Fidelity & Deposit Co. v. Thomas

Boyd, C. J., delivered the opinion of the Court. On the 30th day of April, 1914, James F. Clark, trading as Clark and Company, and Lehman and Roth entered into an agreement by which Clark sold to Lehman and R'ot-h all the goods, wares and merchandise and fixtures located in 334 North Charles street, in the City of Baltimore, together with the good will of the business- theretofore carried on, by Clark, .for the sum of $13,000. The amount, was payable as follows: $1,024.00 in cash; $3,500 in three notes, two of them being, for $1,166.66 and payable respectively in two and four months-, and the third being for $1,166.67, payable in four months.; and Lehman and Roth agreed to pay all of the merchandise accounts of Clark & Co-, up to, hut not exceeding the sum of $8,476.00—the agreement providing that if those accounts were in the aggregate less than that sum, the purchasers- were to pay Clark the difference, and if more, Clark was to pay the excess. Clark agreed to give them a bond in the penalty of $5,000 with satisfactory surety—the condition being that he would hold them harmless from any loss, damage or liability if the amount of the merchandise accounts exceeded the above sum, and “also to protect, the parties of the second part as purchasers of said property bought under this agreement from any liability on any claims due by the said party of the first- part to persons- o-r corporations- other than the merchandise creditors to be paid by the parties of the second part hereunder.” By a supplementary agreement- it was provided that LeF man and Roth should accept- a, bond without surety, provided that one of the. notes payable four months after date be placed in the hands of Douglas H. Thomas as. -collateral security for the performance by Clark of his obligation under the bond until tbe maturity of said note, when it should be delivered ²⁷² to Clark and become payable: provided that Clark “shall not then be in default under said bond and that the said bond shall continue in full force and effect, notwithstanding the maturity or payment of said note.” A bond was given witb condition as provided for in the agreement.

The purchasers paid the cash, all of the merchandise accounts amounting to $8,476, less, a small amount found to be an error, and tbe notes—the last note being paid to Mr. Tbomas by a certified check which was subsequently collected and held by him. Clark furnished Lehman and Both with a list of the accounts amounting to $8,476. Charles J. Taylor & Co. and O’Heill & Co. had what are admitted to be merchandise accounts against Clark which were not in the list and hence were not paid by Lehman and Both. Tbe A. S. Abell Company had an account for advertising the business of Clark, and Joshua'Horner, Jr., had an account for professional services as attorney.

Attachments were issued by those creditors and were laid in the hands of .Mr. Thomas, but we do not deem it necessary to discuss them for reasons which will appear later. Mr. Thomas filed a bill of interpleader after the attachments were issued aud a decree was passed requiring the parties to interplead. Answers were filed and testimony taken, which resulted in a decree allowing the costs and the claims «of the above parties, excepting that of Joshua Horner, Jr., whose claim has been assigned to the Fidelity and Deposit •'Company of Maryland, which with leave of Court became a party to this proceeding. This appeal was taken from the last decree.

It is apparent that the parties, had in mind the Sales in Hull!: Act when the agreement was made, and while the terms of that Act were not wholly complied with, the purchasers undertook to protect themselves against loss by reason of its provisions. That Act as amended will be found in Article 83, sections 100, 101, 102 and 103 of 3rd Volume of Annotated Code. There has been some confusion in the numbering of these sections, hut sections 19, 20 and 21 of Article 83 ²⁷³ in the 2nd Volume of the Code were amended by the Acts of 1912, Chapter 451, and 1914, Chapter 409, and are now numbered in the 3rd Vplume as stated above. Mr. Lehman testified that the bond was given to protect them from the Act.

It is therefore proper that it should be considered in ascertaining the intention of the parties in making the agreement, if it be necessary to go outside of the agreement itself. IVe do not understand why the witnesses speak as if the agreement only provided for merchandise accounts, as what we have quoted above dearly shows that such was not the case, and the Sales, in Bulk Act does not limit the rights of the creditors to those having claims for merchandise accounts. It requires by section 100 “a written statement, under oath, containing the names and addresses of all the