Seldner v. Smith

40 Md. 602, 1874 Md. LEXIS 90

• Court: Court of Appeals of Maryland
• Decided: June 25, 1874
• Status: Published

Opinion

Grason, J.,

delivered the opinion of the Court.

At the trial of this case, the defendant offered to prove by King and Wilkinson, that they were applied to by Mrs. Melissa A. Smith, one of the appellees, by her proper agent and by her authority, to sell for helas rapidly as they properly could, the goods purchased by her t\jo or three days before of Tracy, Irwin & Co. of New York, and which were the subject of the replevin suit, in which the bond sued on in this case was given ; that the said sale was to he for cash, and that although the transaction was an unusual one, they agreed to make it in consideration of a commission of five per cent. their regular commission in the ordinary course of their business, being from one to two and a-half per cent. ; that as part of the transaction, they were to advance to Mrs. Smith, three thousand dollars, upon the goods upon receiving possession of ’them, with the invoices ; that the goods were accordingly on a dray, in the course of transportation from the warehouse of McCIeisli, Rives & Co. of Baltimore, where the goods had been left by Mrs. Smith, to the salesrooms of the witnesses on German Street, when they were seized by the sheriff under the writ of replevin. That if sold for cash by a commission house, in the manner in which this firm was about to sell them under the arrangement with Mrs. Smith, they would not have brought more than seventy-five cents on the dollar of their cost, and probably not more than fifty cents at the outside; that but for the seizure of the goods, as aforesaid, under the replevin, they would have proceeded to sell them as directed, as soon as they could have closed them out, and at such prices as could be obtained for them, no limit having been put on them; and further, that the prices they would have obtained for them, would have been the best that could have been obtained in the market by that mode of sale. The admissibility of the evidence thus offered, was objected to by the appellees, the objection was sustained, and the ruling of the Court in this respect, forms the subject of the first exception. We are of opinion, that the evidence thus offered, was not admissible for the purpose of proving the value of the goods replevied. The price which the goods would have brought at a sale, made in accordance with the arrangement with Mrs. Smith, would not have furnished a true test of their actual value. It is evident, that if sold in that mode, the goods must have sold below their actual value, and the true test of their value, was their actual worth at the time of their seizure, and not what they would probably have brought at a sale made in the mode named, a mode no doubt consented to by Mrs. Smith, in order that she might be enabled to receive an advance of throe thousand dollars upon the goods. Her necessities may have compelled her to consent to such a mode of sale, notwithstanding such sale would result in a realization of less than the cost of the goods, and the agreement upon her part to have them so sold, furnishes no evidence of their actual value.

Nor was this evidence admissible for the purpose of showing fraud committed by Mrs. Smith in the purchase of the goods. It is true that at the time of the purchase, she stated to Tracy, Irwin & Co. that she wanted the goods to sell in a retail dry goods store in Baltimore; but she had given her notes for the purchase money, secured by three mortgages on real estate, and no evidence whatever was offered tending to prove that she did not own the real estate described in the mortgages, or that it was so encumbered as to make the security doubtful, or that there were any other circumstances surrounding the transaction of a fraudulent character, or that were calculated to lead to the conclusion that the mortgages were unavailable as security for the payment of the notes. If the security for the payment’ of the price of the goods was ample, how could the mode of their sale, or a probable loss upon such sale affect Mrs. Smith’s title to the goods, or confer upon Tracy, Irwin & Co. any right to interfere with them. If the security taken by Tracy, Irwin & Co. was good and available it mattered not, so far as they were concerned, whether Mrs. Smith sold the goods at a profit or loss. If the goods had been bought by Mrs. Smith and Tracy, Irwin & Co. had been induced to sell them to her under , her representations that she wanted them to sell in a retail dry goods store in Baltimore city, and she had neither paid for them, nor given security for payment, and had immediately upon getting possession of them made such an arrangement for their sale as the appellant offered to prove she had made with King and Wilkinson, such proceedings upon her part would have been admissible, as tending to show fraud upon her part in the purchase, and thereby to annul the sale. But we think that the question of title to the goods was conclusively- settled by the verdict and judgment in the replevin suit. It is true that in this State a verdict and judgment for a defendant in a replevin suit is not always conclusive as to the want of title in the plaintiff. This action is most frequently brought to try the right of possession only, and if it appear at the trial that the right to the possession is not in the plaintiff at the time of the institution of the suit, the verdict will he for the defendant.

The. title may he in the plaintiff, while the right of possession for the time being may he in the defendant, or some other person. See Cullum vs. Bevans, 6 H. & J., 470, 471; Warfield vs. Walter, 11 G. & J., 85 ; Mason vs. Sumner, 22 Md., 321; McKinzie vs. Ballimore & Ohio Railroad Co., 28 Md., 175. But in the replevin suit between Tracy, Irwin & Co. vs. the present appellees, no such right of possession merely seems to have been involved. The only proof offered on the part of the plaintiffs in that case appears to have been offered for the purpose of showing that the sale of the goods was made under such circumstances and representations,- and the conduct of the purchaser with reference to the disposition of the goods after the sale to her, was such as to justify the vendors in annulling the sale and retaking the goods, and the evidence offered hy the defendants in the replevin tended to show that the goods had been fairly purchased hy Mrs. Smith, and the payment of the purchase money secured hy her notes and mortgages. In other words, it appears that the title to the goods was put in issue and no evidence was offered hy either party, except that which tended to support his title. We are therefore of opinion that under the peculiar circumstances of this replevin case, the verdict and judgment were conclusive as to the want of title of the plaintiffs in the replevin, and! that the question of title could not be re-opened in this suit. But we think that the evidence excluded by the Court below was admissible for another purpose. In the event of the jury finding that the appellees were not entitled to recover in this case the value of the goods, hut only the profits they would have reasonably made upon their sale, this evidence was admissible and proper to be taken into consideration by the jury in determining the question whether the appellees would have made any profits at all, or incurred a loss in the sale of the goods. The Court below therefore erred in rejecting the evidence.

The evidence set out in the second exception was clearly admissible. In the case of Belt vs. Worthington, 3 G. & J., 252, this Court said that the object of the law in prescribing that a replevin bond shall be entered into by the plaintiff before he should have the benefit of the writ, was only to give indemnity to the defendant. Judge Archer, in delivering the opinion of the Court in that case, says-: ££.the recovery on the replevin bond ought to be moulded in such manner as will best subserve the principles of justice; the question of evidence must always be regulated by a reference to the rights decided in the action and the character of the bond.” Judge Archer’s language in that case iS quoted with approval by this Court in Mason vs. Sumner, 22 Md., 319, 320. In the case of Walter and Warfield, Purviance, J., held that a plaintiff, in a suit on the replevin bond, can recover only the amount of the damage sustained by him personally, in consequence of the taking of the property from his possession, and refused to instruct the jury that the plaintiff, if they should find for him, was entitled to recover the value of the property mentioned in the schedule returned with the writ of replevin; and this ruling was affirmed on appeal to this Court, in 2 Gill, 216. If the appellees had sued Tracy, Irwin & Co. in trespass or trover for taking the goods in question and converting them to their own use, they could unquestionably have récouped from the plaintiffs’ claim of damages the amount of the price of the goods which still remained due and unpaid. Without referring to authorities elsewhere to sustain this proposition, though they are numerous and full to the point, we deem it quite sufficient to refer only to the recent decisions of this Court in the cases of the Baltimore Marine Ins. Co. vs. Dalrymple, 25 Md., 308 ; Dowler vs. Cushwa, 27 Md., 367, and War-field vs. Booth, 33 Md., 72, in which the doctrine of recoupment has been clearly and definitely settled. If then Tracy, Irwin & Co., in a suit against them could have recouped from the plaintiffs’ damages the price of the goods which still remained unpaid, their surety in the replevin bond is also entitled to do so, for the bond being for indemnity only, the surety is entitled to be subrogated to all the rights of his principal, and to avail himself of the same defences which were open to him. This principle was recognized and applied by the Court of Appeals of this State in the case of State, use of Scoffield’s Adm’r, vs. Craddock, 7 H. & J., 41. That was a suit upon the bond of an administrator, pendente lile, against the surety, and the question was whether the sxxrety could abate the sxiit by plea puis darrein continuance. After deciding that the principal could have so abated the suit against -him, the Court say, “the question then is, can this privilege of the special adxninistrator be extended to a suit on the administration bond against his sxxrety ? And why should it not be extended to him ? Is the principal to possess a privilege which is denied to his surety?” And the Court concluded that the sxxrety was entitled to the same privilege which was possessed by the principal. See also, Bechervaise vs. Lewis, 7 Law Reps., Com. Pleas, 376 ; Pittman on Prin. & Surety, 40 Law Lib., 117, 118. But it was contended that the appellant is the surety of Strong, and not of Tracjq Irwin & Co., inasmuch as the latter are not obligors in the bond, and it is execxited by Strong, Baker and the appellant. Bxit while sxich is the case, the bond itself recites that Tracy, Irwin & Co. are about to sue out the writ of replevin, and they do in fact sue out the writ and become the plaintiffs in the replevin and all the obligors in the bond are in fact but the sureties of the plaintiffs in that suit. But in the answer of the appellees in the name of D. & E. August & Co., to the petition of the appellant, filed in the bankrupt court of New York, they state that Seldner, the petitioner, became surety with Strong in the replevin bond. It is true that said answer is filed in the name of August & Co., but Mr. Stevens proved in this case that he went to New York on behalf of the appellees, that he never knew August & Co. until the day before the answer to the petition was filed, and that said answer was filed on behalf of and in the interest of his clients, the present appellees, as well as in behalf of August & Co. Their answer having alleged that the appellant, with Strong, became surety in the replevin bond, they cannot now be permitted to assert that Strong is principal in the bond, and that the appellant is his surety, and therefore not entitled to make the same defences in this suit, which were open to Tracy, Irwin & Co., in a suit against them for taking the goods. But it was further contended that, as the appellant had not the notes in Court to be delivered up and cancelled, the evidence in this exception was inadmissible. The appellant offered to prove, and, if the evidence had been admitted, would have shown that Tracy, Irwin & Co. had offered to deliver up to the appellee, Mrs. Smith, the notes and mortgages, and that Yan Schaick had actually sent them to her by mail, and that she had received and returned them to him, declining to receive them, as was alleged in argument, because the offer to return them was coupled with a repudiation of the contract of the sale of the goods. The evidence would have further shown that these notes and mortgages are still in the possession of Yan Schaick, the counsel of Tracy, Irwin & Co., and that the assignees in bankruptcy have never taken any steps to obtain possession of them upon the ground that the goods for which they were given went into the assets of the bankrupts, and their creditors got the benefit of them, and therefore that the assignees were not entitled to the notes and mortgages. The fact would have also appeared that hotli Van Schaicli and the assignees in bankruptcy were and have been always willing that Mrs. Smith should have the notes and mortgages, and that Mr, Pippey actually offered at his own expense to get authority to deliver them to her, and that she refused to take them and urged the assignees to take possession of them and hold them, stating when pressed for her reason therefor, that she wished it done for the effect it would produce upon the trial of this case. And when tlie appellant filed his petition to Judge Blatchporo, asking that they might he delivered to him, and stating all the facts connected with the transaction, .the appellees made use of the name of a creditor of the bankrupt firm to prevent the prayer of the petition from being granted, and did actually prevent it, the Judge denying the prayer of the petition without filing any opinion, or stating any reasons. It seems clear, therefore, that the appellees have no reason to complain that the notes and mortgages are not in their own possession, or that the appellant had not the notes in Court at the trial to he delivered up or cancelled, for it is manifest that they would neither receive them themselves nor let the appellant have them. Under such circumstances, the appellant can not he required to produce them in Court to be can-celled, nor to give bond to indemnify the appellees against any demand which might he made upon them for payment. Nor can any demand for payment he now successfully made against them. The notes are long since over-due, and any person to whom they might now he passed would take them subject to all the equities which the appellees may have, and therefore the latter would he entitled to set-off or recoup the value of the goods against the claim on the notes or mortgages for the purchase money, and thus prevent a recovery against them. If the assignees in bankruptcy proceeded upon them, the appellees would he entitled to set-off their claim of damages for taking the goods and thus protect themselves. See Sect. 19 of the Bankrupt Law; Bump’s Bankruptcy, 6 Ed., 76, 77, 415, 416. But independently of the set-off authorized hy the Bankrupt law, the appellees, in any suit against them to recover the amount of the notes or mortgages, would have the right to recoup the value of the goods from the amount of the claim upon the notes. In any aspect of the case, therefore, the appellees cannot he injured hy the non-production of the notes in Court, at the trial of this case, to he cancelled. There can he no good ground for requiring their production, as it was not necessary for the protection of the appellees. If they had been destroyed, proof of that fact would have furnished a sufficient excuse for not producing them. 2 Parsons on Bills and Notes, 308, 304. If it appear that the appellees cannot be injured by not producing them, they have no right to require their production, and especially when they have utterly refused to accept them when offered, have prevented the appellant from getting possession of them in order that he might produce them, and have made repeated efforts to induce the assignees to take possession of and hold them for the purpose, as Mr. Smith stated, of producing an influence and effect upon the result of this case. The evidence in this exception was clearly admissible, and ought to have been permitted to go to the jury. The objection to the admissibility of Smith’s statement to Moelinger, that his wife had just come from New York and brought the notes, &c., with her, on the ground that it was made in an offer of a compromise, is not tenable. The statement was no part of the offer of a compromise, but was merely a statement made by Smith to induce Seldner to offer a compromise, and was not liable to the objection urged.

From what we have said, it follows that the measure of damages fixed by the appellees’ first prayer was, under the peculiar facts and circumstances of this case, erroneous, and there was error in granting it. If the goods had been paid for by tlie appellees, or they could now be held liable on the notes or mortgages, the measure of damages fixed by the first prayer would not have been liable to objection. But as the goods have not been paid for, and no recovery can be had against the appellees, they can recover in this case only the costs in the replevin suit and whatever profits, if any, the jury might find that the appellees would have made on a sale of the goods, had they not been taken under the writ of replevin.

(Decided 25th June, 1874.)

The deposition of Mrs. Smith was not admissible for the purpose of showing that at the time the goods were replevied, they were the property of Tracy, Irwin & Go. We have already said that in this particular case, the verdict and judgment were conclusive against the title of Tracy, Irwin & Go., the plaintiffs in the replevin. The appellees’ third prayer was therefore properly granted.

The appellant’s first prayer -was properly rejected. The paper marked A, was clearly admissible for the purpose of showing what had been put in issue in the replevin suit, and upon what points evidence had been offered in that case.

We are also of opinion that the appellant’s third prayer was properly refused. There is evidence in the record legally sufficient to be submitted to the jury, tending to prove that the goods replevied were the separate property of Mrs. Smith. The fourth, sixth and seventh prayers ought to have been granted, and it was error to reject them.

The fifth prayer was properly rejected, as it is inconsistent with the sixth prayer which we have stated sets forth the correct measure of damages in this case.

Judgment reversed, and new trial awarded.