Gordon v. State Nat. Bank of Bethesda

Decision Date02 April 1968
Docket NumberNo. 151,151
Citation239 A.2d 915,249 Md. 378
CourtMaryland Court of Appeals

Karl G. Feissner, Hyattsville, (William L. Kaplan and Alpern & Feissner, Hyattsville, on the brief) for appellants.

James E. Murray, Washington, D. C., (John P. Arness, Washington, D. C., on the brief) for appellee.



On 31 August 1965, Milton Gordon and Adrienne Gordon, his wife, the defendants below and appellants here, delivered to the plaintiff-appellee, State National Bank of Bethesda (the Bank), an agreement 1 which was intended to guarantee a loan to be made by the Bank to Frontiers Capital Corporation (Frontiers).

On 29 August 1966, Frontiers, of which Gordon was treasurer, borrowed.$19,000 from the Bank on a 90-day confessed judgment note. When the note was not paid, the Bank, on 16 February 1967, entered a judgment by confession in the Circuit Court for Montgomery County against Frontiers and Mr. and Mrs. Gordon for.$19,000, plus interest in the amount of $336.19, attorneys' fees of $2850, and costs. Acting under Maryland Rule 645 b, 2 Gordon and his wife moved to vacate the judgment which had been entered against them, and from a denial of their motion, this appeal was taken.

In the lower court, under the mistaken impression that the agreement of guaranty had been given the Bank two days after the loan was made, the Gordons argued that the guaranty, having been given after the execution of the principal contract, was not supported by consideration and relied on Roberts v. Woven Wire Mattress Company, 46 Md. 374 (1877).

Judge Shook, who heard the case below, was quick to point out that the guaranty, actually dated 31 August 1965, preceded the note of 29 August 1966 by nearly a year. In the argument of the case before us, the appellants, while not abandoning the contention that the guaranty was not supported by consideration, insist that the guaranty, given to secure 'a loan of $30,000 made or to be made' to Frontiers, cannot be availed of by the Bank to secure the repayment of a loan of.$19,000, and add, that in any event, Mrs. Gordon cannot be held liable, since there was no consideration for her joinder in the guaranty.

The Bank counters, and we think quite properly, with two contentions: first, that the Gordons' affidavit, filed in support of their motion to vacate the judgment simply states that the guaranty '* * * is without consideration in that neither the defendant, Milton Gordon, nor the defendant, Adrienne Gordon, received or gave consideration for their signature thereon (and) that such document was issued without consideration between the parties' and that this does not amount to the showing of a cause 'why the judgment should be vacated, opened or modified' within the contemplation of the Rule. On the contrary, the Bank says, the averment of lack of consideration is a mere conclusion and does not meet the requirement that the facts and circumstances on which the debtor relies be alleged. Cropper v. Graves, 216 Md. 229, 139 A.2d 721 (1958); Remsburg v. Baker, 212 Md. 465, 129 A.2d 687 (1957); Bolotin v. Selis, 212 Md. 239, 129 A.2d 130 (1957); Foland v. Hoffman, 186 Md. 423, 47 A.2d 62 (1946); Keiner v. Commerce Trust Co., 154 Md. 366, 141 A. 121 (1927).

In Bolotin v. Selis, supra, where a motion to strike a judgment by confession was based on the grounds that the debtor 'is not now and never was indebted to the plaintiff as alleged,' that 'this defendant never promised to pay the plaintiff as alleged,' and that 'this defendant signed the promissory notes, * * * solely for the accommodation of the plaintiff, and his son Augustus Selis * * *', 212 Md. at 241, 129 A.2d at 131, Judge Henderson, who filed the opinion for the Court, after pointing out that our decisions require that a motion to strike must set out fully all the facts and circumstances on which the debtor relies, and that a general denial of liability is not sufficient, said:

'In the instant case the grounds of the motion amount to no more than the general issue pleas. Even the claim, that the judgment debtor was an accommodation maker, would seem to set up a defense that could be presented under the general issue pleas. Cf. Citizens Nat. Bank of Pocomoke City v. Custis, 153 Md. 235, 243, 138 A. 261, 53 A.L.R. 1165, and Foland v. Hoffman, supra. Under the cases heretofore cited, we think the allegations of the motion fall short of a full disclosure of the facts and circumstances, tending to show that the judgment should be stricken out, and if any proof was offered at the hearing, the record does not disclose it. In this connection, we think there is perhaps an analogy to the practice in regard to summary judgments, where it has been held that a general denial is not enough. Cf. Frush v. Brooks, 204 Md. 315, 320, 104 A.2d 624, and cases cited. The opening of a confessed judgment is based on the exercise, by courts of law, of a quasi-equitable jurisdiction, Keiner v. Commerce Trust Co., 154 Md. 366, 371, 141 A. 121; cf. Pioneer Oil Heat v. Brown, 179 Md. 155, 16 A.2d 880. The requirement that there be a proper showing of facts, which if proved would constitute a meritorious defense, is a prerequisite in any case where it is sought to vacate a judgment or decree. Mere conclusions of the pleader are not sufficient. There must be a showing of facts, by affidavit or testimony, that present a controversy for determination by a court or jury.' 212 Md. at 242-243, 129 A.2d at 132.

See, Guerassio v. American Bankers Corp., 236 Md. 500, 204 A.2d 568 (1964). Cf. Plitt v. McMillan, 235 Md. 349, 201 A.2d 787 (1964); Stankovich v. Lehman, 230 Md. 426, 187 A.2d 309 (1963).

Secondly, the Bank says that since lack of consideration was the only ground for dismissal referred to in the Gordons' affidavit 3 or asserted in their behalf below, the ambiguity or lack of certainty which is alleged to obtain between the guaranty and the note cannot be raised on appeal. Rule 885, which provides that 'This Court will not ordinarily decide any point or question which does not plainly appear by the record to have been tried and decided by the lower court; * * *' is simply enunciatory of the practice which has existed since 1825. 4 Maryland Code (1951) Art. 5, § 10; Schiller v. Lefkowitz, 242 Md. 461, 219 A.2d 378 (1966). See, Panamerican Consulting Co., Inc. v. Broun, 238 Md. 438, 209 A.2d 575 (1965); Jolly v. First Union Sav. & Loan, Inc., 235 Md. 161, 201 A.2d 4 (1964).

We share the views advanced by the Bank. The lower court was correct when it denied the Gordons' motion, since the affidavit alleged no facts or circumstances raising issues to be determined by a jury. Certainly, the alleged ambiguity between the guaranty and the note cannot be raised for the first time in this Court.

Even if this were not the case, however, the Gordons could not prevail. The guaranty agreement 5 was in a form customarily used in commercial banking, carefully drawn to protect the Bank from technical defenses which might otherwise be asserted by the guarantors because of extensions or renewals without notice, the acceptance of additional security, or failure to make presentment, demand, or protest.

Judge Delaplaine, speaking for this Court in...

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