Wheaton Lumber Co. v. Metz

Bruñe, C. J., delivered the opinion of the Court. The plaintiff, Wheaton Lumber Co., Inc. (Wheaton) appeals from a judgment in favor of the appellees, Metz and Mood and Best Construction Company, a corporation, who are three of the four defendants in this suit. The suit was for the price of lumber and other building materials sold by Wheaton in June and July, 1959. It was filed in June, 1960, and as originally filed contained two counts.

The first alleged that the defendant, Rothman, had purchased goods from Wheaton and that they were delivered to him and accepted by him in accordance with an itemized statement ⁸⁰ attached to the declaration and incorporated by reference in this count. The second count alleged that the defendants Metz and Mood, trading as Best Window Company, individually and through their authorized agent, Rothman, purchased goods from the plaintiff in accordance with the itemized statement attached to the declaration and incorporated by reference in the second count. The itemized statement was made out to “Best Window Co. of Maryland.” Attached to the declaration was a motion for summary judgment, a notice to the defendants, the itemized statement above referred to and an affidavit in support of the motion. Rothman was duly summoned, but did not plead or answer, and after default Wheaton obtained an order for judgment against him on November 2, 1960, for the full amount of its claim, plus interest and costs.

Metz and Mood were summoned to the August return day, but there apparently was no effort to have judgment entered against them when judgment was obtained against Rothman. On November 7, 1960, Metz and Mood filed the general issue pleas and a plea denying Rothman’s agency for them and any ratification of his act. Thereafter Wheaton took the depositions of Metz and Mood in February, 1961, and of Rothman in April, 1961. In May, 1961, Wheaton sought and obtained leave to file an amended declaration joining Best Construction Company, a corporation, as a defendant.

This application was based upon statements in the Metz and Mood depositions to the effect that the business of Best Window Company had been transferred to Best Construction Company during the time when the bills on which the suit was brought (as shown by the itemized statement filed) had been incurred. The amended declaration repeated counts 1 and 2 of the original declaration and added a third, similar to the second, but alleging that the purchases had been made by Best Construction Company through its duly authorized agents, Metz, Mood and Rothman. This corporation (which was summoned in May) filed the general issue pleas on November 15, 1961. The case was set for trial on November 16, 1961, and witnesses were summoned for that date.

On the day of trial the defendants-appellees filed a motion for summary judgment which was then served on the plain ⁸¹ tiff’s counsel. The motion was based “on the ground that the pleadings and record of judgment against Harold Rothman in this case show that there is no genuine dispute as to any material fact and that [these] Defendants * * * are entitled to judgment as a matter of law.” The appellant’s brief informs us that protests were made against this “11th hour move” and the plaintiff’s counsel adverted frequently to his “lack of opportunity to prepare for the hearing or research adequately the points involved,” but the trial judge refused additional time, allowed counsel for the plaintiff a few minutes to read the cases cited by the defendants’ attorney, and granted the motion. Maryland Rule 610 c. 2 (1958 Ed., unchanged in 1961 Ed. effective January 1, 1962) provides for hearing upon not less than ten days’ notice. It appears that this requirement was not waived and it is evident that it was not complied with.

Cf. Frush v. Brooks, 204 Md. 315, 322 , 104 A. 2d 624 . We cannot approve this disregard of the ten days’ notice requirement of the Rule, but in view of the appellant’s concession in this Court that a reversal on this ground alone would be futile if the appellant could not succeed in any event, we shall not base our decision on that ground. We may, however, observe that the result might well have been the opposite of that reached in the trial court if the plaintiff had been allowed the time and opportunity to prepare for argument of the motion and so to point out that the rule of law urged by the appellee and adopted by the trial court would not be applicable to the facts as indicated by the pleadings and inferences which might be deducible therefrom.

Cf. White v. Friel, 210 Md. 274, 285 , 123 A. 2d 303 . Here, as there, the facts themselves are uncertain, and a summary judgment was therefore not appropriate. As to the effect of failure to give the prescribed notice, compare generally, Frush v. Brooks, supra; H. J. Heinz Co. v. Beech-Nut Life Savers, Inc., 181 F. Supp. 452 (S.D. N.Y. 1960) with Sequoia Union High School Dist. v. United States, 245 F. 2d 227 (9th Cir. 1957); New and Used Auto Sales, Inc. v. Hansen, 245 F. 2d 951 (9th Cir. 1957); Bowdidge v. Lehman, 252 F. 2d 366, 368-69 (6th Cir. 1958).

The decision of the trial court appears to have rested upon ⁸² the rule, which the appellant advises us was the ground urged by the appellees, that if a creditor deals with an agent for an undisclosed principal, who contracts in his own name, without disclosing his interest, though he is acting exclusively for the benefit of a third person, and, if the creditor after discovering the principal, pursues a suit against either to final judgment, the other is discharged. E. J. Codd Co. v. Parker, 97 Md. 319, 325 , 55 A. 623 ; Hospelhorn v. Poe, 174 Md. 242, 258-60 , 198 A. 582 ; 1 Poe, Pleading and Practice (1925 Ed.) § 378. Substantially the rule of the Codd case, when judgment is obtained against the agent, is stated in the Restatement, Agency, Second, § 210, as follows: “Judgment for or Against Agent. (1) An undisclosed principal is discharged from liability upon a contract if, with knowledge of the identity of the principal, the other party recovers judgment against the agent who made the contract, for breach of the contract.

(2) The principal is not discharged by a recovery of judgment against the agent by the other party before knowledge of the identity of the principal.” If this is a case of an undisclosed principal, § 210(1) would apply here, at least as to Metz and Mood. The appellant, however, contends that the rule above stated applies only to undisclosed principal situations, and that it cannot form the basis for a summary judgment here. We agree. The account stated, which was attached to the declaration, was in the name of the Best Window Company.

Metz and Mood were trading under that name and the plaintiff, as indicated by the declaration, had information to that effect. Rothman did not, so far as the account shows, contract in his own name. If the new corporation, Best Construction Co., were the purchaser and an undisclosed principal, it seems evident from the pleadings that Wheaton did not know this at the time when it took judgment against Rothman. Hence, the condition stated in the Restatement, op. cit. supra, § 210 (2) and in Codd v. Parker and Hospelhorn v. Poe, both supra, was lacking as against the ⁸³ Corporation.

On the other hand, if Metz and Mood were the purchasers, they appear to have been at least partially disclosed principals, and, for reasons stated below, the rule of the cases cited and of § 210 (1) of the Restatement, Agency, Second, would not be applicable. The ultimate facts are uncertain and we think that no sufficient facts were established by the pleadings and judgment against Rothman as to support a summary judgment for the other defendants, the appellees. Restatement, Agency, Second, § 184 thus states the applicable rule when the principal is disclosed or partially disclosed: “Judgment for or Against Agent. (1) Recovery of judgment against the agent of a disclosed or partially disclosed principal for failure of performance of a contract to which the agent is a party does not thereby discharge the principal unless the agent and principal were joint contractors.” The commentary to § 184 explains the rule as follows: "a.

The rule stated in this Subsection is not in accord with the rule stated in Section 210 dealing with the undisclosed principal. The cases