Haight v. Burr

Bartol, J.,

delivered the opinion of this Court :

This is an appeal from an order of the Circuit Court for Baltimore city, granting an injunction and appointing a receiver. By the 21st sec. of the 5th Art. of the Code of Gen. Laws, the right of appeal from such an order is given, “the answer of the party appealing being first filed in the cause." In. this respect the provisions of the Code are identical with *133 those of tho Act of 1835, cli. 380; and must be construed in tho same way. According to the uniform course of decisions under the Act of 1835, it has been held, that although tho necessity of filing an answer is imposed upon the defendant, as one of the conditions on which his right to appeal depends, yet this Court is confined to the case made by the bill, and does not examine the answer. Wagner vs. Marshall & Cohen, 6 Gill, 97 . Roman, et al., vs. Strauss, et al., 10 Md. Rep., 89 . McCann vs. Taylor, et al., 10 Md. Rep., 419 .

The averments of the bill on this appeal, whatever may be the real state of the case, must be taken as true. 10 Md. Rep., 410 , Rose & Gauss, vs. Bevan, et al.

Our duty is to determine whether tho case stated by tho complainant, was one which justified the passage of tho order appealed from.

Without stating here all the averments in the bill, we will briefly refer to those allegations on which the equities of the complainant mainly rest. It is alleged, that in the year 1854, he formed a co-partnership with the respondents, Haight and O’Connell, in the business of making, repairing and selling carriages, in the city of Baltimore, The two partners, Burr and Haight, residing at that time in Bridgeport, Connecticut, it was agreed that O’Connell, the other partner, should give his personal attention to the business, and receive a compensation of $500 per annum therefor. The bill alleges that the partnership was to continue for three years, and that after the expiration of that time, (in 1851,) articles for the renewal thereof were signed by the respondents, but not by the complainant, though he tacitly assented to the continuance of the old partnership till July last past, (July 1861,) as one during the sufferance or pleasure of the co-partners.

The bill, after stating that settlements had been made every year, up to July last, and setting out the condition *134 •of tlie affairs of the firm at the time of the last settlement, in July 1861, charges “that since that time O’Connell has largely over-drawn all his interest in the concern, and Haight has largely diminished his, while the complainant has received nothingand the bill further charges that the respondent, O’Connell, has carried on the business as . if it was his own, exclusively, denying to the complainant .any settlement or satisfaction, refusing to allow him to have access to the books of the firm; that he has failed to pay the debts of the firm, although he had funds in hand sufficient for the purpose, leaving the complainant liable for .such debts; and the bill further charges that the defendant, O’Connell, is fraudulently appropriating to his own use the funds of the partnership, and that he “threatens, in fraud of the complainant's rights, to sell out the whole concern, (being in possession,) to the exclusion of all rights of your orator; and is actually diminishing the assets of the said firm, which, if lost, your orator is remediless,” because it is alleged “that O’Connell is of no pecuniary responsibility.”

In the case of Blondheim vs. Moore, 11 Md. Rep. 374, the rules by which Courts of Equity in this State are governed in the appointment of receivers, were distinctly stated, and among them is the following: “That fraud or imminent danger, if' the intermediate possession should not be taken bj the Court, must be clearly proved, and that unless the necessity be of the most stringent character, the Court will not appoint until the defendant is first heard in response to the application.”

These rules are deduced from an examination of all the cases on the subject. And while we adhere to them, we are of opinion that the case made by this hill of complaint falls within them, and justified the Court below in passing the order, without waiting for the answers of the defendants. See Williamson vs. Wilson, 1 Bland, 418 . Rosenberg *135 & Blondheim, vs. Moore, 11 Md. Rep., 316 . Speights vs. Peters, 9 Gill, 412 . Walker vs. House, 4 Md. Ch. Dec., 39 N. C. Railway Co. vs. State, 18 Md. Rep., 193 .

In tlie argument of the cause, the appellants have contended that the complainant ought to have exhibited with his bill the articles of co-partnership, so that their terms- and the respective rights of tlio partners might clearly have appeared to the Court. Such a course would certainly have been proper, and if it had appeared from the hill that they were in his possession, the failure to produce them-might have been urged ivith much force, as a ground for refusing to grant an injunction or appoint a receiver before answer. See Union Bank vs. Poultney, 8 G. & J., 332 . Nusbaum vs. Stein, 12 Md. Rep., 318, 319, 321 . Mahaney vs. Lazier, 16 Md. Rep., 69 .

It appears, however, from the bill, that the articles of co-partnership wore not in the possession of the complainant. This is our interpretation of the averment in the hill on this subject, which is, “that they were loft in the hands of the defendant, O’Connell.”' In such ease, the failure of the complainant to produce them, forms no valid objection, and ought not to deprive him of tho relief to which he appears to he entitled upon the allegations of the bill, verified by his oath. If upon the exhibition of the articles of co-partnership by the respondents, and their answers, it shall appear that the complainant is not entitled to a continuance of tho injunction, or to have the funds placed in the hands of a receiver, an opportunity will he afforded to the respondents, by the Circuit Court, for an early hearing, on a motion to rescind the order complained of; but, as we have said, the proceedings subsequent to the passage of the order, are not before us on this appeal. And being of opinion that the averments of the Mil, verified by the oath of the complainant, presented such a case of alleged fraud *136 and imminent danger as to justify tlie action of tlie Circuit Court, tlie order appealed from will be affirmed.

( Decided December 3rd, 1862.)

Order affirmed and cause remanded.