Herring v. Citizens Bank & Trust Co.

Decision Date13 June 1974
Docket NumberNo. 398,398
Citation321 A.2d 182,87 A.L.R.3d 527,21 Md.App. 517
Parties, 87 A.L.R.3d 527 James F. HERRING et al. v. CITIZENS BANK AND TRUST COMPANY.
CourtCourt of Special Appeals of Maryland

John J. Pyne, Chevy Chase, with whom were McChesney & Pyne, Chevy Chase, on the brief, for appellants.

Robert L. Burchett and Francis J. Ford, Rockville, for appellee.

Argued before MORTON, MOYLAN and MOORE, JJ.

MOYLAN, Judge.

On December 23, 1969, the Citizens Bank and Trust Company, the appellee, through its attorney, instituted confessed judgment proceedings in the Circuit Court for Prince George's County on two demand notes held by the Bank against Lyle E. DeWees, James F. Herring, and Worth W. Offutt, the appellants. Judgment was entered on December 30, 1969. As a result of the institution of that action, the appellants (Lyle E. DeWees and James F. Herring, jointly, and Worth W. Offutt, individually) filed suits against the Bank alleging 1) malicious use of process, 2) abuse of civil process, and 3) business defamation.

The cases were removed to the Circuit Court for Calvert County and consolidated for trial. At the close of the plaintiffs' case, a directed verdict verdict was granted in favor of the defendant as to the business defamation count. At the conclusion of the defendant's case, a directed verdict was granted in favor of the defendant on the second count alleging abuse of civil process. The jury returned a verdict in favor of the plaintiffs on the malicious use of process count, awarding to Lyle e. DeWees compensatory damages in the amount of $39,000 and punitive damages in the amount of $30,000; to James F. Herring, compensatory damages in the amount of $21,000 and punitive damages in the amount of $30,000; and to Worth W. Offutt, compensatory damages in the amount of $29,000 and punitive damages in the amount of $30,000.

A motion for judgment n. o. v. or, in the alternative, a motion for a new trial was filed by the defendant-appellee. After a hearing, the judgment n. o. v. was granted, and judgment was entered in favor of the defendant. The court further ruled that if judgment were to be reinstated upon appeal, the court would grant the motion for new trial unless the plaintiff DeWees agree to a remittitur of the compensatory damages in excess of $7,500; the plaintiff Herring, to a remittitur of compensatory damages in excess of $2,000; and the plaintiff Offutt, to a remittitur of compensatory damages in excess of $5,000; and further that all plaintiffs agree to a complete remittitur of punitive damages.

On appeal, the plaintiffs-appellants raise four contentions:

1) That the trial court erred in granting defendant's motion for a directed verdict on the count of business defamation;

2) That the trial court erred in granting defendant's motion for a directed verdict on the count of abuse of civil process;

3) That the trial court erred in granting judgment n. o. v. because the evidence in the case was sufficient to support the jury's verdict on the count of malicious use of process; and

4) That the trial court abused its discretion in conditionally granting remittitur or, in the alternative, a new trial.

The Facts of the Case

The facts underlying the institution of confessed judgment proceedings are a tangled skein. The object of all the complicated legal gransactions is a tract of land, known as 'the Spencer tract,' situated in Prince George's County. The first relevant transaction for present purposes was on March 13, 1956, when Maude B. Eslocker and her husband sold the property to S. Aubrey Spencer for an indicated price of $65,000. On that same day, Spencer executed a deed of trust 1 for the benefit of Maude B. Eslocker (hereinafter the Eslocker mortgage), evidenced by a promissory note for $45,000.

On May 31, 1963, Spencer and his wife conveyed the property to Lyle E. DeWees and Robert H. Law, as joint tenants, for an indicated price of $100,000. On that same day, DeWees and Law executed a mortgage to Spencer and his wife (hereinafter the Spencer mortgage), evidenced by a promissory note for $48,568.70. Then on June 5, 1963, DeWees and Law, in turn, conveyed the property to T. D. Burgess and wife and Frank G. Principe and wife. Under a Joint Venture Agreement, dated June 4, 1963, the title was to be held for the benefit of Lyle C. DeWees, Oscar R. Duley, T. D. Burgess and Frank G. Principe. Upon Duley's death, James Herring and Worth W. Offutt (the two appellants along with the appellant DeWees) purchased his interest.

Three years later, on April 1, 1966, three of the joint venturers (and the wives of two of them) determined to redeem the property from its encumbrances. On that date, Lyle C. DeWees and wife, James Herring and wife and Worth W. Offutt borrowed $18,614.52 upon a demand note from the defendant Citizens Bank. With this, they purchased 'the Eslocker mortgage' from its holder. This deed of trust was then endorsed in blank and delivered to the defendant Bank by the borrowers as collateral security for the demand loan.

The same borrowers, on June 9, 1966, undertook to accomplish the same redemption with respect the Spencer mortgage. They borrowed $40,882.82 from the Citizens Bank and with it purchased the Spencer mortgage note from its holder. That mortgage note was then endorsed in blank and delivered to the Bank by the borrowers as collateral security for the demand loan. As of the dates of these two loans by the Bank, both of the collateral notes (the Eslocker deed of trust and the Spencer mortgage) were past due, and, at the option of the holder, the entire balances were due and payable.

In early 1968, disagreement broke out among the joint venturers and resulted in litigation. An action was filed by the joint venturers requesting the appointment of trustees to oversee the sale of the Spencer tract and to assure the proper distribution of the proceeds among the joint venturers and their just creditors. By a court order of June 5, 1969, Hal C. B. Clagett and Thomas B. Yewell were appointed trustees. As early as March 11, 1968, Yewell, then acting as attorney for DeWees, wrote to the Citizens Bank about the pending litigation and gave his legal opinion that since the notes held by the Bank as collateral security were secured by encumbrances against the property, they would be priority claims against the proceeds of the sale of the property.

In April, 1969, the joint venture having failed to pay taxes due on the property, Prince George's County was preparing tax foreclosure proceedings. On April 17, 1969, the Bank, in writing, demanded payment on the two demand notes. On April 24, 1969, the Bank retained C. Edward Hartman, II, to enforce the payment of the money owed the Bank.

Although payments on the demand notes had been made regularly through April, 1969, the Bank refused the tender of the May payment since it had already made demand for full payment. On May 5, 1969, Hartman informed Yewell that the Bank wanted payment on the demand notes and that it was the Bank's intention to foreclose on the two mortgages if full payment was not immediately forthcoming. Yewell asked Hartman to forebear from such actions because 1) a foreclosure sale would deprive him of the sale commission he would get if the property were sold through the equity proceeding and 2) he (Yewell) though that a sale through the equity proceeding would bring a higher price. Hartman replied that he would take no further action without notifying Yewell.

On May 20, 1969, the Bank filed a petition reciting that the Eslocker mortgage was in default, that the Bank was about to begin foreclosure on the deed of trust and asking that Ronald Council be appointed trustee for the purpose of such foreclosure. Meanwhile, Yewell and Clagett had been appointed on June 5 as trustees to sell the property. Knowing that this decree was being prepared, Hartman had asked that the decree include a paragraph specifying that both the deed of trust and the second mortgage held by Citizens Bank be paid from the sale proceeds as priority items. The decree, prepared by Yewell, made no mention of the Bank's priority claim.

On June 6, 1969, the day after the appointment of the trustees, the Bank was permitted to intervene in the equity proceeding, seeking a clarification of the decree. By a petition filed on June 7, the Bank recited that it held the two demand notes together with the deed of trust and the second mortgage, that they were in default and that if the property was to be sold free and clear of the mortgages that the Bank might lose the land which was its security on the demand notes. The Bank also petitioned the court to instruct the trustees to pay in full the two collateral notes, if the property were to be sold free and clear of the liens.

On September 26, 1969, the Spencer tract was sold by the trustees for $200,000, free and clear of all liens. The advertisements for the sale recited that the property was 'to be sold free and clear of all encumbrances.'

On September 30, 1969, Hartman sent Yewell a sheet showing the balance due on all the notes and asking the date of settlement in order to appear, collect the Bank's money, and reassign the liens and notes. On October 7, Yewell replied, stating that a verified claim should be filed and notifying Hartman that the trustees would disburse the amount due to the Bank upon ratification of the sale and audit. On October 14, the Bank filed the verified claim, seeking payment of $69,004.02. This represented the face value of the two mortgages. From it the Bank desired to pay the amount due on the two demand notes ($51,649.21) plus something in excess of $5,300 in attorney's fees plus an extra cushion to be returned to the trustees after the Bank made its disbursements.

On December 11, 1969, Yewell wrote Hartman that both trustees and the auditor were in agreement that the claim, as based on the collateral notes, could not be paid and called for...

To continue reading

Request your trial
27 cases
  • Palmer Ford, Inc. v. Wood, 22
    • United States
    • Court of Appeals of Maryland
    • 8 Febrero 1984
    ...Md. 80, 87, 205 A.2d 302, 306 (1964); Bartlett v. Christhilf, 69 Md. 219, 230, 14 A. 518, 521 (1888); and Herring v. Citizens Bank & Trust Co., 21 Md.App. 517, 531, 321 A.2d 182, 189, cert. denied, 272 Md. 742 (1974). None of these Maryland cases involved use of criminal prosecution as a co......
  • Alexander v. Washington Gas Light Co.
    • United States
    • United States District Courts. United States District Court (Columbia)
    • 23 Febrero 2006
    ...Plaintiff must prove that process of the court was actually abused or perverted once it has issued. Herring v. Citizens Bank & Trust Co., 21 Md.App. 517, 528-537, 321 A.2d 182 (1974). Plaintiff must show the willful use of process after it was issued in a manner not contemplated by law to s......
  • Lewis-Davis v. Balt. Cnty. Pub. Sch. Infants
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • 30 Abril 2021
    ...element of it) are limited to an improper arrest of the person or an improper seizure of property." Herring v. Citizens Bank and Trust Co., 21 Md. App. 517, 536, 321 A.2d 182 (1974); accord One Thousand Fleet Ltd. P'ship v. Guerriero, 346 Md. 29, 45-46, 694 A.2d 952, 956 (1997) ("The plaint......
  • Campbell v. LAKE HALLOWELL
    • United States
    • Court of Special Appeals of Maryland
    • 2 Julio 2004
    ...itself, however, is not actionable, even if it is done with an "ulterior motive" or "bad intention." Herring v. Citizens Bank and Trust Co., 21 Md.App. 517, 534, 321 A.2d 182 (1974). Rather, "`[s]ome definite act or threat not authorized by the process, or aimed at an objective not legitima......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT