United Bank & Trust Co. v. Schaeffer

¹¹ Orth, J., delivered the opinion of the Court. In Schaeffer v. United Bank & Tr. Co., 32 Md. App. 339 , 360 A. 2d 461 (1976) the Court of Special Appeals reversed a judgment in the amount of $5,313.83, with interest and costs, entered in the Circuit Court for Prince George’s County in favor of the United Bank and Trust Company of Maryland (the Bank) against Marvin C. Schaeffer and remanded the case for a new trial. Upon petition of the Bank we issued a writ of certiorari to the Court of Special Appeals.

Briefs were filed and argument heard in this Court. We affirm the judgment of the Court of Special Appeals. Judge John P. Moore, speaking through a unanimous three judge panel for the Court of Special Appeals, determined that the ultimate question presented was “whether the Circuit Court for Prince George’s County properly granted [the Bank’s] motion for a directed verdict in an action upon an installment note where there was evidence that [Schaeffer], an accommodation maker, was unable to read and had been told by the accommodated party, who had been his supervisor and friend, that the document he was signing was a ‘character reference’.” Schaeffer v. United Bank & Tr. Co., supra, 32 Md. App. at 340-341 .

This is also the ultimate question before us. The Court of Special Appeals found that the grant of the motion was erroneous. Id. at 347 . We reach the same answer as did the Court of Special Appeals, and for substantially the same reasons.

The facts and circumstances leading to the judgment against Schaeffer were concisely set out in the opinion of the Court of Special Appeals. In early 1973 James and Marie Estepp, husband and wife, sought a debt consolidation loan from the Bank. The Bank was unwilling to make them an unsecured loan for the amount they desired without the additional signature of a real property owner in Prince George’s County. To that end Mr. Estepp then approached Schaeffer, whom he supervised at work at the Tantallon Country Club and who owned real property in Clinton.

On May 19, 1973 the Estepps signed the face of an “Unsecured ¹² Installment Note” in the amount of $5,622.69 and Schaeffer signed the reverse side which was blank. The note contained a standard confession of judgment clause. After the Estepps had made‘a few of the required monthly installments of $192.93, the payments ceased and the Bank communicated with Schaeffer, who advised the Bank of Mr. Estepp’s new telephone number and place of employment, in Las Cruces, New Mexico. The Bank contacted Estepp there but, his assurances to the contrary notwithstanding, no further payments were ever received.

In due course, Schaeffer was invited to the Bank to make arrangements for him to start paying on the loan. He endeavored, unsuccessfully, to have the Estepps resume the payments and the Bank ultimately obtained judgment by confession against him in the amount of $5,313.83. Schaeffer’s motion to vacate the confessed judgment was granted and Schaeffer filed a general issue plea. He also alleged that the Bank obtained the note by