Hodges v. Ninth National Bank

Grason, J., delivered the opinion of the Court. It appears from the record that Hodges Brothers issued an attachment against George Hughes, Thomas A. Smith, John Waddell and John Caldwell, partners, trading as James Duncan and Company, and caused the same to be levied upon certain goods in the City of Baltimore. The appellee filed a petition claiming the property, and filed pleas, and also issued an attachment and caused it also to be levied upon the same goods, this second attachment being against George Hughes and Thomas A. Smith, trading as James Duncan and Company. Judgment was rendered in favor of the claimant, and from that judgment this appeal is taken.

Three exceptions were taken by the appellants, the two first of which were to the rulings of the Court upon the evidence, and the third to the rejection of their two prayers, and the granting of the prayer of the appellee, by which the jury were instructed that the plaintiffs had offered no evidence to enable them to recover against the defendant, Caldwell, as a member of the firm of James Duncan & Co., and were not entitled to recover in this action.- ⁴¹⁸ The proof shows that in the early part of the year 1875, about a year before the final failure of the firm of James Duncan & Co. and the issuing of the attachment in this cause, George Hughes and Thomas A. Smith, both members of the firm of George Hughes & Co., of New York, formed a partnership under the name of James Duncan & Co., and commenced business under that name in Baltimore City. Hodges Brothers had refused to sell goods to James Duncan & Co., and Waddell, who was a member of the firm of Hughes & Co., of New York, but not of the firm of James Duncan & Co., arrived in Baltimore for the purpose of starting the business and establishing the credit of James Duncan & Co. He was a friend of Lewis, a member of the firm of Hodges Brothers, and called upon Hodges Brothers, and had interviews with Lewis, and .James Hodges, the senior member of the firm, for the purpose of obtaining credit for James Duncan & Co. with the house of the appellants. He stated that the firm of James Duncan & Co. were in difficulties and that he had come to 'Baltimore to take possession of their effects. He represented that George Hughes & Co. were large creditors of James Duncan & Co., and had taken possession of their effects, and were going to run that house themselves under the name of James Duncan & Co.; that it was their concern; that they owned it and that they were going to be responsible for every dollar of its purchases, and that Hodges Brothers might now sell James Duncan & Co. as many goods as they chose.

He further stated that George Hughes & Co. had turned Duncan out of the firm of James Duncan & Co., and that they intended to run the concern profitably. He introduced to Hodges Brothers two young men, named Denny, whom he stated he had brought from Philadelphia to conduct the business; that they were active, smart and energetic, and that they would run the concern. From the time of this introduction Hodges Brothers began ⁴¹⁹ to sell them goods and continued to sell for about a year, when the Dennys were turned off and a man named Franklin became the manager. It is clearly proved by Lewis that the appellants sold to James Duncan & Co. exclusively on the representations of Waddell that the concern in Baltimore belonged to, or was the concern of George Hughes & Co., and that the latter firm would be responsible for its debts.

James Hodges also proved that he never knew, till about the time his firm was about to issue the attachment in this case, who constituted the firm of George Hughes & Co., and then learning who did constitute said firm, the attachment was issued accordingly; and that he did not know, until after the attachment was issued, that George Hughes and Thomas A. Smith only composed the firm of James Duncan & Co. Thomas A. Smith swears that the appellants were never informed, as far as he knew, that the firm of James Duncan & Co. was composed of only two of the members of the firm of Hughes & Co. In January, 1876, George Hughes was in Baltimore, and stated to the appellants that they should never lose one dollar of their indebtedness, but that their accounts should be paid in full, and both Smith and Caldwell testify that they were informed of such promise by Hughes & Co., and it does not appear that they made any objection to, or dissented from such promise. It was also found by Smith and Caldwell that James Duncan & Co. were largely indebted to the New York firm, and the latter, in consequence thereof, had an interest in giving them credit and maintaining their credit and promoting their business success. It also appears in proof that when Franklin was put in charge of the Baltimore house as manager, Hodges Brothers addressed a letter to George Hughes stating that the latter had changed the management of the firm house of James Duncan & Co., and asking whether Hughes was still interested in its business ⁴²⁰ and would be responsible still for its purchases. To this-, letter Hodges Brothers received a reply, signed George Hughes & Co., saying “ we still continue to guarantee the payment of all purchases made by James Duncan & Go.

Baltimore. After this letter was received, Hodges Bros, continued to sell to the house of James Duncan & Go. till the time of their failure. George Hughes & Go. also failed and made an assignment for the benefit of their creditors, but the contents of, and the debts due to, said Baltimore house, were not included in the assignment. Caldwell, after having testified to the large indebtedness of Duncan & Co. to George Hughes & Co., and of the interest the latter therefore had in giving credit to them, and maintaining their credit, further stated that such interest induced George Hughes & Co. to assume the entire obligations of James Duncan & Go., and that, when parties called upon them about James Duncan & Go., “ we said if they did not pay their bills we would.” He further swore that George Hughes & Co. did give credit to James Duncan & Co. with the firm of Hodges Bros., and assumed the payment of any purchases they might make with that firm, guaranteeing the payment of the bills; and in answer to the fifth interrogatory, he stated that there was an understanding between George Hughes & Go. and Hodges Bros., that George Hughes & Co. should be responsible for all sales made by Hodges Bros, to James Duncan and Company.

Smith, also, another member of the firm of George Hughes & Co. swears that “we assured Hodges Bros, that we would be responsible for all purchases which James Duncan & Co. should, from time to time, make from them ;” and he states that this assurance was given at the beginning of the sales, and that it was the understanding that George Hughes & Go. should be responsible for all the purchases during the entire period. But while both Caldwell and Smith thus testify, they in other parts of their testimony speak of the obligation of ⁴²¹ 'George Hughes & Co. as a guaranty, and state that whatever personal assurances were given to Hodges Bros, were given hy either Hughes or Waddell. Caldwell says these assurances were both verbal and in writing, and that his knowledge of them was derived from Hughes and Waddell. It will appear from the language of the interrogatories and cross-interrogatories to Caldwell that the •assurances made to Hodges Bros, were assurances of Hughes & Co., and not individual assurances of Hughes •and Waddell.

Upon the aforegoing proof the appellants offered two prayers, both based upon the verbal representations made to the appellants by Waddell. The first prayer asked an instruction, that, if the jury should find the •sales of goods mentioned in the account filed, to have been made hy the appellants to Duncan & Co. and that any part of the account was due when the attachment issued; and should also find that Hughes, Smith, Waddell and Caldwell composed the firm of George Hughes & Company, and that said firm, before the sale and delivery of the goods, held itself out to the appellants as James Duncan & Co. hy declarations of Waddell to that effect, made to the appellants in the course of the business of George Hughes & Co., and within the scope of its partnership, •and through and hy those declarations, stated to the •appellants that the concern of James Duncan & Co. was the concern of George Hughes & Co., and that the ■latter firm owned the same; and if the jury should further find that the appellants, after and on the faith of said ■statements gave credit to James Duncan & Co., as composed of the parties above