Englar v. Offutt

• Decision Date: 09 January 1889
• Citation: 16 A. 497,70 Md. 78
• Parties: ENGLAR ET AL. v. OFFUTT.
• Court: Maryland Court of Appeals

16 A. 497

70 Md. 78

ENGLAR ET AL. v. OFFUTT.

Court of Appeals of Maryland

January 9, 1889

Appeal from circuit court of Baltimore city.

Argued before ALVEY, C.J., and MILLER, ROBINSON, IRVING, BRYAN, and MCSHERRY, JJ.

Fielder C. Slingluff and Robert Biggs, for appellants.

John P. Poe, for appellee.

ALVEY C.J.

Prior to the 21st of May, 1883, and down to the 1st of January 1886, John P. Shriver was a merchant, and manufacturer of harness, in the city of Baltimore, and he carried on the business under the name and style of John P. Shriver & Co. though he was the only person interested in the business. On the 21st of May, 1883, he was appointed, by the orphans' court of Carroll county, guardian of Mary and John Englar infants, and received into his possession, as belonging to his wards, the sum of $10,846.25. Of this sum there was deposited by Shriver, on the day of its receipt by him, that is to say, the 21st of May, 1883, in the Howard Bank of Baltimore, to his own credit, in an account kept in the name of John P. Shriver & Co., the sum of $10,238.20. As against this and all other credits in such account, amounting in the aggregate, between the date just mentioned and the 28th of August, 1883, to the sum of $28,804.13, John P. Shriver checked and otherwise drew out, as he needed the money, various sums, amounting in the aggregate to the sum of $28,755.64; so that at the date last mentioned there remained in bank to his credit on this account only the small balance of $48.49. The money appears to have been drawn out of bank for various purposes; some of it to be loaned out, a considerable portion of it to take up outstanding paper payable by Shriver, and some of it to pay bills of merchandise, etc. Shriver also kept an account in the Manufacturers' National Bank of Baltimore, during the same time of the account in the Howard Bank, but there is nothing to show that there was any specific sum belonging to the Englar trust fund deposited to his credit in that account. There were a great many deposits made to his credit in that account, but there is nothing to indicate that any portion of them belonged to a trust; and the checks against the credits in that account, down to the 1st of September, 1883, had reduced the balance in favor of Shriver to the small sum of $34.01. For some time immediately preceding the 31st of December, 1885, Edward C. Shriver, a younger brother of John P., had been a clerk in his brother's store; and on the 31st of December, 1885, the brothers entered into the following agreement: "John P. Shriver, owning the business of John P. Shriver & Co., hereby agrees to associate with him in said business the said Edward C. Shriver, upon the following terms and conditions: The said Edward C. Shriver is to receive for his services to be rendered in said business the annual salary of six hundred and twenty-four dollars, and is to receive, in addition thereto, one-tenth part of the profits of said business, as carried on in the city of Baltimore or elsewhere by said firm, after all expenses, including the said salary, are paid and satisfied. John P. Shriver is to have the right alone to sign all checks, notes, etc., of said firm, and to conduct the business thereof as he shall think proper, and to the best interest of both, as he has heretofore carried on said business. And the said Edward C. Shriver, in consideration of said salary and said interest in said firm, hereby agrees to devote his whole time and attention to said business. Witness our hands and seals." By this agreement, and the clear intention of the parties thereto, Edward C. Shriver was made a partner with his brother in the business, with all the responsibilities of a partner to creditors and other third parties dealing with the firm; and, being such partner, and interested in the discharge of partnership obligations, it was his right to require that all the partnership funds and effects be directly and regularly applied to the payment of the partnership debts; and it is only after all partnership debts are paid that the separate debts of the partners can be paid from partnership assets. It was in respect to these rights, and this order of payment of debts, that the general assignment for the benefit of creditors, executed by the partners on the 15th of November, 1886, made provision. To this order of payment the creditors of the firm of John P. Shriver & Co. are, by the terms of the deed of assignment, entitled to insist, unless some superior right be shown. It appears that the trustee to whom the general assignment was made sold at private sale all the partnership property and assets of every kind for the sum of $9,500, which sale was ratified by the court. The trustee has in his hands, of this purchase money, the sum of $6,543.60, for distribution to those entitled to receive it. In this state of the case, the appellants filed their petition, stating the facts under which John P. Shriver received their money, and alleging that he applied the same to the use of the firm of John P. Shriver & Co., and that "the said firm received said money with full knowledge as to its character, and as to the violation of his trust by the said John P. Shriver, guardian as aforesaid, and used said money in the business of said firm, converting the same into stock and materials used in the said business;" and that, "while still holding said money, and using the same in their business as aforesaid, the members of said firm, including the said John P. Shriver," made the general assignment for the benefit of creditors. The petition then proceeds to allege the amount of money realized from the sale of the partnership effects remaining in the hands of the trustee, and, after alleging the amount due them from their guardian, the appellants "charge that they are entitled to priority over other creditors of the firm of John P. Shriver & Co. in the distribution of the net proceeds of sale of the stock of said firm," now subject to the control of the court for distribution. The matter of the petition was referred to the auditor of the court, with power to take testimony, and state an account. Testimony was taken, and an account stated; but, the auditor finding nothing in the evidence, according to his view, to justify the application of the fund to the claim of the appellants, he distributed the entire fund to the claims of the partnership creditors. To this account the appellants excepted, but their exceptions were overruled, and the account ratified, and the petition of the appellants was dismissed. It is from that order that this appeal is taken. The appeal presents...