Makover v. Webb

• Decision Date: 16 May 1939
• Docket Number: 22.
• Citation: 6 A.2d 231,176 Md. 524
• Parties: MAKOVER v. WEBB.
• Court: Maryland Court of Appeals

6 A.2d 231

176 Md. 524

MAKOVER v. WEBB.

No. 22.

Court of Appeals of Maryland

May 16, 1939

Rehearing Denied June 28, 1939.

Appeal from Circuit Court of Baltimore City; Samuel K. Dennis Judge.

Suit by A. B. Makover against Charles A. Webb, individually and trading as A. L. Webb & Sons. From a decree dismissing the bill of complaint, the plaintiff appeals.

Affirmed.

Jacob Kartman, of Baltimore, for appellant.

Hall Hammond, of Baltimore, for appellee.

Argued before BOND, C.J., and OFFUTT, PARKE, SLOAN, MITCHELL SHEHAN, JOHNSON, and DELAPLAINE, JJ.

JOHNSON Judge.

This is an appeal from a decree passed by the Circuit Court of Baltimore City dismissing appellant's bill of complaint filed for the purpose of requiring appellee to enter a judgment settled and satisfied and to enjoin him from issuing an attachment or execution thereon. The decree was passed after answer had been filed and testimony taken in open Court before the Chancellor.

The facts are simple and may be stated as follows: For sometime prior to September, 1935, Baltimore Liquors, Inc., a body corporate, having as its President, J. Bernard Edmonds, and as its Treasurer, A. B. Makover, had been engaged in the liquor business in Baltimore City. It was then in straitened financial circumstances and faced the prospect of being closed by its creditors. Its assets were of small value and its credit exhausted. In this extremity, Charles A. Webb, a business man connected with A. L. Webb & Sons, of Baltimore City, was one of the few persons who had confidence in the ability of the corporation to survive. Webb was not a stockholder in the company nor in any manner interested in its welfare, but felt that if it could pull through its emergency he might be able to sell merchandise to the corporation. Webb was then a creditor of the corporation to the extent of $1,000, which he realized would be lost unless it secured additional capital. Accordingly, in order to secure such capital, all of which, as far as Webb knew went into the business, he, with A. L. Webb & Sons, executed a sixty day $1,200 note payable to the corporation's order at the Equitable Trust Company. The corporation has never done business with that bank and had no line of credit there, the loan having been arranged exclusively by Webb, who was well known at the Trust Company and according to the testimony of one of its officials, the loan was made solely upon the strength of his name. It bore the corporation's endorsement by its President, Edmonds, and Treasurer, Makover, and beneath that endorsement bore the individual endorsements of the same officials. At its last maturity on September 24, 1936, the principal had been reduced to $1,000. Shortly thereafter the corporation failed and was placed in receivership.

In that situation the Equitable Trust Company secured judgment against Makover on March 24, 1937, as endorser of the obligation. In that action Makover failed to file a plea and affidavit of defense. Subsequently Webb, upon the strength of whose credit the loan had been made, paid Equitable Trust Company the amount due on the judgment and took an assignment thereof.

The bill of complaint was filed on the theory that Webb, who appeared on the face of the note as maker, was the principal debtor and Makover an accommodation endorser. But the proof shows to the contrary, for Webb was never indebted to Baltimore Liquors, Inc., and signed the note solely for its benefit, a fact which must have been well known to Makover its Treasurer, who admitted the...