Bowles v. M. P. Moller, Inc.

• Court: Maryland Supreme Court
• Citation: Bowles v. M. P. Moller, Inc., 163 Md. 670, 164 A. 665 (Md. 1933)
• Decision Date: 15 February 1933
• Docket Number: 73.
• Parties: BOWLES ET AL. v. M. P. MOLLER, INC., ET AL.

164 A. 665

163 Md. 670

BOWLES ET AL. v. M. P. MOLLER, INC., ET AL.

No. 73.

Court of Appeals of Maryland

February 15, 1933

Appeal from Circuit Court, Washington County; Frank G. Wagaman Judge.

Suit by M. P. Moller, Inc., against the M. P. Moller Company, in which John Wagaman and another were appointed receivers. From an order denying petition of Norman S. Bowles and another for leave to intervene as defendants, the petitioners appeal.

Appeal dismissed.

BOND C.J., dissenting.

Appeal from order of equity court directing sale of property does not stay proceedings, unless appeal bond is filed or stay secured. Code Pub.Gen.Laws 1924, art. 5, § 33.

Argued before BOND, C.J., and ADKINS, OFFUTT, DIGGES, and PARKE, JJ.

Norman S. Bowles and James L. Skinner, both of Washington, D. C for appellants.

J Lloyd Harshman, of Hagerstown (John Wagaman, of Hagerstown, on the brief), for appellees.

DIGGES Judge.

The facts leading up to this appeal may be thus stated: On February 2, 1932, a bill of complaint was filed in the circuit court for Washington county by M. P. Moller, Inc., against the M. P. Moller Company. The bill states that the plaintiff is a corporation duly incorporated under the laws of the state of Maryland, with its principal office in Hagerstown, Washington county, Md.; that it sues for itself as well as for all other creditors of the defendant, which is also a corporation incorporated under the laws aforesaid, with its business located in the same town; that the defendant is indebted to the plaintiff on open accounts in the amount of $103,658.97; that the defendant is also indebted to other persons, firms, and corporations to the amount of approximately $2,000; that the present assets of the defendant consist of accounts receivable of $2,725.10, accrued interest receivable of $2,377.72, merchandise, inventory consisting of instruments, supplies, and all other stock in trade, $23,988.58, equipment, fixtures, etc., $639.95, automobile delivery trucks worth approximately $400, making the total assets of the defendant approximately $30,131.35; that, in addition to these assets, it owns installments on conditional sale contracts which have accrued to this date, but the value of which installments is not, at the time of the filing of the bill, known, and the collection of a large percentage of which "is to say the least very doubtful and problematical"; that the defendant is insolvent and unable to meet and discharge its debts and obligations; that it is necessary for the protection of the interest of the plaintiff as well as other creditors of the defendant that a receiver be appointed immediately to take charge of the property and assets of the defendant "so as to preserve the same and dispose of the same to the best advantage under the power, authority and direction" of the court. The prayers of the bill are that a receiver be appointed to take immediate charge of the property and assets of the defendant for the purpose of conserving and liquidating the same under the direction of the court, and for further relief. The allegations contained in the bill are sworn to by E. O. Schullenberger, secretary of the plaintiff, stating that he is the secretary of the plaintiff, has personal knowledge of the matters and facts therein alleged, and that he is a duly authorized officer and agent of the plaintiff to make such affidavit.

At the same time the bill of complaint was filed, an answer of the defendant was also filed, wherein it is stated: That it admits the allegations, matters, and facts set forth in each and all of the paragraphs of the bill, and submits its rights to the court for such action as the court may deem fit and proper in the premises. The answer is sworn to by the vice president of the defendant.

On the same day the circuit court for Washington county, on the bill and answer, signed a decree appointing John Wagaman and J. Lloyd Harshman receivers of the defendant company, "with power and authority to take charge and possession of all the estate and property, stock in trade, cash, fixtures and equipment of or belonging to The M. P. Moller Company, a corporation, and to collect all outstanding obligations and debts owing to the said The M. P. Moller Company, which company is hereby required to yield up and deliver to the said receivers all its goods, wares, merchandise, stock in trade, fixtures, equipment, accounts, books, papers, and all of its assets of whatsoever kind and nature, subject to the order and direction of this court; that the said receivers proceed as expeditiously as may be reasonable with the liquidation of the business of the M. P. Moller Company and with the collection of the bills receivable as fast as said collections may be reasonably made, and as soon as may be convenient after making such liquidation the receivers shall report to the court under oath a full and particular account of their proceedings under this decree, and bring into this court the money arising from said liquidation as well as from said collections, the same to be disposed of under the direction of the court, after deducting the costs of this suit, counsel fees and such commissions to the receivers as the court shall allow." The decree further provided that the receivers, before proceeding to act, should give bond for the faithful performance of the duties reposed in them by the order and decree, or any future order and decree in the premises, in the penalty of $30,000. The bond, with corporate surety, was filed and approved by the court on February 3, 1932.

On February 5, 1932, the receivers filed a petition reciting that they had filed bond and taken charge of the business; that the "receivers now have a bona fide offer from a party to purchase all the assets of the defendant corporation consisting of goods, wares, merchandise, stock in trade, fixtures, equipment and accounts receivable whether on conditional sales contracts or otherwise, at and for the sum of $41,324.83, which said sum includes and embraces the sum of $6,102.60 representing the exact appraised value of all of the stock in trade, goods, wares, merchandise, equipment and fixtures, which appraisement your receivers had made by three competent appraisers and which has been already filed in this proceeding; and also embraces the sum of $35,222.23 offered your receivers for the purchase of the aforesaid accounts receivable to the defendant corporation, approximately $100,000 of which accounts are represented by installment payments on conditional sales contracts some of which payments are past due and some of which cover a period of as high as thirty months in the future from this date, as well as approximately $5,000 of unsecured open accounts due and owing to said defendant corporation"; that "your petitioners are advised and believe that the aforesaid sum of $35,222.23 offered them for the purchase of the aforesaid accounts receivable is eminently fair and reasonable and amounts to probably more than what your receivers would be able to realize from said accounts should they be required to undertake the collection of them"; that M. P. Moller, Inc., the party making the aforesaid offer, is represented to the petitioners, and they believe it so, to be entirely able and capable from a financial standpoint to carry through its offer, $5,000 of which said sum has already been paid to the receivers, who are holding the same subject to the action of the court, and the balance is payable in two equal installments of $18,162.42 each, represented by promissory notes which will be given by M. P. Moller, Inc., and payable respectively in 3 and 4 months after the date on which the court may take action; that appended to the petition as a part thereof is a certificate of M. P. Moller, Inc., the largest creditor of the defendant corporation, in which it agrees to give prior right to all other creditors of the defendant, to the end that all other common creditors may be paid their accounts in full before anything out of the proceeds of this sale is distributed to M. P. Moller, Inc.; that also appended to the petition as a part thereof is the certificate or answer of the defendant corporation in which it states that it is familiar with the entire business and accounts of the defendant corporation, the property of said corporation, including accounts payable on installment contracts, and that, from its experience covering a period of approximately 20 years in handling conditional sales contracts, and taking into consideration that the offer to the receivers is a cash offer, it recommends that the court pass an order authorizing and directing the receivers to accept said proposition; that the receivers have made an investigation from persons who are in a position to know the success with which collections can be made on conditional contracts after they have been turned over to the receivers, and those persons "do not hesitate, after taking everything into consideration, to recommend to this honorable court that it pass an order authorizing, empowering and directing them to accept said proposition of M. P. Moller, Inc." The prayer of the petition is that the receivers be authorized and empowered to accept the offer of M. P. Moller, Inc., to purchase the assets of the defendant at and for the sum of $41,324.83 and payable as set forth in the petition. This petition is sworn to by the receivers.

On the same day, upon said petition and affidavit, and the certificate and affidavit of the proposed purchaser, as well as the answer and affidavit of the defendant company, the court ordered and decreed that the receivers "be and they are hereby authorized, empowered and directed to sell all the assets, stock in trade, goods, wares, merchandise fixtures, equipment...