*1 366 E. KEINER v. COMMERCE TRUST
MARY
COMPANY. 43, October Term, [No. 1927.] *2 8th, December Decided 1927.
The cause argued was O. before J., Rattison, Ad- Bond, kins, Ubnek, Offutt, JJ. Digges, Pakke, Sloan, Mi,lion-
W. Ortel and J. Leroy with was Lyell, whom T. Bayard Williams on the for the brief, appellant. Smith,
Horace T. for the appellee. delivered the J., of the Court. opinion Offutt, On or about November 13th, 1926, Cardwell-Fisher Fixture a Company, Maryland corporation, manu- engaged owed facturing, Commerce Trust a Company $12,000 on note which had matured on November 3rd, 1926, had been $5,000 on an protested, $69.93 overdue demand note, an $413.20 overdraft, balance on a note for $2,500. It its, was without cash assets, and it needed .about for $1,680 On that payroll. day Thomas L. Cardwell, of president B. corporation, Walter approached Bahn, vice-president of trust who it in the company, represented transaction herein referred him if the to, asked trust would company a discount note of the Spetzler Drug Company $3,115. Bahn to have declined to advise unless the that, trust better for its loans. a company given security As result Bahn between negotiations Cardwell, following between them. The plan agreed upon trust to take note demand new note for $5,500, $10,000, take an assignment $4,500 accounts discount receivable, note for and credit the Spetzler fixture company to retire the $12,000 to retire protested note, $5,000 $413.20 demand the balance pay due on the note, $2,500 and cash check for drawn note, .a to the roll order. pay The consummation of that however plan depended *3 endorsement of the new $10,000 note Conrad Keiner by and E. Mrs. Keiner. At that time Keiner was Mary not on any of the of the overdue fixture held paper company the trust and be it assumed that it availed company, may itself of the need opportunity presented by for company’s ready money its so that Mrs. loans, Keiner would be change individually in liable for at least which event it could $10,000, reasonably to collect at least that amount in the expect event that the fixture became unable to meet its company obligations.
Mr. Mrs. and Keiner held about $15,000 of the together fixture most of stock, which had been company’s purchased with her had been for some apparently money. She thirty in the retail notion and business in years engaged dry goods a business which she for Canton, sold eventually $30,000. Her been a husband had letter a carrier, few and, years after his wife had sold her his health business, began fail, he felt that he and would like to his resign and position invest some so that business, he could have an “easier” and in some he and his wife were induced to place, way invest the Oardwell-Fisher Fixture which was Company, in the manufacture of engaged and bank store, office, fixtures, show etc. He was cases, made eventually and vice-president director of the and company, appears have been employed it in minor which he received some capacity, forty dollars week. It have been successful fairly for a but towards the end of 1926 time;, its business was its assets were in- failing, liabilities were diminishing, it and was creasing, more difficult for becoming more it to secure and meet its credit, became obligations due. It had borrowed from the trust heavily company about its secu- company obviously becoming uneasy It was under that the rity. these circumstances referred plan to above was the trust and Mr. Card- proposed company, well, the fixture president order to company, carry undertook to secure the Mrs. out, endorsement of Keiner. He failed, his failure to Hahn. After however, reported that he and Balm went to see Mrs. and at together Keiner, interview fixture she, husband, company, and Mr. and Mrs. a note for Cardwell, signed $10,000 pay- able to the trust which contained this demand, power “And the attorney: does au- undersigned hereby thorize of record to on his any attorney behalf at appear time after the any date court of hereof, record, any confess judgment against for the face of undersigned this note with costs and collection fee.” Demand was 10% but made, the note not and thereafter, on Decem- paid, ber 22nd, 1926, confessed based on the judgment power contained in the note was entered the makers thereof against counsel fees. principal sum, *4 On Mrs. Keiner filed a motion 21st, 1927, to strike January that out the as on judgment against her, grounds, (1) it was it procured by fraud, (2) procured by it was without consideration. duress, The (3) it answered the was set motion, down plaintiff hearing, and thereafter the testimony taken, court have the overruled the record motion, although contains no order to that effect. From that formal action the present was taken. appeal
Before the evidence reviewing the relating appellant’s we will refer to the contention, which she taken position has 370 of te and duties the functions,
with the powers, reference strike out trial court in with motions to judgments dealing As it is that in of this character. we understand it, cases if keen it was the motion should have granted supported by the sufficient to establish defendant’s evidence any legally in that if the offered In other evidence words, contention. failure of con- the issues of or fraud, duress, connection with if was suffi- it conflicting, nevertheless, legally sideration was strike the court was bound to the issue, cient to the support issues to a No and submit the jury. authority out judgment in of that and we have has cited proposition, been support none. been able to discover all the is incidents, confession
A
by
possesses
judgment
to the
and is entitled
the same presumptions,
by
supported
as
other
credit,
judgment (Freeman
same faith and
any
the confession
that is so whether
1337),
Judgments, par.
his
in
or
another with
con
the
person
is
defendant
the
true,
Ibid. But while
widespread
sent.
in
warrants
of
notes,
embodying,
promissory
general practice
of
the
of
confession
authorizing
judgment
attorney
lends itself too
with counsel fees,
amount thereof, together
at
and in this state
least such
to fraud and abusé,
readily
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stricken out on motion
de
“are
judgments
freely
Necessarily, as all not it, the facts to matters alleged supporting to the merits of or surprise going controversy, deceit he must entry judgment itself, prove such facts a fair of the evidence. But as preponderance merits of the claim defenses which going *5 rests, different rule In such if judgment prevails. cases, the evidence adduced in of the motion is support sufficient the fair and persuade reasoned of an man judgment ordinary that there are and substantial sufficient for an grounds actual toas the merits of controversy the defendant should case, be deemed to have met the burden of has a showing meritorious defence. In other if the evidence is such words, persons could hon ordinary prudence and judgment and draw different inferences from favor estly fairly one it, ing and the other the plaintiff the court defendant, should not itself decide that conflict, but should submit to a jury. And while rule thus stated is not universally it seems to be approved, supported weight of authority, is consistent justice with and and is equity, harmony the decisions of this court. “Courts law exercise an equita ble jurisdiction over judgments entered confession upon
372 Balm was not for that. and responsible invested, surely no in the contention that there was merit any Uor is there the The fixture her note. for execution consideration it had funds over owed its and company employees have it to believed, them. She and which to pay the note the trust unless did sign that she true, been the and She note advance no “new” money. signed would roll. She for the advanced money pay trust company the the maker, the advanced money was an accommodation and at her credit (Code, least upon was advanced part payee consideration which afforded an adequate 13, 48), art. sec. her act. the ease turns on whether appellant that the finally So that her above, with the rule stated accordance showed, note fraudulent to the was procured by misrepresen- signature made her which were by Bahn, facts to tations- of material believed him be but'which she false, and known to false which she relied. true, he and to note her first to brought testified Cardwell She to it but that she failed sign then, on Friday evening, he that at that time Bahn; the next returned with day result of the and nervous out, she was worn upset and excited visit, recent death of daughter, “I wouldn’t this Bahn, note,” told Mr. sign again she is needn’t Mr. “There said, nothing it, you Bahn is all we want addi about it, everything right, only worry “I this time, want me-at said, my tional security.” ‘Why in.’me Mr. Bahn has been along, why drag husband going let Fixture ‘It will be a shame to the Cardwell-Fisher said, under; have built wonderful go they up reputa Company well. In the future tion and are so near money they doing into I told —I will be you again again coming plentifully. ‘If the condition as that, why said, factory good want me.’ Efe ‘We must have seen said, do additional you So I over little while—it thought again got rity.’ the men wouldn’t at on said my they get any pay nerves— Then I over I went and said: there ‘Well, guess factory. * * * I left for me to note. is nobbing signed do/ I I r. After the note and 31 signed guess satisfied, called and told them Bahn them up factory give * ** Mr, hundred dollars sixteen When pay payroll. was in home from Bahn around one my walking other. He didn’t more than place say anything just mind it was impressing nothing, keep my they only additional wanted as I security would everything well,— in first class *7 it, condition; was figure splendid factory and the order would be in and money coming was everything * * * all He that right. said was in the splendid factory a and it would be shame to condition, see anything happen to it because the Cardwell-Eisher now, had worked Company a wonderful in were up reputation they splendid shap much in e—as as to were they then. He say splendid shape Xou said, don’t have to worry about all we want this, is this note he renewed’; ‘You don’t said, have to about it, worry he is all everything said, it right’; abo-ut ?’ Of ‘Why worry I course didn’t know what condition the was in.” factory Conrad Keiner testified that Bahn Keiner, said to Mrs. “there was renewal of a note and nothing it, only that the was in business Mr. good condition and Cardwell mak was a wonderful ing reputation; the firm and the notes, * * * will all come out everything make I right, said, money. ‘I I was rid of note.’ thought this Mr. going get Balm Mr. is said, ‘Well, Cardwell to have going somebody your and Mr. Cardwell verified place that and he said was going Mr. away and see then night Crawford, Mr. Bahn went to sit over the door and wife was by the tele* my * Q. he What did about ? phone. the business A. say He be was fine said trade 'and knows he will building up make Q. Mr. Bahn that? A. said 3£r. Bahn money. said that, the customers are well work pleased and he is Q. the firm. Then making reputation what followed? After fliat one A. assurance of some 3£rs. taking my place, ” it.’ Bahn Keiner signed positively denied statements him Mr. attributed to and Mm Keiner, and Cardwell, was did not remember much present, who of what was said, hear Baku that the business was he good
but said did say interview, of the four at So that persons present shape. Mrs. not interested corroborated directly witness only two-said that Bahn did and, others, Keiner part, did to- and one the statements attributed him, make our for the was, This opinion, purpose not. evidence that he did the inference sufficient to motion, support make them. false whether these- statements were next
The inquiry That Bahn at the time be false. made, knofwn to- when we inferrible from think, in fact fairly were false is, which the com- that contracts It is undisputed evidence. it had materialized, prac- receive not expected pany its there, -a few men were working down, shut tically only it after two weeks was still unpaid, nearly for $12,000 note workmen were of its the current wages had been protested, it them, which from to-pay and it was without funds unpaid over- it the bank on other bank, owed overdrawn at bank accounts to- it had notes, due assigned it had had, all receivable, which practically im- would condition believe that its to- reasonable grounds *8 prove. Bahn knew these statements next is whether
The question rule them. Whatever be the when he made may be false, that, sup- established law of this state it is the elsewhere, “knowl- misrepresentation, of fraud upon a based port charge making representation” of the by p-arty edge falsity Evans, v. 123 Md. Boulden Reynolds 372; must shown. be- Stillwell, v. Md. stated in 100 543. the case last cited: Or, of action is actual fraud, nothing “The foundation this will suffice. misrepresentation, short of Consequently, his true-, to be induced believed by speaker though will or not sustain an action for de- negligence, ignorance ceit. There must be either of of the- knowledge falsity such reckless or indifference to truth in mak- representation, is it as held actual While the ing equivalent knowledge.” in fraud an court that case connection with discussing deceit, action of to- the language equally applicable scienter must be in this case. But while fraud charged of actual or be of knowledge shown proof proved, may knowledge.” Rey circumstances which impute “facts and Evans, v. nolds supra,. Bahn and 6th, 1926, that on November shows
The proof the trust went E. treasurer of Edwin Kershaw, company, had but while fixture they over the books of the company, said that both they access to the books, they complete from reliable information could shape gain they of strength testified that however, them. Cardwell, of a reduction asked for the books their they examination of he de And although line discount. of the fixture company’s on November condition nied that the shaky said that his optimism, no facts gave justify 1st, in the went the company 1st and the time between November in an it was 1926, December 1st, hands of a receiver, which they because coiitracts condition, mainly unsatisfactory that Bahn seemed also said He did not materialize. expected in as was not coming facts that work familiar with the to be Bahn men. off their laying expected, suggested they Feb the company furnished by testified that a statement furnished whereas one $110,000, a net worth showed ruary a net worth of showed to’ the transaction immediately prior was explained and that the difference $80,000 to $82,000, inventory, taken no had on the Cardwell ground he went that when that explanation; and that he accepted had him the company or Cardwell told over Miller the books, to about accounts receivable amounting outstanding Miller, plus Cardwell and heard from and that what he led him to that the hand, what was on believe inventory He was correct. statement of the net worth the company Keiner interview at the at the further said that Cardwell, *9 Mr. in the to interest a Crawford said that expected he home, he would invest or reasonably’sure was company, forty fifty that he was not familiar with the it; thousand dollars had never off affairs of the company, suggested men, laying with its had to do' Kershaw testified operation. nothing learn from its books, while could nothing he he believed that, from what Cardwell told him that the was in company “pretty In connection with good shape.” testimony, this it must remembered that Bahn knew fixture the had allowed company note to to that go protest, other notes which it owed the bank overdue that it was over unpaid, roll that its and that it drawn, due, was without pay it, funds and that the bank had taken an assignment to pay all of its accounts receivable practically amounting and a note of the fo'r $4,500, Spetzler Drag Company additional it was to ad the security unwilling rail en vance for the unless. Mrs. Keiner factory pay money note. Whilst an $10,000’ dorsed a inference be drawn might from that we cannot say favorable testimony appellee, fair of an man of and reasoned judgment ordinary could not from it that reasozzablecare and izzfer prudence statements attributed to him when he made Bahn, MRS. Azzd laiew that were false. our opinkta Keizzer, met buz-den her with therefore the placed upon appellant to that issue. respect re- Keiner
The is whether Mrs. remaining question only an attributed to Bahn to lied the statements note. not have signed extent that without them she would she and whilst did, not in words Whilst she did SO' many say owed money, it is true that she knew the company attended stockholder it and and it that she was a too the evidence indicates and while stockholders’ meetings, roll, meets its pay that she knew that it had zio money while there is some evideizce to show that the thing tending which induced her to the note was the really sign necessity for the ízeverthelessthat evidence roll, securing money pay must be considered connection with the fact undisputed she had against persistezzt positively, inportunities of both Bahn and refused the note Caz’dwell, sign, until Bahn had assuz-edher that she razz zzorisk because thereby, izz and with splezidid shape, the further fact that she could have raised the for the roll znoney pay on her own without security guaz*anteeing debt of a insolvent and the corporatioiz, practically improbability that, *10 she her to the note, in view of decided refusal sign very state- would have done so unless she had believed finally incurred no risk. ments to Bahn that she attributed thereby In the of the all court, considering of a opinion majority the burden which the evidence in the defendant met case, the motion, she assumed of showing, purposes her contention that there was substantial ground to statements to the note was induced Bahn’s signature in our it follows that her. Accepting view, opinion have been the motion strike out the should judgment granted.
Ther are to rulings upon four exceptions unsigned) (one In is sufficient to to them it evidence. respect questions after examination we have discovered careful say in these rulings. reversible error reversed, and cause re-
Order appealed from manded accord- proceedings for further views in this ance expressed opinion. C. JJ., dissent. J., Pabke, Sdoan,
Bond, order. On motion for modification of proceed- this was remanded for further Inasmuch as case impose is within the trial court power ings, out judgment terms or conditions act striking of the the rights be protect may proper necessary the order and it therefore unnecessary modify parties, in this case. 17th, 1928.
Filed February notes warrants of and it is attorney, necessary justice should they exercise liberally jurisdiction, may on therefore, of the application defendant, vacate them and him to make a permit defense on merits, provided ’’ of a proper meritorious defense made Freeman showing Reeside, 1340. 34 Judgments, C. J. Wisner par. 415; v. Neuhauser, International Co. Harvester v. supra; supra; v. Phillips Taylor, supra. these we principles mind, will now consider the Having evidence to the relating reasons which relies appellant motion her to strike out the The first third judgment. reasons, duress and failure of namely bo consideration, may of. There is not the disposed evidence that briefly slightest any practiced duress was Balm Card- upon Mrs. Keiner. did go well home to induce her to sign but treated her used note, they courteously, threats, they and, asked her to Bahn they although sign it, voluntarily sug- that she consider the alone with gested matter her husband, that conference withdrew from during the room, not she and did return until called them. The compul- only Mrs. Keiner was that affecting sion exercised condition in which her of the and that of her money liubsand