Collier v. Benjes

Collins, J., delivered the opinion of the Court. This is an appeal by Warren V. Collier, Jr., Administrator C. T. A. of the Estate of Richard P. Benjes, deceased, from the dismissal of his bill of complaint filed against John H. Benjes, appellee here. Richard P. Benjes and his brother, John H. Benjes, in 1937, began the operation of a hotel and tavern known as Anchor Hotel in Baltimore City, as partners. At that time they opened a checking account in the Maryland ¹⁷² Trust Company in the following form: “Richard P. Benjes, in trust for himself and John H. Benjes, joint owners, subject to the order of either, the balance at death of either to belong to the survivor.” Mr. Oscar E. Ross, Assistant Treasurer of the Maryland Trust Company, testified in this case that he knew that the partners wanted that type of account.

He could have given them any type they wanted. The bank carried partnership accounts. This was a checking account and was rather active. It was used by the two brothers both for the partnership and personal business.

Richard Benjes was an educated man, having graduated from City College in Baltimore and having attended Johns Hopkins University for three years. According to the auditor, Mr. J. Robert Shaw, a Certified Public Accountant employed by the Consolidated Gas Company, whenever a check was drawn out of this account, for personal purposes it would be charged on the partnership books against that individual partner’s account. In 1939, Richard P. Benjes married and one son was born as a result. Mr. Shaw met Mr. Richard Benjes first in Feburary 1942 in reference to the partnership’s income tax statements.

Mr. Shaw testified in this case that Mr. Richard Benjes at that time told him “that he and his brother had been boys together, grown up together, and went to school together, and had started in business a few years together on a shoe string. In examining the books he showed me the bank account and told me he wanted it set up on the basis that he and his brother would have an equal share in, whichever one passed away the balance would go to the survivor.” When asked by the Court: “It was already set up that way, wasn’t it?” Mr. Shaw replied: “He asked me to check that. He asked me to find out if it was set up that Way to accomplish that purpose. I told him it was, but also told him to also consult his attorney, as I was not a legal advisor, and also to check with the bank, and he told me later he did both of these things.” When asked what duties each partner performed in the operation of the ¹⁷³ partnership Mr. Shaw replied: “John, the surviving brother, handled the bar, the repair work, and supervised the cleaning of the hotel and made general repairs.

Richard was the business manager. He handled practically all of the contacts with the suppliers, hired the help, took care of the banking arrangements, signed the checks, and kept the records. He kept all of them himself.” On February 21, 1942, the account opened in 1937 was closed and a new account opened in the same bank in the same form as the 1937 account, and the bank book for the period 1942-1944 was also in the same form. At that time three cards were prepared for the bank’s files and signed by John H. Benjes and Richard P. Benjes.

All money taken in by the partnership was deposited to this account and all checks for expenses of the partnership were drawn against this account. If either partner drew money for personal uses from this account it was charged, as previously, to his capital account on the partnership books. Mr. Shaw further testified that he first met John Benjes on Election Day in 1944, several years after he had met Richard. When asked what was the occasion of that meeting Mr. Shaw replied: “I received a telephone call from Richard the day before and he told me he had something very important to discuss, and asked if I could come down and see him and his brother, and I saw them the next evening, and for the first time I met John.

He [Richard] told me he had come up for draft examination and the doctors discovered he had tuberculosis and recommended that he see his own physician, which he had done, and they were sending him to Saranac within the next few weeks, and he asked if I would handle the book part or record part that he himself had handled, that John was unfamiliar with that sort of work, and we reached an agreement, and I told him I would be glad to do that until he returned. He expected to be gone not for too long.” Mr. Shaw further testified that on that occasion in 1944 Richard Benjes “reminded me of our earlier discussion in 1942, when ¹⁷⁴ I first met him, and asked me again, he says, ‘You know how we wanted it,’ because that is the first time I had met John, ‘You know how we want this account set up, so that the surviving one will have the remaining cash in the account.’ He asked me again, ‘Is this set up proper to accomplish that?’ I told him my own account was set up that way with my wife, and in my opinion that was the proper way to set them up to accomplish what he wanted. I again said I would check with Mr. Cox and also with the bank on that point.” Mr. Cox was an attorney. Mr. Shaw also testified that John Benjes said: “ ‘That’s exactly how we want this established.’ He said, ‘We have worked together for a great many years and whatever is left should belong to the one who is left.’ ” Richard Benjes died on December 2, 1944.

Two days later on December 4, 1944, John Benjes withdrew the balance of this account in the amount of $69,139.30 by a check signed by him. Richard Benjes’ will was probated by the Orphans Court of Baltimore City and Harry B. Wolf, Jr., Esq. was appointed Administrator C. T. A. of his estate. Mr. J. Robert Shaw was employed to audit the books of the partnership as of December 2, 1944. He prepared an audit which showed an overdraft at the bank in the amount of $1,053.82.

This overdraft represented checks drawn for partnership purposes against this account in the Maryland Trust Company before the death of Mr. Richard Benjes. That account having been closed by John Benjes before the checks so drawn reached the Bank, these checks were paid and carried as overdrafts by the bank. On the basis of the •audit prepared by Mr. Shaw, the Administrator C. T. A. sold John H. Benjes his decedent’s partnership interest for $12,500.00 by a release and assignment dated June 20, 1945, and the estate was closed. In December 1948 Mrs. Richard Benjes received a letter from the United States Treasury Department claiming additional income taxes.

Upon investigation her counsel became aware of the existence of the joint account ¹⁷⁵ which had been withdrawn by John Benjes. Warren V. Collier, Jr., Esq. was later appointed Administrator C. T. A. of the Estate of Richard P. Benjes, after Harry B. Wolf, Jr., Esq. had resigned. On the 16th day of February, 1949, Warren Y. Collier, Jr., Administrator C. T. A. of the Estate of Richard P. Benjes, Deceased, filed a bill of complaint in Circuit Court No. 2 of Baltimore City setting out in part the facts hereinbefore set forth and asking that the defendant below, appellee here, John H. Benjes, be required to set forth in detail a discovery of property of every kind belonging to the former partnership; that he be required to produce all books and papers of the partnership to be examined by the Court; that the appellee be required to account to the Court for the interest of Richard P. Benjes in the partnership; that the appellee be enjoined from transferring or disposing of the assets of the partnership; that the Court declare null and void the agreement entered into between John Benjes and the Administrator C. T. A. of the Estate of Richard P. Benjes, deceased; and for other and further relief. The appellant claims that all of the sum of $69,139.30 is a partnership asset.

After answer filed and the taking of testimony in open Court, the Chancellor, by decree, dismissed the bill of complaint. From that decree appellant appeals. We are of opinion that the estate of Richard Benjes is not barred by laches in this case. There is nothing to show that anyone having an interest in the estate of Richard Benjes, or counsel for any interested party, knew of this bank account or had reason to believe that it existed, until shortly before the bill was filed, John Benjes having withdrawn the money from the Maryland Trust Company two days after the death of Richard.

It was not until the Internal Revenue Department wrote to Mrs. Richard Benjes in December 1948, two months before the bill of complaint in this case was filed, that anyone of interest knew of this account. The injured parties in