J. Whitson Rogers, Inc. v. Hanley

Orth, C. J., delivered the opinion of the Court. This appeal presents two interrelated issues. One involves the service of process on a corporation. The other concerns the revisory power and control of a trial court over an enrolled judgment.

I The first issue arose by attempts to summons J. Whitson Rogers, Inc. (the Corporation) as a defendant in an action filed by William Hanley and Marinda Hanley (the Hanleys) in the Circuit Court for Prince George’s County, seeking damages for breach of contract and fraud. 1 The declaration ³⁸⁵ specified that the Corporation was to be served through its resident agent, John Whitson Rogers (Rogers). The record shows that the summons with respect to the Corporation, as originally issued on 28 September 1972 and as reissued from time to time, was returned non est three times. 2 On 23 February 1973, upon motion of the Hanleys, an order was entered appointing a private person, one Charles V. Utley, to execute process. The summons as to the Corporation was reissued on 7 March 1973 and on 14 March 1973 was returned with the affidavit of Utley: “I personally served secretary of J. Whitson Rogers (at his request at 5400A Kenilworth Ave. Riverdale, Md. on this 13th day of March 10:45 A.M. 1973.” On 16 May 1973 the Hanleys moved for a default judgment against the Corporation “for failure to comply with the requirements as to time allowed for pleading in that the defendant has failed to respond by filing a plea or appearance to the Declaration served upon it on March 15, 1973, before the expiration of the return date of April 17, 1973.” They also moved “for a hearing without jury ex parte to offer evidence of damages.” By order issued 18 May 1973 and filed 21 May judgment by default was entered as ³⁸⁶ prayed.

On 16 July there was a hearing “in open court on ex parte proof of damages.” On that date a judgment was entered in favor of the Hanleys and against the Corporation in the amount of $15,700 “with interest from date and costs.” Rule 310 b; Himes v. Day, 254 Md. 197 . On 5 September the Corporation moved to set aside the judgment. The Hanleys filed opposition thereto on 14 September. Upon hearing in open court on 17 October the motion was denied.

An appeal was noted the next day. See note 1, supra. Cf. Rule 605; Frericks v. Baines, 16 Md. App. 343 .

II The motion to set aside the judgment was bottomed upon an allegation that the Corporation had not been validly served. The hearing judge denied the motion, concluding that the service had been valid. In an opinion supporting the conclusion, he referred to Rule 106 b 3 permitting, under specified conditions, service of process to be made upon any person expressly or impliedly authorized to accept it. He then gave a precis of the evidence adduced and applied the law as he construed it: “Now, we have testimony — we do know that Mr. Utley and Mr. Hanley went to the principal office of the corporation and were met by Miss Gorman.

We also know that the pleadings filed in this case were left in the office. We also know that the pleadings in the case were seen by Miss Gorman, because she mailed them according to her to Mr. Meisnere [attorney for the Hanleys when the suit was filed], and according to Mr. Hanley, who at least presented the papers along with an envelope addressed to him which he says he received on the 13th or 14 of March, so we know she saw the pleadings. 3 ³⁸⁷ We also know that she was authorized to sign for registered or certified mail directed to J. Whitson Rogers, Incorporated. We know that she was Mr. Rogers’ personal secretary rather than a corporate secretary. In viewing all of the circumstances attendant upon the service of process in this case I am satisfied that there was compliance with the rule in that there was implied authority to accept service.

Now, under our rules in areas on corporations where there is a resident agent whose address is known, delivery of registered mail with return receipt can be used to effectuate valid service, so certainly if she is authorized to accept or would be authorized to accept the mail through which service could be accomplished, not in this particular instance, but as provided under Rule 104, 4 then it would seem reasonable that she would have the implied authority to accept service under the manner of authorized service. And, in light of her position as personal secretary and in light of her having seen these papers and having returned them to Mr. Hanley and being aware of the name of the lawyer who was named in the pleading as — rather in the summons as attorney, the Court would be hardpressed to conclude that there was not service on J. Whitson Rogers, Incorporated. . . . But it would certainly seem that there was adequate notice to the corporation as would put ³⁸⁸ them on notice of the pendency of this suit — substantial compliance with the provisions of Rule 106. And, also faced further with the presumption of the validity of the service, and in light of the circumstances attendant upon that service as indicated by the testimony of Mr. Utley and Mr. Hanley, Mr. Hanley said that he saw Mrs. Rogers in the office, that he did not see Mr. Rogers, and there is no showing by anyone that Mr. Rogers was in the office at that time.

But certainly we know that Miss Gorman was his secretary, and I adopt the testimony of the witnesses, Hanley and Utley, that she did leave and go into a room, come back and say that she could in effect take care of the matter, and I do that for this reason. Miss Gorman testified that she mailed these papers to Mr. Meisnere, the process served upon her, when in fact they were mailed to Mr. Hanley. So, I must conclude from that which is supported by documentary evidence as well as testimonial evidence, that she just doesn’t remember all of the very critical facts attendant upon the service of process in this case and as a matter of credibility I have got to be satisfied that the presumption or the validity of the service has been rebutted and am not so satisfied, so I would overrule the motion to set aside the judgment by default.” As we construe the opinion, the judge found that Miss Gorman had implied authority to accept the service and was, therefore, authorized to receive it under Maryland Rule 106 b 3. Ill Unless otherwise specifically provided by statute, “[a]ll service of process upon a domestic or foreign corporation in any judicial proceeding shall be governed by the Maryland Rules of Procedure . ...” Code, Art. 75, § 75B (a) (1).

Process is usually served by a sheriff, Rule 104a, by ³⁸⁹ delivery of a copy thereof to the party to be served, Rule 104 b 1 (i) or by delivery to an agent authorized by appointment or by law to receive it, Rule 104 b 1 (ii). “The court”, however, “for good cause may, in its discretion, appoint a competent private person over 21 years of age, including an attorney of record, but not a party to the action, to execute any process other than writs of execution, replevin or attachment of property or person. The person appointed shall have the same power and duty to execute such process as a sheriff.” Rule 116 a 1. In lieu of personal delivery, service may be by registered mail, delivery restricted to the addressee. Rule 104 b 2.

And service other than by personal delivery or registered mail, upon a domiciliary or resident or one who maintains his principal place of business in this State, may be made under these circumstances: “When proof is made by affidavit that a defendant has acted to evade service, the court may order that service be made by mailing a copy of the summons together with a copy of the original pleading to the defendant at his last known residence and delivering a copy of each to a person of suitable age and discretion at the place of business, dwelling house or usual place of abode of the defendant within the State.” Rule 104 h 1. Subsection 2 of § h provides that delivery of process provided for in subsection 1 “... may be made by any competent private person over 21 years of age, including an attorney of record, but not a party to the action.” Rule 106 deals with the service of process on corporations. “Process may be served upon a resident agent or upon the president, secretary or treasurer thereof.” Rule 106 b 1. If an unsuccessful attempt has been made to serve process upon the resident agent, “... process may be served upon the manager, any director, vice-president, assistant secretary or assistant treasurer thereof.” Rule 106 b 2. If none of these or the president, secretary or treasurer can be found in the State, “... process may be served upon any other person expressly or impliedly authorized to accept such service.” Rule 106 b 3. “The officer serving process shall leave a copy thereof with the person upon whom it is served, and if such ³⁹⁰ process is not served upon a resident agent, the president, secretary or treasurer, a copy thereof shall also be left at the principal office of the corporation in this State, if any.” Rule 106 d.

When unsuccessful attempts 5 have been made on different business days to serve process twice upon one resident agent, process may be served upon the State Department of Assessments and Taxation as the attorney of such corporation. Code, Art. 75, § 75B (a) (2); Rule 106 e 1. IV It is clear from the record that the Hanleys did not invoke the provisions of Rule 104 h for service other than personal delivery or registered mail, and did not turn to service on the State Department of Assessments and Taxation as permitted by Code, Art. 75, § 75B (a) (2) and Rule 106 e 1. They relied on personal delivery of the process, although by a private person under Rule 116 a 1, rather than the sheriff.

Since Utley, the private person, had the same power and duty as the sheriff to execute the process, we look to Rule 106, as did the trial judge, to determine whether the service was valid. We think the judge misapplied Rule 106 b 3. We find it plain that process may be served upon such other person expressly or impliedly authorized to accept it only when ³⁹¹ none of a corporation’s president, secretary, treasurer, resident agents, manager, any director, vice president, assistant secretary or assistant treasurer reside or can be found in the State. In other words, there was no legally sufficient evidence to show that Miss Gorman was duly appointed to receive service on behalf of the corporation, but assuming that she was expressly or impliedly so authorized, she could be validly served only after failure to find in Maryland any of the other specifically designated officers or officials of the corporation who reside in the State.

The record does not establish that none of the corporation’s president, secretary, treasurer, manager, any director, vice president, assistant secretary or assistant treasurer, if such officers it had, who resided in Maryland, could be found. On the contrary, the record affirmatively shows that there were attempts to serve only the resident agent, Rogers. This was not enough to permit service to be validly made on Miss Gorman under the Rule. We also observe that Rule 106 d, directing that the officer serving process shall leave a copy with the person upon whom it is served, further provides that “. . . if such process is not served upon a resident agent, the president, secretary or treasurer, a copy thereof shall also be left at the principal office of the corporation in this State, if any.” The evidence adduced does not clearly show if the office at 5400A Kenilworth Avenue was “the principal office” of the Corporation in Maryland.

Rogers, on cross-examination, said it was the “main office”, but, assuming that it was the principal office, there was no evidence that a copy of the process, in addition to the one allegedly served on Miss Gorman, was left there as Rule 106 d requires. The People of the State of Maryland declared by Article 23 of the Declaration of Rights, Constitution of Maryland, “That no man ought to be . . . deprived of his . . . property, but ... by the Law of the land.” The essential elements of “Law of the land”, which is equated with “due process of law” are, as they relate'to a judicial proceeding, notice and an opportunity to be heard. Accrocco v. Splawn, 264 Md. 527, 534, 535 , quoting Matter of Easton, 214 Md. 176, 188 ; Horace ³⁹² Mann League of the United States of America, Inc. v. Board of Pub. Works, 242 Md. 645 . “Due process requires that personal notice of any proceeding in personam shall be given as a prerequisite to making a defendant a party to a suit.” North v. Town Real Estate Corp., 191 Md. 212, 218 . 6 “It is an elementary principle that no valid proceeding can be had against a person until he has been notified of the proceeding by proper summons, unless he voluntarily waives such constitutional right.” Harvey v. Slacum, 181 Md. 206, 210 .

The Court of Appeals said the same thing in a slightly different way in North v. Town Real Estate Corp., supra, at 217: “It is a fundamental rule that a judgment obtained in a suit of which the defendant received no notice is a nullity, and should be stricken out upon proof that no summons had been served upon him and he had no opportunity to be heard.” “To have been valid the service must have