Martin v. Call Carl, Inc.

• Decision Date: 15 May 1953
• Docket Number: No. 146,146
• Parties: MARTIN v. CALL CARL, Inc. et al.
• Court: Maryland Court of Appeals

Page 399

202 Md. 399

96 A.2d 504

MARTIN v. CALL CARL, Inc. et al.

No. 146.

Court of Appeals of Maryland.

May 15, 1953.

Stedman Prescott, Jr., Silver Spring (Donald K. Staley, Silver Spring, and John F. Hillyard, Washington, D. C., on the brief), for appellant.

Joseph B. Simpson, Jr., Rockville (Vivian V. Simpson and Simpson & Simpson, both of Rockville, on the brief, for appellee Call Carl, Inc.

H. W. Wheatley, Jr., Hyattsville, for appellee Western Union Telegraph Co.

Before SOBELOFF, C. J., and DELAPLAINE, COLLINS, HENDERSON and HAMMOND, JJ.

HENDERSON, Judge.

This case originated as an interpleader suit instituted by Western Union Telegraph Company, as a tenant of part of the premises known as 8511 Colesville Road in Silver Spring, Maryland, to determine which of the parties named as defendants, Wilbur W. Martin and Call Carl, Inc., was entitled to receive the rents due and to become due on the premises. The court signed an order naming Martin plaintiff and Call Carl, Inc. defendant. Appropriate pleadings were filed, whereby the defendant claimed the rent under a sub-lease and assignments which the plaintiff asserted to be void. The owners of the property intervened as defendants. After the taking of testimony before an examiner and the filing of certain stipulations the chancellor found for the defendant.

The evidence showed that in 1944 Martin and one Henry W. Lowe entered into an unwritten partnership agreement to engage in the used car business and share the profits equally, trading under the name of Lomar Motor Company. Martin was a doctor, practicing in Washington, D. C., and supplied the capital; Lowe was the active member. In June, 1944 they leased from William A. Walsh and Edna O. Walsh the commercial property in question for a period of five years, with a right to renew for another five year period, and conducted the business there until late in 1947, when they suspended operations. In March 1948, they sub-let room 10 in the building to the Western Union Telegraph Company, with the consent of the lessors. Lowe made this sub-lease without the knowledge or consent of Martin, but he subsequently ratified it and it is not here in question. In 1949 they exercised their option to renew the lease for another five years, and sought to sub-lease the remainder of the building. On September 20, 1949 Martin and Lowe went to the office of Call Carl, Inc. in Washington in an effort to negotiate a sub-lease. They reached an oral agreement as to terms, which was reduced to writing by Philip Shinberg, attorney for the partnership. The agreement called for Martin's signature and acknowledgment. It also provided that monthly rental payments of $550 be made to Martin, personally, at his Washington office. At a subsequent meeting between Lowe, representatives of Call Carl, Inc., and their respective attorneys, at which Martin was not present, the written agreement was executed by the officers of the corporation and delivered to Lowe for the purpose of having Dr. Martin execute it. It was later delivered to the attorney for Call Carl, Inc., bearing the purported signature of Martin and his acknowledgment, whereupon a check for four months rent and certain other checks covering equipment and adjustments, all payable to Lomar Motor Company, were delivered to Lowe. A few days later, Lowe talked to Mr. Carl about an assignment of the lease for a cash consideration. They finally agreed on a price of $9,000 for the assignment. An assignment was prepared to be signed by the partners. On September 29, 1949 Lowe delivered the executed assignment and received a check payable to Lomar Motor Company. At the same time Lowe purported to assign the sublease with Western Union to Call Carl, Inc. by endorsing thereon the name Lomar Motor Company, 'by Henry W. Lowe'. Lowe cashed all the checks received, took the money and departed for California. Martin demanded possession of the premises from Call Carl, Inc., on the ground that he had not executed any of the documents delivered to Call Carl, Inc.

It was clearly shown that Lowe had forged the name of Martin to the sublease dated September 20, 1949 and to the assignment of lease dated September 29, 1949 to Call Carl, Inc., and that the sub-lease was notarized in the District of Columbia by a Maryland notary who admitted that Martin had not appeared before him or acknowledged the instrument. It was also shown that Martin had no knowledge of Lowe's actions subsequent to the negotiations at which he was present, had not authorized Lowe to negotiate for an assignment, and was totally unaware of the transaction. He admitted that the sub-lease was in the form agreed upon and that he would have signed it if it had been presented to him together with checks payable to him in the amounts agreed upon. He admitted that at the time of the negotiations at which he was present he had in his possession a paper executed by Lowe dated June 30, 1948 assigning all Lowe's interest in the original lease to Martin. He did not disclose this to Call Carl, Inc., or to anyone else, because he 'didn't think it was good business.' He stated at that time that Lowe was his partner.

The chancellor held that Call Carl, Inc. was entitled to the rents from Western Union, accounting from October 1, 1949, on the ground that Martin was estopped from denying the partnership and bound by Lowe's actions. We think the decision cannot be supported.

It is quite true that the action of Martin in holding out Lowe as his partner, after Lowe had executed an instrument assigning to him all of his interest in the lease, would estop him from denying the existence of the partnership. McBriety v. Phillips, 180 Md. 569, 26 A.2d 400, and cases cited. But in order to invoke the doctrine of estoppel, it must be shown that the creditor acted in reliance upon the representations at the time he entered into the transaction. In the instant case Martin did not authorize Lowe to execute the sub-lease for him or in the name of the...