Goldsborough v. County Trust Co.

Henderson, J., delivered the opinion of the Court. ⁶⁶ The appeal in this case is from a decree of the Circuit Court of Caroline County, in equity, dismissing the appellant’s bill of complaint for an accounting after hearing upon merits. The case was before this Court on demurrer in 180 Md. 59 , 22 A; 2d 920, but was remanded without affirmance or reversal to permit further amendment of the bill to restrict the accounting to information which the plaintiff could not otherwise obtain. Appropriate amendments were made, and from the third amended bill, and answer thereto, it appeared that the appellant claimed the right to apply a certain sum, claimed to be due him as commissions from 1920 to 1939, against his obligation upon a mortgage given in settlement of the appellees claim against him on December 31, 1937. The testimony shows that from 1914 to 1939, the appellant, for many years a Congressman from the First Congressional District and since 1939 a United States District Judge of the District of Columbia, acted as attorney for the Federalsburg Bank, now operated as a branch of the County Trust Company of Maryland, appellee.

The other appellee is a subsidiary corporation, and both will be referred to simply as the Bank. From 1924 to 1939 the appellant was a director of the Bank. In 1929 he borrowed §20,000 from the Bank, secured by collateral valued at §35,000. However, the value of the collateral declined sharply, and although he made one payment of §5,000, in April, 1937, he owed, with interest, §18,506 secured by collateral then worth only about $3500.

He was also heavily indebted in other quarters, had borrowed upon his life insurance and the only capital asset he possessed was his home in Denton. He did have considerable income from his law practice, however, as well as his Congressional salary. On November 4, 1937, Mr. J. Allan Coad, president of the Bank, wrote the following letter to the appellant: “Dear Mr. Goldsborough: “With further reference to the suggestion made by you in this office today, namely, that your entire obligation !o ⁶⁷ County Corporation in the amount of approximately §18,000.00 be liquidated upon payment by you of §10,000.00 in cash. I am writing to say that this, while a very liberal concession on the part of County Corporation, is acceptable with the understanding however, that any unpaid bill or bills for legal services performed by you for our Federalsburg branch be considered as a part of the proposed settlement in addition to the §10,-000.00 in cash.

In other words, I feel that in addition to the §10,000.000 in cash to be paid by you, any bill or bills for services rendered, including items in process of collection, should be applied to the settlement of this obligation. “Needless to say, any securities held by us as collateral to your loan will be surrendered to you at the time of settlement. “Kindly advise me at your earliest convenience as to when we may expect settlement of this item. “Very truly yours, “J. Allan Coad, “President.” Mr. Goldsborough acknowledged this letter, stating that it was necessary for him to consult other creditors, and suggested in a subsequent letter, that the Bank accept §10,000, less his bill for services, but after further negotiations, the parties met on November 22, 1937, in Mr. Goad’s office, and a settlement was agreed to. The appellant testified that the terms of settlement were that he would pay §10,000 and waive a bill for §783.05 which he had sent the Bank for services rendered, which bill included his commission on the collection of a certain judgment. He testified that the settlement did not include any bills for services rendered other than the bill of §783.05, and did not include items in process of collection. Mr. Coad testified, on the other hand, that the settlement was in strict accord with the terms of his letter of November 4, 1937, and did include any and all bills ⁶⁸ for services rendered and items in process of collection.' His testimony is corroborated by a memorandum he dictated the same day, and by an entry in the books of account of the Bank made by the Treasurer.

This settlement was reported to the Executive Committee and the Board of Directors of the Trust Company, and it was the only settlement authorized or approved by them. On December 31, 1937, the