Hooke v. Equitable Credit Corp.

365 A.2d 594, 33 Md. App. 437, 1976 Md. App. LEXIS 371
CourtCourt of Special Appeals of Maryland
DecidedNovember 3, 1976
DocketNo. 26
StatusPublished
Cited by2 cases

This text of 365 A.2d 594 (Hooke v. Equitable Credit Corp.) is published on Counsel Stack Legal Research, covering Court of Special Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hooke v. Equitable Credit Corp., 365 A.2d 594, 33 Md. App. 437, 1976 Md. App. LEXIS 371 (Md. Ct. App. 1976).

Opinion

Melvin, J.,

delivered the opinion of the Court.

This is an appeal by A. Michael Hooke and Marguerite E. Hooke, Trustees, from an order of the Superior Court of [438]*438Baltimore City denyingtheir motion to strike a judgment by confession against them in the sum of $152,565.69, plus attorney’s fees of $22,600.00 and costs.

On October 25, 1973, the appellee, Equitable Credit Corporation (Equitable) loaned $100,000 to two Maryland corporations, Holly Lane Apartments, Inc. and A. Michael Hooke and Sons, Inc. The loan was evidenced by a confessed judgment note signed on behalf of the two corporations by A. Michael Hooke and Marguerite E. Hooke in their respective capacities as president and secretary of each corporation. The Hookes also signed the note in their individual capacities as guarantors. The note contained a provision that the Hookes’ liability as guarantors was “joint, several and unconditional with HOLDER having the express right to proceed against . . . [them] ... without first proceeding against makers.”

On March 14, 1974, Equitable loaned $50,000 to “A. Michael Hooke, Sr. and Marguerite E. Hooke, Trustees, under a certain Deed of Trust1 dated May 1, 1972, and recorded on May 12, 1972 among the Land Records of Baltimore County, in Liber O.T.G. 5267, at Folio 391.” This loan was also evidenced by a confessed judgment note, signed by the Hookes as trustees and, in their individual capacities, as guarantors. This note also provided that their liability as guarantors was “primary and not secondary”. Thus, upon default of the first note (hereinafter termed “corporate note”) Equitable had the option of proceeding directly against any one of the corporate makers and individual guarantors, against all of them, or any combination of them. Upon default of the second note (hereinafter termed “trustee note”) Equitable had the option of proceeding against the Hookes either in their capacities as trustees or in their individual capacities, or in both capacities.

Both notes being in default, Equitable, on November 21, 1974, filed a declaration in the Superior Court of Baltimore [439]*439City against “A. Michael Hooke, Sr. and Marguerite E. Hooke ..., Trustees under that Certain Deed of Trust dated May 1, 1972, and recorded among the Land Records of Baltimore County in Liber O.T.G. 5267 at Folio 391 . . . . ” No other party was named as a defendant in the action.

The declaration alleged the non-payment of the corporate note in the amount of $101,562.50 and a counsel fee of $15,000, and the non-payment of the trustee note in the amount of $51,003.46 and a counsel fee of $7,500.00. Both notes were filed with the declaration together with an affidavit stating the combined amount due on the notes to be $152,565.96. Also filed with the declaration was the entrance of the appearance of an attorney “for the defendants” and a direction to the clerk to “enter a Judgment by Confession for the Plaintiff” for the sum of $152,565.96 with interest, costs of suit and attorney’s fees of $22,600.002 “as provided in said note.” (Emphasis added). The clerk entered the judgment as directed and issued a summons to “A. Michael Hooke, Sr. and Marguerite E. Hooke” to appear “ . . . within 30 days after service of this notice upon them and show cause, if any they may have, why the judgment of Confession entered against them ... for $152,565.96, interest, and attorney’s fee of $22,600.00 and costs, should be vacated, opened or modified.” (Emphasis added) The summons further stated, “If no such cause be shown within thirty days said judgment will be deemed to be final to the same extent as a judgment entered after trial.” The summons was served on the Hookes on November 30, 1974. Maryland Rule 645 c provides that if no application is made to vacate, open, or modify a judgment by confession within 30 days after service of a summons upon the defendants, “the judgment shall stand to the same extent as a judgment absolute entered after trial.”

On May 26, 1975, the Hookes, in their capacities as trustees, petitioned the court to strike the judgment “or in [440]*440the alternative to modify” it. Their “Amended Motion to Strike Judgment”, filed October 27, 1975, alleged that the $152,565.96 (plus a $22,600.00 attorney fee) judgment had been obtained against them “as Trustees” on two confessed judgment notes; that the corporate note was not executed by the trustees and the trustees were “in no way responsible for its payment”; that “the Plaintiff and its attorney knew that the said Trustees were not responsible for the $100,000.00 note but joined that note with the Trustees’ note in order to confuse and deceive the court and thereby have a judgment on both notes rendered against them as Trustees”; that “the said judgment was entered by the court by mistake because of the fraud practiced upon it by the Plaintiff”; and that “the notice of the judgment served on your Petitioners did not disclose that it was against them as Trustees so that they were unaware of the judgment against the Trust Estate and had no opportunity to file a motion to strike.” (Emphasis added) After a hearing, the court below denied the motion. It is from that ruling that the Hookes have appealed.

It is clear under Rule 645 that a defendant in a confessed judgment action is entitled to move to vacate, open or modify the judgment within 30 days after service of a “summons for the defendant notifying him of the entry of the judgment.” (Emphasis added) The defendants in the instant proceedings are “A. Michael Hooke, Sr. and Marguerite E. Hooke, Trustees ... . ” The summons did not notify the trustee defendants of any judgment against them. The summons purported to notify the Hookes only that Equitable had obtained a judgment against them individually and not in any representative capacity.

Equitable invokes the second sentence of Md. Rule 625 a claiming that the failure of the Hookes to respond within 30 days after service of the summons upon them resulted in a final enrolled judgment against them as trustees, that the court’s revisory power and control over the judgment could then only be exercised “in case of fraud, mistake, or irregularity”, and that neither fraud, mistake or irregularity [441]*441had been shown.3 In our view, that portion of Rule 625a is not applicable to this case, presupposing as it does the existence of a final enrolled judgment. Under Rule 645, dealing with judgments by confession, the judgment does not become a final enrolled judgment against a party defendant until 30 days after that party has been properly summoned and has failed to move within those 30 days to have the judgment vacated, opened or modified. The defendant, of course, does not have to wait until he receives a proper summons before filing the motion.

In Gay Investment Co. v. Angster, 231 Md. 323 (1963), the Court pointed out the necessity of strictly following the Maryland Rules regarding notice in confessed judgment cases — even where the defendant may have actual knowledge of the judgment.4 The Court said at 322:

“In Suydam v. Bank of Silver Spring, 233 F. 2d 21 (D.C.), where the record did not show that the judgment debtor had been served with summons as required by the General Rules of Practice and Procedure of Maryland, Pt.

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Bluebook (online)
365 A.2d 594, 33 Md. App. 437, 1976 Md. App. LEXIS 371, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hooke-v-equitable-credit-corp-mdctspecapp-1976.