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The Annotated Code of the Public Civil Laws of Maryland, 1911
Volume 372, Page 1216   View pdf image (33K)
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1216 INSOLVENTS. [ART. 47

Custodia legis.

The insolvent's property being vested in the trustee, is no longer within the
reach of process. Insolvent Estate of Leiman, 32 Md. 240.

Upon an application for the benefit of our insolvent laws, a debtor's prop-
erty passes in cuatodia legis, and Is not thereafter liable to distraint. This
is true though the rent be due at the time the petition is filed. The same
principle Is applicable to proceedings in bankruptcy when administered in
Maryland. Fox v. Merfeld, 81 Md. 82; Buckey v. Snouffer, 10 Md. 155; In Re
Southern Company, 180 Fed. 838.

The "custodia legis" commences with the filing of the petition. All bona
fide liens for a valuable consideration antecedently attached must be
respected. Assignees in Insolvency are not bona fide purchasers for value,
but take the property subject to all the burdens it was under in the hands of
the assignor. Set-off as applicable to insolvency cases. Dowler v. Cushwa, 27
Md. 365. As to set-off, see also, Colton v. Drovers' Bldg. Assn., 90 Md. 95.

Property in the hands of an insolvent trustee is not liable to attachment by
a non-resident creditor. Pinckney v. Lanahan, 62 Md. 451 (overruling earlier
cases to the contrary; see note to Larrabee v. Talbott, 5 Gill, 426); Terrene
v. Hammond, 10 Fed. 900.

Trustee's power of sale.

The insolvent trustees sells all the insolvent's property (save as mentioned
in section 25) free and discharged from liens, reserving the settlement of
all priorities until the final distribution. Eschbach v. Pitts, 6 Md. 75; Mana-
han v. Sammon, 3 Md. 473; Glenn v. Gill, 2 Md. 18.

The creditor's acquiring a lien in accordance with this section does not
divest the trustee of his right to sell, which extends to all of the insolvent's
property. Alexander v. Ghiselin, 5 Gill, 179.

This section makes it evident that where there is specific property, it must
be sold. Zeigler v. King, 9 Md. 334.

Generally.

This section does not clothe the insolvent court with the powers and juris-
diction of a court of chancery; it is acting under special statutory powers.
Gable v. Scott, 56 Md. 185. And see Bowie v. Jones, 1 Gill, 208; Paul v.
Locust Point Co., 70 Md. 292.

The provisions of this section apply equally to voluntary and involuntary
insolvency. A creditor who files his claim for a distributive share of an
insolvent estate, will not be allowed to impeach the adjudication. Gottschalk
v. Smith, 74 Md. 562.

Where A. Issues an attachment against B. and the latter thereafter goes
into insolvency, and C. still later gets a judgment against B. and issues an
attachment thereon laying it in the hands of the insolvent trustee to affect
the fund arising from a sale of the property attached by A., C. may intervene
and move to quash A.'s attachment. Clarke v. Meixsell, 29 Md. 228.

Where there are three Judgment debtors and one of them dies and the
other two go into insolvency, and the judgment debt being filed against the
insolvent estate of one of the latter, Is paid by the trustee, the latter is enti-
tled to two-thirds of the amount paid by him out of the proceeds of the sale
of the real estate of the deceased judgment debtor, the evidence establishing
the relation of principal and surety between his insolvent and the other
Judgment debtors. Walsh v. Boyle, 30 Md. 267.

This section relates only to cases of insolvecny. Triebert v. Burgess, 11
Md. 462.

The attachment may be on mesne process, as well as on judgment. Thomas
v. Brown, 67 Md. 515.

The insolvent trustee could not recover from the guarantors of debts of the
insolvent. Colton v. Mayer, 90 Md. 716.

Cited but not construed in Insolvent Estate of Leiman, 32 Md. 241; State
v. Mayugh, 13 Md. 377.

The landlord's lien on crops reserved as rent is not divested by the tenant's,
insolvency—art. 53, sec. 22.

As to the Insolvency of agents and factors as bearing upon consigned goods,
and money due therefor, see art. 2, sec. 7, et seq.

 

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The Annotated Code of the Public Civil Laws of Maryland, 1911
Volume 372, Page 1216   View pdf image (33K)
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