Glen Burnie Savings & Loan Ass'n v. Martindale

Sloan, J., delivered the opinion of the Court. James K. Cullen filed a bill of interpleader in the Circuit Court for Anne Arundel County against the Glen Burnie Savings and Loan Association of Anne Arundel County, and Harry V. Martindale, rival claimants of a fund of $375. An order was passed requiring the parties to interplead. The money was paid into court by Mr. Cullen, and a decree finally passed declaring the money to be the property of Martindale, from which the Glen Burnie Savings and Loan Association appeals.

While the defendants in the interpleader were required to interplead, neither of them was designated as plaintiff or defendant, according to the usual practice (Hopkins v. Easton National Bank, 171 Md. 130 , 187 A. 874 ; Wetzel v. Collin, 170 Md. 383 , 185 A. 117 ; McNally v. Rinn, 169 Md. 399 , 181 A. 675 ; Miller’s Eq. Proc. 827, 828), but both answered, neither of them denying that it was a proper case for interpleader, and set up in their answers their respective claims and rights to the fund. Scott v. Marden, 153 Md. 14 , 137 A. 523 . It appears from the record that on August 13th, 1930, Harry V. Martindale had given a mortgage to the Glen Burnie Savings and Loan Association to secure a loan of $2000, the payments on which had been regularly and promptly made.

On or about February 15th, 1933, Martin-dale applied for an additional loan of $3800, to cover the purchase money of another property, $3500, plus $300 for furniture. The association declined to make the loan, so Martindale borrowed $2000 in New York, for which he received a draft on the Chase National Bank of New York, which was endorsed to the association and deposited by it in its general account in the Glen Burnie ⁵⁸⁸ Branch of the County Trust Company, and cleared before the bank holiday of February 25th, 1933. Martindale, in the meantime had applied for a loan on the new property for $1800, and on March 21st, 1933, the purchase of the property was made and the mortgage executed to the association, which paid the purchase money to Carroll F. Conley, who conveyed to Martindale. According to the settlement sheet, the association accounted for $3800, out of which it paid Martindale a balance of $207.74.

At the end of the bank holiday on March 4th, 1933, the County Trust Company did not reopen, but later in the ' month was reopened and reorganized on a restricted basis. For each $100 the depositors were allowed to withdraw $50, and were given certificates of beneficial interest for $16.67, and a share of stock of $10 par value for the remaining $33.33. This controversy arises because of the claim of the association against Martindale for its loss or shrinkage by reason of the deposit of the New York draft for $2000 in the County Trust Company. In May, 1936, Martindale executed a mortgage to the First Federal Savings & Loan Association of Brooklyn, conveying to it both properties in Anne Arundel County, on which the Glen Burnie Association held mortgages to secure a loan of $3900, the amount then owing it from Martindale being $1299.

The Glen Burnie Association declined to accept this amount, and refused to release its' mortgages unless paid $1674, which included its loss on the deposit on account of the New York draft in the reorganization of the County Trust Company. It was later agreed between Martindale and the Glen Burnie Association that Mr. Cullen should retain $375, and that it would release the mortgages held by it, which was done November 14th, 1936. To accomplish this purpose, according to Mr. Cullen’s settlement sheet, Martindale himself paid the plaintiff, Cullen, $151.29. Martindale’s chief contention is that the Glen Burnie Association had no right to refuse to release its mortgages when it was tendered its mortgage debts in full, and that it could not require, as a condition precedent, the tacking ⁵⁸⁹ of its claim against Martindale on account of the $2000 deposit of his New York draft, and correctly cites Brown v. Stewart, 56 Md. 421, 430 ; Evans v. Bulman, 91 Md. 84, 88 , 46 A. 315 , in support of his contention.

This contention of Martindale’s, however, would have been, if raised by him on the bill of interpleader, a case wherein he would not have been required to interplead, as the Glen Burnie Association had no right to condition the release of Martindale’s mortgages on the payment of its losses in the County Trust Company. Having waived his right to the release of the deposit made with Mr. Cullen, his position now is his right to the money as opposed to that asserted by the Glen Burnie Association (Scott v. Harden, supra), and to determine this question resort must be had to the facts in evidence. Martindale testified that, after receiving the draft, he went to see James H. Croggan, then acting president of the Glen Burnie Association, who said “* * * he thought it would be possible with that check to lend me the balance of the money * * *” but “* * * he would have to talk to Mr. Kindred (attorney for the building association) about it first.” They saw him, the loan was agreed to, subject to inspection of the property, which was made that evening by Messrs. Croggan and Kindred, and Fred W. Kuethe, secretary and treasurer of the Glen Burnie Association, and the loan approved.

Asked about what conversation was had in Mr. Kindred’s office, when taken there by Croggan, he said, “I do not recall the entire conversation. I do recall that Mr. Croggan