Makover v. Webb

JOHNSON, J., delivered the opinion of the Court. This is an appeal from a decree passed by the Circuit Court of Baltimore City dismissing appellant’s bill of complaint, filed for the purpose of requiring appellee to enter a judgment settled and satisfied, and enjoin him from issuing an attachment or execution thereon. The decree was passed after answer had been filed and testimony taken in open court before the chancellor. The facts are simple and may be stated as follows: For some time prior to September, 1935, Baltimore Liquors, Inc., a.*body corporate, having as its president, J. Bernard Edmonds, and as its treasurer, A. B. Makover, had been engaged in the liquor business in Baltimore City.

It was then in straitened financial circumstances and faced the prospect of being closed by its creditors. Its assets were of small value and its credit exhausted. In this extremity, Charles A. Webb, a business man connected with A. L. Webb & Sons, of Baltimore City, was one of the few persons who had confidence in the ability of the corporation to survive. Webb was not a stockholder in the company nor in any manner interested in its welfare, but felt that if it could pull through its emergency he might be able to sell merchandise to the corporation.

Webb was then a creditor of the corporation to the extent of S1000, which he realized would be lost unless it secured additional capital. Accordingly, in order to secure such capital, all of which, as far as Webb knew, went into the business, he, with A. L. Webb & Sons, executed a sixty day S1200 note payable to the corporation’s order at the Equitable Trust Company. The corporation had never done business with that bank and ⁵²⁶ had no line of credit there, the loan having been arranged exclusively by Webb, who was well known at the trust company and, according to testimony of one of its officials, the loan was made solely upon the strength of his name. It bore the corporation’s endorsement by its president, Edmonds, and treasurer, Makover, and beneath that endorsement bore the individual endorsements of the same officials-.

At its last maturity on September 24th, 1936, the principal had been reduced to $1000. Shortly thereafter the corporation failed and was placed in receivership. In that situation the Equitable Trust Company secured judgment against Makover on March 24th, 1937, as- endorser of the obligation. In that action Makover failed to file a plea and affidavit of defense.

Subsequently Webb, upon the strength of whose credit the loan had been made, paid the Equitable Trust Company the amount due on the judgment and took an assignment thereof. The bill of complaint was filed on the tlíéory that Webb, who appeared on the