Mohr v. Universal C.I.T. Credit Corp.

• Decision Date: 27 March 1958
• Docket Number: No. 148,148
• Citation: 140 A.2d 49,216 Md. 197
• Parties: Carl H. MOHR v. UNIVERSAL C. I. T. CREDIT CORPORATION.
• Court: Maryland Court of Appeals

Page 197

216 Md. 197

140 A.2d 49

Carl H. MOHR v. UNIVERSAL C. I. T. CREDIT CORPORATION.

No. 148.

Court of Appeals of Maryland.

March 27, 1958.

John B. Fox, Baltimore, for appellant.

Eli Baer, Baltimore, for appellee.

Before BRUNE, C. J., and HENDERSON, HAMMOND, PRESCOTT and HORNEY, JJ.

HORNEY, Judge.

Carl H. Mohr (Mohr) in an action against Universal C.I.T. Credit Corporation, Inc. (C.I.T.), in the Circuit Court of Baltimore City (Oppenheimer, J.) sought a declaratory decree providing that a conditional contract of sale of an automobile, purportedly executed by Mohr to Suburban Nash, Inc. (Suburban), dealer in automobiles, and assigned by Suburban to C.I.T. was null and void because the signature thereon was a forgery. C.I.T. denied that Mohr's signature was foreged, and claimed that even if it were, he was estopped to deny the validity of the lien ¹ created by the conditional contract of sale. The chancellor found that the purported signature was in fact a forgery, but ruled that Mohr was estopped to assert the forgery as a defense to the lien. From the decree passed by the chancellor in accordance with his finding Mohr appealed.

On February 28, 1955, a conditional contract for the sale of a Nash automobile, bearing the purported signature of Mohr as the buyer, was assigned by Suburban to C.I.T. C.I.T. paid $2,200 to Suburban for the contract which was immediately recorded in Baltimore City where Mohr resided, but a certificate of title showing its lien noted therein was not delivered to C.I.T. on the date the contract was purchased.

About two months later, on April 28, 1955, Mohr borrowed $2,200 from the Second National Bank of Towson (the Bank), purchased the same Nash automobile from Suburban, and executed a chattel mortgage to the Bank. The Bank promptly recorded the chattel mortgage in Baltimore City. On the same day Mohr purchased the automobile, he applied to the Department of Motor Vehicles (the Department) for a certificate of title. When the title was issued on the same day, there was no notation of a lien in favor of the Bank. The next day, April 29, the Bank contacted Mohr and demanded that a notation of its lien be entered on the title. Mohr requested the Bank to return the title to Suburban, whereupon he went to Suburban and signed in blank an application for a duplicate title so that the lien of the Bank could be inscribed thereon. Apparently someone at Suburban indicated on the application for a duplicate that the lien was in favor of C.I.T. The Department issued the duplicate title on April 29 showing a lien in favor of C.I.T., and mailed the duplicate to C.I.T. Someone at Suburban, by using a typewriter equipped with 'pinpoint' type, similar to that used in the Department to note the existence of liens, typed on the original title the notation of a lien in favor of the Bank, and returned the original to the Bank. Thus, two titles were outstanding on the same automobile, each showing a lien in favor of different lienors.

Immediately after recording its contract on March 1, 1955, C.I.T. mailed to Mohr's residence, 2135 West Baltimore Street, a number of documents in three separate envelopes including (i) a policy of automobile insurance, (ii) a credit life insurance policy, an accident policy, a bail bond certificate and a credit identification card, and (iii) a payment book and account record which Mohr was to use in making payments to C.I.T. The branch manager testified that it was customary for C.I.T. to mail such documents to the customer, but no copies of the accompanying letters were ever kept. There was testimony that each of the letters was mailed through 'normal company procedure', and that, although the envelopes bore a return address, none of them was ever returned to C.I.T. Mohr denied receipt of any letters or documents from C.I.T.

C.I.T. received ten payments of $95.68 each, the monthly sum stipulated in the contract. A coupon out of the same payment book, which had been sent by C.I.T. to Mohr, was attached to each payment. The payments were made by checks of Suburban. It was not unusual for customers to make payments to dealers, who would in turn make payment to the finance company by the check of the dealer. On June 28, 1955, a payment was made for only $93.68, two dollars less than the payment required by the contract. A form letter was addressed to Mohr by C.I.T. to his home address, requesting payment of the deficit. The next day a representative of Suburban paid the two dollars due in cash to C.I.T. Payments to C.I.T. terminated on January 28, 1956. Suburban went out of business soon thereafter. C.I.T. demanded from Mohr the remaining $1,913.60 due under the contract, but Mohr disclaimed all responsibility for the debt.

Although Mohr's son was a salesman for Suburban, there is no evidence in this record that he knew of the fraudulent practices attributable to Suburban, but he was involved in the transactions which gave rise to Mohr v. Sands, 1957, 213 Md. 206, 131 A.2d 732. There is also no evidence that the father and son were engaged one with the other in any illegal transactions. And no one from Suburban was called to testify as to the transactions that led to this litigation. There was proof, however, that the son did have access to the father's house. He had a key and it was 'sort of a second home' to him.

The Bank was paid in full, presumably by Mohr, and it had no interest in the outcome of this litigation. Both C.I.T. and the Bank were unaware of the fraudulent practices carried on by Suburban.

The chancellor found as a fact that Mohr received the mail addressed to him from C.I.T. and we are unable to find that the chancellor was clearly erroneous. Maryland Rule 886, subd. a. The branch manager of C.I.T., in addition to other testimony as to its practice with respect to addressing and mailing letters documents, and notices to its customers in envelopes having a return address printed thereon, testified that: 'The normal [company] procedure is that [the] coupon book and * * * notice [of the company's record of the transaction] is mailed out to the customer to the address that is noted on the record.' Such testimony was admitted subject to exception, but no motion was subsequently made to strike it out. While proof of the custom was not as full as it might have been, we believe that it was sufficient for the chancellor to find, as he did, that there had been a substantial compliance with the universal rule to the effect that the receipt of a letter by the addressee is presumed, when it is shown that the letter, properly stamped and addressed, was posted in the mails. 1 Wigmore, Evidence, (3d ed. 1940), Sec. 95, and cases therein cited. The more recent Maryland rule, although it is the minority view, is that the mere existence of an office custom or practice without more, is sufficient to warrant a presumption that a particular letter was posted. ² Proof of the custom may be established simply by proving the existence of a system of addressing and mailing, and that it was the invariable office practice to comply with such system. Lawrence Bank of Pittsburgh v. Raney & Berger Iron Co., 1893, 77 Md. 321, 26 A. 119; Wolf v. Union Trust Co., 1926, 150 Md. 385, 133 A. 121. Cf. Lansburgh v. M. P. Howlett Fish & Oyster Co., 1927, 153 Md. 312, 138 A. 269. See also Goodman v. Saperstein, 1911, 115 Md. 678, 81 A. 695, and Kolker v. Biggs, 1953, 203 Md. 137, 99 A.2d 743, which are not directly in point, however, since the witness in each case testified that he personally mailed the letter in question. Testimony of the employee, whose duty it was to collect outgoing letters in the office of the sender and deposit them in the mails, is no longer necessary. The testimony of any employee or officer, who has personal knowledge of the custom or practice used in his office to effect the addressing and mailing, is all that is required to raise a presumption of the receipt of a particular letter by the addressee.

The chancellor further found as a fact that the signature of Mohr on the conditional contract of sale had been forged, but be held that Mohr was estopped from asserting the forgery as a defense to the lien of C.I.T. on his automobile. We agree.

It is true, of course, that mere silence will generally not raise an estoppel against a silent party. Furst v. Carrico, 1934, 167 Md. 465, 175 A. 442, 96 A.L.R. 375. See also Biggs v. Stueler, 1901, 93 Md. 100, 48 A. 727, and Ryan v. Canton National Bank, 1906, 103 Md. 428, 63 A. 1062, with holdings similar to the Furst case. And see Martin v. Call Carl, Inc., 1953, 202 Md. 399, 96 A.2d 504. But when the circumstances are such as to require a silent party to speak so that an injured party may take steps to protect himself against a loss which might otherwise result, then the party, who has remained silent when it was his duty to speak, will be estopped from asserting the defense he would have had but for his silence. First National Bank of Union Bridge v. Wolfe, 1922, 140 Md. 479, 117 A. 898, 25 A.L.R. 172; Union Trust Co. v. Soble, 1949, 192 Md. 427, 64 A.2d 744.

In Furst v. Carrico, supra, a seller of goods on credit sued two alleged guarantors of payment. The supposed guarantors denied that they had signed a guaranty. The plaintiffs contended that the defendants were estopped to deny their signatures because they had made no reply (i) when notified that credit would be extended and the goods sold and delivered on the faith of the supposed guaranty, and (ii) when the supposed guarantors were notified of the failure of the buyer to pay in full. There we said, 167 Md. at page 469, 175 A. at page 443:

'Mere silence, standing alone, does not have * * * [the effect of an estoppel]. On the facts it must appear that the statements or charges, if wrong, would naturally, or with such great probability have brought contradiction, that absence of contradiction gave assurance of truth. And the fact that the failure to...