Warfield v. Keyser

Boyd, C. J., delivered the opinion of the Court. This is the third time this case has been before us — the previous appeals being reported in 100 Md. 72 and 103 Md. 161 . The present appellant was appellee in each of those appeals, and although he recovered a judgment at the last trial it was for a less amount than he contends he was entitled to. There are two bills of exception — the first presenting the ruling on the admissibility of evidence, and the second including the rulings on the prayers.

The appellant was the president and Henry B. Keyser was the treasurer of the Maryland Manufacturing and Construction Company — a corporation engaged in the manufacture and sale of bicycles. The company needed funds and two of its notes for $2,500.00 each were discounted by the Merchants Rational Bank, after the appellant and Mr. Keyser had signed their names in blank on the back of them. They were payable “to the order of-,” and the main question disposed of in 100 Md. was the character of liability incurred by those gentlemen, whether as joint makers or endorsers. After the first trial the defendant died and his administrators were made parties and at the second trial the defendants took the position that Messrs.

Warfield and Keyser were either guarantors or endorsers and not joint-makers. At the trial now before us for review other defenses were relied on, which will require us to state the facts more ¹⁶⁴ fully than would ordinarily be necessary when a case has already been in this Court. The two notes were dated July 31st, 1896, and have been paid by Mr. Warfield. He is seeking to hold the estate oí Henry B. Keyser liable for one-half of the amount so paid by him, with the exception of one payment which was conceded to be barred by limitations.

The testimony.of Mr. Keyser given at the first trial was in evidence, as was that of Mr. Warfield, and hence we are not deprived of their respective versions of the transaction by reason of the death of Mr. Keyser, but they contradicted each other as to some of the material questions. Mr. Keyser testified that he consented to become responsible on the two notes on the agreement of Mr. Warfield that one of them should be paid'out of a sum of money then due the company by the Baltimore and Ohip Railroad Company, and it was shown at the last trial that the railroad company did pay the Construction Company upwards of $8,000 at different times, beginning with January 28th, 1897, when it paid $1,484.33, and paid the same amount in each of the months of February and March. Mr. Keyser claimed that when he signed the notes there was due by the railroad company something over $2,900.00. Mr. Warfield positively denied that any such agreement was made, but said that he and Mr. Keyser signed their individual names on the notes because Mr. Thomas, the president of the bank, refused to discount them unless they made themselves individually responsible.

In the latter part of 1896, sometime after the notes were given, steps were taken to raise sufficient money to pay off the indebtedness of the company, which finally resulted in the company agreeing to deliver to Henry A. Parr, trustee, a number of bicycles for which a certain sum was to be paid by the trustee (apparently $25.00 per bicycle) and certain stockholders and some others contributed to a fund to be used by the trustee for that purpose, and the trustee was to apply the money to the payment of the debts of the company and' distribute the surplus from the proceeds of sales made by firm in proportion to the amount of the respective contribu ¹⁶⁵ tions to the purchase money. That arrangement is spoken of in the record as the bicycle trust. Mr. H. Irvine Keyser, the father of Henry B. Keyser, contributed a considerable sum, which the defendants contend was for the benefit of his son who was the largest stockholder in the company. The bicycle business in 1891 proved to be disastrous, and as a result the contributors lost instead of receiving a handsome return for the investment, as was expected.

Mr. Irvine Keyser contends that he was induced by Mr. Warfield to make the contribution and that he (Warfield) told him it would enable the company to pay off its indebtedness but he did not tell him of these notes. The third prayer of the defendants granted by the Court is based on that transaction, and instructed the jury that if they found the facts set out in it the plaintiff was estopped to claim the payments against the defendants set out in the statement on which the suit was brought. The prayer will be considered later but these facts are now referred to as they reflect upon the first exception which we will now discuss. 1. At the close of the plaintiff’s case, the defendants offered a tissue paper copy of a paper which purported to be signed by Henry B. Keyser and five others individually and by S. Davies Warfield, President of the Construction Company.

It was dated November 23rd, 1896, and apparently referred to what is spoken of as the bicycle trust. At the same time they offered another paper dated on the --- day of October, 1896, which purported to be signed by Henry B. Keyser, per K., John K. Cowen, Henry Á. Parr and Nelson Perm. That paper states that the undersigned stockholders, in order to aid in carrying six hundred bicycles, agreed to advance to said company sums equal to 45% of the par value of their respective holdings of stock, receiving interest on the sums advanced at the rate of six per cent, until paid.

Opposite the name of Mr. Keyser is “$10,000,” opposite that of Mr. Cowen “$2,000,” that of Mr. Parr “$5,500” and of Mr. Perm “$6,000.” The plaintiff objected to the introduction of either of said papers, and Mr. Phil ¹⁶⁶ lips who was formerly secretary of the company, was recalled as a witness. He did not identify either of the papers, but on the contrary his testimony tended to show that neither of them was the agreement finally entered into. The first bill of exceptions states that “The Court excluded the first or tissue paper copy, but allowed the second paper to be offered in evidence, in these words: 'If it is intended to corroborate Hr. Warfield’s statement in his testimony it may go in for that purpose.’ ” Just what that means is not shown, as the defendant could have no object in corroborating Mr. War-field’s testimony, and his counsel objected to the paper being admitted.

It is not shown that that was the agreement which was fianlly executed, but on the contrary there is endorsed on the back of it: “Original agreement in regard to 600 wheels. Oct., 1896. Hot carried out. See subsequent-agreement.” It is stated in the record that the “defendants then offered in evidence two papers to prove that the money paid to the company by H. Irvine Keyser was contributed by the representative of Henry B. Keyser,” and then follow the two papers.

But how a paper, which in the language endorsed upon it was “Hot carried out,” and which was not signed by Mr. Warfield, individually or as President of the company, and was not the paper under which the money was advanced by Mr. Irvine Keyser, could reflect on that question or could be admissible for any purpose, we confess our inability to see. The record does not even show where the paper came from. The contents are wholly different from those of the tissue paper copy and from the testimony in reference to the agreement that, was made, and it was not claimed by Mr. Irvine Keyser that he advanced any money under it. That it was error to admit it seems to us clear, and we are also of opinion that it was injurious error.

The jury had the right to suppose it was admitted for their consideration for some purpose and there would be great danger of their drawing unwarranted inferences from it. ¹⁶⁷ 2. We will consider the third prayer of the defendants in this connection, and will request the Reporter to insert it in his report of the case. It concludes by instructing .the jury that the plaintiff is estopped to claim the money sued for if they find the facts therein set out. We are of the opinion that it ought not to have been granted.

The defendants’ theory is that the money advanced by Mr. Irvine Keyser was paid “in the name of and on behalf of his son, Henry B. Keyser.” It certainly could not be contended that the plaintiff would be estopped from recovering from Henry B. Keyser or his personal representatives if Mr. Irvine Keyser paid $6,370.00 into-the bicycle trust on his own account, merely because Mr. Warfield did not tell him of these two notes. There is no principle of estoppel known to the law that could be used as a defence to this suit on that ground. And if “in the name of and on behalf of his son” he advanced it to the construction company “as the proportionate part of the advance to be made by said Henry B. Keyser” — in other words, if he was simply representing his son and paying the money for him — upon what principle could the mere failure of Mr. Warfield to tell him of the notes estop the plaintiff from recovery ?'. Henry B. Keyser knew as well as S. Davies War-field that they had endorsed (we do not use the term in its technical sense) the notes.

He was the Treasurer of the company, the largest stockholder and according to the evidence had as much if not more opportunity to know the actual condition of the company’s affairs than the plaintiff. If Henry B. Keyser had died before the transaction between Mr. Irvine Keyser and the company, or had been incapable of attending to business, there might have been some reason for Mr. Warfield telling Mr. Keyser of the notes — although we do not want to be understood as conceding that he would then have been estopped from recovery merely because he did not tell him of them. He might even then have assumed that Mr. Irvine Keyser knew of them or he might not have had any reason to suppose that the latter’s contributions to ¹⁶⁸ the bicycle fund would have been affected by his knowledge of the notes. The prayer does