Murphy v. Stubblefield

• Decision Date: 01 May 1918
• Docket Number: 4.
• Parties: MURPHY et al. v. STUBBLEFIELD.
• Court: Maryland Court of Appeals

104 A. 259

133 Md. 23

MURPHY et al. v. STUBBLEFIELD.

No. 4.

Court of Appeals of Maryland

May 1, 1918

Appeal from Superior Court of Baltimore City; Robert F. Stanton Judge.

Action by Thomas W. Stubblefield against William J. Murphy and others. Judgment for plaintiff, and defendants appeal. Reversed and remanded for new trial.

Argued before BOYD, C.J., and BRISCOE, THOMAS, URNER, STOCKBRIDGE and CONSTABLE, JJ.

John L G. Lee and J. Albert Baker, both of Baltimore, for appellants.

Charles F. Diggs, of Washington, D. C., and Watson E. Sherwood, of Baltimore, for appellee.

STOCKBRIDGE J.

This action is one in assumpsit, and the first six counts in the declaration are the common counts in that form of action. The seventh count is as follows "And for that one Fred. A. Dolph on the 24th day of November, 1916, by his promissory note now overdue, promised to pay to himself, or order, $1,000 four months after date, and the defendants indorsed the same to the plaintiff, and jointly and severally guaranteed payment of said note, and the said note was duly presented for payment and was dishonored, whereof the defendants had due notice and did not pay the same."

The eighth count is similar to the seventh, the note mentioned in it bearing the same date as that declared on in the seventh count, having the same length of time to run, and for the same amount. The two notes mentioned were attached to the narr. each being in this form:

"$1,000.00.

Baltimore, Md., November 24, 1916.

Four months after date I promise to pay to the order of myself, one thousand dollars, at Baltimore, Md., with interest at 6 per cent. from date. Value received. Fred. A. Dolph.

Indorsed: "Fred. A. Dolph."

Calvert Bldg., Baltimore, Md.

For value received we hereby jointly and severally guarantee the payment of the within mentioned note; and also hereby jointly and severally waive demand, protest and notice of nonpayment thereof. Wm. J. Murphy.

Anna C. Murphy.

Wm. Bevan.

Susie R. Bevan.

Herman A. Rehling.

Louisa Rehling.

H. T. Weber.

James F. Davis.

H. S. Robinson.

T. W. Stubblefield."

When the time of maturity arrived, neither of the notes were paid, but were protested for nonpayment, and notice was mailed to all those whose names appeared on the back of the note with the exception of the maker.

The suit was brought under the speedy judgment act applicable in the city of Baltimore and contained the affidavits required by the Act of 1886, c. 184. Within the time required under the act for the filing of pleas, in order to prevent a judgment by default, all of the defendants named with the exception of H. S. Robinson appeared and filed the general issue pleas. In the affidavit attached to those pleas the defendants admitted $1,344 to be due to the plaintiff, and disputed the balance of his claim, and in August, 1917, the plaintiff took a judgment for the sum of $1,344 with costs against the defendants who had pleaded. The next step took place on December 3, 1917, when the defendants obtained leave of the court to file an additional plea, and the same day the following plea was entered:

"That on the 24th day of November, 1916, defendants sent to plaintiff two notes of $1,000 each, with the understanding that said notes were to be discounted by plaintiff; that plaintiff gave to defendants only $1,300, and refused to pay more; that defendants then tendered to plaintiff the entire sum advanced, with interest, and demanded the return of notes, which plaintiff refused; and that the amount disputed in this case is usurious interest demanded on said loan and retained by plaintiff from the amount of said notes."

A motion ne recipiatur to the additional plea having been overruled, a demurrer was entered. The contention of the appellants is that the legal result of the demurrer was to make the error mount up to the first error in pleading, and that such error is to be found in the seventh count of the declaration, and consists in a misjoinder of two causes of action in a single count. The insuperable difficulty for the adoption of this view lies in the fact that, in so mounting up, the demurrer becomes a general demurrer to the declaration, and, as long as there is one good count, the narr. will stand and cannot be reached by a general demurrer. In this case the action was in assumpsit, the first six counts being the usual common counts in that form of action, and as repeatedly held, these not being open to demurrer, even if the seventh count could have been held liable to demurrer if standing alone, the present objection to it is not maintainable as enough would be left to enable the plaintiff to maintain the action.

The judge of the superior court sustained the demurrer to the additional plea, and the correctness of that ruling is now called in question by this appeal. Apparently what the pleader had in mind in preparing that plea was to set up the defense of usury with regard to both of these notes. What is requisite for a valid plea of usury has remained practically unchanged since the Act of 1845, c. 352, now embodied in the Code, art. 49, § 5. Being a statutory defense, the terms of the statute must, of course, be strictly complied with. If the plea sets up a loan, then the plea was good, for usury applies only with regard to a loan. On the other hand, if the plea sets up a sale, then the plea was bad, since on the sale of negotiable paper the vendee is in an entirely different position from the one who makes a loan upon similar paper. The term which is used in the plea itself is "discounted," and it is therefore material to inquire whether under the circumstances of this case the use of the word "discount" implies a sale or a loan. In Amer. & Eng. Ency. of Law (2d Ed.) vol. 2, p. 469, it is said:

"To discount paper as used in a business of banking is only a mode of loaning money with the right of taking the interest allowed by law in advance."

The term has been defined by this court in almost the same language in Weckler v. First National Bank, 42 Md. 592, 20 Am. Rep. 95, where Judge Miller says:

"The ordinary meaning of the term 'to discount' is to take interest in advance, and in banking is a mode of loaning money. It is the advance of money not due until some future period, less the interest which would be due thereon when payable."

And the same rule has been reaffirmed in Black v. Bank, 96 Md. 428, 54 A. 88, in which Judge Pearce, after quoting from Judge Miller, adds "Only the legal rate of interest would be due on the principal when payable, and thus Judge Miller's definition of the term is shown to be the...