#### RAYMAN W. BORTNER *vs.*J. C. LEIB et al.

*Equity*— Petition *for Rehearing*— Receiver—Authority *of Corporate Officer*— Lending *of Credit*— Conversion *of Securities.*

Tbe refusal of a petition for a rebearing, after a decree, is a matter witbin tbe sound discretion of tbe lower court, and will not be considered by tbe Court of Appeals when there is nothing on tbe record to indicate any injustice sustained by tbe petitioner or any abuse of its power by tbe court before which tbe cause was beard. p. 584

After a decree has been enrolled no rehearing can be granted.

p. 534

As a general rule, an attorney who represents one of tbe antagonistic interests should not be appointed sole receiver, p. 534

An agent’s authority being commonly available only for tbe principal’s benefit, tbe fact that a corporation owned no stock in another corporation, though each of tbe four stockholders therein did own such stock, was in itself tbe negation of any grant of power by tbe former corporation to one of such stockholders, its manager, to bind it for obligations voluntarily incurred by him for tbe benefit of tbe other corporation. p. 537

No agent has implied power to give away any portion of tbe corporate property or to create a corporate obligation gratuitously, as tbe property of tbe corporation belongs to its shareholders, and its use must be confined to tbe chartered purposes, except by unanimous consent. p. 537

Tbe authority to lend tbe credit of a corporation, without a consideration, or to sign its name to negotiable paper for the accommodation of others, is usually not implied. p. 537

One partner cannot, without tbe consent of tbe others, bind tbe firm by lending tbe firm’s credit without consideration, or signing tbe firm name to negotiable paper for tbe accommodation of others. p. 537

*531Tbe power of an agent to bind bis principal by endorsing negotiable paper or by pledging his principal’s credit for the benefit of a third person may be established by implication, but, if not proved to have been conferred in express terms or to be the result of an estoppel, the delegation of the power must be shown to be necessarily implied from the very nature of the agency created, or to be an actual incident to an established course of dealing. pp. 537, 538

The manager of a corporation, the stock in which was owned by him and three others, *held,*on the evidence, not to have authority to Bind such corporation by endorsing for accommodation the paper of another corporation, in which all such four stockholders were interested and of which he was a director.

p. 538

The treasurer and active manager of a corporation, in which he was one of the four stockholders, was a fiduciary who had imposed on him the burden of proof completely to account for negotiable warehouse receipts which had been entrusted to him as collateral security for a loan made by the corporation, p. 545

Where the testimony was taken in open court, so that the chancellor’s judgment was informed by the manner and conduct of the witnesses, the appellate court is indisposed to disturb the finding on issues of fact, especially when there is great conflict in the evidence, unless it is apparent that his determination is not supported by the clear weight of the proof. p. 546

*Decided December 4th, 1924.*

Appeal from the Circuit Court of Baltimore City (Dmnrr,

Bill by James C. Leib, Clayton E. Rutledge and Otha L. Gladding against the1 J. C. Leib Company, Inc., and Rayman W. Bortner. From a decree appointing a receiver for the corporation named, and requiring the said Bortner to pay a sum named to the receiver on account of collateral converted by him, he appeals.

Affirmed.

The cause was argued before PattisoN, ITkNeb, AdtíiNS, Os*futt, Digges, BoNd, and Pabice, JJ.

*532*J. Edward Tyler,*with, whom was *JO'seph, T. England*on •the brief, for the appellant.

*Henry M. Sigel,*with whom were *S'igel & S'igel*on the brief, for the appellees.

Parece, J.,

delivered the opinion of the Court.

The bill of complaint was filed on. August 30th, 1923, by James C. Leib, Clayton E. Rutledge, and Otha L. Gladding, against the J. C. Leib Company, Inc., a body corporate, and Rayman W. Bortner. The plaintiffs .alleged that the capital stock of -the corporation was held by the plaintiffs and the defendant, Rayman W. Bortner, and that the corporation vtfas insolvent with a large judgment against it outstanding; that it had not been actively in business since August, 1923, and that the defendant, Rayman *W.*Bortner, held certain stock of the Aspers Fruit Products Company in his own name, when it was in fact the property of the J. 0. Leib Company, Inc. There was a prayer for general relief, and the specific relief sought were a receivership to preserve and liquidate the .assets of the insolvent corporation; the.transfer by Rayman W. Bortner to the receiver of the stock of the Aspers Fruit Products Company, and an injunction to prevent his disposition of 'the stock in any form before the transfer was made; and, finally, the distribution of 'the assets of the corporation and its dissolution.

The allegation in the bill, that gave rise to .the controversy below, .and this appeal, is the charge that the J. C. Leib Company, Inc., had advanced the sum of ten thousand dollars to the Aspers Fruit Products Company, which had issued its preferred stock in the sum of eight thousand and six hundred dollars, in part payment of this loan, to the defendant, Ray-man W. Bortner, who held the stock in his own name when it w'as, in fact, the property of the J. C. Leib Company, Inc. The lower court appointed a receiver, with power and authority to take charge of the assets of the company, and to collect its outstanding accounts receivable; and enjoined Rayman W. Bortner from making any disposition whatso*533ever of the sitares of preferred stock of the Aspers Ffnit Products Company then supposed to be held by him in his name in the amount of eight thousand dollars, until the further order of the court.

The answer of Rayman W. Bortner did not admit the allegations of the bill with respect to the company’s financial condition, and asserted that the three plaintiffs were largely in the debt of the company. With reference to the advance^ ment by the company to the Aspers. Fruit. Products. Company of the alleged sum of ten thousand dollars, the defendant, Rayman W. Bortner, admitted that advancements, had been made, but asserted that these had all been fully adjusted in 1921 between the four stockholders of the company, and that, while he was the holder of preferred stock in the Aspers Fruit Products Company, every share of this stock was his own private property, in which neither the plaintiffs nor the defendant company had the slightest interest. While the answer of the appellant was verified, and was filed on October 1st, 1923, yet the secured preferred stock of the Aspers Fruit Products Company was not held by the appellant, as this stock had stood in the name of his wife since May 5th, 1922, as his gift. A judgment *pro confesso*was obtained against the J. 0. Leib Company, Inc., and testimony was taken, and a decree was. passed .adjudicating the corporation to be insolvent, appointing a permanent receiver to wind up its affairs and declaring that the defendant, Rayman W. Bortner. should pay to the receiver the- sum of ten thousand dollars by reason of his. fraudulent conversion to his own use of warehouse eider certificates of that value belonging to the said the. J. C. Leib Company, Inc. It was. through the alleged wrongful conversion by the appellant of these certificates that he obtained the preferred stock in question.

The decree was dated on December 6th, 1923, and on January 8th, 1924, the defendant, Bortner, filed a petition setting forth that he had discovered certain evidence which was not in his possession at the1 time of the trial of the case, and asking that he be granted a rehearing. This petition was *534answered by the plaintiffs* and the lower court, passed its order on January 25th, 1924, dismissing- the petition.

1. On January 29th, 1924, the defendant, Kayman W. Bortner, took separate appeals from the decree of December 6th, and the order of January 25th. Consequently there are .two appeals on this record. The appeal from the refusal of the lower court to grant a rehearing with leave to offer additional testimony, will not be considered by this Court, as a rehearing, after a decree, is a matter in the sound discretion of the lower court and will not be considered here when there is nothing on the record to indicate any injustice sustained by the petitioner or any abuse of its power by the court before which the cause was heard. *Dorsey*v. *Hammond,*1 Bland, 463, 473, 474; *Walsh*v. *Smyth,*3 Bland, 9, 27, 28; *Tessier*v. *Wyse,*3 Bland, 28, 61; *Meluy*v. *Cooper,*2 Bland, 200. Furthermore, the decree was enrolled, and no rehearing could have been granted. *Miller’s Equity,*sec. 286; Code, art. 16, sec. 188. This leaves for consideration the propriety of the decree appointing a permanent receiver and awarding a judgment of ten thousand dollars *in personam*against the appellant.

2. So far as the appointment of a permanent receiver is concerned, no point is made by the appellant that requires attention. It is admitted that a receiver should be appointed, and there is nothing before this Court to1 indicate reversible error in the selection of one of the attorneys for three of the principal stockholders, who, with the appellant, are the chief parties in interest. In this connection, however, it may be said that, as a general rule, it is better practice not to appoint as sole receiver an attorney who represents one of the antagonistic interests. As the naming of the receiver is so largely in thq discretion of the circuit courts; they should be careful to choose those who have practical knowledge, experience and sound judgment in the matter involved, and wW shall be impartial with respect to the parties affected and the conflicting interests involved. In the course of the receivership, the court is in control, and possesses ample power to remove its *535original nominees, and appoint other or additional receivers as circumstances may, from time to time, require, in safeguarding the interests and rights of those concerned. *High on*Receivers, secs. 65-70, 820-829; *In re Colvin,*3 Md. Ch. 300; *Williamson*v. *Wilson,*1 Bland, 418. There is no reason to assume that these principles will not be enforced by the chancellor to the end of the proceedings in this cause.

3. The primary matter for the court on this appeal is to determine from a mass of testimony, largely made up of irreconcilable statements, what is the truth in respect to the inception, progress and conclusion of a transaction, whereby ten thousand dollars passed from the J. C. Leib Company, Inc., to the Aspers Fruit Products Company. Every essential fact is a subject of controversy. It is, however, agreed that for a number of years J. O. Leib carried on in Baltimore1, under the trade name of J. C. Leib Company, the business of selling fruits, and vegetables, and their products, as a commission merchant, in 1914, he formed a corporation, called The J. C. Leib Company, Inc., with a capital stock of thirty thousand dollars; and he transferred his business to it, and thereafter the business was conducted as a corporate enterprise. Leib1 retained control of the corporation, and became its president. Clayton E. Rutledge, Otha L„ Gladding and Rayman W. Bortner, the appellant, old employees, were kept, and became, in June, 1921. with Leib, the holders of all the capital stock. At this time, and until the filing of the bill of complaint,-the respective holdings of the stock of the incorporation were J. 'C. Leib, $16,000, Clayton E. Rutledge; $4,000, Otha L. Gladding, $4,000, and Rayman W. Bortner, $6,000, aggregating the authorized capital stock of $30,000.

From the beginning, J. C. Leib continued as the president of the corporation. The management of the corporate affairs was similar to that of a partnership. Notwithstanding Leib’s large interest, the profits were divided among all the shareholders, who, with the exception of Leib, were paid salaries. The business was, in 1921, in the hands of Leib, who. was. *536chiefly consulted with respect to financial matters; of Hut-ledge, who was the traveling salesman for five or six months of every year, and who was, also; when in Baltimore, a.salesman at the docks; of Gladding, who was not in the office but who was chiefly occupied in looking after the affairs of the corporation at Bolton Depot and on the wharfs; and of Bort-ner, who was the 'active manager of the corporation, its treasurer, with general charge of the office work and of the books.

Among the business concerns, with which the J. C. Leib Company, Inc., dealt, was the newly formed Aspers Fruit Products Company, a corporation located at Gettysburg, Pennsylvania. In order to make more secure the future patronage of this company, the J. C. Leib Company, Inc., in 1911, 1918, bought $10,000 of its common stock, upon the understanding that it would advance the purchase price of $10,000 for the account of the four stockholders, and would charge the sum of $2,500 against the personal account of each stockholder on the books of the company. This was done and for two- years the stock seems to have been in the name of the J. C. Leib Company, Inc., but, at the expiration of that period, every stockholder having paid for his portion of the stock in full to the Leib Company, certificates of stock were issued in the individual names of the four stockholders, and have since been so severally held. Since 1920, therefore, the I. C. Leib Company, Inc., has not held a share of stock in the Aspers Fruit Products 'Company, and has had no vote in its corporate affairs. The appellant has, however, advanced the theory that, while he was a director of the Aspers Fruit Products Company, he was as such director acting .as an agent of the J. O: Leib Company, Inc., and that, therefore, it was bound by his act in 'becoming the individual accommodation endorser of the Aspers Fruit Products Company, and obliged to indemnify him against any loss personally sustained as one of the seven directors of the Aspers Fruit Products Company, who had endorsed for its accommodation to the extent of some $86,000 or $87,000.

*537It is clear -that an agent’s authority is commonly available only for the principal’s benefit. So the conceded ownership in severalty by Leib, Gladding, Rutledge and Bortner of-$2,500 each in certificates of the common stock of the Aspers Fruit Products -Company is of itself a negation of any implied corporate grant of power by the J. C. Leib Company, Inc., *to*the appellant, to bind it for the obligations of the appellant that were voluntarily incurred in his own individual name and for the relief of a third party. If any benefit indirectly inured from the appellant’s endorsement, it was not to the corporation but to- Leib, Bortner, Gladding and Rutledge personally as stockholders of the Aspers Fruit Products Company. *Mechem on, Agency*(2nd Ed.), sec. 981.

No agent has implied power to- give away any portion of the corporate property or to create a corporate obligation gratuitously, as the property of tbe corporation belongs to its shareholders, and its use must be confined to the chartered purposes, except by unanimous, consent. ’ On tbis practical ground the authority to lend the credit of a corporation without a consideration, or to sign its name to negotiable paper for the accommodation of others, is usually not implied. If the corporation is. to be bound, the endorsement must generally have, been made with the knowledge and assent of all the directors and stockholders, and the rights of creditors must not be impaired. Even if tbe corporate form, be brushed aside as immaterial, and the relation of the four shareholders he regarded as a partnership, one partner eo-uld not so bind the firm without the consent of all its. members. *Morawetz on Private Corporations*(2nd Ed.), sec. 423; 3 *Cook on Corporations*(7th Ed.), sec. 774; *Savage Manufacturing Co.*v. *Worthington,*1 Gill, 284; 1 *Daniel on Negotiable Instruments,*sec. 365; *Navarre Realty Co.*v. *Coale,*122 Md. 494, 501; *Bear Creek Lumber Co.*v. *Bank,*120 Md. 566, 569 ; *Johnson*v. *Johnson Bros.,*108 Me. 272, 281, 26 Ann. Cas. 1303, 1313 *et seq.; Mechem on Agency*(2nd Ed.), sec. 976; *Johnson & Pitt*v. *Crichton,*56 Md. 108.

It is. true that, the dangerous, power of an agent to bind his, principal by endorsing negotiable paper- or by pledging *538bis principals credit for tbe benefit of a third person may be established by implication, but, if not proved to have been conferred in express terms or to be the result of an estoppel, the delegation of this power must be shown to-be necessarily implied from the very nature of the agency created, or to be an actual incident to an established course of dealing. *Mechem on Agency*(2nd Ed.), sec. 1001-1003.

The only basis for this contention of the appellant is tha-t, after the purchase of this stock, the Aspers Fruit Products Company requested Leib to join its board of directors in order to watch its- affairs-. When Leib declined, Bortner was selected as hi® substitute. The appellant stated in his testimony that he went upon the board of directors- of the Aspers Fruit Products Company as the representative of the J., O. Leib Company, Inc., but this assertion is emphatically and categorically denied by the three other stockholders, and there is nothing in the proof sufficient- to establish such a relation. There was no written authority ever conferred upon Bortner to use the credit of the corporation as an accommodation endorser. The appellant endorsed in his own name, and told Leib that he was not using the corporate name. No pretense is made -that either the corporation, or his associates- in the James C. Leib Company, Inc., ever authorized a single one of such endorsements, or ever had one submitted for consideration, approval or ratification, or that .anything was ever said or done that could be construed into establishing an agreement of any kind, or creating an estoppel, whereby the Jaimes C. Leib Company, Inc., was bound to save harmless the appellant from his independent acts and ill considered use of his own personal credit. In fact-, the appellant himself accepted the situation as one in which he co-uld not successfully maintain -tha-t his acts-as a -director of the Aspers Fruit Products Company were the acts of the J. C. Leib Company, Inc. All that he deduced from the situation was a “moral” responsibility of the other three stockholders to indemnify him for his- personal endorsement of -the paper of the Aspers Fruit Products Company. In speaking of his loss as endorser, the appellant *539testified that he said: “Mr. Leib, I felt that I represented the firm in this transaction. If you three insist that I stand this loss, I will have to stand it, but I tell yon now, I will not stand it gracefully.” This is an unequivocal recognition that neither the corporation nor the three stockholders were under any legal obligation to reimburse the appellant on any of his endorsements.

4. In order to determine the remaining questions on this record, it is necessary to ascertain what occurred in the course of the transaction assailed, and this has required a. careful consideration, weighing and review of all the evidence. To set out every conflict of proof resolved would serve no useful purpose. It is, therefore, best .to state the conclusion on the testimony in a narrative form, with some discussion of the testimony on the crucial points.

Although the Aspers Emit Products Company had borrowed heavily on its own and its directors’ personal credit, it was nevertheless in urgent need of money, and on June 15th, 1921, appealed for a loan of $10,000 from the J. C. Leib Company, Inc., that was to he secured by the pledge of certain negotiable warehouse receipts for eider in storage in Gettysburg which were worth more than the amount of the loan desired. The four stockholders met and considered the application. Leib, Rutledge and Gladding opposed a loan of $10,000, and the stockholders denied the request, but agreed to a loan of $5,000, with the certificates as collateral. The cheek for the loan was issued on June 15th.

At the time of the granting of this loan, the J. C. Leib Company, Inc., was not in a good financial condition. In order not to weaken its credit hv having the statement to its bank show a loan of its capital to the Aspers Fruit Products Company, it was agreed by the four shareholders that they would personally take the loan in equal parts, so that, the capital of their * corporation would not he impaired if the Aspers Fruit Products Company should fail to pay the $5,000 loan. For this, purpose, the personal account- of every one of the four stockholders was to be charged with the sum of $1,250 on the books of the J. O. Leib Company, Inc. Tf *540the Aspers Fruit Products Company piaid the note to the lender each of the four stockholders would then be credited with the payment of $1,250.

The financial distress of the borrower soon became acute, and its officers again went to Baltimore, and met Lieb and Bortner on June 23rd, and sought an additional loan of $5,000 on the same collateral. At first Leib opposed the loan, but according to the proof on the part of the appellant, lie finally agreed that the loan could be made as proposed, and a 'check of the lender* was. made out and delivered on the same day for $5,000.

At the making of this second loan the negotiable warehouse receipts for cider of the value of more than $10,000, which had been pledged as collateral for the first loan of $5,000, remained in the custody of Bortner, treasurer of the lender, as collateral for the first and second loans.

Leib denied that he had either been consulted or had consented to the second loan. While he is. contradicted by the witnesses for the appellant, it is established beyond doubt that no meeting of the four stockholders had been held for the purpose of re-considering their recent decision not to extend the credit. Moreover, neither Gladding nor Rutledge was present at the negotiation of the second loan, or had been consulted or informed about it, or had conferred any authority upon Bortner or Leib to malee it.

Whatever was the part played by Leib, it is. unquestionable that on July 23rd, 19’21, the loian to the Aspers Fruit Products Company was fully secured by more than $10,-000 of collateral in the form of negotiable warehouse receipts, which represented cider in cold storage in Gettysburg. These receipts were in the hands of the appellant as treasurer of the lender, and were faithfully kept by him for a period of two or three months.

While Bortner had in his possession as treasurer these negotiable warehouse receipts, Rutledge and Gladding testified that they found out that the loan had been made for the full $10,000, in defiance of the decision of the stockholders on June 15th, and they at once protested to Leib, who as*541serted that he knew nothing of this increase. Leib and Rutledge stated that they went to Bortner, who informed them that he had made the additional loan of $'5,000, but that their company held negotiable warehouse- receipts for eider to cover these lo-ans which would enable the company to earn at least $3,500 in commissions- for the sale of the cider.

A few months after the second loan, of June 23rd, 1921, the Aspers Eruit Products Company was unahle to meet its maturing obligations, and one o-f the seven directors had refused to. continue to endorse at the banks the company’s notes as they fell due-. As the- amount- of this- outstanding paper Was between $86,000 and $87,000, it became necessary for every one of the- directors to take care of between $12,000 and $13,000 of this debt. Bortner had not paid his share, and his liability was being carried temporarily by his co-directors. In order to- avoid bankruptcy, a plan of liquidation Was ¡proposed, and finally carried out-, whereby the creditors agreed to- surrender their -accounts, and (a) either to accept fifty *per centum*of their face value in cash, (b) or to take seventy *per centum,*of their claims- in an equivalent face value of the s-eoond preferred stock of that company, and the remaining thirty *per centum,*of the -claims in cash. In order to accomplish this, it became neces-sary for the directors each to pay in $9,000, amounting to- $63,000 for the seven directors, and to release their thirty *per centum*distributive share in cash on their claims, as creditors of the company and to take the preferred stock. By this me-an-s, the necessary funds to pay the company’s indebtedness! of $86,000 or $87,000 to the hanks were procured. In consideration o-f severally contributing $9,000 for this purpose, each director was released o-f a liability as endorser for the company of between $12,000 and $13,000, and each was to receive one hundred and seventy-two shares of the second preferred stock of the company, with a face Value of $8,600, hut with a then sale value of but $2,580.

Tbe failure of Bortner to pay his- $9,000 in cash would destroy this plan. If these negotiable warehouse receipts- of a value of at least $10,000 could be obtained, the cider *542could be sold, and the proceeds could take care of Bortner’s individual liability of $9,000.

Accordingly Aspers, the president, and Butt, the vice-president, of the Aspers Fruit Products Company, went to Baltimore, where Aspers and Bortner state they and Butt met Leib and submitted the scheme that Bortner should surrender all of the pledged negotiable warehouse receipts for the purpose of taking care of Bortner’s $9,000 liability; that the J. C. Leib Company, Inc., should (a) release $9,000' of the $10,000 loan of the Aspers Fruit Products Company with the J. C. Leib Company, Inc., and (b) should transfer $9,000 of the loan of the Aspers Fruit Products Company to a charge of a like sum against Bay man Bortner’s personal account on the books of the J. O. Leib Company, Inc., and (c) should allow the remaining $1,000 of the loan to the Aspers Fruit Products Company to stand as an advance against cider which was in cold storage in Baltimore, and which was then being offered for sale by the J. C. Leib Company, Inc.

The only excuse for this extraordinary proposal, whereby the corporate assets were to be applied to the prejudice of creditors and shareholders, rvithout any consideration therefor, to the payment of the private debt of the appellant, was that there was a moral obligation on the part of the J. C. Leib Company, Inc., to reimburse the appellant because he had become a director in the Aspers Fruit Products Company'' at its instance. It is needless to say that the law does not suffer the rights of creditors to be impaired by the diversion of corporate property to pay the private debt of its officer, even with the consent of *all*the shareholders. *Supra..*

Without the authority, knowledge or acquiescence of But-ledge and Gladding, the appellant delivered these pledged negotiable warehouse receipts to the Aspers Fruit Products Company, which sold the cider represented by the receipts, and applied the proceeds to the discharge of its. obligations- and of the appellant’s as its accommodation endorser. The appellant conceded that he had no power to make this deliv-*543•cry from any authorization of either the L C. Leib Company, Inc., or of Rutledge or of Gladding. With respect to Leib, the appellant said that, in a conversation among Leib, Aspers and himself, Leib “did not object to the surrender of the certificates and I took it for granted then it was all right to release these certificates because I was assuming the $9,000 ■obligation for which I was to settle later.” Aspers corroborated Bortner but Leib denied either having made this statement, or having been present at this conversation, or having ever sanctioned the surrender of these receipts.

When it was discovered by Rutledge and Gladding that the negotiable warehouse receipts, of a value then in excess ■of $10,000 had been appropriated by the appellant for his •own personal benefit and that of the Aspers Fruit Products 'Company, and that the debt of that company to the extent of $9,000 had been extinguished, a crisis was produced in the affairs of the J. C. Leib Company, Inc. After a short period of unrest, during which Bortner admitted that Rutledge and Gladding consistently maintained that their company was not responsible for Bortner’s losses in the Aspers Fruit Products Company, the appellant testified that he brought the controversy to a head at a meeting of the four stockholders, where it was agreed that the corporation would stand $5,000 of the loss, and the appellant $4,000, with the right to the appellant to get all that the Aspers Fruit Products Company would pay on account of its obligations to Portlier as one of its creditors on account of his responsibility as one of its accommodation endorsers. The witness, further asserted that the amount of $9,000 was to be charged on the books of the company against the personal account of each of the stockholders, and that accordingly he entered a charge of $1,250 against each of Ms eo^stockholders, and $5,250 against himself, which was his proportion ($1,250) of the loss, assumed by the corporation and the amount ($4,000) personally to be assumed by him.

This understanding is said to have been reached on September 5th, 1921, and the only other persons present were *544the two- women clerks, wbo said they were in the office on that day, but neither could recall hearing the conversation narrated by the appellant. The books were kept by the appellant, and were in his control, and the entries there made were by him in his own handwriting, so they are in the nature of self-serving declarations, and do not possess any positive evidential value, especially in view of the obvious- and admitted alterations made in the entries of the amounts of the charge against the appellant, who offered no convincing explanation of their two successive changes. In fact, the only corroboration is found in the testimony of Aspers, who swore that, some time about the close of 1921 or the first part of 1922, he was in Baltimore and had a conference with J. C. Lei'b in reference to the adjustment of a claim of J. C. Leib Company, Inc., against the Aspers Eruit Products Company on an open account of $2,281.50 and that in the course of their talk, Aspers asserted that Leib had said that he felt that the corporation should stand $5,000 of that obligation and Bortner $4,000, for which he would receive the $8,600-of second preferred stock of the Aspers Eruit Products Company and would get the benefit of whatever he would make out of it.

The Aspera Eruit Products Company had, with knowledge, received the full benefit of the appropriation by Bort-ner of the warehouse receipts, and had also been relieved thereby of its indebtedness to the J. C. Leib Company, Inc., to the extent of $9,000. ' So the testimony of its president cannot be given the weight of a disinterested witness, and he is flatly contradicted by Leib. Furthermore, Leib, Grlad-ding and Rutledge denied that the agreement narrated by Bortner had ever been made or contemplated.

In November, 1921, the Aspers Eruit Products Company issued and delivered to appellant a certificate for $8,600 of its second preferred stock, which was worth about thirty cents on the dollar, and later on advanced to sixty or eighty cents on the dollar. At the time of the filing of the bill of complaint, this stock was believed to be in the name of the-*545appellant, and tbe bill was prepared on that theory, but, although the appellant’s verified answer asserted that this stock was his own individual property, the evidence established that the appellant had transferred it as a gift to his wife on May 5th, 1922, which was twenty days after his marriage.

The record permits but one deduction. The appellant himself admitted that the loan of $10,000 by the J. C. Leib Company, Inc., was an extraordinary- transaction, and certainly, his surrender and use of the negotiable warehouse receipts are none the less remarkable. He made no pretense that Gladding or Rutledge participated in, or authorized the delivery of, these receipts. He failed to1 show1 any express or implied power delegated to himself or to- Leib warranting his act, and Leib denied all knowledge of conversion of the securities. He produced no corporate action, no common determination of the four stockholders, .empowering, consenting to, or ratifying his conduct. In the absence of anything to make it credible, he asked the lower court to believe that a failing corporation would surrender at least $10,000 of pledged marketable negotiable warehouse receipts, and would also forgive $9,000 of a $10,000 debt, and would accept the substitution of the precarious obligation of entries on the personal account of its own shareholders of a book charge against Bortner of $5,250, and of $1,250 against every one ol the remaining three parties in interest, Leib, Gladding and Rutledge. Such a rash course involved an impairment of the liquid capital, when financially embarrassed, to the extent of $10,000, a personal loss by Leib, Gladding and Rutledge of $1,250 each, and the present receivership.

The appellant was the associate in business of the other three shareholders, the treasurer of the corporation and its active manager, and, until the additional loan was made, had enjoyed their confidence. By reason of his official position and of his relation to the other stockholders', he was a fiduciary who had imposed upon him the burden of proof completely to account for the negotiable warehouse receipts which had been entrusted to him as collateral security for *546the corporate loan of $10,000. *Acker, Merrall & Condit Co.*v. *McGam,*106 Md. 536, 556, 551; *Macgill*v. Macgill, 135 Hid. 584, 593, 594. The crucial test of the adequate discharge of this 'burden was his ability to prove his account of what he alleged had been agreed upon by the corporate stockholders on September 5th. The experienced chancellor below, after an extended investigation and careful consideration, came to the conclusion that the appellant had failed in his proof. The testimony was taken in open court, where the judge had an opportunity to see the witnesses, to hear their evidence fresh from their lips, and to observe their expression and demeanor, so that, in weighing the testimony and passing on its credibility, his judgment was informed by the manner and conduct of the witnesses while testifying. The appellate court does not enjoy this advantage, and it has, therefore, no inclination to disturb the finding of the chancellor on issues of fact, especially when 'there is so much conflict in evidence, unless it be apparent that his determination is not supported by the clear weight of the proof. The court, moreover, is convinced that this cause is an illustration of that class of reprobated instances where a trusted officer of a private corporation has misused his position by appropriating the corporate property to the discharge of his. private debts, and that the decree for the value of the converted property was demanded by the proof.

(5) The appellant has urged as a ground of reversal that the chancellor did not give the appellant credit for a payment of $4,000 on account of the conversion of the warehouse receipts, and for $899.39 collected by the J. C. Leib Company, Inc., from the sale of the cider which appellant alleged was pledged as colláteral for the residue of $1,000 on the original loan. The contention with respect to tire first item of $4,000 is based on appellant’s testimony to the effect that he had paid to the J. C. Leib Company, Inc., on account of the $4,000, which he swore he assumed as his personal loss, the sum of $4,654.12, less a withdrawal of $500, but this amount was duly credited by himself on his personal *547account, whiqh, at the time of the severance of his connection with the J. O. Leib Company, Inc., showed him indebted to his company in the sum of $5,288.09 by his own figures. As there is included in this sum the charge of $5,250 on account of the Aspers stock, a deduction of the whole charge would still leave the appellant indebted to the extent of $38.59 on this account in addition to the value of the warehouse receipts. Nor can credit be claimed for the proceeds of cider sold for the account of the Aspers Fruit Products Company, as it was not available for that purpose. The appellant himself had opened a special account of his company’s transactions with the Aspers Fruit Products Company, and, among the credits given on that account, is the one for $899.39, leaving the Aspers Fruit Products Company indebted to the J. C. Leib Company, Inc., in the sum of $2,281.50.

Under the authorities cited and for the reasons assigned, we concur in the conclusion of the court below, and the decree will be affirmed.

*Decree affirmed, with costs to the appellees.*