Ebert v. Gitt

• Decision Date: 17 June 1902
• Citation: 52 A. 900,95 Md. 186
• Parties: EBERT et al. v. GITT.
• Court: Maryland Court of Appeals

52 A. 900

95 Md. 186

EBERT et al. v. GITT.

Court of Appeals of Maryland

June 17, 1902

Appeal from circuit court, Frederick county; James McSherry, Chief Judge.

Action by Harry N. Gitt against B. Ebert & Sons. From a judgment in favor of plaintiff, defendant appeals. Affirmed.

BOYD PAGE, SCHMUCKER, and JONES, JJ.

Fred. J. Nelson, for appellant.

John S Newman, for appellee.

JONES J.

In this case the appellee sued the appellant in an action of assumpsit in the court below, the cause of action being a promissory note, which appears in the record as follows:

$600.00. Frederick, Md., May 22nd, 1900.

Six months days after date we promise

to pay to the order of L.M. Alleman, six hun-

dred__________________________ 00/100

dollars at____________________ Value received.

B Ebert and Sons.

Indorsed: L.M. Alleman.

U.S. Rev. Stamps U.S. Rev. Stamps

6 cts. 12 cts. Cancelled.

Cancelled June 8, 1900. H.M. Cramer,

First National Bank, Deputy Collector.

Hanover, Pa. April 19, 1901.

Note duly stamped by H.M. Cramer, D.

C.Int.Rev., April 19, 1901.

The narr. contained seven counts, the first of which was upon the promissory note, and alleged that the same had been indorsed by the payee, Alleman, to the appellee. The remaining counts were the usual common counts. The appellant, who signed the note and was sued by the name of B. Ebert & Sons, demurred to the first count of the narr. and to the others pleaded the general issue. The demurrer was overruled by the court below, whereupon the appellant pleaded the general issue to the first count. The case was submitted to the court for trial without a jury, and the facts were agreed upon as follows: L.M. Alleman, who is mentioned as payee in the note sued on, was indebted to the appellant, who was doing business under the name of B. Ebert & Sons, in the sum of about $8,000, and that the appellant, about the time of the date of the note, through his agent, sought Alleman, and made the effort to get from him a payment on account; that, failing in this, the agent asked Alleman, if he should give him (Alleman) the notes of the appellant, whether he could get them discounted; that Alleman replied to this, "Yes; have them made in small denominations, and I will take them to the bank, have them discounted, and remit you the money at once;" that the appellant made out five notes in denominations of $600 and $700; that one of these notes is the one sued on in this case; that these notes were sent to Alleman at Littlestown, Pa.; that no consideration was given for any of these notes; that Alleman informed the agent of the appellant that he (Alleman) could get only one of the notes discounted, the banks refusing to discount the four other notes; that Alleman then said to the agent it was useless to do anything with the notes, and directed him where to get them; that this was between the 25th and the 31st of May, 1900; that the agent forgot the notes, and neglected to get them; that the agent called on Alleman several times after this, and demanded the notes, one of which was the note in suit in this case, but was met with excuses, and failed to have them delivered to him; that finally the agent recovered two of the notes, but failed entirely to recover the other two; that one of these latter was the note here sued on, which Alleman, in the early part of June, 1900, without the knowledge or consent of the appellant or of his agent, indorsed to the appellee to be discounted and credited to Alleman on account of loans of money made by the appellee to Alleman on the 23d of March and 21st of May, 1900; that the appellee accordingly had the note discounted at a bank in Hanover, Pa., and credited Alleman's account with the proceeds; that the note was forwarded by the bank at which it was discounted to a bank in Frederick, Md., where the appellant resided, for collection, and was returned protested, whereupon the appellee paid the note to the bank at Hanover, and retained the same unpaid to the time of suit brought; that appellee had no knowledge, at the time the note was indorsed and passed to him by Alleman, of how the latter came into possession of it, and knew of no business relation existing between Alleman and appellant, except what the note indicated, and did not know that the note was without consideration as between the maker and payee;that at the time the note came into the possession of the appellee it was insufficiently stamped according to the requirement of the United States internal revenue act, having on it stamps only to amount of six cents, which the appellee at the time overlooked; that no fraud was intended by the failure to sufficiently stamp the note upon the internal revenue act, which, as to the requirement for stamping promissory notes, was repealed June 30, 1901; and that the appellee, prior to bringing suit on the note, had the same restamped, as appears from the indorsement on the note. It further appeared that on January 14, 1901, the appellant filed in the circuit court for Frederick county a bill in equity against the appellee and his attorney, alleging the facts and circumstances in relation to the execution and delivery of the note here sued on; that it was without consideration; that the appellant had demanded a return of the note to him prior to its being indorsed to the appellee; that the appellee had received the note with knowledge that it was without consideration; and that he had placed the same in the hands of the attorney, who was made his codefendant, for the purpose of having suit brought on the same. It was also charged that at the time the note was executed and delivered to Alleman and when it was indorsed to the appellee it had not been duly stamped under the act of congress, and was, therefore, "invalid, and of no effect; *** that is to say, through mistake or inadvertence, and without any intent to defraud the government of the United States, an insufficient amount of stamps were put on said note, which fact was well known to" the appellee. The bill closed with a prayer for an injunction to restrain the appellee from prosecuting suit on the note, and that the note be ordered to be brought into court to be canceled, and for general relief. The answer of the defendant to this bill denied all knowledge of what had occurred in reference to the note in question between the maker and the payee thereof, and averred that the appellee was a bona fide holder of the note, for value, and without notice of any defect of title in Alleman, the indorser. As to the insufficient stamping of the note the answer averred that this was overlooked at the time the appellee acquired title to the note, and denied that such insufficient stamping of the note made the same "invalid, and of no effect," as charged by the appellant in his bill. Testimony was then taken in this case in equity, and the court, in disposing of the case, passed upon all the questions raised upon the pleadings, and held that it had been shown that the appellee was a bona fide purchaser and holder of the note in question, and had acquired title to the same for value, and before maturity of the note, and that under the proof in the case the note in question was not invalid by reason of not being sufficiently stamped at the time it was acquired by the appellee. The court then passed a decree dissolving the preliminary injunction that had been granted in the case and dismissing the bill of complaint, the decree reciting that the decree was "in accordance with the *** opinion" of the court. In the case at bar the appellant set up against the action of assumpsit, as a defense thereto, the same matters which were alleged by him as grounds for application for the injunction in the equity suit, and which were there passed upon by the court in disposing of that case. The appellee here contends that these matters of defense are res adjudicata, from having been passed upon in the equity suit, and that the decree in the equity suit is in itself a complete defense to the present action.

As we think the judgment below must be affirmed upon other grounds going more to the merits of the controversy here, we will not extend this opinion by discussing this question of res adjudicata. Upon the admitted facts in the case, which have been recited, the appellant submitted to the court below a prayer in which the court was asked to rule that if the court, sitting as jury, should find the facts appearing in evidence in reference to the origin of the note sued on; how it came into the possession of Alleman, the payee; the acts of Alleman in retaining possession of and transferring the note to the appellee; that the note was so transferred to the appellee for a valuable consideration; "and that said note, at...