Taylor v. University National Bank

Smith, J., delivered the opinion of the Court. University National Bank (Bank), appellee here, sued appellants David J. Taylor, Jr., (Taylor) and Marion J. Conyers, Jr., (Conyers), “both individually and as co-partners trading as Clinton House”, and their respective wives, Saundra J. Taylor and Mary Louise Conyers, when 42 promissory notes connected with Clinton House retail installment sales agreements and endorsed to Bank were not paid. We shall here affirm the resulting judgment. Taylor and Conyers were in the appliance business.

They had discussions with two representatives of the bank relative to the financing of some of their conditional sales contracts. On March 4, 1968, Conyers and Taylor entered into two agreements with Bank. The first was labeled “Dealer Agreement”. The first paragraph recited the desire to sell to the bank “from time to time, notes, conditional sale contracts and/or chattel deeds of trust” (paper) which would be “receive[d] from retail buyers of new television sets, stereos and other appliances and equipment attached thereto.” The second paragraph causes a bit of the controversy here since it provided that the paper so purchased would be assigned to Bank without recourse to Taylor and Conyers.

The agreement after providing for a reserve fund, certain warranties, certain procedures in the event of repossession, etc., concluded with a paragraph which read as follows: “This agreement shall be irrevocable until all ‘paper’ purchased hereunder by you from us shall have been pfiid in full to you and shall inure to the benefit of and bind your and our respective heirs, personal representatives, successors and assigns. No change, amendment or modification of this agreement shall be made or ⁶¹ shall be binding upon either party unless it is in writing and duly signed by us and you.” The contract bore a memorandum of acceptance by Bank on March 4. Immediately below that acceptance appears the following language: “It is hereby mutually agreed that heretofore referenced ‘Paper’ may be transferred, assigned, and/or endorsed to University National Bank by either of us as individuals with full force and effect as if both were signatory.” This was signed on the same day by both Taylor and Conyers. The second document of March 4 was styled “MEMORANDUM OF UNDERSTANDING”.

This provided for a reserve account. On March 8 two separate loan guarantee agreements were entered into. One was executed by Conyers and his wife. “In consideration of cash advances made or to be made by” Bank “on conditional sales contracts purchased from Marion J. Conyers, Jr. and/or Mary Louise Conyers T/A CLINTON HOUSE and evidenced by the promissory notes of customers of CLINTON HOUSE, payable to the order of” Bank, Mr. and Mrs. Conyers guaranteed payment. An identical agreement was entered into on the same day by Taylor and wife.

Each of the notes sued upon was at the foot of a retail installment sales agreement. Each was payable to “Clinton House or order”. Each was endorsed to Bank by Clinton House over the signature of one or the other partners. Each endorsement was “[w]ith full recourse.” The appliance business of Taylor and Conyers apparently did not prosper.

In an effort to avoid their liability appellants here contend that the dealer agreement “obligated the bank to accept papers from said Marion J. Conyers, Jr. and David E. Taylor, Jr. trading as Clinton House without recourse to them until such time as said agreement was modified, in writing, by the parties ⁶² to the same”; that parol evidence showing a contrary intention was inadmissible; that “[t]he Loan Guarantee Agreement signed by all of the Appellants and not by the Appellee did not amend the Dealer Agreement, dated March 4, 1968, and did not make all of the Appellants responsible to the Appellee for all of the notes endorsed to appellee”; and that the endorsement of each of the notes by one or more of the partners trading as Clinton House did not make Messrs. Conyers and Taylor “responsible to the Appellee for the balance of any deficiency on any Conditional Sales Contract, when said endorsement was contrary to the Dealer Agreement of March 4, 1968.” In Freeman v. Stanbern Const. Co., 205 Md. 71 , 106 A. 2d 50 (1954), the Court had before it a controversy between a general contractor and a subcontractor. The trial judge excluded testimony as to an alleged oral agreement varying the terms of the written contract, basing his ruling on the clause of the contracts which