Brenner v. Plitt

• Decision Date: 14 December 1943
• Docket Number: 25.
• Citation: 34 A.2d 853,182 Md. 348
• Parties: BRENNER et al. v. PLITT.
• Court: Maryland Court of Appeals

34 A.2d 853

182 Md. 348

BRENNER et al. v. PLITT.

No. 25.

Court of Appeals of Maryland

December 14, 1943

Appeal from Circuit Court of Baltimore City; Joseph N. Ulman, Judge.

Bill of interpleader by Home Life Insurance Company against Clarence M. Plitt, Hannah Brenner, Fannie M. Pehr and others, to determine who were entitled to the proceeds of two insurance policies issued by the plaintiff on the life of Joseph Brenner. From decree directing distribution of the fund deposited, Hannah Brenner and Fannie M. Pehr appeal.

Reversed and remanded.

William L. Rawls and Louis M. Silberstein, both of Baltimore (Silberstein & Gorfine, of Baltimore, on the brief), for appellee.

Before SLOAN, C.J., and DELAPLAINE, COLLINS, MARBURY, GRASON MELVIN, ADAMS, and BAILEY, JJ.

BAILEY Judge.

This is an appeal by Hannah Brenner and Fannie M. Pehr from a decree of the Circuit Court of Baltimore City, passed on January 18 1943. By said decree the clerk of said court was directed to make the following distribution of the fund deposited with him under a decree of interpleader, passed on October 4 1941, upon a bill of complaint of Home Life Insurance Company against Clarence M. Plitt and others, including the appellants:

First. To pay the court costs.

Second. To pay to Clarence M. Plitt the sum of $5,210.65, in full and final payment of the unpaid balance of a mortgage and note of May 19, 1939.

Third. To pay to William L. Rawls and Louis M. Silberstein, counsel for Plitt, the sum of $521.06 as counsel fee, under the provision of the note of May 19, 1939.

Fourth. To pay the balance, in equal shares, to Hannah Brenner and to Fannie M. Pehr.

The money paid into court under the decree of interpleader represented the proceeds of two life insurance policies issued by Home Life Insurance Company on the life of Joseph Brenner, in which policies Hannah Brenner was named as beneficiary. The policies had been assigned to Plitt as collateral security for the note of May 19, 1939, under circumstances hereinafter more fully explained.

The Brenner family consisted of the following: Joseph Brenner and Hannah Brenner, his wife, and Ethel A. Brenner, Henry Brenner and Nathan Brenner, their children. On December 23, 1937, the Brenners executed a mortgage for $2,500 upon their home at 2302 Tioga Parkway, in Baltimore City. The mortgage was taken in the name of Edward Azrael, but it is admitted that the money was advanced by Plitt. The sum actually advanced to the Brenners was $1,920. The difference of $580, after the payment of the recording expenses, was divided between Azrael and Plitt, the evidence being vague as to the amounts received by each. The mortgage note provided for payments in installments on the principal, and interest at the rate of six per centum. In determining the total amount due from the Brenners to Plitt on May 19, 1939, the amount due on the mortgage was fixed at $235.25, but in arriving at this figure interest at the rate of six per centum was calculated upon the face amount of the note and mortgage, $2,500, rather than upon the sum of $1,920 actually received by the Brenners.

Joseph Brenner and his son, Nathan Brenner, were co-partners, trading as Joseph Brenner and Son, in the scrap iron and junk business. Commencing on April 30, 1938, with a loan from Plitt in the amount of $500, there were many transactions between Plitt and this firm, involving almost daily loans from Plitt in various amounts, until May 17, 1939. In the course of their business, the firm had opportunities to buy certain scrap and junk for cash, but, not having the necessary funds available, the money was borrowed from Plitt, with the understanding that when the merchandise was sold, the money advanced by Plitt was to be repaid to him, together with an additional amount for the use of the money. Plitt contends that these various deals constituted joint ventures, and that he was to receive a certain percentage of the profits for the use of the money advanced by him. But he testifies that Brenner, meaning the father, personally guaranteed the repayment of the loans and that he, Plitt, was to be repaid in full, even if the particular transaction resulted in a loss rather than a profit. The evidence offered by the appellants shows that what Plitt received for the use of hs money was an arbitrary amount, designated by Plitt, upon the receipt of the proceeds of the various sales, without regard to the profit that may have been made on the particular transaction. The bookkeeper for the Brenners testifies that she made all entries on the books in accordance with instructions given her by Plitt and that the money repaid to him, in excess of the money loaned or advanced by him, was entered on the books in a column headed 'Commission'.

There were other personal loans to Joseph Brenner for personal and household expenses, and upon their repayment Plitt was likewise paid a commission in excess of the legal rate of six per centum. On May 19, 1939, the amount due to Plitt on the loans to Joseph Brenner and Son and on the personal loans to Joseph Brenner was the sum of $9,729.35, but, in making this calculation, no credit was given to the Brenners for the amount of 'commissions' paid, in excess of interest at the legal rate.

Joseph Brenner had five policies of insurance on his life, in the total face amount of $21,000, in four of which policies his wife, Hannah Brenner, was designated the beneficiary and in the fifth, the beneficiaries were his wife and thrce children. Brenner had borrowed on said policies and was paying interest on the loan at the rate of six per centum. This insurance loan was refinanced for Brenner by Plitt, and the five policies were assigned by Brenner to Plitt as security for the loan, with interest at three per centum. This transaction was carried on the Brenner books as a separate item, and the balance due thereon on May 19, 1939, was $10,378.92.

Another transaction between the parties involved the purchase of certain assets of Geiser Manufacturing Company, of Waynesboro, Pennsylvania. The sum of $3,100 advanced by Plitt in this matter was carried on the Brenner books as a separate item, upon which no interest was paid, and was taken into consideration in figuring the total amount of the indebtedness on May 19, 1939. While a considerable part of the record is concerned with this item, the facts in connection therewith are not material to the decision of the issues involved in the instant case. Many of the facts are detailed in the opinion of this court in the case of Berg v. Plitt, 178 Md. 155, 12 A.2d 609, 13 A.2d 364.

The other principal item taken into consideration in arriving at the amount of the note and mortgage of May 19, 1939, was the sum of $1,125, owed by Joseph Brenner and Son to Plitt and secured by a chattel mortgage on a motor driven shear. There is no dispute about this item.

Some time in May, 1939, Plitt decided to discontinue loaning or advancing money to Joseph Brenner and Son and to Joseph Brenner, individually, and at his suggestion and request, all the Brenners, on May 19, 1939, executed to Plitt a mortgage and collateral note, payable thirty days after date, in the amount of $24,459.93. This amount represented the total indebtedness from the Brenners to Plitt as of that date, and included the balance due on the Azrael mortgage, the running account of the loans to Joseph Brenner and Son and to Joseph Brenner, individually, the insurance loan, the money involved in the Geiser Manufacturing Company transaction, and the chattel mortgage on the shear, with a slight adjustment of interest. The mortgage was a lien on the Brenner home at 2302 Tioga Parkway, all the household furniture therein, a 1935 White automobile truck and the motor driven shear. The five life insurance policies, in the face amount of $21,000, were assigned to Plitt as collateral security for the note, which bore interest at the rate of six per centum.

Thereafter no further advances were made by Plitt, except certain fees in connection with the Geiser Manufacturing Company transaction, about which there is no dispute, but the indebtedness was credited by him with payments received from time to time from the sales of merchandise by the Brenners and with disability payments made under certain of the insurance policies. $Joseph Brenner died on January 17, 1940. A dispute then arose between the surviving Brenners and Plitt as to the correct amount due him on the indebtedness of May 19, 1939, and there was an agreement between the parties that Plitt should proceed with the collection of three of the life insurance policies and apply the proceeds thereof as a credit on the indebtedness, but that the amount due on the two policies of Home Life Insurance Company was not to be collected by him until final agreement among them as to the correct amount due to Plitt, and that, upon their failure to reach such an agreement, the proceeds of the two policies, in the approximate amount of $7,000, were to be paid into court, under bill of interpieader, and distributed in accordance with the decree of the court. The only items disputed by the Brenners were the balance on the Azrael mortgage of $235.25 and the running account of $9,729.35.

In the meantime, in settlement of a suit which had been instituted in the Superior Court of Baltimore City by Fannie M. Pehr against the Brenners, the Brenners assigned to her an undivided one-half interest in and to the claim or claims of every kind, character and description which they had against Plitt or Home Life Insurance Company.

When the Brenners and Plitt failed to agree upon the correct amount of the indebtedness, Home Life Insurance Company filed its bill of complaint asking that the parties interplead. The decree of...