Lesser v. Todd Cigarette Service Co.

Murphy, C. J., delivered the opinion of the Court. In the latter part of 1970 the appellant, Jesse Lesser, undertook to open a restaurant in Pikesville. Associated with him in the venture were Joseph Mandell and Nathan Herr. The trio had formed a corporation — “Nate’s & Joe’s Pressbox, Inc.” to operate the restaurant.

The appellee, Todd Cigarette Service Co., Inc. (Todd), agreed to lend the three men $7500 if it was afforded the exclusive right to place its cigarette vending machines in the restaurant. To this end a contract was prepared; it began with the heading “Nate’s & Joe’s Club House” and recited that in consideration of the $7500 loan “the undersigned” agreed to use Todd’s vending machines exclusively for five years. The agreement was signed by “Joseph Mandell V. Pres.,” by “Nathan Herr, Pres.” and also bore the signature “Jesse Lesser.” A confessed judgment note which read “On demand ... I promise ⁵²⁶ to pay” (there being no reference to a corporate or trade name) Todd $7500 at the rate of $100.00 a week bore the same signatures as the contract.

Todd’s check for $7500 payable to “Nathan Herr, Joe Mandell and Jesse Lesser” was delivered to the three payees; it was endorsed by them simply “Nathan Herr, Joe Mandell, Jesse Lesser” and deposited in the account of their corporation as part of its capital. The restaurant became insolvent in 1971, leaving an unpaid balance due Todd of $4527.88. Todd procured a judgment by confession for this amount against Herr, Mandell and Lesser. Lesser moved to vacate the judgment against him on the ground that he had not signed the note, whereupon Todd filed an amended declaration, accompanied by a motion for summary judgment.

The first count was on the promissory note. The second count was based on the check; it alleged that Todd made a loan to Herr, Mandell and Lesser in the amount of $7500 “represented by cancelled check No. 4712, drawn on Maryland National Bank: that Defendants received said check on August 24, 1970, endorsed the same in blank and cashed the same on August 25, 1970. . . .” Judge Charles D. Harris, sitting without a jury in the Superior Court of Baltimore City, heard testimony from George Hammerbacher, the general manager of Todd, who arranged and consummated the loan. He testified that Lesser had signed the note. Lesser testified that he had not signed the note.

Judge Harris reserved decision until Lesser answered the amended declaration and its accompanying motion for summary judgment. In his plea, Lesser claimed he was never indebted and had never promised as alleged. His answer said that there was a genuine dispute as to material facts. In his affidavit in opposition to the motion for summary judgment, Lesser said he had been a stockholder and employee of Nate’s and Joe’s Pressbox, Inc.; that Mandell arranged for the loan; that Todd requested that he sign the note, that he refused, telling Todd he was not an of ⁵²⁷ fleer, but that Mandell and Herr were; that “the funds derived from the loan” were deposited in the corporation’s bank account and “used for working capital”; that he “never personally received either the use or benefit of any of said funds”; that all payments in curtailment of the loan were made by the corporation; and that “ [i] t was, is, and always has been my [Lesser’s] impression and understanding that the loan was made to the corporation and that only the corporation would be responsible for the payment of said loan.

If I were informed at any time prior to the making of the loan that I was to be personally responsible for the repayment then the loan would not have been accepted.” Judge Harris heard further testimony from Lesser and Hammerbacher and vacated the judgment by confession. On Todd’s claim against Lesser on the check, Judge Harris said: “This check was made payable to all three defendants individually, and all three defendants endorsed it in blank without reservations of any kind. Parol evidence by Mr. Lesser was introduced so that he could attempt to show that he endorsed the check with the reservation that he was not to be personally liable. This contention was flatly contradicted by Mr. Hammerbacher, on behalf of the plaintiff, who testified in definite and precise terms that no such understanding or agreement was ever suggested by Mr. Lesser, much less accepted by the plaintiff.

The corporate name of the enterprise was never mentioned, either as a payee or as an endorser. “It seems to me that Mr. Lesser has failed to rebut the presumption that, as a payee and endorser of the check, he is jointly liable