opinion upon the questions suggested, we refer to Leake vs. Loveday, 4 M. & G., 972; Bolander vs. Gentry, 36 Cal., 105, and Hanson vs. Herrick, 100 Mass., 323.

Judgment reversed and new trial ordered.