Bradyhouse v. Levinson

Sybert, J., delivered the opinion of the Court. Appellants, makers of a confessed judgment promissory note, who were defendants in an action brought in the Superior Court of Baltimore City by an assignee thereof, sought to implead the appellee as a third-party defendant. They now appeal from a judgment for costs in favor of appellee, entered on an order granting appellee’s motion to dismiss the third-party claim without leave to amend. ⁵²¹ On February 10, 1959, appellants signed a confessed judgment note to Security Finance, Inc., for $1,792.00 which was endorsed by Jacham Music Service, Inc., designated under its endorsement as “seller”. On July 1, 1960, Jacham, to which the note had been assigned, obtained judgment by confession against appellants for $1,696.00, the principal and interest alleged then to be due, together with interest, costs and attorney’s fee.

Appellants succeeded in having the court open the judgment and thereupon filed pleas, including the general issue and two special pleas, one alleging absence of consideration and the other failure of consideration for the note sued upon. On December 7, 1961, appellants filed a third-party claim against the appellee as “S. Robert Levinson, Escrow Agent”, consisting of a count for money allegedly received by the third-party defendant for the use of the appellants and also a special count. Neither count specified with any particularity the transaction out of which appellee’s alleged escrow status arose, nor the precise terms of the alleged escrow agreement, nor whether the latter was in writing or in parol. The special count alleged that the promissory note had been given to Security Finance, Inc., assignor of the plaintiff, Jacham, “only and solely as part of, and on and subject to all the conditions of, a proposed arrangement” between the parties to the note and the third-party defendant.

It was alleged that under this arrangement the consideration for the note, said to be $1,600.00, was not given to appellants for their own use but that appellants were merely “conduits to convey the same to the third-party defendant, as escrow agent, to be held by him in escrow for the sole purpose of payment of said entire proceeds of said alleged promissory note to certain creditors of a certain Moravia Inn, Inc., a licensed alcoholic beverages establishment, only in the event of and at the time of transfer of the alcoholic beverages license of said Moravia Inn, Inc., to said * * * [appellants].” It was further alleged “that said proposed arrangement was never consummated and said alcoholic beverages license of said Moravia Inn, Inc., was not transferred to the * * * [appellants]”, and that although the appellants had demanded said $1,600.00 of the appellee, the latter had refused to pay the same. Appellee filed a motion to dismiss the third-party claim, which was granted by the trial court without leave to amend. ⁵²² Appellants contend that the averments of their third-party claim were sufficient, if established, to show that the appellee is or may be liable to them for all or part of the claim of the plaintiff, Jacham, against them, and that even if the court below felt that, the third-party claim, as stated, was not sufficient it should have afforded them an opportunity to amend. Appellee takes the position that the trial court was required as a matter of law to dismiss the third-party claim as not sustainable under Maryland Rule 315 a, and that even if the third-party claim were one that could be brought under the rules, the court in dismissing it was acting within the wide discretion accorded it by law. Rule 315 a provides that a third-party claim may only be filed “[wjhere the defendant in an action claims that a person not a party to the action is or may be liable to him for all or part of the plaintiff’s claim against him * * *." As was pointed out in Allen & Whalen v. Grimberg Co., 229 Md. 585, 185 A. 2d 337 (1962), not every liability of any kind which the third-party defendant may have to the original