Martindale v. Brock

41 Md. 571 | Md. | 1875

Bartol, C. J.,

delivered the opinion of the Court.

On the 5th day of December, 1873, a suit was instituted in the name of William E. Brock against George H. Dob-son and Franklin G. Martindale, upon their bond, for the penal sum of $20,000, conditioned for the performance by said Martindale and one James W. Krepps of certain covenants contained in Articles of Agreement entered into between Brock of the one part, and Martindale and Krepps of the other part. The condition of the bond, and the covenants in the Articles of .Agreement are set out in the declaration, and need not be particularly mentioned here.

The defendants were both summoned and on the 8th day of December, 1873, John P. Poe, Esquire, appeared for them; and on the 12th day of the same month, hied two pleas in their behalf alleging substantially:

1st. That before the suit was brought they had satisfied and fully discharged the bond by payment thereof.

2nd. That they had fully performed all the covenants and conditions on their part to be done and performed, according to the terms and conditions contained in the .bond.

On the 12th day of January, 1874, the pleas were withdrawn by Mr. Poe’s order, and on the same day “ a judgment by default for want of plea,” was entered against both defendants, which was on the same day extended for $3,198.35, “damages assessed by the Court.” Whereupon the following paper was filed:

"William E. Brock

vs. ¶

Franklin G. Martindale ,> In the Superior Court.

and George H. Dobson.” 1

“In pursuance of the provisions of section 6 of Article nine (IX) of the code of Public Genera] Laws, I hereby assign the judgment recovered by me in the above entitled case to George II. Dobson, the surety upon the bond, the cause of action in said case, and hereby authorize and direct the clerk to enter said judgment to the use of said Dobson.”

[Signed,] Wm. M. Merrick and

Victor Smith,

Attorneys for Pltff.

On the same day a writ of fieri facias, and a writ of attachment were issued against Martindale, upon the judgment in the name of Brock for the use of Dobson.

On the next .day Martindale, the appellant, appeared hy other counsel and filed a motion ho quash the writs off. fa. and attachment, and to strike out the judgment.

Among the reasons assigned in support of the motion is that the judgment was obtained hy fraud and surprise practiced upon the appellant, hy George H. Dohson.

The affidavits of Brock, Martindale and Dobson were filed, and also the affidavits of Messrs. Merrick and Smith the attorneys of Brock; together with other papers; all of which have been carefully read and considered. In-disposing of the questions presented hy the appeal, we deem it unnecessary to refer particularly to much of the testimony contained in the record; which in some respects is contradictory.

It does not dearly appear what were the actual relations between Dohson and Martindale with respect to the transactions referred to in the bond, and the Articles of Agreement. The inference from the face of the bond would he that Dobson signed it only as surety. He so represented himself, and it is evident that he was so regarded both hy the attorneys of Brock, and by his own counsel Mr. Poe ; who appear to have been ignorant of the existence of the articles of co-partnership signed hy him with Martindale, Krepps and Tilghman in September, 1872 ; whereby they mutually agreed to share the profits arising from the sales of the patent rights purchased from Brock, and to which. the bond and Articles of Agreement referred. Brock testifies that this co-partnership was formed before the bond was executed. But whether before or afterwards, it is very doubtful whether Dobson, after entering into the co-partnership, could be entitled, under any- circumstances to claim against Martindale, the rights belonging to a mere surety upon the bond. But if he was a surety only, he would be entitled to claim from the principal no more than he had actually paid in satisfaction of the bond.

The bond was originally conditioned for the payment of $10,000, absolutely, and upon certain contingencies, a larger sum. It appears by Brock’s testimony, that he had agreed to reduce the amount to $5000, and afterwards to $4000. A portion of this sum, he says, was paid by the firm of Martindale, Tilghman & Co. composed of Martin-dale, Dobson, Krepps and Tilghman; and he further testifies that the whole amount paid him by Dobson on the bond was $200. There seems however to be some confusion in Brock’s statements in this respect. He appears to have confounded the bond in question, which related exclusively to the sales of patent rights in Illinois, with others relating to Missouri, Iowa and other States mentioned in the original Articles of Agreement. He says the bond relating to Missouri and Ioiva was settled by Dobson paying him $1000, and that the latter required him to assign the same. This statement probably refers to the bond sued on in this case, as is shown by the assignment of May 22nd, 1873, produced with the affidavit of Mr. Smith the plaintiffs attorney. Without however, adopting Brock’s statement: it appears from the uncontradicted proof in the cause, that in February, 1873, while Brock held the bond and Articles of Agreement, he borrowed from Victor Smith, Esq., $500, (the money of M. J. Hesbet) assigned to Miss Nesbet the bond and articles, and placed them in Mr. Smith’s hands, as collateral security for the repayment of the loan, and took from Mr. Smith a receipt, in which it was stipulated that they should be returned to him on payment of the $500, “and in event of a suit, the balance, after payment of Miss Nesbet’s claim and lawyers’ fees should be returned to Brock.”

In May, 1873, Mr. Smith, by the direction of Brock, instituted suit on the bond against Dobson and Martin-dale ; but finding the suit was brought prematurely, it was stricken off, and in December following, this suit was brought, without further instructions from Brock. In the meantime, on the 22nd day of May, 1873, Dobson paid Brock $1000, in full satisfaction of the bond, and took from him an assignment of all his rights and claims thereon— except for the $500, due M. J. Nesbet.

Dobson states in his affidavit, that as surety he “paid Brock the holder of the bond sued on in this case $3552.50, including interest; ’ ’ but no receipt or other evidence is produced to corroborate this statement, and it is contradicted, not only by the testimony of Brock, but also by the assignment of May 22nd, IB^, taken by himself; in which the consideration paid by him is stated to be $1000.

But whatever may have been the amount paid by him to Brock, it is very clear that at the time the suit was instituted, the only sum for which the defendants Dobson and Martindale were legally liable upon the bond was $500, the amount due to Miss Nesbet.

In no event could a judgment for any larger sum be properly rendered against Dobson and Martindale the defendants in the suit.

The Code, Art. 9, sec. 5, authorizes a surety upon a bond or other obligation, who has paid the money due thereon, to demand an assignment thereof “and by virtue of such assignment, to maintain an action in his oion name against the principal debtorUnder this provision, the remedy of Dobson, if he had paid to Brock the money due on the bond, assuming he was surety, was to obtain an assignment and sue the principal in his own name. He could not legally recover the money so paid by him, by a suit in the name of the obligee, against himself and his co-obligor. In this case the suit does not app.ear to have been instituted at his instance, he states that he had no knowledge of it till the summons was served upon him.

The suit was brought by Victor Smith, Esq., to recover the money due to Miss Nesbet, to secure which the bond had been assigned to her by Brock, and as we have before said, if the legal defences had been made to the suit, no larger sum could have been recovered than the amount due Miss Nesbet.

It appears from the proof that after the pleas had been filed on behalf of both defendants, Dobson conceived the purpose of availing himself of the pending suit, in order to recover the money which he considered Martindale owed him, and in execution of that design, arranged with Mr. Smith, the plaintiff’s counsel to satisfy Miss Nesbet’s claim and 1 c to take charge of the suit; ’ ’ accordingly without the knowledge of Martindale the co-defendant, he instructed Mr. Poe to withdraw the pleas, and allow “judgment by default for want of plea,” tobe entered against Martindale and himself; which was assigned to him by plaintiff’s attorneys, and entered for his own use. This assignment purports to have been made in pursuance of sec. 6, Art. 9, of the Code. That section provides that “where any person shall recover a judgment against the principal debtor and surety, and tlxe judgment shall be satisfied by the surety, the creditor shall assign the same to the surety, aud such assignment being l’ecorded in the Court where the judgment was rendered, the assignee shall be entitled to execution in his owxi name against the principal.”

In this case the judgment was extended by the Court for $3198.35. Upon what proof the Court acted in ascertaining this amount does not appear in the record. Bxit it is very clear from the evidence of Mr. Smith, plaiixtiff’s attorney, that tlxe judgment for that amount, was not satisfied by Dobson after it was rendered. The only sum paid by him, was the amount due to Miss Nesbet assignee; and whether that was actually paid befoi’e, or after the judgment, does not appear.

The Code provides that the assignment shall be made by the creditor; whether it is competent for the attorney to make it, is a question not necessary for us to decide in this case, and we express no opinion upon it. Nor is it material to consider whether the bond sued on, was one upon which the damages might be assessed by the Court, under the Act of 1864, ch. 175, without the intervention of a jury. Waiving these questions, it is evident that the judgment was erroneously extended. According to the proof in the cause, it is impossible that a judgment for such a sum could properly be rendered against both the defendants.

(Decided 3rd March, 1875.)

But the evidence shows that the pleas were withdrawn by the direction of Dobson alone, without the knowledge of his co-defendant; for the purpose of enabling Dobson to avail himself of the judgment, as a means of collecting the money which he alleges he had paid for Martindale, as his surety upon the bond. This proceeding was one hostile to Martindale, and exclusively in the interest of Dobson, in'which it was impossible for them to be represented by the same attorney; and it operated as a complete surprise upon Martindale, who had no notice or knowledge of it, and who was virtually without counsel to represent him.

Without imputing to Dobson any intentional fraud ; or casting any imputation upon the conduct or good faith of any of the counsel engaged in the cause, it is evident that the proceedings whereby the pleas were withdrawn, and the judgment was allowed to be entered, and the assignment made to Dobson, in the manner stated in the record, were the result of error, and operated as a surprise upon the appellant.

In our opinion justice requires that the judgment by default and the extension of the same' be stricken out, and the appellant be allowed to appear and make his defence to the suit. To that end, the order of the Superior Court overruling the motion to strike out the judgment will be reversed and the cause remanded. The judgment being stricken out, the entry of the use should, of course, be stricken out also, and the executions quashed.

Orders reversed, and cause remanded.