Jolly v. First Union Sav. & Loan, Inc.

• Decision Date: 04 June 1964
• Docket Number: No. 297,297
• Citation: 235 Md. 161,201 A.2d 4
• Parties: Raymond G. JOLLY, etc. v. FIRST UNION SAVINGS & LOAN, INC.
• Court: Maryland Court of Appeals

Page 161

235 Md. 161

201 A.2d 4

Raymond G. JOLLY, etc. v. FIRST UNION SAVINGS & LOAN, INC.

No. 297.

Court of Appeals of Maryland.

June 4, 1964.

Francis N. Iglehart, Jr., Towson (Sidney C. Miller, Jr., Baltimore, on the brief), for appellant.

Richard A. Reid, Towson (Kenneth C. Proctor, and Proctor, Royston & Mueller, Towson, on the brief), for appellee.

Before BRUNE, C. J., and HAMMOND, HORNEY, MARBURY and SYBERT, JJ.

SYBERT, Judge.

This appeal represents another episode in the large volume of litigation which has arisen following the recent failure of several savings and loan associations.

Between October 9, 1961, and January 10, 1962, the appellant, Raymond G. Jolly, as trustee for Laymen's Home Missionary Movement in Philadelphia, deposited in the appellee, First Union Savings & Loan, Inc., a newly formed Maryland savings and loan association, sums of money totaling $10,000.00. The money was deposited in a savings share account and thus the appellant became what is known as a free shareholder of the association. On May 22, 1962, the appellant executed a withdrawal order for $9,800.00 and mailed it and his pass book to the appellee, which received them on May 24, 1962. The order was not honored on the asserted ground that it was not on the withdrawal form prescribed by First Union, although it appears that Jolly was not notified of the rejection at that time. A week later, on May 31, 1962, the State of Maryland by its Attorney General, filed a petition on the equity side of the Circuit Court for Baltimore County asking for the appointment of a receiver for First Union and for the forfeiture of its charter for alleged violations of State law in the conduct of its business. On the same day, the equity court passed an order 'freezing' the assets of First Union, one provision of which enjoined it from paying out any sums of money on free share accounts. On June 6, 1962, the vice-president of First Union wrote Jolly, returning his pass book and withdrawal order and informing him of the 'freeze' and the pending equity case. On July 24, 1962, the equity court appointed a conservator for First Union and, on August 21, 1963, a receiver was appointed after an appeal had been taken to this Court. First Union Savings & Loan, Inc. v. Bottom, 232 Md. 292, 193 A.2d 49 (1963).

In the meantime, after the appellant had learned that his withdrawal order would not be accepted, he filed a summary judgment action against First Union in the Circuit Court for Baltimore County, at law, on June 29, 1962, to recover $9800.00 from his account. The law court, on July 26, 1963 (which was after the equity court had appointed a conservator for the appellee but before the appointment of the receiver), entered a judgment for costs in favor of First Union, holding that the equity court's assumption of jurisdiction over the affairs of First Union deprived the law court of jurisdiction in Jolly's suit. After stating that it felt 'persuaded that multiplicity of litigation is frowned upon by the Courts', the court advised the appellant that he still had the opportunity to file a petition for priority of payment in the receivership proceeding on the equity side of the court. This appeal by Jolly is from the law court's judgment.

Claiming error in the disclaimer of jurisdiction, the appellant has attempted to limit this appeal solely to the question of jurisdiction of the law court, stating in his brief that 'there is not at issue here the question of the appellant's rights as a withdrawing depositor and whether the action taken by him prior to the appointment of a receiver over the appellee entitled him to the position of a judgment creditor.' On the other hand, the appellee has maintained both in the lower court and here, first, that the law court's jurisdiction was ousted, or at least suspended, by the prior equity proceeding; and second, that even if the law court had jurisdiction, the appellant is not in the position of a creditor and therefore was not entitled to a judgment against the appellee association which would have the effect of giving him priority over the remaining shareholders in the distribution of the appellee's assets.

Since the lower court based its judgment for the appellee upon its disclaimer of jurisdiction, it did not decide whether the actions of the appellant placed him in the position of a creditor. (The trial judge did state as dicta in his memorandum opinion, however, that 'This member of the Court would find as facts (if Law had jurisdiction) that: * * * c. Payment should have been made when requested; d. Plaintiff would be entitled to judgment if this Court had jurisdiction.' Thus, the reason for the appellant's attempt to exclude any consideration of the merits on this appeal is apparent.) While ordinarily this Court will not rule on questions which were not decided by the lower court, Maryland Rule 885 permits us to decide questions presented to, but not ruled upon, by the trial court, in order to provide guidance to it or to avoid the expense and delay of another appeal. For a recent case in which the rule was applied, see Kent v. Mercantile-Safe Dep. & Tr. Co., 225 Md. 590, 593, 171 A.2d 723 (1961). If we were to hold, as the appellant urges, that the law court had jurisdiction, and reverse and remand, without reaching the question of whether the appellant is in the position of a creditor, it is highly likely that there would be another appeal to this Court, after the law court had ruled on the merits of the appellant's claim. Therefore, in order to avoid the expense and delay of another appeal to this Court, we will consider the question of whether the actions of the appellant were sufficient to entitle him to a judgment as a creditor of the appellee. Cf. Lee v. County Board of Appeals, Md., 200 A.2d 159 (1964).

The appellant contends that since a receivership proceeding is generally regarded as an action in rem, whereas a suit at law in contract is an action in personam, a law court has jurisdiction to determine the rights of a creditor of an insolvent debtor, even after receivership proceedings have been instituted in equity against the debtor. To support this contention the appellant has relied mainly upon Riehle v. Margolies, 279 U.S. 218, 49 S.Ct. 310, 73 L.Ed. 669 (1929); Chicago Title and Trust Co. v. Fox Theatres Corporation, 69 F.2d 60, 91 A.L.R. 991 (C.A.2, 1934); Anno. 91 A.L.R. 996; and 75 C.J.S. Receivers § 131b. We note, however, that the authorities cited deal with the relationship of creditor and debtor; if that relationship did not exist in the instant case, those authorities would not seem to be in point. As a secondary argument, the appellant contends that the appellee waived any possible objection to the jurisdiction of the law court by submitting to its jurisdiction in the first instance, and only raising the issue of jurisdiction later in the case. The appellant points out that although a fundamental want of jurisdiction of the subject matter cannot be waived, where a court has general jurisdiction of the subject matter a lack of jurisdiction over the particular case may be waived, citing Moore v. McAllister, 216 Md. 497, 512, 141 A.2d 176 (1958). In answer to this argument the appellee maintains that the appellant was not a creditor but a free shareholder and that therefore the equity court acquired jurisdiction over First Union and the subject matter, Jolly's free share account, and hence over Jolly. Such jurisdiction having attached, it is argued, the law court had no jurisdiction in the fundamental sense to entertain Jolly's subsequent suit, and consequently failure of First Union to object...