American Bonding Co. v. Ensey

Pearce J., delivered the opinion of the Court. The j udgments from which these two appeals were taken were rendered in the Superior Court of Baltimore city upon the same cause of action. The original suit was brought against John S. Chandlee, Alexander W. Chandlee, and Lot Ensey, surviving members of a co-partnership trading as the Charles H. Torsch Company, H. P. Chandlee, one of the co-partners having died before the institution of the suit. ‘Subsequently John S. ²¹³ Chandlee and Lot Ensey died, and by appropriate proceedings a separate suit was docketed against Lot Ensey to which his executrix, Louisa Ensey, appeared, and became the party defendant therein. The original action continued against Alex.

W. Chandlee as sole surviving member of the partnership, and the two cases were tried together in the lower Court. The cause of action arose in this way : The Charles H. Torsch Company held a claim of $33.34 against Hoyt and Mitchell, a firm doing business at Washington, North Carolina, which claim had sometime before April 14th, 1900, been placed by F. G. Stilley, a salesman of the Charles H. Torsch Company, in the hands of Small & MacLean, attorneys at Washington, North Carolina, with instructions to proceed as they thought advisable. On May 1st, 1900, they advised the Charles H. Torsch Company by letter, that Stilley had done this, and under bankrupt proceedings instituted against Hoyt and Mitchell to set aside an alleged sale of part of their property to one L. R. Mayo, they had been adjudicated bankrupts, and that it was necessary the said Charles H. Torsch Company should prove their claim before May 8th, in order to participate in the appointment of a trustee, and these attorneys requested that this proof be made and be sent to them together with a fee of ten per cent upon the amoun t of the claim. This letter was replied to by Charles J. Cordrey, who then had charge of the sales and salesmen of the Charles H. Torsch Company, and who proved and sent the claim to Small and MacLean, together with the required fee, but did not inform them that Stilley had no authority with respect to the collection of claims.

At the same time, the O. K. Stove and Range Co., of Louisville, Ky., had a claim of thirteen hundred and thirty four dollars against Hoyt & Mitchell, which was in the hands of B. F. McLean, an attorney at Maxton, N. C., and the Mineralized Rubber Co., of New York also had a claim against them of $165. which was in the hands of Small and MacLean as attorneys. It should be observed here that the McLean of Maxton,' was not also the MacLean of Small and MacLean, ²¹⁴ the first name of the former being indicated by the initials B. F., while the latter was Angus D., the surnames being differently spelled though pronounced alike. The proceedings in bankruptcy mentioned above were instituted April 14th, 1900, by the three creditors above named, thepetition being signedforthe Charles H.Torsch Company by “ F. G. Stilley, Agent; ” for the O. K. Stove and Range Company by “ W. J. Thompson, Agent,” and for the Mineralized Rubber Co. by “Angus D. MacLean, agent and attorney.” Upon this petition an order was made by the U. S. District Court for the Eastern District of North Carolina on the same day authorizing and requiring the Marshall of said Court “ to seise and take possession of all the estate real and personal of said Hoyt and Mitchell, and to hold and keep the same safely, subject to the further order of the Court.” On the same day also a bond in the penalty of $5,000 was given in behalf of the. three creditors above named, to Hoyt and Mitchell, with the American Bonding Company as surety, to indemify Hoyt & Mitchell for such damages as they might sustain in event that such seizure should have been wrongfully made. This bond was executed for the O. K. Stove and Range Co. by W. J. Thompson, agent, and for both the Mineralized Rubber Co. and the Charles H. Torsch Co. by B. F. McLean, as attorney, it appearing in the deposition of B. F. McLean that he so signed in accordance with the request and authority of Small and MacLean, as B. F. McLean was to go to Raleigh to institute the proceedings.

Subsequently, tí. F. McLean was again in Raleigh, when the U. S. Marshal, H. C. Dockery, informed him that his authority to sign that bond was questioned, and that Mayo was claiming the stock of goods seized, and that unless he, Dockery, was properly assured of McLean's authority in the premises, and was furnished with a bond of indemnity to himself as respected the seizure of the property, he would go to the Judge and ask an order releasing the property claimed by Mayo. He replied that, “he would at once write the parties for proper authority, or rather a letter authorizing him to sign ²¹⁵ these bonds, and would ask them to date it back so as to cover both bonds, that he wrote these letters from the Yarborough House in Raleigh and consequently had no copy cf either of them,” but that he received in reply a letter from the Charles H. Torsch Co. upon their letter head as follows: “Baltimore April 12th 1900. Mr. B. F. McLean, Atty at Law, Maxton N. C. Dear Sir You are hereby authorized to sign any affidavit as our attorney, and execute for us as attorney any bond that may be necessary to get an order to seise and hold the stock of goods, wares and merchandise of Hoyt and Mitchell whom we are informed are bankrupts.

Yours very respectfully The Charles H. Torsch Company.” Neilson Ramsay, who succeeded Charles J. Cordrey in the charge of the credits and salesmen of The Charles H. Torsch Company says that this letter was written by Cordrey while with that company one year before his own connection with that company, though he says that he was not very familiar with his handwriting. Similar replies were received to this letter from Raleigh from the Stove and Range Co. and from the Rubber Co. both dated back as requested to April 12th, 1900, the former authorizing W. J. Thompson “to make any affidavits necessary, and to sign in our name any bond that may be requred in the proceedings,” and the latter authorizing B. F. McLean “to execute for us as our attorney any bonds that may be necessary to get an order to seize and hold the stock of goods, wares and merchandise of Hoyt and Mitchell, of Washington, N. C. whom we are informed are bankrupt.” It will be noticed that the language of the authority of the Rubber Co. is the precise language of the authority of The Charles H. Torsch Co. except that in the former the plural word “bonds” is used, and in the latter,'the word “bond” is used, and so also as to the words “affidavits,” and “affidavit.” This difference is not material in any aspect of the case, and is perhaps a ²¹⁶ typographical error in one of these letters, but the identity of language strongly indicates that they were prepared by B. F. McLean for the signatures of the parties, and thus reflects the purpose of the writer declared in his testimony “to cover both bonds.” Indeed, the dating back to April 12th, whether actually written by McLean, or by the parties at his request, in itself indicates the purpose to cover the first bond, and the reference to both seizing and holding the property, by strong implication points to the second bond demanded by the ■ Marshal, since for the purposes of those parties seizure would or might be futile unless the property were also held. In pursuance of these letters, on June i6th, 1900, B. F. McLean and Small and MacLean as attorneys for these parties made application to the American Bonding Co. of Baltimore through its agent at Raleigh, for a bond of $8,000 for the protection of the Marshal of the Court by reason of the seizure and holding of said property, and signed in their behalf an agreement for the same in which it was stipulated that they should indemnify the Bonding Co. against all loss or damage which it might be put to in consequence of the execution of said bond; and on the same day the bond was executed to said Dockery as Marshal to indemnify him from all harm “or actions that have been or may be brought against him by reason of the seizure and holding of said property.” Mayo sued Dockery for the seizure of said property and recovered judgment against him for $6,670 which Dockery succeeded in satisfying by payment of $5,019, and he then sued the Bonding Co. upon said bond and recovered judgment against it for $4,619.17, which judgment the Bonding Co. satisfied by payment of $4,715 and costs aggregating $5,077. The O. K. Stove and Range Co. and the Rubber Co. settled with the Bonding Co. their respective one-third of this amount, and the present suit was brought upon the agreement before mentioned to recover the one-third claimed to be due from the Charles H. Torsch Co. After the institution of the suit by Mayo against Dockery, the latter informed the Bonding Co. by letter of its pendency, ²¹⁷ and that he was defending the same to the best of his ability, , and requested the Bonding Co. and the creditors upon whose application the bond was executed, to aid in defense of the suit, and notified them that in event of a recovery by Mayo against him, he should look to the parties to the bond of indemnity to reimburse him without further proof of the breach of the bond than the recovery of judgment thereon.

Dockery said he received in due course of mail a letter written upon the printed letter heads of the Charles H. Torsch Co. dated May 16th, 1901, and signed “The Charles H. Torsch Co. per Neilson Ramsay,” stating they had recently learned he was apprehensive of loss in connection with the seizure of goods of Hoyt & Mitchell, and asking him to inform them of the ground of his fears and what course he would advise them to pursue to protect their interests, adding : “ We supplied you with a bond at the time the goods were seized. ” Dockery further said that the only bond supplied him by the Charles H. Torsch Co. or by any one in their behalf, was the bond for $8,000 before mentioned. Ramsay identified this letter as written by him. He said that in May, 1901, he was called to the office of the American Bonding Co. to see Mr. Abrahams who was in its employment, and that he had never before heard of any bond in connection with this matter, or of Hoyt and Mitchell or Dockery in any connection ; that Abrahams told him that the Charles H. Torsch Co. were on a bond to a man named Dockery in some bankruptcy proceedings, so he went back and looked up the correspondence ; that he found in the letter book the letter of April 12th, 1900, which he showed Abrahams and asked him, “Are we on this bond? ” and that Abrahams replied, “ Yes, you are on it hard and fast,” and that he wrote the letter of May 16th, 1901, at Abrahams request or suggestion. He said the firm was supposed to have proper employees, and they wrote letters for the firm and no one supervised them, and that this course of business included his department.

He also said he never heard until sometime after writing that letter that two bonds had been given in this matter. ²¹⁸ Abrahams said that he knew of the bond to Dockery and produced the application for it, which was made while he was in the employment of the Bonding Company, and that this matter was in his department and the execution of the bond was reported to him. The application was objected to on the ground that B. F. McLean had no authority to sign it, but it was admitted subject to exception if not followed up by proof of such authority. He said that at this interview with Ramsay he showed him the entire file of the company relating to that matter, and that file did not cover the bond to Hoyt and Mitchell, but he was not clear whether he showed Ramsay that bond, or whether he told him there were two bonds given in the matter, but said the interview with Ramsay, had to do with the bond referred to in Dockery’s letter of December ioth, 1900, in which he stated his apprehension ©floss, and which letter was then shown to Ramsay. He also denied that he suggested to Ramsay to write the letter of May 16th, 1901.

Wm. T. Donaldson, an attorney in charge of the loss and claim department of the Bonding Co., said that as soon as suit was entered by Dockery upon the bond, he wrote the Charles H. Torsch Co. notifying them of that fact, and they then sent a Mr. Carnan to