Fidelity & Deposit Co. v. People's Banking Co.

Oefutt, J., delivered the opinion of the Court. The appeal in this case is from an order dismissing the appellant’s petition, filed in the same case as that in which the decree was entered from which the appeals in Nos. 61 and 63 were taken. See 165 Md. 657 , 170 A. 544 . The purpose of the petition was to have the court rescind and modify so much of that decree as awarded four mortgages, held by the Central Trust Company of Maryland, to the People’s Banking Company of - Smithsburg, Maryland, and award such mortgages to the Fidelity & Deposit Company of Maryland.

The circumstances under which the Central Trust Company acquired possession of those mortgages, and the facts relating to the appellant’s contention in respect to them, have been fully stated in the opinion in Nos. 61 and 63, and need not be repeated further than is necessary to indicate the basis of the conclusion in this case. The contention of appellant is that those four mortgages formed part of collateral which the Trust Company had promised to transfer to it to protect it from loss as surety on certain depositary bonds whitíh it had executed on behalf of the Trust Company to protect state deposits, but that, while the Trust Company never had transferred those mortgages to appellant, it nevertheless was entitled to them under an agreement with the Trust Company, dated August 10th, 1931, referred to in the opinion in Nos. 61 and 63. But the contention that the agreement of August 10th, 1931, was in itself a contract to deposit collateral security is fallacious. That agreement is not that.

It is an agreement fixing the relative rights and interests of the parties in the collateral pledged; it does not bind them to pledge it. On its face it ⁶⁹⁵ refers to collateral which the “Principal” “has deposited,” not to collateral which it was to deposit. It does refer to' a schedule of mortgages included in the collateral, said to have been, but which in fact had not then been, deposited, which embraced the four mortgages. The agreement does not itself contain any promise to deposit collateral, but such a promise must be found, if at all, in the evidence taken in connection with the proceedings which culminated in the final decree in this case.

If that evidence were considered, it would disclose an executory promise to deposit the four mortgages as collateral security, and it would show too that none of the mortgages which the agreement of August 10th, 1931, scheduled, were legally assigned to the Fidelity & Deposit Company until after August 19th, 1931, and that the Central Trust Company never did assign or deliver the four mortgages to appellant. It would show, too, that the bonding companies accepted the executory promise of the Trust Company to deposit collateral described in certain lists or schedules, including the four mortgages, as sufficient consideration for its agreement to continue on the depositary bonds as surety; that that promise was later executed by depositing the listed collateral except the four mortgages, but that they never were either assigned or deposited; so that the Fidelity & Deposit Company never acquired any title, legal or equitable, to them, whatever its rights to sue at law on the breach of the contract to deliver them may be. If this court were at liberty to entertain this appeal, that conclusion would lead to an affirmance, but it has no such power. The title to those four mortgages was directly in issue in the case in which the petition was filed, and was finally