Lindsay v. Stemper

• Decision Date: 31 January 1934
• Docket Number: 116.
• Citation: 170 A. 766,166 Md. 257
• Parties: LINDSAY ET AL. v. STEMPER. LINDSAY ET AL. v. COMMUNITY GARAGE CO., INC.
• Court: Maryland Court of Appeals

170 A. 766

166 Md. 257

LINDSAY ET AL. v. STEMPER.

LINDSAY ET AL. v. COMMUNITY GARAGE CO., INC.

No. 116.

Court of Appeals of Maryland

January 31, 1934

Appeal from Circuit Court of Baltimore City; H. Arthur Stump, Judge.

Proceedings between George W. Lindsay and another, receivers of the Lambert Automobile Company, Inc., and Joseph Stemper, trading as Edgemere Garage, and between the receivers and the Community Garage Company, Inc. From the decision, the receivers appeal.

Appeal dismissed.

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

Morris A. Rome, Irving B. Grandberg, and Nathan Hamburger, all of Baltimore, for appellants.

W LeRoy Ortel and T. Bayard Williams, both of Baltimore, for appellees.

OFFUTT Judge.

The question which this appeal was intended to present is whether one who deposits money as collateral security against loss with a depositary which later became insolvent, is entitled to a priority over general creditors in the distribution of the insolvent estate, where the anticipated loss never occurred and the depositor is not indebted to the depositary.

The record shows these facts: The Lambert Automobile Company was the agent for the sale and distribution of Hudson and Essex automobiles, parts, and accessories in a territory which included the Dundalk district in Baltimore county, Md. On November 21, 1932, it entered into a written contract with the Community Garage, Inc., under which it granted to the garage company the nonexclusive right to sell Hudson and Essex automobiles and chassis in certain territory including the Dundalk district. As a part of that agreement, the garage company called the dealer, deposited with the distributor $250 to secure it against any loss which the distributor might suffer either through the failure of the dealer to perform its part of the contract, or from its failure to pay any debt due by it to the distributor for the purchase of parts, accessories, or other supplies, or from the failure of the dealer to pay any other claims which the distributor might have against it.

On December 8, 1932, the distributor entered into a similar contract with Joseph Stemper, trading as the Edgemere Garage, and in each instance the deposit was made in accordance with the terms of the contract, and the funds so paid were deposited by the distributor with other similar deposits in a bank and mingled with the general funds of the distributor. On September 15, 1932, the cash balance of the distributor was $7,872.57, and on the same day it had accepted deposits which had not been repaid amounting to $8,350.26. On September 15, 1932, on the petition of the Lambert Automobile Company, George W. Lindsay was appointed a receiver for it and later Reuben Oppenheimer was appointed a coreceiver with him. Why they were appointed receivers, what their powers, duties, and functions were, and whether the corporation was solvent or insolvent does not appear from the record which lacks many particulars necessary to any complete or intelligible statement of the facts involved in the question which the appeal is assumed to present.

In that state of the record there is nothing before this court upon which it can act. For it to assume in the absence not only of proof but of allegations that the corporation is insolvent or that the receivers were appointed to wind up its affairs would be pure speculation. It may be that it is insolvent, and that appellants were appointed to wind it up and distribute its assets, but if those were the facts it was the duty of the appellant to bring them to the attention of the court. If the corporation was solvent then the orders appealed from were nugatory and harmless, because the payment of one...