Trump v. Baltzell , 3 Md. 295 ( 1852 )

Le Grand, C. J.,

delivered the opinion of this court.

These are cross-appeals from a decree of the chancellor, passed in a cause in which the facts, as alleged in the bill, are substantially as follows: Thomas and Philip Baltzell entered into a copartnership with William B. Trump, and the terms under which it was to exist and be conducted were specified in writing. These were, so far as the questions in this case are involved, that the Baltzells and Trump were to contribute to the capital an equal amount, constituting in the whole the sum of fourteen thousand dollars. The partnership was to last for three years. It was stipulated by the third article of the agreement, that all expenses relating to the business of the firm were to be taken out of its funds, and a regular expense account should be opened on the books of the firm, and each and every article charged as the expense accrued. The fifth article was in these words: — “The said William B. Trump binds himself not to take out of the business or stock in trade of the said firm of William B. Trump & Co., more than seven hundred dollars per annum, in goods, or money, or both.” The bill further states, that as the time fixed for the dissolution approached that matter became one of negotiation and arrangement between the parties constituting the firm, and resulted in an arrangement by which the Baltzells were to become possessed and entitled to all the stock, debts and assets of the firm, pay its debts, and to Trump, the sum of fifteen thousand five hundred dollars; that the Baltzells faithfully complied with all their obligations under the contract. That after they came into possession of the books they discovered certain entries therein wholly unauthorised by the terms of their copartnership; that on the leger of the firm an account had been opened against Trump, in which he was charged with various items amounting in the aggregate to the sum of twenty-one hundred dollars; and that for the purpose of balancing the account, Trump, on the first day of February 1838, whilst the negotiation of the terms of the dissolution was pending, credited the account by an entry of $2100, for expenses, there being no evidence on any of the books showing in what manner such expenses had been incurred.

The answer admits most of the facts stated in the bill, and claims the credit of $2100 as compensation allowed to Trump, at the rate of $700 per annum, under the articles of copartnership, for his personal services in the supervision and conduct of the business.

It does not apppear from the testimony in the cause, with any great degree of certainly, whether the credit of $2100 had been entered on the leger when the terms of dissolution were agreed upon. It bears date the first day of February, and the agreement for dissolution was executed on the ninth of the same month. Had Trump stood charged on the books with the $2100 at the time the terms of dissolution were agreed upon, we would be of the opinion that the settlement contemplated a release of that indebtedness, and, we think, the case of Patterson vs. Martin, 6 Iredell, 111, is a sufficient authority for it; but if the terms of dissolution were settled on the supposition that the account of Trump had been properly balanced, when, in point of fact, the credit had been improperly and fraudulently entered, then we are of the opinion, that the Baltzells are entitled to recover the amount of the debit to the account of Trump.

The answer of Trump, it is true, claims the credit as legitimate and just, but this cannot avail against the written evidence of which this claim is predicated. It must speak for itself. Jones vs. Belt, 2 Gill, 106.

We concur in opinion with the chancellor, that the claim of Trump for compensation has no countenance from the articles of copartnership. The fifth article evidently was designed to protect the capital from diminution during the continuance of the firm, and the authority which it gives to Trump to draw out of the concern, annually, a sum not exceeding seven hundred dollars, must be regarded as a limitation on his right to appropriate, beyond that amount, his proportion either of the capital or profits until the partnership should cease by its own terms. And it is obvious to us, that this construction was placed upon it by Mr. Trump", for in conformity with the articles of copartnership an expense account was opened, as" well as one against himself, in neither of which, until the first day of February 1838, was there any entry for compensation for his services. The debits in his individual account Commence as early as March the" 27th, 1835, and the claim of $700 per year, claimed under the third article of the terms of partnership, is not set up until nearly three years thereafter, and then a claim for threé years services is preferred, and that too, without any explanation of its elements. This fact, independently of the plain" purport of the language of the articles of agreement, would be sufficient to satisfy us of the understanding which Mr. Trump had of his rights. But the testimony of Mr. Raymond must remove all doubt. He says — and what he says is competent evidence under the act of 1832, chap. 302, it not having been excepted to — “that he suggested the article restricting the said Trump to the drawing out of $700 per annum; that amount was then explained to William B. Trump, by the" witness, to be used by him for family purposes, was to be charged to him individually, and not as any additional compensation.”

There is not a particle of evidence showing that the Baltzells were aware, at time of the dissolution, the unauthorised credit of $2100 was .for compensation claimed under the third article of agreement of copartnership. The entry gave no such explanation;" it merely declared that Trump was entitled to it for expenses” incurred in the business. We must assume, in the absence of all proof on the subject, that the Baltzells dealt with Trump under the belief that the books had been fairly and correctly kept, and to have entered into the arrangement for the purchase of the effects of the firm under this conviction; and if, by means of this improper credit, the settlement realized to Trump $2100 more than the Baltzells- agreed to pay him, that is to say, $17,500 instead $15,500, they are entitled to relief.

We concur with the chancellor, that neither the articles of copartnership, the understanding of the parties, nor the testN mony of the witnesses give the slightest color to the claim preferred in the answer of Trump.

In regard to the time from which interest should commence to run, we think with the chancellor, that no injustice would be done by fixing the period of the filing of the bill as the proper time, and therefore affirm the decree.

Decree affirmed;

Mason, J., dissented.