Bank of Commerce v. Dalrymple

Eggleston, L, delivered the opinion of this court. This action of asswnpsit was instituted' by the appellees against the appellant, to recover damages for the alleged refusal of the latter to issue and deliver to the former, one of those orders which were known as “Extra Dividend Orders” of the Baltimore and Ohio Railroad Company. The nar. contains six common money counts. The plea is, that the defendant did not promise as alleged. Then follow three agreements: First. “That the within plea shall be considered as filed subsequent to the nar. and notice, and all errors of pleading on both sides waived.” Second. “That the plaintiffs in this case may, under the — 27 — declaration in this case, recover any amount they could under any nar., in assumpsit, and that the defendant may give in evidence any defence they could have taken by special plea.” Third. “That this case is to be tried as if issue had been formally joined on the record.” The plaintiffs, as partners, were engaged in business as stock and money brokers, under the firm name of Josiali Lee & Co., and during the year 1856, kept their .account with the defendant, the Bank of Commerce, of which James W. Alnutt, was then, and has ever since continued to be, president. For the purpose of securing the defendant against any loss, from the casual overdrawing of their account at any time, the plaintiffs, on die 25th of August 1856, voluntarily transferred upon the books of the Baltimore and Ohio Railroad Company, to the name of “James W. Alnutt, president,” five hundred shares of the capital stock of thejsaid company, and delivered the certificates thereof, so made out, to Alnutt, which he accepted, and deposited among the securities of the bank. On the 17th of December 1856, the president and directors of said railroad passed the following resolutions: “Whereas, there has been appropriated by the Baltimore and Ohio Railroad Company, from time to time, the sum of three millions of dollars and upwards, of the net earnings of the main stem of the road, to the purpose of construction, with the intention, in conformity with the practice of the company, of paying the same to the stockholders in the shape of a dividend, at such time as they might deem judicious, therefore, be it “Resolved, That an extra dividend of thirty per cent, be declared on the stock of the company, to be paid on or after the 12th day of January next, to all stockholders owning stock on the 22nd day of December 1856, in certificates of indebtedness, bearing an interest from the first day of June 1857, of six per cent, per annum, payable half-yearly on the first day of December and June in each year, until the first day of June 1862, inclusive, after which, the said certificates — 28 — of indebtedness shall be converted into the stock of the company at par. “Resolved, That for the payment of the dividend aforesaid, the transfer hooks be closed on the 22ud instant., and remain closed until the 12th day of January next.” On the 31st of December 1856, the appellees dissolved their copartnership, and settled their account with the bank, leaving nothing due the bank. On the 1st of January 1857, they demanded of Alnutt to-deliver up to them the said shares of stock, and to give them., likewise, an order on the treasurer of said railroad company for the ceitificat.es of indebtedness corresponding thereto, under the aforesaid resolutions of the 17th of December 1856. Alnutt redelivered the certificates of stock which had been pledged, duly endorsed and re-assigned, but refused to give any written order, as demanded, for the extra dividend, saying that he would collect it, if it was ever paid, and hand it over to the plaintiffs. In October 1856, a cash dividend had been declared upon this stock, while it stood in Alnutt’s name, which he collected and immediately passed to the credit of the appellees with the bank. Proof was given that on more than one occasion, the plaintiffs renewed their demand upon Alnutt for a written order, as aforesaid, for the said extra dividend, which he continued to refuse; whereupon, on the 24th of February 1857, by a letter addressed to the president and directors of the bank, the plaintiffs gave notice that the said president and directors would be held responsible for damages resulting from thejr refusal to transfer, by order or otherwise, the said extra dividend. When this letter was presented to Alnutt, he said he would attend t.o it,.but did not want the orders of the bank hawked about the streets. On the 26th of February 1857, James W. Alnutt, president^ enclosed to the appellees an order for the extra dividend, stating (hat the Bank of Commerce had no interest in it or the stock, the same being the property of the appellees. This order was returned the same day, the appellees refusing to receive it, unless they were paid the dif — 29 — ference between the (hen market price of it, and that for which such orders Avere selling on the 1st of January preAUOUS. The order sent by the defendant to the appellees was as-follows: “Bank of Commerce, Baltimore, February 26th, 1857. Joshua J. Atkinson, Esq’r, Treasurer of the Baltimore and Ohio Railroad Company: Please deliver to Messrs. Josiah Lee & Co., the certificate of indebtedness for the amount of dividend on the five hn«dred shares of the capital stock of the Baltimore and Ohio Railroad Company- standing in the name of James W". Alnutt, president, on the twenty-second day of December last, as represented by certificates Nos. 20582, 20683, 20584, 20588. All of which bear date the twenty-fifth day of August last, and were on the first day of January, eighteen hundred and fifty seven, assigned and transferred to the said Josiah Lee & Co., by endorsement; said stock being their propertjv Bank of Commerce having no interest whatever in the said stock or certificate of indebtedness is hereby made in no AVay responsible or liable for the certificate of indebtedness embraced in this order. James W. Alnutt, Presid’t.” The following letter is that Avhicb aves sent by the appellees when the above order was returned to the defendant: “James W. Alnutt, Esq’r, President. Bank of Commerce, Sir, — Yours of 26th inst. is received with an order for the dividend of the 22nd Deceinber last on 500 shares Baltimore and Ohio Railroad stock which we herewith return, but will receive again, on condition, that you pay us the difference between the market price of said dividend at (.he time you refused to deliver it and the present market price. In the event of your refusal to do this we hereby repeat we shall hold you responsible for any loss sustained in consequence of your action in the case. Respectfully yours, &c., Josiah Lee Co., Baltimore, February 26th, ’57¡’? — 30 — The proof shows that io January 1857, orders on the treasurer of the Baltimore and Ohio Railroad Company, for certificates of indebtedness on the extra dividend, under its resolutions, became common articles of sale and purchase in the Baltimore stock market, separate from the stock on which the certificates were to be issued, the first sale being made on the 17th of that month, at 50 per cent, of their par value. In making sales of such orders at the stock market, whether separately, or in conjunction with the stock itself, it was not necessary that such orders should have been previously presented to or noted by the treasurer of the company — said orders did not refer to anjr particular named stock, and were taken on the good faith of the party giving them. This was the case even when the orders were in fact delivered; but when time contracts were made, there was no delivery of any orders at the time of the contracts, nor any required or made until the maturity of the contracts. The treasurer of the railroad company never accepted said orders when presented to him, as many of them were, and made no note or memorandum of any kind, and entered into no engagement of any kind binding the company to the holders, and would not have done so in any case. According to the testimony of Thomas Coulson, such orders were sold at the following rates on the dollar: Jan’ 17, 1857, at 50 cents. 20, CC cc 50* « 22 & 24, cc 55 “ 26 cc 54 « 27 cc 51* « 24 cc 30* “ 25 cc 30 « 26 cc 30* CC 27 . 30* cc 28 30- At the time of the trial of this case the orders were^wortb from 9 to 11 per cent. Fifty shares of the stock in question, which had been re-transferred by Alnutt to the plaintiffs, were sold and delivered by — 31 — them to Fisher on the 9th of March 1857, at f;82 per share, carrying the extra dividend, and orders for the extra dividend were supplied from another source. All sales of this railroad stock, prior to the declaration of the extra dividend in question, made at the Board, carried the extra dividend, but if made after, they-carried it or nest as the parties might agree in the particular- case. Although tiie first sales of the orders, separate from the stock, were made on the 17th of January 1857, there were, nevertheless, sundry sales of stock carrying the extra dividend, made from the 1st to the 17th of the same month, at prices ranging from 84 to 38*, cents on the dollar, and on the 13th of that month stock was sold without the extra dividend at 71 cents. The plaintiffs offered to prove, that sundry time contracts, by them previously made, for the delivery of Baltimore and Ohio Rail Road stock, with the extra dividend on, matured between the 22nd of December 185G and the 13th of January following, while (lie transfer books were closed, to the amount of 1000 shares in all, and that if they had been in possession of the dividend orders, here in controversy, they might have used them in fulfilling said contracts in part on January 13th, 1857, when the transfer books were re-opened, and delivery under said contracts was to be made. The evidence Was offered for the purpose of proving damages sustained by the plaintiffs in consequence of the non-delivery to them of the dividend orders demanded as herein before stated. To the admissibility of which evidence the defendant objected, but the court overruled the objection, and permitted it to go to the jury for the purpose for which it was offered; which ruling constitutes tiie ground of the defendant’s first exception. It appears from the testimony of the witness, Coulson, that the letter of the 24th of February 1857, was delivered by him on that day, to James W. Ainutt, President of the Bank of Commerce, at the Banking House; and that during the interview between them, Ainutt said nothing about the — 32 — kind of dividend order he might sign, nor did he raise any ■objection on account of any particular form of order. Whereupon the defendant admitted that no particular form of order was demanded by the plaintiffs, and that said Alnutt’s refusal to accede to the several demands of the plaintiffs, was not placed upon the ground of his objection to any particular form. The defendant offered in evidence a duly authenticated and sufficient transcript of the record in the case of the Mayor and City Council of Baltimore against the Baltimore and Ohio .Rail Road company, in the Circuit court for Baltimore city, not as evidence -of any of the matters and things therein alleged and averred, but merely to show that the said court, in the-said cause, did, on the 10th of January 1857, issue an injunction, prohibiting the Baltimore and Ohio Rail Road company, its officers and servants, from issuing, or causing to be issued, the certificates of indebtedness or extra dividend, provided for by the resolution of the president and directors of said company, given in evidence by the plaintiffs, and that injunction had never since been dissolved. The plaintiffs’ ■counsel objected to this evidence, which objection being sustained by the court, the defendant excepted. This decision, we think, is erroneous. The injunction •should have been ■ admitted as proper evidence for the purpose for which it was offered. The resolutions of the company, under which the extra dividend is claimed, provided that the same was to be paid “on or after the 12th day of January, then next,” ® * *' * ¿íin certificates of indebtedness, bearing an interest,” <fcc. On the 10th of January 1857, two days before the certificates could be demanded of the company, under their resolutions, the injunction referred to was issued and served; and had not been dissolved, when this case was tried. Under such circumstances, it has been contended by the .appellant’s counsel, that there never was any obligation upon Alnutl, or upon the bank, to deliver to the appellees the ■orders demanded by them, and, therefore, the refusal to deliver the same gave the appellees no right of action., — 33 — It would seem to be a clear proposition, that, prior to the 12th of January 1857, no stockholder could have demanded of the rail road company a “certificate of indebtedness” on account of the extra dividend, or any evidence of, or security for, the said dividend. Prior to that date, what have subsequently been called “extra dividend orders” of the Baltimore and Ohio Rail Road Company, and now in question, were not known as having any separate existence, or as being understood to be legal entities. They were not known as common articles of sale and purchase in the Baltimore stock market. The first sale of them, as separate from the “certificates of indebtedness” for the extra dividend, provided for in the resolutions of the rail road company, is proved to have been made on the 17th of January 1857. Thus it appears the injunction was issued and served before any stockholder had a right to demand of the company the “certificates of indebtedness,” before the “extra dividend orders” had become common articles of sale and purchase in the stock market, before the first separate sale of such orders, and indeed, before they became known or were considered as legal entities, either at the slock board or elsewhere; at least, there is no proof to the contrary. The injunction was the act of a court of competent jurisdiction on the subject, and it directly prohibited the company from issuing the certificates of indebtedness for the extra dividend, and, as a consequence of it, no legal demand for them could be made. It, in effect, was sufficient to relieve the defendant from liability to answer in damages for refusing to give the orders demanded by the plaintiffs. There has been no contract between the present parties for the sale and purchase of these orders, stipulating for their delivery at any time. The claim urged by the appellees is based upon a voluntary deposit of the stock with the defendant, or with “James W. Alnutt, President,” which stock has been returned. They insist, that the deposit was in the nature of a bailment, and that when the principal or corpus was returned they were also entitled t.o the extra dividend as an increment, and therefore, they had a legal demand for — 34 — the dividend orders. Bat before the extra dividend could be demanded, under the terms of the resolutions declaring the same, the injunction was issued and served, and has not yet been dissolved. It is believed, therefore, that there was no such legal increment in existence as to give the appellees a cause of action against the defendant. (Decided June 1st, 1860.) There can be no doubt that if A sell goods to B, on credit, without any promise on his part to give á note for the amount of the purchase, if A should, subsequently, demand a note, he could not enforce such demand by any proceeding either in a court of law, or of equity. There would seem to have been no more obligation on the defendant in this case, to have given the order demanded by the plaintiffs. In the order sent by the defendant to the plaintiffs, on the 26th of February 1857, the treasurer of the rail road company was authorised to deliver to the plaintiffs the certificate of indebtedness for the extra dividend, in question, in which order the defendant disclaimed any interest, whatever, in the stock or certificate of indebtedness, therein mentioned. Inasmuch as the injunction, in express terms, was designed to operate directly upon this extra dividend, the admissibility of the injunction in evidence, cannot be denied upon the ground of its being res inter alios acta. For the purpose of showing the propriety of admitting it as evidence, we would refer to Key vs. Dent, Adm’r of Wood, 14 Md. Rep., 97, 98, and the authorities there cited. If the views which have been presented in this opinion are correct — and we think they are — the judgment should be reversed, without a procedendo; and therefore, the other questions which have been urged in argument do not require consideration. This decision is to be understood as made with reference to the circumstances existing at the institution of the suit, and not as intimating any opinion in regard to the rights of the plaintiffs below, in case the injunction should be dissolved. Judgment reversed without a procedendo.