Penrose v. Page

• Court: Maryland Supreme Court
• Writing for the Court: THOMAS , J.
• Citation: Penrose v. Page, 145 Md. 14, 125 A. 553 (Md. 1924)
• Decision Date: 01 February 1924
• Docket Number: 105.
• Parties: PENROSE v. PAGE.

125 A. 553

145 Md. 14

PENROSE v. PAGE.

No. 105.

Court of Appeals of Maryland

February 1, 1924

Rehearing Denied April 8, 1924.

Appeal from Baltimore City Court; Carroll T. Bond, Judge.

"To be officially reported."

Action by George W. Page, receiver of the Lafayette Bank, against William Penrose and another. Judgment for plaintiff, and defendant Penrose appeals. Reversed and remanded.

See also, 125 A. 549.

Argued before BOYD, C.J., and THOMAS, PATTISON, URNER, STOCKBRIDGE ADKINS, and OFFUTT, JJ.

Edwin T. Dickerson and Lindsay C. Spencer, both of Baltimore, for appellant.

Samuel J. Fisher, of Baltimore, for appellee.

THOMAS, J.

In this case the appellant and H. Walter Ganster, Jr., were sued by the receiver of the Lafayette Bank in the Baltimore city court on the following guaranty:

"Baltimore, Md., February 19, 1921.

For value received, and at the request of Karl M. Bubert and Nina K. Bubert, his wife, we, the undersigned, H. Walter Ganster, Jr., and William Penrose, hereby guarantee the payment of principal of note of Karl M. Bubert and Nina K Bubert, his wife, dated February 19, 1921, and payable to the order of the Lafayette Bank, one year after date, and secured by mortgage on property Nos. 104 and 106 S. Charles Street, to William T. Haydon, which mortgage is to be assigned to the said Lafayette Bank, as collateral security therefor, and the liability of the undersigned shall not become due and payable, until default in said mortgage, and sale and payment under foreclosure proceedings.

H. Walter Ganster, Jr.

William Penrose.

Witness: Charles Mulligan."

The defendant, H. Walter Ganster, Jr., pleaded "never was indebted" and "did not promise as alleged," and in addition to those pleas the defendant, William Penrose, filed under a plea of set-off the following claim against the bank:

Baltimore, Maryland, February 26, 1923.
The Lafayette Bank to William Penrose, Dr.
To professional services rendered during the months of October, November and December, 1921, as special counsel of said bank .....	$ 5,000 00
To commission on $300,000 secured as a loan for said bank ...........	15,000 00
	----------
	$20,000 00

The plaintiff joined issue on the first and second pleas and demurred to the plea of setoff, and the court below sustained the demurrer, but the case was submitted to the court, without a jury, upon the following stipulations of counsel and the evidence hereinafter referred to:

"Stipulation.

It is agreed that the claim of the plaintiff as against the defendant, Penrose, as set forth in the plaintiff's declaration in this case shall be heard without the aid of a jury, and the said Penrose does hereby waive his right to a jury trial.

It is further agreed that the case shall be heard on its merits without regard to the form of the pleadings and all errors in the pleadings are hereby waived.

It is further agreed that the annexed signed copy of the stipulation filed in the case of State of Maryland v. Lafayette Bank is a part of this stipulation and that this court shall give effect to it in entering any judgment against the said Penrose.

Stipulation.

It is agreed that the claim of William Penrose, herein filed, and the answer of the receiver thereto, shall be heard before Hon. Carroll T. Bond with the right to either party to produce testimony in support of their respective contentions.

It is further agreed that if any part of such claim is allowed by the court it shall, at the option of the said Penrose, be allowed as a set-off against and deducted from any sum found to be due by the said Penrose either individually or jointly with any other person to the said George W. Page, receiver of the Lafayette Bank, in his case against the said Penrose and others in the Baltimore city court, and it is agreed that a copy of this stipulation shall be filed in said case in said Baltimore city court.

It is further agreed that the above claim shall be heard on its merits without regard to the form of the pleadings and that all errors in the pleadings are hereby waived."

At the trial the plaintiff offered in evidence the above guaranty and the following promissory note, marked "mortgage note," and indorsements:

"No. ______

Baltimore, Md., February 19, 1921.

$27,000.00 Secured by mortgage of even date herewith. One year after date, we jointly and severally promise to pay to the order of William T. Haydon twenty-seven thousand dollars, with interest thereon at the rate of six per cent. per annum, payable semiannually.

Value received. Karl M. Bubert.

Nina K. Bubert.

Indorsed:

Without recourse. William T. Haydon.

Lafayette Bank,

J. Shorb Neale, Pres't."

The plaintiff also offered in evidence the mortgage of 104 and 106 South Charles street, to William T. Haydon, dated February 19, 1921, which was, on the same day, assigned by Mr. Haydon to the Lafayette Bank, and which contains the following recital:

"Whereas, the said Karl M. Bubert and Nina K. Bubert, his wife, are justly indebted unto the said William T. Haydon, in the full sum of twenty-seven thousand ($27,000) dollars being part of the purchase money of the hereinafter described property for which principal sum they have executed and delivered to the said William T. Haydon, their joint and several promissory note, of even date herewith, payable to the order of the said William T. Haydon, in one year after date, with interest thereon at the rate of six per cent. per annum, payable semiannually; and to better secure the payment of the aforesaid principal sum and all installments of interest thereon, when and as each of them shall respectively become due and payable, these presents are executed."

The evidence shows that the mortgage was foreclosed by the receiver of the bank and the property was sold for $18,000, and that after applying the net proceeds of sale to the mortgage debt, it left a balance due on the mortgage of $13,265.84, which, by an adjustment made by counsel for the receiver and counsel for Bubert, was reduced to $11,521. It further appears from the evidence in the case that William T. Haydon was counsel for the bank; that the entire transaction of the loan by the bank and the guaranty was put through on the 19th of February, 1921, and that the bank, for convenience in discounting, also took a note, signed by Karl M. Bubert alone, for the full amount of the mortgage note, payable in four months, and successive renewals thereof covering the year for which the mortgage note was given, but that nothing was ever paid on said note or the renewals thereof; that the loan was procured by Mr. Ganster from the bank to enable Bubert to take up a mortgage which Mr. Ganster had secured for him from the Maryland Title Company, and the appellant admitted that when he was asked about the loan in the "Montrose Case" he said:

"All I can say about that is that was a mortgage that Mr. Ganster had secured for one of his clients from the Maryland Title Company, and he had asked me, as a personal favor to him, to guarantee that mortgage, and subsequently applied to the Lafayette Bank to take that mortgage up. And he asked me to continue my

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