Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

PETERSON v. FIDELITY & DEPOSIT CO. OF MARYLAND

June 22, 1971

Karl PETERSON, Plaintiff,
v.
FIDELITY & DEPOSIT CO. OF MARYLAND, Defendant


Corcoran, District Judge.


The opinion of the court was delivered by: CORCORAN

I

 In 1963 the plaintiff was President, Director, and holder of approximately one-half of the outstanding shares of stock of a small contracting firm, Oxford Constructors Corporation (hereinafter "Oxford"). Lee Butler, Jr. owned the remaining one-half of the corporation.

 During the period here involved, Oxford had contracts with M. J. Bles Construction Co. for the construction of a part of the Potomac Interceptor Sewer in Virginia, (hereinafter the "Virginia Job"). It also had a contract with La Sal Constructors, Inc. for the construction in Maryland of another part of the same sewer, (hereinafter the "Maryland Job").

 The defendant, Fidelity and Deposit Company of Maryland, (hereinafter "Fidelity") executed, as surety, performance and labor and material payment bonds on both jobs.

 By June, 1963, Oxford had encountered severe financial difficulties and the plaintiff requested Fidelity to advance enough money to Oxford to enable it to continue its work under the contracts. Fidelity agreed to release $30,000 which Oxford had deposited with it as collateral provided two conditions were met: (1) That Oxford demonstrate its faith in its ability to complete the work by raising $20,000 working capital; and (2) that this $20,000, the released collateral, any retainages released by LaSal and Bles, and all future receivables from either the Virginia or Maryland jobs be placed in joint accounts under the joint control of Oxford and Fidelity.

 On or about June 14, 1963, the parties agreed orally that:

 1) Oxford would assign all balances due or to become due from the Virginia and Maryland jobs into two checking accounts to be carried in the joint names of Oxford and Fidelity.

 2) Plaintiff and Butler would each contribute an additional $10,000 to Oxford -- the $20,000 so raised to be deposited in the special joint accounts.

 3) Fidelity would release the $30,000 collateral into such joint accounts.

 4) Fidelity would recommend to M. J. Bles the release of any retainages held by Bles, the retainages, if released, to be placed in the joint accounts.

 An assignment and power of attorney were prepared by Fidelity and executed by plaintiff and Oxford on June 21, 1963, under the corporate seal of Oxford Constructors. The joint bank accounts were to be established in the Union Trust Company, and on June 25, 1963, plaintiff and Oxford executed a "Resolution to Establish a Joint Account" on a preprinted form supplied by Union Trust. Due to a misunderstanding, the joint accounts at Union Trust were not opened until July 10, 1963. In the meantime, plaintiff's check for $10,000, together with Mr. Butler's check for $10,000 were deposited in Oxford's corporate account at Suburban Trust Company on July 1, 1963. During the delay in opening the joint accounts, numerous bills were paid from Oxford's Suburban account so that on July 10, 1963 when the balance in the corporate account was transferred to the joint accounts only $14,000 of the original $20,000 remained.

 The joint accounts, designated respectively the "Virginia Account" and the "Maryland Account", were subject to signature on behalf of Oxford by plaintiff, as its President, and by Mr. Tambellini, as Secretary. They were subject to countersignature on behalf of Fidelity by either Messrs. Fisher, Kroll or Gordon. The agreed system of operation was that prior to drawing any given check representatives of Oxford would advise the surety of the nature and amount of the check and the surety would then indicate if it would co-sign such a check, if drawn.

 Thus after the establishment of the joint accounts, all of Oxford's bills arising under the Virginia and Maryland jobs were paid by Oxford with checks co-signed by Mr. Fisher of Fidelity. Included among the payments out of the joint accounts were obligations for taxes owing to the U.S. Government, to the States of Maryland and Virginia, and to the District of Columbia. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.