Chesapeake & O. Canal Co. v. Gittings

• Decision Date: 19 June 1872
• Parties: THE CHESAPEAKE AND OHIO CANAL COMPANY v. JOHN S. GITTINGS, and others.
• Court: Maryland Court of Appeals

36 Md. 276

THE CHESAPEAKE AND OHIO CANAL COMPANY v. JOHN S. GITTINGS, and others.

Court of Appeals of Maryland

June 19, 1872

APPEAL from the Circuit Court of Baltimore City.

A general statement of the case will be found in the opinion of the Court. The following Exhibit of the complainant, which was received by its agent from the appellee Gittings, and the agreement of counsel, will further contribute to elucidate the questions discussed:

EXHIBIT C. Chesapeake and Ohio Canal Co. in acct. with Chesapeake Bank and J. S. Gittings, for the Trustees of the Canal Co. 1840. DR. To notes rec'd in May ...... 63,993 90 To notes rec'd in June .... 133,158 16 To notes rec'd in July ..... 67,182 75 To notes rec'd in August ... 17,185 95 To notes rec'd in Sept....... 9,756 90 To notes rec'd in Oct........ 8,607 70 To notes rec'd in Dec........ 2,052 60 1841. To notes rec'd in Jan.......... 973 35 To notes rec'd in Feb.......... 659 20 To notes rec'd in March ..... 1,075 85 To notes rec'd in April ....... 236 90 __________ 304,883 26 1840. June 13. To bill advertising ......................................... 9 50 Dec. 11. To T Fillebrown, acc't for services, ...................... 45 00 To ints. on over dfts. to 1st Jan.......................... 7,342 16 To expenses of J. Swan and Gittings to New York ............. 100 00 To expenses of J. Swan, to N. York, delivering bonds ......... 33 30 ---------- Am't carried forward .................................... 312,413 22 Am't brought forward .................................... 312,413 22 Dec. 11. To interest on over drafts, from 1st Jan. to 27th Feb.... 1,143 03 1841. Jan. 5. To balance of acct. rendered ............................ 4,375 63 April 6. To commission allowed J. Swan and J. S. Gittings ........ 6,893 30 12. To C. & O. C. Co's acceptance 27,976 53 21. To balance .............................................. 8,274 17 ---------- 361,075 88 ---------- ---------- 1840. CR. May By sales of sterling bonds >10,000 to Godfrey, Patterson & Co 38,119 00 June 17. By sales of sterling bonds >5,000, to Peabody, Riggs & Co.................................. 19,111 10 19. By sales of sterling bonds, >4,000, to J. Ferguson, N. York ................................ 15,466 66 July 11. By sales of sterling bonds, >10,000, to Peabody, Riggs & Co.................................. 39,078 00 Oct. 5. By sales of sterling bonds, >6,000, to Hoffman & Co......................................... 23,743 76 Dec. 28. By sales of sterling bonds, >15,000, to Peabody, R. & Co..................................... 56,543 18 1841. Feb. 27. By sales of sterling bonds, >40,250, to Oelricks & Lurman .................................. 152,055 56 Jan. 19. By interest on coupons rec'd from comm's of loans ...... 16,958 62 ---------- 361,075 88 ---------- April 19. Balance to Cr............................................ 8,274 17 ---------- ---------- (E. & O. E.) CHESAPEAKE BANK, BALTIMORE, April 21st, 1841. R. MARSHALL, Per Bkr. >10,000 Godfrey, Patterson & Co., N. Y. 30,000 Peabody, Riggs & Co. 4,000 John Ferguson, of N.Y. 6,000 Hoffman & Co. 40,250 Oelricks & Lurman. ------------------------- >90,250 ------------------------- -------------------------

AGREEMENT.

The complainant, with a view to narrow the issues in this case, admits all the debits claimed in the account bearing date April 21st, 1841, a copy whereof, marked Exhibit C, is filed with the bill, except the following items:

1. Interest on over drafts to 1st January ...............	$7,342 16
2. Interest on over drafts from 1st Jan. to 27th Feb., ...	1,143 03
3. Balance of account rendered ...........................	4,375 63
4. Chesapeake and Ohio Canal Co. acceptances ............	27,976 53
5. Balance ...............................................	8,274 17

the propriety of and right to which debits it denies, and waives all the allegations in its bill in this case, except such as relate to the above named disputed items, of which items it requires proof. It also waives its allegations with reference to the sales by the trustees of the bonds, and admits all the credits in said Exhibit C, to be correct as therein stated.

John S. Gittings agrees that in view of the aforegoing admission, it shall not be necessary for the complainant, by appropriate proceedings, to make the representatives of James Swan parties to the suit.

The said John S. Gittings also admits that his co-defendant, William Gunton, one of the trustees named in both deeds of trust, filed with the bill as Exhibits A and B, never authorized or sanctioned the payment out of the trust funds in the hands of the trustees, of the canal acceptances, amounting, as claimed in said Exhibit C, to $27,976.53. Also, that an attachment on judgment obtained by P. McLaughlin, against the said Chesapeake and Ohio Canal Company, was issued by said McLaughlin out of the Circuit Court of the United States for the District of Maryland, on the 4th day of June, A. D., 1841, and laid in the hands of said John S. Gittings as trustee, under the deed of trust herein specified; that the same was contested by him, and that the case was twice tried in the said Circuit Court in Baltimore, and once before the Supreme Court of the United States, and was finally settled by judgment in favor of said Gittings, on the 9th day of December, 1856, and that it shall not be necessary to produce a certified copy of the record of said proceedings, but the original papers may be read at the hearing, to have the same effect, and be subject to the same exceptions as a transcript of the record produced by the defendant. Also, that the 12th, 13th and 14th annual reports of the president and directors may be read from the printed reports, as if filed and proved under the commission by the defendant.

BROWN & BRUNE,

N. & J. P. POE,

For the Canal Company.

GEORGE H. WILLIAMS,

January 16th, 1871. Solicitor for J. S. Gittings.

The cause was argued before BARTOL, C.J., STEWART, BOWIE, ALVEY and ROBINSON, J.

Frederick W. Brune and Philip F. Thomas, for the appellant, argued upon briefs submitted by them and Neilson and John P. Poe.

The consent decree of the 3d of November, 1851, is no bar to this suit.

The Chesapeake and Ohio Canal Company was debtor to the Bank of Potomac for the whole amount of the bond given to the Alexandria Canal Company, and subsequently transferred to said bank--and the decree against it, instead of being for $14,780.30, should have been for $29,414.29.

The fact that the Bank of Potomac was willing to accept a decree against the Chesapeake Bank, against which it had no claim, for a portion of the debt due it by the Chesapeake and Ohio Canal Company, and one against the latter for the balance, and to waive its right to a decree against Mr. Gittings for the surplus of a trust fund set apart for the payment of its claim, seems to us no valid reason why this present complainant, after crediting him with the whole amount actually paid, cannot recover from him the balance of trust funds still in his hands. Certainly this does him no injustice. If the canal company sees fit to allow him, in his account as trustee, a credit for the amount paid to the Bank of Potomac by the Chesapeake Bank, as if paid by him, it is difficult to perceive how he can justly complain.

The decree was a consent decree, binding at most only upon the parties to the agreement under which it was passed; and it should not be so extended as to shield a trustee from the obligation of rendering a full and faithful account of his trust according to the terms of the deed creating it, and thus enable him to retain $40,000 of trust funds, with interest for twenty years.

As between the Bank of Potomac and the Chesapeake and Ohio Canal Company, we might admit that the decree establishes the liability of the latter to the former to the extent of the amount decreed.

But the canal company is not here seeking relief against either the Chesapeake Bank or the Bank of Potomac--but is proceeding in a separate suit against Mr. Gittings, as a trustee, having in his hands unaccounted for a large amount of its funds, entrusted to him for a specific purpose long since answered--and it seems to us wholly immaterial to the proper decision of this case to inquire what kind of claims other parties may have against it.

So long as Mr. Gittings has no claims properly pleadable as a set off to the demand of the canal company against him, now at last brought to a hearing, how can it affect this litigation to know the Chesapeake Bank or the Bank of Potomac has obtained in a different suit a decree against it?

If the canal company were seeking to recover an alleged debt from either of these banks, the decree so entered and held by them might be available as an off-set or counter claim, but upon this proceeding by it against Mr. Gittings, the decree now owned by the Chesapeake Bank should have no more influence than the canal scrip or the canal acceptances that the bank paid such a high price for and has held so long. Cecil vs. Cecil, et al., 19 Md., 78; Alexander vs. Walter, et al., 8 Gill, 249, 250; Shafer vs. Stonebraker, 4 G. J., 355, 360; Story's Eq. Pl., 791, 793; Seebold vs. Lockner and Wife, 30 Md., 133; Packet Co. vs. Sickles, 5 Wallace, 592; Washington, Alexandria and Georgetown S. P. Co. vs. Sickles, et al., 24 Howard, 342.

The canal acceptances amounting to $27,976.53, claimed to belong to the Chesapeake Bank, are not a proper charge upon the trust fund in the hands of the trustees, Swan, Gittings and Gunton. Because not authorized by the deed of trust. Huntt vs. Townsend, 31 Md., 336; Dolan and Foy vs. Mayor, &c., of Balto.,...