Lord v. Smith

⁴⁴ Worthington, J., delivered the opinion of the Court. The litigation in this case grows out of a dispute between the parties as to which is the proprietor of a certain brokerage business carried -on in Baltimore City for a number of years past under the trade name and style of Charles W. Lord & Co. The appellant, who was the complainant below, claims that the business was established by him in 1895, and has ever since been conducted by him as the sole proprietor, with the appellee (the defendant below) as his trusted and confidential clerk. While, on the other hand, the appellee contends that the business was established in 1895 by him, and that it has ever since been cohducted by him as sole proprietor, with the appellant as his clerk. According to the testimony of the parties themselves, neither of them was aware of the claims and pretensions of the other until the month of Hovember, 1907, when a controversy took place between them concerning the ownership of the business, and Mr. Lord, according to his testimony, claimed the whole; but according to Mr. Smith’s testimony, Mr. Lord said in the course of that controversy that he had as much interest in the business as Smith had; that half of it was his.

At the same time Smith claimed that the whole business belonged to him. Shortly after this conversation, that is to say, on December 24th, 1907, Mr. Lord filed the bill of complaint in this case in the Circuit Court for Baltimore City, setting forth his claims to the business as sole proprietor, alleging that he had established the business in the early part of the year 1895, at 21 Grant St., in Baltimore City, and had there begun operations as a manufacturer’s agent of wooden ware and kindred merchandise. That Harry W. Smith, the defendant, had been taken into the employ of the old firm .of Lord and Robinson when he was a boy fifteen years of age, and had continued in its employ for many years until the failure of that firm in 1893. That complainant had been a member of the firm of Lord and Robinson until it went into the hands ⁴⁵ of receivers in the year 1893, and that there had developed toward Smith on complainant’s part an attitude of trust and confidence.

That upon commencing business again, after his failure, the complainant took with him to 21 Grant Street the said Harry W. Smith, in whose integrity he had implicit confidence, at the weekly salary of fifteen dollars per week, which was subsequently increased to twenty-five dollars per week. That at the time he started the new business, the complainant was not entirely free from-the obligations of the old firm, and as he contemplated handling in a fiduciary capacity, to wit, that of factor or sales agent, the money of such of his old business associates as might entrust the sales of their merchandise to him, he feared that if he opened a bank account in his own name, and deposited therein such monies, together with his own earnings, that such funds might be subject to the danger of being tied up by proceedings instituted by some of his old creditors, who had not at that time been settled with; and for the sole purpose of avoiding this danger he opened a bank account in the-name of Harry W. Smith, with his consent, and took a power of attorney from the said Smith, authorizing the complainant to draw checks against said account. That both he and Smith thereafter drew checks upon this account, so opened in the name of Smith, and that such practice was continued down to the time of filing the bill of complaint. That by reason of the confidential relations between the complainant and Smith, the latter was allowed broad powers in the handling of the complainant’s cash and bank deposits, and that Smith, acting under these broad powers, would from time to time draw checks for his own purposes, over and above his weekly salary of $25, and charge them on the books of the complainant, and would from time to time purport to put back sums of money to replace Ihe amounts so withdrawn, which sums put back, however, did not in fact measure up to the amounts withdrawn.

That in the course of time the excess of the withdrawals ⁴⁶ by Smith over the amounts put back by him was over $9,000, not including withdrawals from the cash drawer. That in October, 1907, Smith had purchased with $1,750 of the complainant’s money a ground rent on the dwelling property known as No. 2318 Gnilford Avenue, in Baltimore City. The bill further averred that Smith had recently set up pretensions that he was the sole owner and proprietor of the business, and that all the money taken by him was his own money, for which he was accountable to no one. That Smith had threatened, unless complainant would recognize Smith’s pretensions, to solicit away from the complainant his patrons and customers, which it was averred Smith was able to do.

The prayers of the bill were for an injunction: • (1) Prohibiting said Harry W. Smith from exercising any control or interference in the complainant’s business, as it was known under his trade name of Charles W. Lord and Company. (2) That said Smith be enjoined from collecting any monies or from diverting any consignments coming or due to the said Charles W. Lord and Company. (3) That he be further enjoined from making any withdrawals from the bank deposit of the complainant, standing in the name of Harry W. Smith in the National Bank of Commerce of Baltimore. (4) That he be further énjoined from removing any of the boobs of account, or other evidence of the state of business of Charles W. Lord & Co., from the office thereof, and that he return and replace in said office any books or other evidences of account of said business that were then under his individual control.

(5) That he be further enjoined from soliciting the patrons of the complainant, trading under the name of Charles W. Lord & Co., to discontinue business with the complainant and to give their patronage to the said Smith. (6) That pending these proceedings, the defendant be ⁴⁷ further enjoined from disposing of the lot of ground Ho. 2318 Guilford Avenue, mentioned in the bill of complaint. Also that said Harry W. Smith discover and set forth in •del ail all the sums of money taken by him during the whole period of his employment - since 1895, in excess of $25 a week for sendees, and that Smith be decreed to make restitution and payment of all sums of money shown to be due by him to the complainant, and for general relief. The same day an injunction prohibitory and mandatory was issued as prayed in the bill of complaint, except as to the prohibition against the disposition of the lot on Guilford Avenue.

On February 17th, 1908, the defendant filed his answer, ■denying all the material allegations of the bill of complaint .and averring that he himself “was, has all the time been, and istill is the sole owner of said business,” and that no money had ever been contributed toward or used in said business except the defendant’s own money, or money borrowed by "him for that purpose. That the complainant had never made any pretensions to be any other than an employee of the defendant until shortly before filing the bill of complaint, .and then he claimed to be only part owner of the business. He asked that the injunction theretofore granted be dissolved and the bill dismissed. After much time and patience^ spent in comparing the evidence of the several witnesses, we have finally been able to thread our way through the great mass of most conflicting testimony, taken to support the contentions and claims of the respective parties.

It would extend this opinion to an unreasonable length to attempt to set out here a synopsis of the evidence, consisting as it does of over 600 printed pages; but after the most ■careful consideration that we have been able to give it, we are unable to reconcile the claims of Smith with certain material facts established by the exhibits and documentary evidence produced at 1he hearing. One of these facts is that at the verv commencement of the business, in 1895, certain ⁴⁸ office furniture of the old firm of Lord and Robinson was-purchased of the receivers of the firm for the use of the new concern at 21 Grant Street. Lord testified that he gave the money ($25) to Smith with which to buy the property for him. Smith, on the other hand, testified that he bought the furniture with