Acker, Merrall & Condit Co. v. McGaw

• Decision Date: 21 November 1907
• Citation: 68 A. 17,106 Md. 536
• Parties: ACKER, MERRALL & CONDIT CO. v. McGAW.
• Court: Maryland Court of Appeals

68 A. 17

106 Md. 536

ACKER, MERRALL & CONDIT CO. v. McGAW.

Court of Appeals of Maryland

November 21, 1907

Appeal from Superior Court of Baltimore City; Henry Stockbridge Judge.

Action by the Acker, Merrall & Condit Company against George K McGaw. From a judgment for defendant, plaintiff appeals. Reversed, and new trial awarded.

The question presented on a motion to direct a verdict is whether, admitting the truth of all the evidence given in favor of the party against whom the action is contemplated together with such inferences as may reasonably be drawn from it, there is enough evidence reasonably to sustain a verdict in accordance therewith, and, where the evidence is conflicting, all facts and inferences in conflict with the evidence against which the action is to be taken must be eliminated from consideration, leaving that evidence only which is favorable to the party against whom the motion is leveled.

The following is the declaration as amended by leave of court:

"The Acker, Merrall & Condit Company, a corporation created and existing under the laws of the state of New York, by Steele and Semmes, its attorneys, sues George K. McGaw: (1) For that, on or about the 28th day of February, 1903, and for some years prior thereto, the said George K. McGaw had been conducting a grocery business in the city of Baltimore, under the firm name and style of 'George K. McGaw & Co.,' in certain premises in said city, known as Nos. 220 and 222 North Charles street, which said premises the said George K. McGaw at that time held under a lease from Maurice Gregg, trustee under the last will of James Gregg, and Luther M. Reynolds and Maurice Gregg, trustees under the last will of John Gregg. That on the said 28th of February, 1903, the said defendant sold to the said plaintiff all his interest in the grocery or cigar stores, which he was conducting in the city of Baltimore under the firm name and style of 'George K. McGaw & Co.,' one of which said stores was being carried on on the premises Nos. 220 and 222 North Charles street, and all the goods, wares, and merchandise of every kind and character whatsoever owned by the said defendant in connection with the stores aforesaid, together with the firm name, good will, fixtures, and other assets upon certain terms, and for certain considerations, which terms were all fully complied with, and which said considerations were fully paid by the said plaintiff. It was further agreed that the said defendant should enter into the employment of the said plaintiff, should devote all of his time and best business judgment to the plaintiff, should become one of its board of directors, and should be paid a salary of $10,000 a year for a period of three years, accounting from April 1, 1903. That about April 1, 1903, the defendant was made and constituted the resident and managing director of the plaintiff's business in the city of Baltimore. The said defendant further agreed to assign the lease of the said premises to the said plaintiff. That the said lease contained a condition that the said premises therein described should not be assigned or sublet without the consent of the lessors first had and obtained, and on or about the 16th day of May, 1903, the said defendant, having previously assigned to the plaintiff all his right in the said premises described in the said lease, procured the assent of the said trustees to the said assignment. That the lease under which the said premises Nos. 220 and 222 Charles street had been held by the said defendant expired on the 31st day of January, 1906. That on or about October 24, 1905, the plaintiff received from the said trustees notices to quit the said premises Nos. 220 and 222 North Charles street on the 1st of February, 1906. That thereupon, to wit, on the 25th day of October, 1905, the plaintiff wrote to the defendant, in forming him of such notices, and instructing and requesting him, as plaintiff's managing director, to immediately take up the matter of the said lease with the said trustees. That the said defendant did not reply to the inquiry regarding the said lease in the said letter of October 25th, and, although said defendant was in New York, he did not call to see the plaintiff about the said lease, and on the 28th of October, 1905, the plaintiff again wrote to the said defendant about the said lease, saying that its president would, if necessary, go to Baltimore to see what was best to be done about it. That, not receiving any definite reply from the said defendant, the plaintiff again wrote him on November 8, 1905, requesting him to at once take up the matter of the lease, and again offering to have its president to go to Baltimore, if necessary, to consult about the same. That the said defendant after the receipts of at least one of said letters was in New York, and saw the president of the plaintiff, and, although he was asked about the said lease, made no definite statement in regard thereto. That on or about the 23d of November, 1905, the said defendant was in New York, and was again asked by the president of the plaintiff what he thought should be done by plaintiff in regard to said lease, and said McGaw stated that he wished first to know what arrangement would be made about his own contract for services with plaintiff expiring on April 1, 1906, and that, upon the president of plaintiff stating to said McGaw that the matter of the lease must first be settled, the said McGaw announced his intention of again going into the grocery business in the city of Baltimore in competition with plaintiff, and stated that he had procured in his own name a lease of the premises above mentioned, and that he had induced certain employés of the plaintiff to agree to leave the plaintiff's employ and enter in his employ, and he then offered to buy out the plaintiff's Baltimore store and business, which offer the plaintiff refused to consider. That on the 30th day of November, 1905, under instructions from plaintiff's board of directors, J. T. Harwood, assistant secretary of the plaintiff, saw the said McGaw in Baltimore, and in the name of the plaintiff demanded that he should at once assign the said lease to the said plaintiff, which the said McGaw then and there declined to do. That at said interview, and thereafter, it transpired that the said McGaw had begun negotiations for the renewal of the said lease, more than a year or eighteen months prior to October, 1905, and that at the time the said letter of October 25, 1905, was written by plaintiff to the defendant, the defendant had agreed with the said trustees upon the terms for the renewal of the said lease, and that the said lease was then actually prepared and ready for execution, and was in fact executed in duplicate on or about the 28th day of October, 1905, whereby the said trustees leased the said premises to the said defendant for a term of three years at a rental of $8,000 per annum, and that although this said lease had been renewed as aforesaid, and although the defendant saw the plaintiff, or certain of its officers, after the said lease had actually been executed, and prior to the 23d of November, 1905, as hereinbefore alleged, and although he received at least two letters urging the obtention of the said lease, after he had, as a matter of fact, obtained the same, the said defendant never told the plaintiff before the 23d of November, 1905, that he had taken the said lease in his own name, but, on the contrary, carefully suppressed and concealed the said fact from the plaintiff. That when the said defendant declined to assign the lease as aforesaid, the plaintiff employed counsel, who then made demand upon the defendant for an assignment of the said lease. That the counsel for the plaintiff were referred by the said defendant to his counsel. Whereupon the plaintiff's counsel demanded from the defendant's counsel that the said lease should be at once transferred to the plaintiff, on the ground that the said defendant at the time he obtained the said lease was a director, and the managing or resident director of the said corporation, and therefore occupied a fiduciary relation towards it, and that he could not deal with the said property for his own benefit or in his own behalf, and that he held the same as trustee for the plaintiff, and that it would be a fraud upon the rights of the plaintiff for the defendant to refuse to assign said lease. That subsequently, on the same day, the said defendant, under the advice of his counsel, did assign the said lease to the plaintiff. That the said lease contained a clause that the same should not be assigned without the consent in writing of the lessors first had and obtained. That immediately upon the assignment of the said lease by the said McGaw, the said trustees were notified thereof by the plaintiff and were requested to assent to the said assignment, and a form of assignment was prepared by the plaintiff's counsel and handed to the trustees for execution. That the plaintiff heard nothing from the said trustees with regard to the said assignment until the 2d day of January, on which day its counsel was notified that the trustees did not approve of the assignment of the lease made by the defendant to the plaintiff. That after a number of interviews with the said trustees, the plaintiff was informed by them that they had an offer of $9,000 for the said property, and the trustees declined and refused to assent to the said assignment, or to lease the property to the said plaintiff at a lower rental than $9,000. That the plaintiff found, upon inquiry, that a certain Frank N. Hopper and a certain James B. Warden, who had been associated with the defendant in his grocery business before the sale thereof to the plaintiff, and who had been employed by

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