Iula v. Grampa

257 Md. 370 (1970) 263 A.2d 548 IULA, ET AL. v. GRAMPA [No. 279, September Term, 1969.] Court of Appeals of Maryland. Decided March 31, 1970. Motion for rehearing filed April 13, 1970. Denied May 4, 1970.

The cause was argued before HAMMOND, C.J., and BARNES, McWILLIAMS, FINAN, SINGLEY, SMITH and DIGGES, JJ. Moses Davis for appellant Frank J. Iula. Leon H.A. Pierson, with whom were Pierson & Pierson on the brief, for appellant Morgan L. Amaimo. Alexander R. Martick, with whom was Robert V. Lazzaro on the brief, for appellee.

SINGLEY, J., delivered the opinion of the Court. In the summer of 1961, Grampa, the plaintiff below and appellee here, was a 63 year old Italian immigrant who owned the Norge Bar on South Broadway in Baltimore. ³⁷² Morgan L. Amaimo, a lawyer who practiced in Baltimore, came to Grampa's bar in connection with his representation of the son of one of Grampa's barmaids. In the course of conversations with Grampa, Amaimo learned that Grampa was considering retiring from the tavern business and might have some money to invest. Amaimo introduced Frank J. Iula, a friend and client, to Grampa.

In December of 1961 Grampa loaned $6,000 to Iula and Edward Davis, an associate of Iula's, and took back 12 of their joint confessed judgment notes for $625 each, [1] one of which matured each month commencing in February of 1962. The money borrowed by Iula and Davis was supposed to be used for the purchase of a tavern at Riviera Beach, a transaction which was never consummated. By March of 1962, two of the notes were in default. Grampa complained to Amaimo who arranged for Grampa to buy from Carmela A. Iula, Frank J. Iula's mother, a judgment for $15,000 which she had entered on 21 February 1962 on a confessed judgment note of Peacock Land Corporation (Peacock), of which Frank J. Iula was president.

Grampa paid $11,250 for the judgment: $10,000 in cash and the two $625 notes of Iula and Davis which were then in default. Both the notes and the judgment later proved to be worthless. Grampa had judgment entered on eight of the notes in November of 1962 and by February of 1964 all hope of collecting on the judgment assigned to Grampa by Mrs. Iula had vanished. In March, 1965, Grampa filed a bill of complaint in Circuit Court No. 2 of Baltimore City against Amaimo, Iula, Mrs. Iula and Davis in which he sought a rescission of the transactions and an award of damages because of the fraud and deceit allegedly practiced upon him.

Davis could never be found, and the case came on for hearing against Amaimo, Iula and Mrs. Iula. From a decree rescinding ³⁷³ the assignment of the judgment and entering judgment for $11,250 with interest from 13 March 1962 and costs against Amaimo and Iula, this appeal was taken. No cross appeal was entered in respect of the portion of the decree dismissing the bill as against Mrs. Iula or because the court refused to rescind the promissory notes. Amaimo challenges the decree on the ground that it was error for the chancellor to find that Amaimo defrauded Grampa.

Iula's argument is somewhat more complex: on the one hand he says that Grampa, having entered judgments on the eight notes, has elected his remedy and could not later seek equitable relief in connection with an obligation arising from the same transaction. On the other hand, Iula argues that there can be no fraud when the value of the assigned judgment eroded subsequent to the assignment as a result of events beyond his control. In an effort to achieve simplicity, we propose to deal with these contentions in reverse order of presentation. (i) Election of Remedies While Iula is quite correct in arguing that not more than one suit may be instituted on the same instrument, Maryland Code (1957, 1968 Repl.

Vol.) Art. 50 § 2 and that rights cannot be enforced piecemeal, Ex parte Carlin, 212 Md. 526 , 129 A.2d 827 (1957); Olmstead v. Bach, 78 Md. 132 , 27 A. 501 , 22 L.R.A. 74 (1893); Whitehurst v. Rogers, 38 Md. 503 (1873), these principles are not applicable here. The short answer to this contention is that there were two wholly different and quite distinct obligations: One was the joint obligation of Iula and Davis on the eight promissory notes which were ultimately reduced to judgment. The other was the judgment entered in favor of Carmela Iula against Peacock Land Corporation, which was assigned by Mrs. Iula to Grampa. Without passing on whether the rescission of the ³⁷⁴ notes was barred by limitations, as the court held, or because Grampa had elected his remedy, as Iula contends, we think that the chancellor was quite correct when he treated the transactions as separate and distinct and allowed recovery on the judgment and denied relief on the notes.

(ii) Fraud The question whether Amaimo and Iula or either of them practiced fraud and deceit on Grampa should be viewed in the light of two prior cases, Carozza v. Peacock Land Corp., 231 Md. 112 , 188 A.2d 917 (1963) and Iula v. Progress Fed. S & L Ass'n, 247 Md. 421 , 231 A.2d 510 (1967) both of which bear peripherally on the problem. In Carozza , we sustained the purchaser's exceptions to the ratification of a sale at foreclosure of Peacock's property in Baltimore County for $275,700, holding that the inaccurate description of the property in the advertisement of sale amounted to a material misrepresentation. In Iula , we held that when the same property, correctly described in the advertisement, had been resold in March of 1963 for $224,000, there could be no recovery of damages under the facts of that case, by Iula, the mortgagor, against the mortgagee and the trustee who conducted the foreclosure sale because while neither the mortgagee nor the trustee was aware that the advertisement was in error, Iula did know and failed to disclose it. What is salient here, however, goes beyond the rubric of the two cases.

Peacock defaulted on its mortgage prior to 4 August 1961. On 25 September 1961, Peacock entered into a deed of trust for the benefit of creditors. On 10 November 1961, the property was sold for $275,700. The purchaser's exceptions were filed on 15 December 1961.

Mrs. Iula entered her confessed judgment on 21 February 1962, more than two months after the exceptions had been filed. The exceptions were overruled on 18 May 1962, and on 19 March 1963, we filed our opinion, ³⁷⁵ holding that the exceptions should have been sustained and remanded the case in order that the property could be resold. It was during the period between the institution of the foreclosure in August, 1961, and the hearing on the exceptions in May of 1962 that Grampa's conversations with Amaimo and Iula took place. Grampa described them in his testimony: "Q * * * How often after you met Mr. Amaimo did you see him thereafter?

"A Pretty often. I would say, once every eight or ten days. "Q I see. And would you describe to the Judge in your own words what you all said to each other and what you all conversed about?

"A Well, it was something like an acquaintance and we started talking and — Amaimo likes his beer, and he start talking. He start asking me different questions. How long had I been in business and so forth, and how old I was. I told him how old I was and I told him how long I was in business and that I had intentions to retire about a year after that.

And he asked me what I intended to do after I retired. Well, I said, `After I sell my business, I have a piece of property and I intend to buy some more and take care of that.' And he told me he knew a lot about property. In fact, he says, `I have a shopping center and a gasoline station.' And he told me, `I know about a lot of property. If I run into something, would you consider it?' I said, `Well, it's too early yet.

I intend to stay in business one more year and maybe more.' He said, `But it takes time to find something suitable.' He say, `Better start looking now.' I say, `Mr. Amaimo, I got plenty of time.' He say, `If I run into something, don't lose more time looking for anything.' So, that was it. ³⁷⁶ "So, one day he stopped in my place and he asked me — "Q You are talking about Mr. Amaimo? "A Yes. "Q Go ahead. "A Mr. Amaimo, he asked me if I had time to take a little ride with him.

I said, `Well, barmaid's here; business is slow.' I say, `All right, I take a ride with you.' He didn't told me where he going to take me or nothing. So, we take a ride out Belair Road and we stop by Mr. Iula's restaurant. I didn't know Mr. Iula until then. "Q Excuse me.

Is this the gentleman here? "A That's Mr. Iula. "Q You say you stopped in his restaurant? "A Yes.

He introduced me to Mr. Iula. He introduced Mr. Iula as his friend and his campaign manager." Grampa said he went with Iula and Amaimo to the Peacock Restaurant which was closed. According to Grampa's testimony, Amaimo asked Grampa to lend Iula $60,000, which Grampa refused to do. He continued: "Q What other deals did Mr. Amaimo come to you about?

"A A real estate deal. One time he took me out to West Baltimore one place. It was a block of row houses. He told me, if I wanted to buy them; it was a changing neighborhood; I could buy them very cheap.

And I told him that I didn't like it and that was it. "So, one time he come in with Mr. Iula and wanted me to buy a slaughterhouse in South Carolina. "Q Buy a slaughterhouse? "A Yes.

I said, `I don't got the money to buy a slaughterhouse. I don't know nothing about the slaughterhouse.' He say, Mr. Amaimo say, `Mr. ³⁷⁷ Iula is going to run it for you and all you got to do is sit back and get your money.'" Then, according to Grampa, Amaimo returned in late November, 1961: "Q Who came? "A Mr. Amaimo — always Mr. Amaimo. Mr. Iula never did come by himself.

And he say, that Mr. Iula say, he had a place of business, the restaurant, but it was closed up and this manager, the restaurant manager, was without a job. He say, he wants to buy this business at Riviera Beach so this, Mr. Iula's manager, could run that business. So, Mr. Amaimo, we got in his car and he took me to Riviera Beach to look at this place. "Q I see.

"A And he said — Mr. Amaimo now — after paying me $625.00 a month, plus $250.00 rent, Mr. Amaimo said, it was set for him, $250.00 rent — "Q The rent was $250.00? "A It was over $800.00 a month. I say, `I don't think this place can make it.' And he say, `Oh, I know this place.' Mr. Amaimo say, `I know this place from A to Z.' He say, `The slot machine take over $600.00 a week,' he told me. And he told me he knew the licensee and he knew the