Boyle v. Rider

• Citation: 110 A. 524,136 Md. 286
• Decision Date: 17 March 1920
• Docket Number: 40.
• Parties: BOYLE et al. v. RIDER.
• Court: Court of Appeals of Maryland

110 A. 524

136 Md. 286

BOYLE et al. v. RIDER.

No. 40.

Court of Appeals of Maryland

March 17, 1920

Rehearing Denied April 29, 1920.

Appeal from Baltimore City Court; Henry Duffy, Judge.

Action by W. Whitridge Rider against Albert J. Boyle and others. Judgment for plaintiff, and defendants appeal. Reversed without awarding a new trial.

Argued before BOYD, C.J., and BRISCOE, BURKE, THOMAS, PATTISON URNER, and ADKINS, JJ.

Randolph Barton, Jr., of Baltimore (John C. Kumpf and O'Mara & Angelmier, all of Baltimore, on the brief), for appellants.

A Bernard Chancellor, of Baltimore, for appellee.

BOYD C.J.

The appellee recovered a judgment against the three appellants individually, for feed for live stock furnished them while they were acting as trustees for the Slack & Slack Company. That company had contracted with the city of Baltimore to build some sewers, and, having become financially embarrassed, made a deed of trust to Albert J. Boyle, one of the appellants, for the benefit of its creditors. A few days afterwards a meeting of the creditors was held, and Messrs. Kelly and Vervalen, with the consent of Mr. Boyle, were selected as cotrustees, subject to the approval of the court having jurisdiction of the trust. An agreement dated the 12th of November, 1915, was entered into between the creditors and Mr. Boyle, and, although not very clearly shown, we understand that all of the creditors signed it. The appellee was one of the number, but as hereinafter mentioned he testified that he did not read the agreement, and that its terms were misrepresented. It recited that it had been agreed that Messrs. Kelly and Vervalen should be appointed cotrustees; that part of the assets of the company consisted of two unfinished contracts with the mayor and city council of Baltimore, one of which being approximately 98 per cent and the other approximately 25 per cent. completed; that three bonding companies were jointly responsible to the city for the completion of the contracts, and had the right to take possession of the assets of the Slack & Slack Company, pertaining to the contracts, and to complete the work, and threatened to so enforce their rights; that it had been agreed, subject to the approval of the creditors and of circuit court No. 2 of Baltimore city, that if the appellants would give their individual bond to said companies to protect them and save them harmless, the bonding companies would accept it and waive their right to complete the work, provided no creditors of the Slack & Slack Company instituted bankruptcy proceedings against it, and that the bonding companies be reimbursed in full for their claims against that company for premiums due on the bonds furnished by them to the city, and for their Workmen's Compensation bond; that it was reported to the creditors that if the bonding companies proceeded with the work, the creditors would lose approximately $20,000 in the way of profits, lost by reason of the failure on the part of the trustees to complete the work, "whereas, if the trustees aforementioned are allowed to proceed with the work, in accordance with the above-mentioned arrangement, whatever profits might accrue by the doing of the balance of the work, would be applicable to the payment of the claims of creditors of the Slack & Slack Company." It was also agreed that the signing creditors did thereby signify their acceptance of the terms mentioned, to the intent that upon the giving of the bond referred to "the said Albert J. Boyle, Samuel A. Vervalen and John J. Kelly, trustees, shall be authorized to proceed with the administration of the trust created by the said deed of trust, and to finally settle and close all matters appertaining to the administration of the said the Slack & Slack Company, a body corporate." They further agreed not to petition, individually or jointly, to have the Slack & Slack Company adjudicated a bankrupt, and that the trustees were only to be allowed $3,000 commissions-$2,000 to Boyle, $1,000 to be divided between the other two, and $1,000 to be allowed as counsel fees to the attorneys for the trustees.

Over 40 companies, firms, and individuals signed the agreement (18 of them after the plaintiff), the bond was given by the appellants, and they were authorized by the court to proceed with the work. They finished the contracts, and were paid by the city the balances due, but it turned out that there were creditors who had prior claims, which the record shows were allowed by the court, resulting in the trustees not having funds sufficient to pay in full the claims they contracted in finishing the work, after paying those allowed as priorities. The suit by the appellee was for a balance of $915.28, with interest, alleged to be due him for feed furnished the trustees for horses or mules held by them. The plaintiff was a creditor of the company for $4,000 or $5,000 (apparently exclusive of a claim for $2,000 secured by a bill of sale on horses and mules of the company), and the three companies represented by the appellants were also creditors to considerable amounts. It was understood that in completing the contracts the trustees should buy from the creditors of the Slack & Slack Company, which they did, and the companies represented by the appellants, as well as others, furnished materials, and there is still money due those companies for what they furnished the trustees, besides about $1,200 advanced by the appellants themselves. Mr. Boyle testified that they finished the work and collected the money that was retained on the contracts, that "from time to time the court passed orders for us to pay those preferred claims out of the money for bills that were contracted by the Slack & Slack Company before they appointed the trustees. Had that money not been paid preferred creditors, we would have been able to pay every cent that the trustees contracted for, plus about $15,000 on the original creditors' indebtedness." This is also in his testimony: "Did you or did you not know that those preferred claims were in existence? A. No, sir; lots of them I did not. Q. When did you find out? A. Not until the orders were passed; just about the time the work was completed, taking that money away from us, I did not know that the assignment and bills of sale existed." He was the original trustee, and was the principal man in charge, but he said that there was no record of the preferred claims in the Slack & Slack Company's affairs.

It is admitted that there was no express agreement on the part of the appellee to look to the estate for what he sold the appellants, beyond what may be inferred from the agreement of creditors referred to above, and he claims that his intention was to hold them individually for the amount of their purchases. The appellants, on the other hand, contend that the circumstances show that it was the intention of the appellee not to hold them personally responsible.

Before considering the main question, it may be well to refer to the appellee's contention that he did not read the agreement of the creditors, which he signed, and which he claims that Mr. Podlick, the attorney for the trustees, and Mr. Slack, who was with him, told him that it was "simply to keep the old Slack & Slack Company from being thrown into a receivership"-meaning bankruptcy, as his subsequent evidence shows. Mr. Podlick testified that he saw Mr. Rider twice about signing the agreement. At the first time he said he told him of the contents of the paper, what the creditors had agreed to, and passed it over to him, and he read it; that he refused to sign it the first time, saying that he wanted to think the matter over; that his claim was a large one. He went again the next day, but Mr. Rider was not in, and the following day he signed it. The appellee testified in reply that he could not swear how many times Mr. Podlick called at his office, but he only remembered one. Mr. Podlick could have had no possible reason for attempting to deceive Mr. Rider. The trustees had not then begun the work. The agreement, outside of the signatures, occupies nearly 2 1/2 pages of the printed record, and we cannot understand how Mr. Rider could have thought that it was only intended to prevent the creditors from throwing the Slack & Slack Company into bankruptcy. It was hoped by the creditors that the plan proposed would result in not only paying expenses which the trustees incurred in finishing the work, but in paying part of the claims of the general creditors. The agreement does refer to bankruptcy proceedings; and, even if Mr. Rider misunderstood it and thought that was all it included, he was bound to know what he was signing. Even if he was misled by what was told him, he was grossly negligent in signing the agreement without reading it, and there is nothing in the record which excuses his negligence. But beyond that, there is not a particle of evidence to show that the trustees, or the other creditors, knew that he had been misled into signing the agreement. On the contrary, he commenced at once to sell the trustees, who were proceeding under that agreement, and the order of court passed in pursuance of it. As we have said in a number of cases, people cannot be thus negligent, and as the result of their own carelessness sign papers, and then ask a court to excuse them for their negligence, especially if their action misled others. Even illiterate people cannot ordinarily so act and receive the aid of the court, and the appellee is a business man of experience. Wilson v. Pritchett, 99 Md. 583, 593, 58 A. 360, Smith v. Humphreys, 104 Md. 285, 290, 65 A. 57, Paper Bag Co. v. Carr, 116 Md. 541, 551, 82 A. 442, and other decisions show the position this court has taken on that subject.

Another ground the appellee relies on...