Groom v. Margulies

• Decision Date: 05 May 1970
• Docket Number: No. 368,368
• Parties: Horace C. GROOM, Jr. v. Herbert MARGULIES t/a Marko Distributors, Inc.
• Court: Maryland Court of Appeals

Page 691

257 Md. 691

265 A.2d 249

Horace C. GROOM, Jr. v. Herbert MARGULIES t/a Marko Distributors, Inc.

No. 368.

Court of Appeals of Maryland.

May 5, 1970.

Ronald G. Kane and B. George Ballman, Kensington (Staley, Prescott & Ballman, Kensington, on the brief), for appellant.

Edward L. Goldman, Washington, D. C. (Harvey A. Jacobs, Washington, D. C., on the brief), for appellee.

Argued before HAMMOND, C. J., and BARNES, FINAN, SMITH and DIGGES, JJ.

BARNES, Judge.

This appeal involves the principal question of whether or not the Circuit Court for Montgomery County obtained personal jurisdiction over the appellee, Herbert Margulies t/a Marko Distributors, Inc. (Margulies) by service under the Maryland 'Long Arm' Statute, Code (1957), Art. 75, § 96, as amended. There is also a question of whether or not the Affidavit of Service of the appellant, Horace C. Groom, Jr. (Groom) sufficiently complied with the provisions of Maryland Rule 107 a 2.

Groom, on May 28, 1968, filed a declaration, copy of account, affidavit, motion for summary judgment and notice in the Circuit Court for Montgomery County against 'Herbert Margulies, t/a Marko Distributors, Inc.' The declaration alleged that on May 16, 1966, Groom entered into an agreement with Margulies, the defendant, whereby it was agreed that the defendant provide laundry equipment including washers and dryers and to deliver a five year lease for the housing of this equipment in the Alpine Apartments in Oxon Hill, Maryland for the total price of $17,304.00; that Groom paid the defendant $10,000.00 on account of the equipment and lease as required by the agreement, but the defendant failed and refused 'to perform his obligations under said Agreement' notwithstanding Groom's readiness, willingness and ability to pay the remaining balance of $7,304.00 and to perform all of his (Groom's) obligations under the agreement upon like performance by the defendant; that on or about November 15, 1966, Groom seeking performance of the defendant and being ready to tender the balance due, discivered that the defendant 'had left the state of Maryland, wholly failing, neglecting and refusing to perform' pursuant to the agreement and no part of the $10,000.00 had been returned or repaid to Groom; that because of the failure of the defendant to complete performance of the contract and the failure to return the monies advanced, the defendant became indebted to Groom for $10,000.00 and, although 'demand has been made upon him to pay the said sum,' the defendant has failed, refused and neglected to pay it, or any part of it, and neither has anyone paid it or any part of it so that there is due and owing from the defendant to Groom, the plaintiff, the sum of $10,000.00 with interest and costs. (Emphasis supplied.) Groom then set out five common counts and claimed $10,000.00 with interest and costs.

The itemized statement of account filed with the declaration indicates four payments: on May 16, 1966, $1,000.00; on May 24, 1966, $2,000.00; on August 1, 1966, $6,000.00 and also on August 1, 1966, $1,000.00, a total of $10,000.00. It recited that the $10,000.00 total was for 'Monies expended and paid to Herbert Margulies.'

The motion for summary judgment is in the usual form and recited that 'the Defendant has no defense to the Plaintiff's claim, and there is no genuine dispute between the parties as to any material facts, and that the Plaintiff is entitled to judgment as a matter of law.' The supporting affidavit of Groom recites that he is competent to testify and had personal knowledge of the matters set forth in the affidavit. It recites in paragraph 2 that on or about May 16, 1966, Groom, the plaintiff:

'entered into a certain agreement with the Defendant wherein it was agreed that the Defendant, HERBERT MARGULIES, t/a MARKO DISTRIBUTORS, INC., would deliver 34 General Electric Washers and 17 Huebsch Dryers together with a lease in the Alpine Apartments in Oxon Hill, Maryland to the Plaintiff for a total consideration price of $17,304.00.'

The affidavit then continues:

'3. That the Plaintiffs exclusively dealt with HERBERT MARGULIES and delivered payment to him in the amount of $10,000 but that the said Defendant did wholly fail and refuses to perform the contract obligations as he had agreed to do, and the said Plaintiff did pay to the Defendant the sum of $10,000.00 as agreed; that the Defendant is therefore indebted unto the Plaintiff in the full and true sum of $10,000.00 without deduction and over and above all discounts, set offs and other just grounds of defense, beside interest and costs.'

Also on May 28, 1968, counsel for Groom filed a 'Line' requesting the Clerk to receive and file the declaration and to 'issue a summons in said case to the Defendant, Herbert Margulies, t/a Marko Distributors, Inc., who is a resident of the State of New Jersey at 312 Monmouth Drive, Cherry Hill, New Jersey, under Article 95(75) Section 94 et seq. and to be served and returned to this Court under Affidavit of service as required pursuant to Maryland Rules 107 a 2.'

Thereafter counsel for Groom mailed a copy of the declaration, itemized statement of account, line to the clerk, affidavit and motion for summary judgment by registered mail with a return receipt requested and delivery restricted to the addressee only, to Margulies at his New Jersey address. On August 5, 1968, counsel for Groom executed an affidavit reciting the mailing of the papers mentioned by registered mail, with the request and restriction mentioned to 'Herbert Margulies, the Defendant, at 312 Monmouth Drive, Cherry Hill, New Jersey, where the Defendant was outside of the State of Maryland warranting such service and that the aforesaid copies were mailed to the Defendant on June 5, 1968, and that they were in fact received by the Defendant on June 7, 1968, as evidenced by his signature on the original return receipt which is attached to this affidavit pursuant to Maryland Rules 107(a)(2).' The attached return receipt indicates receipt on June 7, 1968, and is signed 'Herbert Margulies.' The affidavit and attached return receipt were filed in the case on August 6, 1968.

On August 23, 1968, the declaration, itemized statement of account, and affidavit in support of the summary judgment were presented to Judge Pugh, who on that date passed an order which recited consideration of the papers mentioned and that Herbert Margulies had been duly summoned and notified to answer, but had failed to answer within the time allowed. The order provided for the entry of summary judgment as prayed in favor of Groom against Margulies. The order of August 23 set the matter for ex parte proof before the Court to establish the amount of damages and costs sustained by the Plaintiff.

Thereafter, on November 15, 1968, a hearing was held, ex parte, before Judge Moore. At this hearing, Groom appeared with counsel and testimony was taken. Four checks were entered as exhibits together with the original agreement dated May 20, 1966, and the lease dated June 1, 1966. The first two checks dated May 16 and 24, 1966, for $1,000.00 and $2,000.00 respectively were made payable to 'Marko Distributors Inc.' in Groom's handwriting; the next two checks both dated August 1 for $6,000.00 and $1,000.00 respectively were made payable to Marko Distributors in Groom's handwriting, the letters 'Inc' being added in another's handwriting. It is conceded, however, that the letters 'Inc' were added prior to deposit. The endorsement on all of the checks is the same 'For deposit only, Marko Distributors, Inc., 7411 Riggs Road, Hyattsville, Md.' The last check for $1,000.00 in addition has the endorsement 'Herbert Margulies.' The agreement is on a printed form headed with the words 'Marko Distributors, Inc., 7411 Riggs Road, Hyattsville, Maryland' and is signed 'Herbert Margulies' after the printed words 'Sales Manager's Approval.' The lease of June 1, 1966, recites that it is between Marko Distributors, Inc., as lessor, and Groom, as lessee, and is signed by the lessor as follows:

'Herbert Margulies Seal

(MARKO DISTRIBUTORS, INC.)'

After considering the testimony and a supporting memorandum of counsel for Groom, Judge Moore on February 26, 1969, passed an order (filed February 27, 1969) entering judgment against Margulies, the Defendant, for '$10,000.00 plus 6% interest from August 1, 1966, of $1,543.56 for a total of $11,543.56 plus costs.'

On June 26, 1969, the defendant Margulies filed a motion to set aside the judgment of February 27, 1969. This motion is as follows:

'Herbert Margulies, Defendant, by Harvey A. Jacobs, his Attorney, moves the Court to set aside its default judgment entered in this case on February 27, 1969 because:

'1. Such judgment was obtained as a result of fraud, mistake and/or irregularity and defendant has acted in good faith and due diligence under the circumstances and has a meritorious defense, are (sic) of which is set forth in more particularity in the attached affidavits of Defendant Margulies and Mr. Harry Foucks, which are prayed to be read as a part hereof.

'2. The Defendant has not been properly served with process and is not now, and was not at the time the action was brought, a resident of the State of Maryland or transacting business within said State.'

The affidavits mentioned in the motion to set aside the judgment were in relevant part as follows:

(a) The Affidavit of Margulies:

'HERBERT MARGULIES, being duly sworn, deposes and says:

'1. I am a resident of the State of New Jersey and reside at 312 Monmouth Drive, Cherry Hill, New Jersey. In June, 1968, I received a certified letter containing a Declaration in the above-captioned case. My intention at the time of receipt was to forward same to my attorney for appropriate action. On June 19, 1968, the master bedroom of my home in New Jersey was completely destroyed and there was smoke and water damage throughout the house causing my entire family to move to temporary...