Home Indemnity Co. v. Basiliko

Horney, J., delivered the opinion of the Court. After The Home Indemnity Company became subrogated to the rights of the insured architects (Terry Horowitz and Walter Seigel) when it paid for the damage to their equipment, drawings and papers caused by water leaking from an air conditioning unit, the insurer sued the owners (Nick and Helen Basiliko) of the building in which the architects had an office. In its declaration, the insurer, proceeding under the doctrine of res ipsa loquitur and without mentioning the written lease between the landlords as lessors and the tenants as lessees, alleged negligence on the part of the lessors in failing to properly maintain the air conditioning unit over which they had exclusive control. The lessors, however, instead of filing a plea, demanded the filing of the lease on which they proposed to base their defense.

The insurer opposed the demand by stating that the suit was not founded on the lease, but the court ordered that it be filed and the declarant complied with the order. Whereupon, the lessors filed a demurrer in which it was alleged in effect that neither the tenant nor the subrogee could sue the landlords because an exculpatory clause in the lease absolved the landlords from all responsibility for loss or damage. Specifically, the clause referred to provides: “Landlord shall not be responsible for loss of or damage to property of Tenant in said building caused by fire or other casualty, or by any acts of negligence of co-tenants or other occupants of said building or any other person, or by rain or snow or water or steam that may leak into or flow from said building through ⁴¹⁵ any defects in the roof or plumbing or from any other source.” The lower court sustained the demurrer without leave to amend and this appeal followed. Maryland Rule 326, concerning the production of written instruments, provides in part that— “Where any cause of action or defense is founded upon a written instrument, any party shall, upon written demand of the opposite party served upon him within the time allowed for pleading, file in the proceedings such instruments or a true or photostatic copy thereof, which, when filed, shall be treated as if incorporated in the pleading.” Accordingly, the basic question for consideration on this appeal is whether or not the lower court erred in requiring the subrogee to incorporate the lease into the declaration and then permitting the lessors to interpose a demurrer on the premise that the lease excused the negligence of the lessors.

Prior to the enactment of what is now § 14 (105) of Article 75 of the Code of 1957, the opposite party was entitled to oyer only in those cases in which profert was necessary. See State use of Kelley v. Wilson, 107 Md. 129 , 68 Atl. 609 (1908). However, the adoption of Rule 326 had the effect of changing the practice by extending the right to oyer to every written instrument which is shown to be the basis of the action or the defense thereto for which written demand is made of the opposite party. We think the lower court was correct in ordering the inclusion of the lease in the declaration and then sustaining the demurrer.

The lease formed an integral and, in this case, the determinative part of the defense. The subrogee was not obliged to file the lease with its declaration, but when it was demanded, the order to file it as well as leave to enter the demurrer were proper. Cf. Haldas v. Commissioners of Charlestown, 207 Md. 255, 261 , 113 A. 2d 886 (1955) ; Kahn v. Janowski, 191 Md. 279, 284 , 60 A. 2d 519 (1948) and Beachey v. Heiple, 130 Md. 683, 693 , 101 Atl. 553 (1917).

Like the discovery rules (Chapter 400), the purpose of Rule 326 is to expedite the disposition ⁴¹⁶ of cases. Had the lessors not demanded the filing of the lease at an earlier stage of the proceeding, it would certainly have been introduced by them at the trial. And, in that event, there is little doubt that a motion for a directed verdict in favor of the lessors would have been granted. Albeit the same result, in a lesser period of time, was obtained, it is clear that the subrogee