text:
    ALLEN W. PRATT et al. v. MARYLAND FARMS CONDOMINIUM PHASE 1, INC.
    [No. 1102,
    September Term, 1978.]

      Decided June 8, 1979.

    The cause was argued before Mason, Wilner and MacDaniel, JJ.

      Barry F. Selig, with whom were Sullivan & Selig, P.A. on the brief, for appellants.

      Christopher L. Allen, with whom were James A. Welch and Welch, Murphy & Welch on the brief, for appellee.
   MacDaniel, J.,

delivered the opinion of the Court.

The appellants, Allen W. Pratt, a minor, by and through his father and next friend, George H. Pratt, and George H. Pratt, individually, filed a suit, in the Circuit Court for Prince George’s County, against Potomac Electric Power Company (Pepeo) and Maryland Farms Condominium, Phase 1, Inc. The appellants alleged that the defendants were responsible for injuries sustained by the minor child on April 16, 1977, when he climbed a pine tree and came in contact with an uninsulated electrical wire. The tree and the electrical easement were on the property of the condominium complex where the child lived with his parents.

Prior to trial, on August 31, 1978, the appellants settled with Pepeo and signed a Joint Tortfeasor’s Release. The trial with respect to Maryland Farms, the appellee, proceeded. The appellee moved for a directed verdict at the conclusion of the plaintiffs’ case and again at the conclusion of the entire case. Rulings on the motions were reserved by the lower court. The case was submitted to the jury, which returned a judgment in favor of the appellants for $20,000. After a hearing on the arguments, the court granted the appellee’s Motion for Judgment N.O.V.

The testimony in the court below showed that Allen Pratt was thirteen years old and was in the eighth grade at the time of the accident. He testified that he went behind the condominium complex to climb trees with his younger sister and her friend, Donna Shepherd. He was asked:

“Q Underneath the trees what is located back there?
A Under the pine trees a bike rack.
Q ... [D]id you ever go down there to play?
A No.
Q Did you ever go down there and observe anybody else playing in that area?
A No.
Q Did you ever go down to that area to climb trees?
A No.
Q Why did you pick the pine tree?
A Because it’s an easy one to get to.
Q Before you went up into the tree and started climbing it did you observe any power lines or electrical wires coming into or out of the tree?
A No.
Q How high off the ground would [the lowest] branch have been if you recall?
A About five feet.
Q When you got up into the tree just prior to the time that you were shocked what were you doing?
A Throwing down pine cones.
Q So you were picking pine cones off the limbs and throwing them to the ground?
A Yes.
Q As you reached for the pine cones did you see any electrical wires in the tree?
A No.”

In addition, he was asked:

“Q Allen, were you aware that someone else had injured themself on the electrical wires prior to the time that you hurt yourself?
A No.”

Donna Shepherd, who was eleven at the time of the trial, testified that she and others ride their bikes in the area where Allen Pratt was injured. She was shown a picture of the tree involved in the accident, and she testified:

“Q And in looking at it now does it look like the tree?
A Yeah.
Q Do you see the wire above it?
A Yes.
Q Okay, do you — how do you know where [Allen Pratt] was?
A Because I stood back and looked up.
Q Could you see the wires when you looked up there?
A Un huh.
Q You can see them now, though, can’t you?
A Yes.”

The appellee’s General Manager, Georgene O’Hara, testified that she was aware, at the time, that Pepeo had an electrical wire running through the particular tree which Allen Pratt had climbed. She knew that a bike rack was in the general area of the tree. She also was aware of a prior accident, in July 1976, in which an individual hired by the appellee received an electrical shock while removing a dead tree from the premises. She never hired anyone to prune the trees in the easement area.

Joseph Morgan, a maintenance engineer for the appellee, testified that initially the bike rack had been placed some distance from the tree in question, but that “the tenants or somebody else moved it back there.” He testified that he was in the specific area almost every day because it was the site of a compacter. He had no knowledge that children played in the area. He testified that the appellee did not trim the trees in the area, but that Pepeo periodically checked the trees.

The appellant’s mother, Mrs. Pratt, was shown a photograph of the tree in question, and she testified:

“Q Does that picture fairly and accurately reflect the condition of the tree, bike rack, fence, etc., that you have mentioned as it was on that date?
A Well, it looks like it. That is the way the tree looked and you can see the wires here, too.”

The trial judge instructed the jury as follows:

“If you find from the testimony that the Defendant, Maryland Farms Condominium, prior to the Plaintiffs injury had actual knowledge or that a reasonable prudent person should have foreseen or anticipated the electric wires were a danger to the Plaintiff by virtue of the Defendant’s prior knowledge that the electric power line was uninsulated that the Defendant’s prior knowledge that a tree trimmer had been electrically burned on July 16, 1976, by these electrical wires, that the Defendant’s prior knowledge that a bicycle rack was near the tree through which the uninsulated electrical wires and that children use bicycles and that Defendant, Maryland Condominium, failed to guard against or protect the Plaintiff by taking reasonable steps to protect him, then you must find the Defendant, Maryland Farms Condominium, negligent.”

With regard to the conduct of Allen Pratt, the judge said:

“A Plaintiff cannot recover if his negligence is a cause of his own injury. The Defendant has the burden of proving by the preponderance of the evidence that the Plaintiff’s negligence was a cause of the Plaintiff’s injury. Contributory negligence is negligence on the part of the person injured which proximately causes the injury of which he complains. The standard by which the conduct of the Plaintiff, a child, is measured when the Plaintiff, a child, is injured as a result of a contact with electric wires while climbing a tree is such care as is ordinarily exercised by children of the same age, capacity, discretion, and experience under the same or similar-circumstances.”

In explanation of its granting of the appellee’s Motion for Judgment N.O.V., the court stated:

“I think it is well settled in the cases that we have had so far, and is precedent in Maryland Law, that a possessor of land is liable for harm that is caused to an invitee by a condition of which he was aware or in the exercise of due care should have been aware only if he realizes that the condition constitutes an unreasonable risk to an invitee, that there is reason to believe that the invitee will discover the risk and fails to exercise reasonable care to make the condition reasonably safe or to warn the invitee.
“Even if this Court determines under that case I have just cited that Maryland Farms, Inc. knew or should have known that the position of the tree in relation to the wires created an unreasonable risk, there was no reason for Maryland Farms, Inc. to believe that Allen Pratt, acting as a reasonable person, would not discover the wires and realize the risk of coming into contact with them.”

I

The appellants argue, now, that the lower court erred in granting the appellee’s Motion for Judgment N.O.V. There was, the appellants contend, sufficient evidence for the jury to determine the question of negligence.

In the present case, both parties concede, and, accordingly, we will assume, that Allen W. Pratt was on the property in question as an invitee of the appellee. In Maryland, the liability of possessors of land with regard to invitees is as follows:

“A possessor of land is subject to liability for physical harm caused to his invitees by a condition on the land if, but only if, he
(a) knows or by the exercise of reasonable care would discover the condition, and should realize that it involves an unreasonable risk of harm to such invitees; and
(b) should expect that they will not discover or realize the danger, or will fail to protect themselves against it, and
(c) fails to exercise reasonable care to protect them against the danger.”

Restatement (Second) of Torts § 343 (1965).

For statements of approval of these principles see Honolulu Ltd. v. Cain, 244 Md. 590, 596, 224 A. 2d 433 (1966), and the cases therein cited. See also Gast, Inc. v. Kitchner, 247 Md. 677, 685, 234 A. 2d 127 (1967).

The above standards clearly apply to common areas set aside by a landlord for the use of his tenants. See, e.g., Macke Laundry Serv. Co. v. Weber, 267 Md. 426, 429, 298 A. 2d 27 (1972), and the cases cited therein. Although there is no clear authority in Maryland, we hold that these standards apply to the conduct of a landlord even where there is an easement across his property and the easement-holder has certain duties of maintenance and repair.

The Court of Appeals of Maryland has explicitly elaborated on the above rule in Yaniger v. Calvert Bldg. & Con. Co., 183 Md. 285, 288, 37 A. 2d 263 (1944), as follows:

“The liability of the owner of a public building to invitees has been defined by this Court in numerous cases and the law governing it is well settled. The owner is not an insurer of such persons but owes them the duty, only, to exercise ordinary care to render the premises reasonably safe and to give warning of latent or concealed perils. When the facts alleged show that the danger is as obvious to an invitee as it is to the owner, the latter is not liable for injuries sustained in failing to heed the danger. Pinehurst Co. v. Phelps, 163 Md. 68, 160 A. 734; Morgenstern v. Sheer, 145 Md. 208, 217, 125 A. 790; Fulton Building Co. v. Stichel, 135 Md. 542, 545, 109 A. 434; Yockel v. Gerstadt, 154 Md. 188, 140 A. 40; Texas Co. v. Washington B. & A. Co., 147 Md. 167, 173, 127 A. 752.”

Quoting Gordon v. Maryland State Fair, 174 Md. 466, 469, 199 A. 519 (1938), the Court added:

“The true ground of liability is the proprietor’s superior knowledge of the perilous instrumentality or the danger therefrom to persons going upon the property. It is when the perilous instrumentality is known to the owner or occupant, and not known to the person injured, that a recovery is permitted. * * * And hence there is no liability for injuries from dangers that are obvious, or as well known to the persons injured as to the owner or occupant.” 183 Md. at 289. (Emphasis supplied.)

See also Elmar Gardens, Inc. v. Odell, 227 Md. 454, 458, 177 A. 2d 263 (1962).

We note that in Maryland, while there is no doctrine of “attractive nuisance” applicable to children who are trespassers or licensees, Fitzgerald v. Montgomery County, 25 Md. App. 709, 712-16, 336 A. 2d 795 (1975), a possessor of land must consider, in exercising reasonable care to make premises safe from any unreasonable risk of harm to his invitees, the capacity of children to understand dangers. See Macke Laundry Serv. Co. v. Weber, 267 Md. at 432, 298 A. 2d at 31. See also Palms v. Shell Oil Co., 24 Md. App. 540, 544, 332 A. 2d 300 (1975), where we said:

“It is not beyond the realm of ordinary anticipation to conceive that a room to which the public is invited will be occupied by children from time to time; nor is it even beyond the common knowledge of an ordinary man that children are inquisitive, exploratory, inclined to climb and ‘occasionally negligent.’ ”

In C. & P. Tel. Co. v. Hicks, 25 Md. App. 503, 523-24, 337 A. 2d 744 (1975), we discussed the burden of proof in a negligence case. We said:

“The basic rule is that the burden of proof is on the party asserting the affirmative of the issue, as determined by the pleadings and the nature of the case. Brehm v. Lorenz, 206 Md. 500, 506. Thus, the plaintiff has the burden of proving each of the elements of a cause of action for negligence. This is explained in 2 F. Harper & F. James, The Law of Torts § 19.1, pp. 1062-1063 (1954): ‘The term burden of proof is used in two senses. The first is often called the burden of going forward with evidence and it means that if the plaintiff does not, in the first instance, introduce evidence on each element which is sufficient to warrant a finding in his favor, he will lose his case at the hands of the court (by nonsuit, directed verdict, or the like). If the plaintiff has introduced sufficient evidence (before he rests his case) he has made out a prima facie case and is entitled to go to the jury. His burden of going forward is met and drops out of the case. Thus the burden of going forward with evidence is applied always by the court, never by the jury____’ ”

Thus, in the present case, to reach the jury, the appellants must have presented evidence in support of each of the above enumerated elements of a cause of action against a possessor of land in addition to the standard elements of a negligent action.

With respect to the sufficiency of the evidence to raise a jury question, the Court of Appeals in Beahm v. Shortall, 279 Md. 321, 341-42, 368 A. 2d 1005 (1977), quoted with approval from Curley v. General Valet Service, 270 Md. 248, 264, 311 A. 2d 231 (1973):

“ ‘We said in Fowler v. Smith, 240 Md. 240, 246-247, 213 A. 2d 549 (1965) that negligence is a relative term, to be decided upon the facts of each particular case; that ordinarily it is a question of fact to be determined by the jury; that before it can be determined as a matter of law that one has not been guilty of negligence, the truth of all the credible evidence tending to sustain the claim of negligence must be assumed and all favorable inferences of fact fairly deducible therefrom tending to establish negligence drawn; that “Maryland has gone almost as far as any jurisdiction that we know of in holding that meager evidence of negligence is sufficient to carry the case to the jury;” that the rule requires submission of the case to the jury if there be any evidence, however slight, legally sufficient as tending to prove negligence, the weight and value of such evidence being left to the jury; that to meet the test of legal sufficiency, the party having the burden of proving another party guilty of negligence cannot sustain this burden “by offering a mere scintilla of evidence amounting to no more than a surmise, possibility, or conjecture, that such other party has been guilty of negligence, but such evidence must be of legal probative force and evidential value.” To like effect, see Richardson v. Rice, 256 Md. 19, 259 A. 2d 251 (1969); Williams Construction Co. v. Construction Equipment, Inc., 253 Md. 60, 251 A. 2d 864 (1969); Snowhite v. State, [Use of Tenant, 243 Md. 291, 221 A. 2d 342 (1966)]. The test of legal sufficiency, we have held, “is whether the evidence serves to prove a fact or permits an inference of fact that could enable an ordinarily intelligent mind to draw a rational conclusion therefrom in support of the right of the plaintiff to recover.” Stein v. Overlook Joint Venture, 246 Md. 75, 81, 277 A. 2d 226, 230 (1966).’ ”

II

Applying the above law to the facts in this case and bearing in mind that we must make all reasonable inferences favorable to the appellants, we hold that the appellants presented sufficient evidence to raise a question of negligence to be decided by the jury. Our reasoning is as follows.

The appellee’s knowledge, through its agents, of the presence of the bike rack near the tree in question may be taken as evidence that the appellee had reason to believe that children played in the areas. As we indicated above, it might be reasonably anticipated that the children would climb the trees. Although the appellee, through its agents, was aware that electrical wires ran by the tree, the critical issue here is that the prior accident of an employee had placed the appellee on notice that the wires were dangerous, Gordon v. Maryland State Fair, supra.

Apparently, Pepeo was normally responsible for keeping the trees in the area trimmed. However, the fact that an agent of the appellee was in the specific area almost daily could be construed as evidence that by the exercise of reasonable care the appellee might have discovered that the tree was not trimmed and that there existed a dangerous condition. The problem could have been reasonably remedied by calling the situation to the attention of Pepeo and requesting that the trees be trimmed or by posting notice.

While the appellants did not directly address the issue of whether the appellee should have reasonably expected that a child old enough to climb a tree would not also realize the presence of dangerous wires, we find that there was sufficient evidence to support such a finding by the jury. Although several witnesses testified that the electrical wire was visible in a picture of the tree, the jury could have found that a boy of Allen Pratt’s age and education could not reasonably be expected to notice the wire and appreciate the danger while playing.

Therefore, we hold that the appellants did present sufficient evidence on whether Allen Pratt could reasonably be expected to realize the danger of his activity to raise the question for the jury. Accordingly, the trial judge should not have granted the appellee’s Motion for Judgment N.O.V., and we will reinstate the jury’s verdict.

Judgment N.O. V. reversed.

Jury verdict reinstated.

Case remanded to the Circuit Court for Prince George's County for entry of judgment in accordance with this opinion.

Costs to be paid by appellee.


source: Caselaw Access Project

author: Lowe, J.,

license: Public Domain

text:
    KAREN LYNN FRIED v. STATE OF MARYLAND
    [No. 1122,
    September Term, 1978.]

      Decided June 8, 1979.

    The cause was argued before Morton, Moore and Lowe, JJ.

      Howard L. Cardin, Assigned Public Defender, for appellant.

      Kathleen M. Sweeney, Assistant Attorney General, with whom were Stephen H. Sachs, Attorney General, Sandra A. O’Connor, State’s Attorney for Baltimore County, Anthony Gallagher and Gary Jordan, Assistant State’s Attorneys for Baltimore County, on the brief, for appellee.
   Lowe, J.,

delivered the opinion of the Court.

Three questions are raised by Karen Lynn Fried’s appeal from her conviction by a Baltimore County Circuit Court jury of murder and conspiracy to commit murder. All three questions 23will be resolved by our holding that a failure to provide Miranda v. Arizona (384 U. S. 436 (1966)) warnings prior to one confession, does not ipso facto taint a subsequent one before which proper warnings are provided.

At a suppression hearing it was learned that Ms. Fried had given five statements to the police in relatively close proximity; the first three were oral and the last two written. The suppression hearing judge found, and appellant does not contest, that the first three were admissible despite a lack of Miranda warnings, because they were noncustodial. The fourth, a written statement given without a Miranda warning while in custody, was suppressed. The fifth, which was obtained immediately after the fourth, was preceded by a proper warning and was found to be admissible. The appeal rests solely upon the admission of the fifth statement.

Relying primarily upon Edwards v. State, 194 Md. 387 (1950), which was followed by Combs v. State, 237 Md. 428, 435-436 (1965), and buttressed by our Keller v. State, 2 Md. App. 623, 628-629 (1967), appellant contends that the Miranda violation preceding the fourth (inadmissible) statement tainted the fifth statement despite the intervening Miranda warning. Edwards, supra at 400, most concisely sets forth that upon which she relies:

“Where one confession is held to be involuntary and inadmissible a presumption exists that any subsequent confession was made by reason of the prior influence, and this presumption must be overcome by the State before a subsequent confession can be offered. The improper influence which produced the first confession is presumed to be still in effect until a cessation of that influence is definitely shown, and the evidence to overcome and rebut such a presumption must be clear, strong, and satisfactory, and any doubt on this point is resolved in favor of the accused.”

Using the language in United States v. Bayer, 331 U. S. 532, 540 (1947), appellant reasons that,

“ ... after an accused has once let the cat out of the bag by confessing, no matter what the inducement, he is never thereafter free of the psychological and practical disadvantages of having confessed. He can never get the cat back in the bag. The secret is out for good. In such a sense, a later confession always may be looked upon as fruit of the first.”

The foundation of appellant’s contention is both factually and legally unsound. The Supreme Court in Bayer further noted:

“But this Court has never gone so far as to hold that making a confession under circumstances which preclude its use, perpetually disables the confessor from making a usable one after those conditions have been removed.” Id. at 540-541.

Factually, appellant relies upon the fourth statement having induced the fifth; however, the suppression hearing judge found otherwise.

“I do not find from the evidence that Statement No. 5 is the product of Statement No. 4. I find it is the product of Statement No. 3. Corporal Heaps did not solicit or initiate Statement No. 4. The evidence does not indicate that the Defendant was caused or persuaded to give that eight-page statement because she made the one-page statement,”

Based upon that factual finding (with which we find no fault, Md. Rule 1086), the cat wasn’t improperly induced out of the bag, but was released voluntarily by appellant.

More significantly from a legal point of view, and even assuming appellant’s factual predicate, we have held that the doctrine of taint, i.e., the fruit of the poisonous tree, does not follow from a “mere Miranda" violation, cf. Bartram v. State, 33 Md. App. 115, 163-167 (1976), aff'd, 280 Md. 616 (1977), but applies only to confessions involuntarily obtained as by improper inducements or coercion. That, of course, is the subject matter of all three cases relied upon by appellant — Edwards, Combs and Keller.

Our discussion in Bartram relied upon the sound authority of the United States Supreme Court interpreting Miranda. In Harris v. New York, 401 U. S. 222 (1971), the Court permitted the use of statements taken in violation of Miranda for impeachment purposes. That was an initial indication that a failure to give interrogated suspects full Miranda warnings does not entitle the suspect to insist that statements made by him be excluded in every conceivable context.

The Court further narrowed the exclusionary effect of Miranda in Michigan v. Tucker, 417 U. S. 433 (1974), by holding that inculpatory evidence (a witness) gained by interrogation without Miranda warnings did not compel exclusion of the witness under the Wong Sun v. United States (371 U. S. 471 (1963)) “fruit of the poisonous tree” doctrine. The Court found that the method by which the evidence was obtained did not violate the defendant’s fourth amendment privileges against self-incrimination,

“... but departed only from the prophylactic standards later laid down by this Court in Miranda to safeguard that privilege.
When involuntary statements or the right against compulsory self-incrimination are involved, a second justification for the exclusionary rule also has been asserted: protection of the courts from reliance on untrustworthy evidence. Cases which involve the Self-Incrimination Clause must, by definition, involve an element of coercion, since the clause provides only that a person shall not be compelled to give evidence against himself. And cases involving statements often depict severe pressures which may override a particular suspect’s insistence on innocence. 417 U. S. at 446,448 (footnote omitted).

Appellant conceded at argument that there was no coercion or improper inducement used to obtain any of the confessions, only a failure in one instance to apply the preventive “prophylactic” of Miranda. The Miranda “prophylactic” like its sanction, the exclusionary rule,

“is calculated to prevent, not to repair. Its purpose is to deter — to compel respect for the constitutional guaranty in the only effectively available way — by removing the incentive to disregard it.” Elkins v. United States, 364 U. S. 206, 217 (1960).

But where the official action was pursued in complete good faith (as it appears here by the testimony and the immediate administering of the Miranda litany prior to taking the fifth statement), the deterrence rationale loses much of its force. Michigan v. Tucker, supra at 447. Before we penalize police error, we must consider whether the sanction serves a valid and useful purpose. Id. at 446. The reasoning of Edwards, supra, relied upon by appellant in explaining why a presumption of impropriety follows from an involuntary statement to its successor, is that “improper influence which produced the first confession is presumed to be still in effect until a cessation of that influence is definitely shown ....” Here, however, there was no “improper influence which produced the first confession,” even if we accept appellant’s view that five flowed from four rather than three. As indicated, she admitted at argument that none of the confessions emanated from “improper influence,” i.e., coercion or wrongful inducement. The fourth was suppressed for a failure to administer the prophylactic preventive prescribed by Miranda, and even that oversight was shown by “clear, strong, satisfactory evidence” to have been corrected before taking the fifth statement which was ultimately admitted.

Imposition of the exclusionary sanction for a prior failure to administer a prophylactic intended to prevent the impregnation of involuntariness necessarily presumes the conception of involuntariness. That presumption, if it ever existed, is overcome by appellant’s concession to the contrary. We decline to declare a paternity where there is no bastard, intercourse without prophylaxis notwithstanding. The failure to suppress was not error.

“In summary, we do not think that any single reason supporting exclusion of this witness’ testimony, nor all of them together, are very persuasive. By contrast, we find the arguments in favor of admitting the testimony quite strong. For, when balancing the interests involved, we must weigh the strong interest under any system of justice of making available to the trier of fact all concededly relevant and trustworthy evidence which either party seeks to adduce. In this particular case we also ‘must consider society’s interest in the effective prosecution of criminals in light of the protection our pre-Miranda standards afford criminal defendants.’ Jenkins v Delaware, 395 US 213, 221, 23 L Ed 2d 253, 89 S Ct 1677 (1969). These interests may be outweighed by the need to provide an effective sanction to a constitutional right. Weeks v United States, 232 US 383, 58 L Ed 652, 34 S Ct 341 (1914), but they must in any event be valued.” 417 U. S. at 450-451 (footnote omitted).

Appellant’s last two questions are equally unavailing. The arguments under each again run together the question of Miranda compliance and voluntariness although the questions appear to acknowledge the distinction.

The exception taken was:

“MR. CARDIN [Defense Counsel]:. We believe that it was proper for the Court to have instructed the jury, pursuant to Section 225 of the Maryland Criminal Jury Instructions, which would have included an instruction dealing with Miranda rights, specifically, and further we believe that the Court should have instructed the jury, ‘Where one confession is held to be involuntary and inadmissible, the State must overcome a presumption that the improper influence which produced the first confession is still in effect until a cessation of that influence is definitely shown, and the evidence to overcome and rebut such a presumption must be clear, strong and satisfactory, and any doubt on this point should be resolved in favor of the accused.’ And we would cite as authority for that Wiggins v. State, 4 Md. App. 95, 241 at Section 424. It’s a 1968 case.”

The short answer to both questions is simply that the jury instructions, read as a whole, clearly set forth the applicable law. England and Edwards v. State, 274 Md. 264, 275-276 (1975). The court, in advising the jury of the State’s burden to show Miranda compliance, is not required to set forth a specified litany. In dealing with this aspect of the confession’s admissibility, the court pointed out the State’s burden of proving the voluntariness of the statements, including the prerequisite that they be made

“with full advice having been given as to constitutional rights to counsel, constitutional rights to remain silent.”

The instruction as to voluntariness pointed out that the statement must have been free from duress, coercion or threat; freely and voluntarily given and that under all the circumstances it was the product of a free and unconstrained will which was not overborne or compelled.

The attempt by appellant to present, by jury instruction, the Miranda noncompliance as an involuntariness taint to the succeeding admitted confession fails for the reasons we noted in explaining why the fifth confession was properly admitted. Beyond that, her express exception to the failure to instruct as to the State’s burden to overcome a carryover presumption from a previously held inadmissible involuntary confession, falls with her admission that there was no evidence of involuntariness in the taking of any of the confessions. Even if we hold that the suppression hearing judge was “clearly erroneous,” Md. Rule 1086, in his factual finding that the fifth confession flowed from the third rather than the fourth — which we cannot do — the fourth was not coerced or improperly induced. That being so, the predicate of involuntariness in the requested instruction was wanting.

Judgments affirmed.

Costs to be paid by appellant.

      . “1. Did not the Trial Court err when it failed to suppress the confessions of the Appellant?
      2. Did not the Trial Court err when it refused to instruct the jury as to the specific requirements of Miranda v. Arizona?
      3. Did not the Trial Court err when it refused to instruct the jury in its instruction dealing with voluntariness of a confession that there is a presumption in Maryland that where one confession is held to be involuntary and inadmissible the proper influence which produced the first confession remains in effect until a cessation of that influence is definitely shown and overcome by clear, strong and satisfactory evidence?”


author: Wilner, J.,

text:
    BARBARA ELAINE PARKINSON v. EDWIN WOODROW PARKINSON, JR.
    [No. 1170,
    September Term, 1978.]

      Decided June 11, 1979.

      The cause was argued before Moore, Wilner and MacDaniel, JJ.

      William T. Glasgow for appellant.

      Joel Marc Abramson, with whom were Talkin & Abramson on the brief, for appellee.
   Wilner, J.,

delivered the opinion of the Court.

No one ever accused Don Quixote de la Mancha of being a practical man; but much of what he said and believed most of us nevertheless hold dear. He said, for example, what every witness in court swears or affirms: “I must speak the Truth, and nothing but the Truth....” He also said, as later in a different context did our nation’s first President, “Honesty’s the best Policy.” This case sorely tests that last statement, though hopefully not to the breaking point.

Barbara and Edwin Parkinson were married in 1965. By 1970 they had three children — a son and two daughters. The parties separated some time in 1975, and, by January, 1976, Barbara had acquired sufficient proof of Edwin’s adultery to cause her to seek an a vinculo divorce on that ground. She also asked for custody of the children, alimony, and child support. The parties sparred and negotiated, and on or just prior to the day of trial on Barbara’s Bill of Complaint, they reached an agreement (or thought they had reached an agreement) with respect to most of the issues collateral to the divorce itself — child custody, visitation rights, spousal and child support, and the division of property.

When they appeared in court on May 4, 1976, Edwin’s counsel advised the court that the parties had arrived at “an agreement in principal (sic) on alimony, child support and property settlement aspects of this case.” The agreed format, to which the court consented, was as follows:

“[T]he Plaintiff [would] present its case — its portion of the case as to the liability — the allegations made, and at that time we would ask the Court to adjourn the case, and we would read into the record the outline of the proposed settlement terms which we would then work up into an agreement to present to the Court And we would request it’s (sic) incorporation into any decree that the Court may have.” (Emphasis supplied.)

Following this announcement, Barbara took the stand and testified in support of the allegations in her Bill of Complaint — the marriage, the children, Edwin’s adultery, her fidelity and affectionate nature, the lack of condonation. She also said that she had “basically entered into a general agreement” with Edwin which, at the court’s request, Edwin’s counsel then read into the record in the following manner:

“MR. TALKIN: If the Court please, these would be the terms of the agreement that will be reduced to writing. First, that the husband would pay for child support for the three children, the minor children of the parties, Two Hundred and Sixty-One Dollars per month, per child, to be paid by his paying.... First of all, a mortgage payment in the amount of Three Hundred and Fifty-Eight Dollars per month as to which he would be entitled to the interest and tax deductions and the balance of Four Hundred and Twenty-Five Dollars a month to be paid directly to Mrs. Parkinson. Next the husband would convey to Mrs. Parkinson the house presently owned by the parties at 8991 Sidelong Place in Columbia, Maryland. Mrs. Parkinson will agree that at the time such house is sold by her to pay the husband the sum of Seventy-Five Hundred Dollars, to be reflected in the agreement. The husband will pay in addition to this child support, if and when he receives commission checks on a monthly basis, the sum of Twenty-Five Hundred Dollars per month on every monthly commission check over Three Hundred Dollars or Fifty Dollars on every monthly commission check over Five Hundred Dollars. The husband would be entitled to take the children as deductions on his tax returns. The husband will have his company — that company’s medical policy cover the children so long as he is able to do so under that policy. The child support which includes the Four Hundred and Twenty-Five Dollars and the Three Fifty-Eight mortgage would be reduced by the — proportionate to the reduction of Two Hundred and Sixty-One Dollars per child as each child reaches eighteen or becomes self-supporting. The wife would waive any and all claim to alimony. The husband would be entitled to reasonable visitation, to have the children with him at reasonable times, without limitation, as long as the periods were reasonable between him and the wife. The parties would agree that to mutually pay for — divide the costs of college education if they are financially able to do so. The husband would pay the court costs of these proceedings and the husband would pay Five Hundred Dollars to the wife towards her attorney fees and detective costs.” (Emphasis supplied.)

This agreement obviously envisioned Barbara maintaining custody of the three children, as it provided for child support payments to Barbara and visitation privileges for Edwin.

After listening to the corroborating testimony of two other witnesses, the court announced its finding that Edwin did, in fact, commit adultery, thus entitling Barbara to an absolute divorce on that ground. The court further announced its intention to award custody of the children to Barbara, subject to Edwin’s reasonable visitation rights. “And the rest,” it said, “— to their support and other arrangements that have been agreed upon — I will embody that into a decree if you gentlemen will get together and submit a decree incorporating these findings and the agreement.”

For whatever reason . or combination of reasons, this “agreement” was never reduced to writing (except to the extent that the proceedings of May 4 were ultimately transcribed by the court reporter), and no decree of divorce was ever submitted to or signed by the court. Nonetheless, for about fourteen months, most, if not all, of its terms were observed. Barbara retained custody of the children and remained in the Columbia home, and Edwin made the various payments called for in the agreement. This peaceful arrangement ended in August,'1977, when Edwin (1) who had since moved to Atlanta, Georgia, returned only two of the three children who had been visiting with him, keeping one of his daughters, (2) unilaterally reduced his child support payments to Barbara, and (3) discontinued making the mortgage payments on the Columbia home. From and after August, Edwin paid Barbara $300 a month total. As a result, Barbara’s counsel, according to a subsequent Memorandum of the court, “requested that the matter be set for a hearing for the purpose of bringing the testimony up to date.”

Upon this request, a hearing was held on October 11,1977. The first order of business at this hearing was an argument over whether the “agreement” read into the record on May 4, 1976, was still in effect. Edwin’s attorney-referred to the “agreement” as a “stipulation”, and concluded that it had been “terminated” by the passage of time. Barbara’s attorney saw the “agreement” as an “agreement” and insisted that it was still binding. At that point, and with this issue still unresolved, counsel put Barbara on the stand “to bring her case to date.” She did this by testifying to the continued separation, without cohabitation, since May 4, 1976, and that there was no hope of reconciliation. Her case fell apart, however, when counsel rested, and this colloquy occurred:

“THE COURT: Mrs. Parkinson, in May of last year, I found that your husband had committed adultery and that you were entitled to an absolute divorce from him on that ground. And I think your testimony was that you had been a faithful, chaste and affectionate wife. Is that still the case?
A. At that time, yes, sir.
THE COURT: But not since?
A. I haven’t lived with him for two years, sir.
THE COURT: Well do you know what I mean by faithful and chaste?
A. Yes, sir.
Q. Well have you been chaste since that hearing?
A. No, sir.
THE COURT: I take it that up until that time you had been but since then you have not. Is that right?
A. I had been up and till that time.”

Barbara did, honorably, what her oath required her to do: she told the truth. But because of her candid admission that she too had committed adultery, the court felt constrained to dismiss her prayer for a vinculo divorce, which it did on October 18, 1977. The court reserved the question of child custody for subsequent determination, largely upon the request of Edwin’s attorney.

Two weeks later — on November 2,1977 — Barbara filed a separate action in equity for specific performance of the “agreement” read into the record at the May 4,1976, hearing. Edwin’s response to this was a demurrer.

On December 9, 1977, the parties reassembled in court to try the custody and child support issues reserved in the court’s earlier ruling, but at once and throughout the proceeding, it was recognized that the resolution of these issues was, to a great degree, dependent upon whether the earlier “agreement” (which purported to settle them) would be given effect. Complicating some of this was a new agreement between the parties, blessed by the court, that the custody situation would remain as it then was: one child with Edwin, the other two with Barbara. No other determinations were made by the court at that time.

All of the court proceedings to this point had been before Judge Macgill. On February 9,1978, however, Judge Fischer overruled Edwin’s demurrer to Barbara’s Bill for Specific Performance, concluding (1) that the “agreement” was not conditioned upon the granting of a divorce, and thus there was no failure of consideration, (2) there was adequate consideration for the promises made by Edwin, and (3) because the “agreement” was ultimately reduced to writing (presumably by the court reporter transcribing what was said in open court), the “agreement” satisfied the requirements of the statute of frauds. Thus, Edwin was required to answer the Bill, which he subsequently did. On July 27, 1978, Judge Fischer solidified in an Order what had been decided by Judge Macgill the preceding December: he awarded permanent custody of one child to Edwin, two children to Barbara, and reserved the issue of child support for future determination.

On August 1,1978, the parties returned to court, once again before Judge Macgill, primarily on the Bill for Specific Performance. Both parties acknowledged their expectation of securing a divorce on May 4, 1976, and, in one fashion or another, both made clear that the “agreement” they reached and allowed to be read into the record that day was in contemplation of and to facilitate the divorce. In contrast to the ruling on demurrer by Judge Fischer, Judge Macgill concluded, from the evidence presented and his own recollection of what had occurred in May, 1976, that the “agreement” was predicated upon the passage of the divorce decree, that performance of it was conditioned upon that event, and that by reason of the failure of that condition, the agreement could not and would not be enforced. Upon that basis, the court, on October 2, 1978, dismissed the bill for specific performance. This appeal followed, and in it Barbara simply asks that the agreement (in particular that part of it requiring Edwin to deed over to her his interest in the Columbia home) be specifically enforced.

It is clear, of course, that property settlement agreements between husband and wife may be conditioned upon one party or the other obtaining a divorce (Frank v. Frank, 203 Md. 361, 369 (1953)), and that such agreements may be specifically enforced where that remedy is otherwise appropriate (Zouck v. Zouck, 204 Md. 285 (1954); Faller v. Faller, 247 Md. 631, 636 (1967)). It is also the case that these agreements are subject to and governed by the general principles of contract law (Heinmuller v. Heinmuller, 257 Md. 672 (1970)), including those rules dealing with the interpretation of contracts.

“The cardinal rule in the construction and interpretation of contracts,” said the Court of Appeals, “is that effect must be given to the intention of the parties, unless it is inconsistent with some established principle of law.” Kasten Constr. v. Rod Enterprises, 268 Md. 318, 328 (1973). In interpreting a contract — in attempting to ferret out the true intention of the parties — the court “places itself in the same situation as the parties who made the contract, so as to view the circumstances as they viewed them and to judge of the meaning of the words and the correct application of the language to the things described.” Canaras v. Lift Truck Services, 272 Md. 337, 352 (1974). See also State Farm Fire & Cas. v. Quirt, 28 Md. App. 603, 610 (1975): in ascertaining the intention of contracting parties “the court must consider the character of the contract, its object and purpose, and the facts and circumstances surrounding the parties at the time of its execution.” If the contract (or its meaning or proper application) is at all ambiguous, “the court may consider evidence of extrinsic factors, i.e., negotiations of the parties, the circumstances surrounding execution of the contract, the parties’ own construction of the contract and the conduct of the parties.” Canaras, supra, at 352. See also Jones v. John S. Stubbs & Assoc., 243 Md. 480 (1966).

A determination as to the intention of the parties is a determination of fact, which an appellate court is not at liberty to set aside or ignore unless it concludes that the finding is clearly erroneous. Maryland Rule 1086. Although, as Judge Fischer pointed out in his ruling on demurrer, the “agreement” as read into the record did not specifically provide that it, or its constituent covenants, were expressly conditioned upon the granting of a divorce, Judge Macgill’s conclusion, based upon the evidence presented to him, that it was intended to be so conditioned, and would therefore be construed as so conditioned, is certainly not clearly erroneous.

In reading the “agreement” into the record, counsel made clear that it was an agreement in principle, one which would later be refined and reduced to writing. Its ultimate purpose or manifestation was to be as part of a divorce decree; and, although such agreements are sometimes executed without reference or regard to any pending or potential divorce action, in this instance the timing, the matters contained in the “agreement”, the subsequent testimony of the parties, and the contemporaneous assertions of counsel all point inescapably to the fact that this “agreement” was very much bottomed on and in contemplation of the imminent rendering of a divorce decree.

Whether or not the failure of that expectation would suffice to vitiate the “agreement” entirely on the ground of failure of consideration, it is certainly a factor that may be considered in determining the appropriateness of decreeing specific performance. The Court of Appeals said in Zouck v. Zouck, supra, 204 Md. 285 at 296:

“A court of equity will not require specific performance, as a matter of course. It will evaluate the conduct of the parties, the circumstances and the equities of each particular case. It will not use its discretion to grant the remedy unless its exercise will subserve the ends of justice and the result of its assistance is fair, just and reasonable.”

See also Pomeroy’s Specific Performance, § 35.

The collapse of Barbara’s divorce action (and her failure to prosecute another under a “non-culpatory” ground to which the defense of recrimination would not apply), coupled with the substantial interval of time that has elapsed since May, 1976, leaves the parties in a quite different posture than they were in when this pact was concluded. Whether the various covenants be considered dependent or independent (see Stancill v. Stancill, 41 Md. App. 335 (1979), cert. granted April 26, 1979), the bargain as contemplated cannot now be made wholly manifest. The “agreement” called for Barbara to have custody of all three children, and for Edwin to pay child support, split between the mortgage payment and cash to Barbara, for all three. That condition has since been changed by court decree. Barbara’s agreed waiver of alimony remains entirely executory, of course, until such time as a divorce is, in fact, granted. And then, the question of her entitlement might well be the subject of additional litigation should she seek to pursue it. Under the 1976 “agreement”, that issue would have been settled by decree at or before the time Edwin would have had to convey his interest in the house. In short, it would not be the entire “agreement”, especially the implied condition of a divorce, that would be specifically enforced, but only part of it.

These circumstances, especially in light of the intention and expectations of the parties when they made the “agreement”, lead us to conclude that the court did not abuse its discretion in refusing to enter a decree of specific performance.

Judgment affirmed; appellant to pay the costs.

      . Don Quixote de la Mancha, Miguel de Cervantes, pt. I, bk. IV, ch. Ill, p. 255 (1930).

      . Id., pt. II, bk. Ill, ch. XXXIII, p. 666. Also, Washington’s Farewell Address (1796).

      3. This was later corrected. The figure agreed to was $25 per month on commission checks over $350.

      . Perhaps Don Quixote was not so impractical. Barbara has lost her quest for specific performance, but she has some rather flexible remedies under the new Marital Property Disposition Act, Courts article, §§ 3-6A-01 — 3-6A-07, that she did not have m May, 1976.


author: Couch, J.,

text:
    THE QUANTICO REALTY COMPANY v. COMPTROLLER OF THE TREASURY, INCOME TAX DIVISION
    [No. 1194,
    September Term, 1978.]

      Decided June 11, 1979.

    The cause was argued before Morton, Melvin and Couch, JJ.

      Kenneth A. Reich, with whom were Allen L. Schwait and Garbis & Schwait, P.A. on the brief, for appellant.

      Gerald Langbaum, Assistant Attorney General, with whom was Stephen H. Sachs, Attorney General, on the brief, for appellee.
   Couch, J.,

delivered the opinion of the Court.

Benjamin Franklin once wrote, “But in this world nothing can be certain, except death and taxes.” Quantico Realty Company, appellant, has learned the wisdom of Mr. Franklin’s statement when it (Quantico) suffered defeat before the Tax Court and the Baltimore City Court, and will not avoid the inevitability of taxes in this Court.

Quantico and the Comptroller, the appellee, proceeded on an agreed statement of facts before the Tax Court. Quantico was engaged in the sale and rental of improved residential real estate. When a purchaser from appellant needed to finance the purchase and the principal amount of the loan exceeded the fair market value of the property, the lending institutions required Quantico to place a required sum of money in an hypothecated savings account with the lending institution as additional security for the loan. While appellant could not usually draw on this account until the purchaser had paid back to the lender an amount equal to twice the amount hypothecated, it did receive interest on these accounts. During the tax years in issue over one-half of appellant’s capital was tied up in the various hypothecated accounts. Quantico deducted the amount of interest income earned from the hypothecated accounts from its net income in computing its 1971, 1972, 1973 and 1974 Maryland income under the purported authority of former Annot. Code Art. 81, § 280A (c) (4).

The Comptroller disallowed these deductions, determined deficiencies, and made assessments against appellant; an appeal to the Maryland Tax Court ensued which affirmed the assessments. Quantico then appealed to the Baltimore City Court, which upheld the decision of the Tax Court. This appeal followed, in which Quantico raises two questions:

“1. Whether the lower Court erred in affirming the Tax Court which construed former Sec. 280A (c) (4), Art. 81, Maryland Code Annotated (1975 Repl. Yol.) so as to deny an exemption from the corporate income tax for interest income earned on hypothecated savings accounts.
2. Whether the lower Court erred in affirming the Tax Court despite the failure of that court to discuss or rule on the issue whether the assessments were improper because the Comptroller of the Treasury issued a private letter ruling to a competitor of Quantico’s which allowed the same exemption that was disallowed to Quantico.”

The standard of review of Maryland Tax Court orders is circumscribed; we may only consider whether a reasoning mind reasonably could have reached the factual conclusion which that agency reached. Comptroller v. Diebold, Inc., 279 Md. 401, 407, 369 A. 2d 77 (1977); Fairchild Hiller Corp. v. Supervisor of Assessments, 267 Md. 519, 521, 298 A. 2d 148 (1973); Bethlehem Steel Corp. v. Supervisor of Assessments of Baltimore County, 38 Md. App. 543, 545, 381 A. 2d 1185 (1977). Mindful of our limitations we proceed to a consideration of Quantico’s contention that the Tax Court’s decision was erroneous as a matter of law and was not supported by substantial evidence appearing in the record.

1.

Article 81, § 280A (c) (4), since repealed but applicable for the tax years contested here, provides the battleground for Quantico and the Comptroller. Corporations are subject to taxation on their “net income”, plus certain additions, set forth in subsection (b) of § 280A and certain subtractions, set forth in subsection (c). Quantico has taken the position that the interest it received on its hypothecated savings accounts may be subtracted from its net income under former subsection (c) (4). This subsection provided in pertinent part as follows:

“There shall be subtracted from taxable income of such taxpayer the following items to the extent included in federal income: (4) dividend income to the extent included in taxable income and any interest income other than interest earned in the conduct of a business, or loans made under the provisions of Article 58A of this Code, and interest earned on business accounts, notes receivable, and installment contracts.” (Emphasis added.)

The Tax Court in considering Quantico’s claimed exemptions cited its opinion in Swarthmore Co. v. Comptroller, aff’d, 38 Md. App. 366. 381 A. 2d 27 (1977). Its construction of § 280A (c) (4) is set forth below:

“We are not aware of any situation where interest income earned by a profit making corporation would not be earned in the conduct of its business. Accordingly, we are of the opinion that the proper construction of Section 280A (c) (4) can be illustrated as follows:
.... (4) dividend income to the extent included in taxable income and any interest income other than interest earned in the conduct of a business, on (1) loans made under the provisions of Article 58A of this Code, (2) and interest earned on business accounts, (3) notes receivable and (4) installment contracts.”

The Tax Court concluded that the interest earned by appellant on the hypothecated savings accounts was interest earned under the category of business accounts and, as such, could not be subtracted from federal taxable income (net income) in calculating Maryland taxable income.

Quantico argues that, upon the basis of the language of the statute and its legislative history, the purpose of subsection (c) (4) was to tax interest income earned in credit transactions of one type or another, not all interest income earned by businesses. Our consideration of Quantico’s construction of § 280A (c) (4) is tempered by the well-established principle that exemptions from taxation are not favored. Swarthmore Co. v. Comptroller, supra at 371, and cases cited therein. Moreover, our construction of this section in Swarthmore places, in our estimation, an insurmountable roadblock in Quantico’s path. The Court in Swarthmore held that interest income earned on loans and mortgages by a real estate investment company was not exempt from taxation under § 280A (c) (4). Judge Menchine, writing for this Court, construed § 280A (c) (4) as follows:

"... § 280A (c) (4), supra, was intended to assure that ‘interest earned in the conduct of a business’ should not be a subtractable item from the taxable income of a corporation. While the language following the quoted words of the subsection is inartful and somewhat ambiguous, it does not, under the facts of this case, provide a basis for lawful deduction by this taxpayer of interest derived from the described transactions.
We think that the subsection evidences a legislative intent to assure that ‘interest earned in the conduct of a business’ be taxed, with only specified kinds of nonbusiness interest income being exempt.” Swarthmore, supra at 372-73. [Emphasis in original.]

Quantico, in apparent recognition of the difficulties posed by Swarthmore, asks us to reconsider our earlier construction of the statute. Quantico urges that although interest on notes and mortgages falls within the categories listed in subsection (c) (4), such is not the case with interest received from hypothecated savings accounts. We fail to see the distinction. The important factor in determining the applicability of the exemption is whether the interest is earned in the conduct of business or derived from a nonbusiness source. We have no doubt that interest earned on the hypothecated savings accounts by Quantico was received in the conduct of business. The capital invested in the accounts facilitated financing for Quantico’s clients. This we believe to be an integral part of Quantico’s real estate sales business, for without the financial intervention of the real estate sales corporation there would be no sales. Thus, if the business is to succeed and if a requirement of the lender results in the receipt of interest on hypothecated money, it cannot be said this interest has no connection with the conduct of its business. Accordingly, Quantico must pay taxes on the interest earned from these hypothecated accounts for tax years 1971, 1972, 1973 and 1974.

2.

There remains for our consideration the question of whether the Baltimore City Court erred in affirming the decision of the Tax Court where that Court failed to discuss or rule on the issue of unfair discrimination against appellant. The record reflects that in 1971 the appellee had advised another real estate company, Scott Realty Co., that it could deduct interest earned from accounts identical to the ones involved here for the years 1967, 1968 and 1970. Appellant argues, under the purported authority of IBM v. United States, 343 F. 2d 914 (Ct. Cl. 1965), that this constitutes unfair discrimination. Appellee contends there was no reversible error because (1) an appeal lies only from the order of the Tax Court and there is no requirement that reasons for its decisions be given, (2) there was no showing of prejudice, and (3) in any event, the record does not demonstrate that appellant was entitled to set up estoppel in the first place. We agree with appellee.

Our review of the record persuades us that there was simply no evidence before the Tax Court that would have warranted the application of estoppel against appellee. First, the ruling permitting Scott to deduct its interest income was made in 1971 and dealt with earlier tax years than the ones in issue here. Second, there was no evidence that the Scott Realty Company, which had received a favorable ruling in 1971 for the years 1967, 1968, and 1970, was still operating under that ruling. Third, we are persuaded that there is nothing to prevent appellee from changing its position so long as it thereafter treats all similarly situated taxpayers alike. See generally, Oursler v. Tawes, 178 Md. 471, 485, 13 A. 2d 763 (1940).

Having found no error, we affirm.

Order affirmed.

Costs to be paid by appellant.

      . Letter from Benjamin Franklin to Jean Baptiste LeRay (November 13, 1789).

      . Net income of a corporation was described in former Md. Annot. Code Art. 81, § 280A (a) (1975 Repl. Vol), as follows:
      “(a) In general. — The net income of a corporation shall be the taxable income of such taxpayer as defined in the laws of the United States as amended from time to time and for the corresponding taxable period ...”

      . Art. 81, § 280A was amended by 1976 Md. Laws, ehs. 637, 811, 904.


author: MacD aniel, J.,

text:
    DONALD L. SPEAKMAN v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
    [No. 1214,
    September Term, 1978.]

      Decided June 11, 1979.

    The cause was argued before Gilbert, C. J., and Lowe and MacD aniel, JJ.

      Louise G. Scrivener, with whom were Thomas P. Heehan and Sherman, Fox, Meehan & Curtin, P.C. on the brief, for appellant.

      Craig S. Rice, with whom were Mclnerney, Layne, McCormick, Sullivan & Rice on the brief, for appellee.
   MacD aniel, J.,

delivered the opinion of the Court.

On or about March 6, 1977, Donald L. Speakman, the appellant, while operating his motorcycle in Florida, was struck by an automobile. As a result of the accident, the appellant incurred hospital and medical bills and loss of income. At the time of the accident, the appellant was the named insured in an automobile liability policy of insurance which provides for $10,000 in Personal Injury Protection (PIP) coverage.

The appellant brought suit in the Circuit Court for Montgomery County against the appellee, State Farm Mutual Automobile Insurance Company, seeking recovery of $10,000 in PIP coverage. The appellant and the appellee filed a joint stipulation of facts and cross-motions for summary judgment. The trial judge denied the appellant’s motion for summary judgment and granted summary judgment to the appellee. The appellant contests that ruling.

The appellant’s automobile insurance policy included the following proviso with respect to PIP coverage:

“THIS INSURANCE DOES NOT APPLY UNDER:
(j) COVERAGE P TO ANY PERSON WHO:
(4) SUSTAINS BODILY INJURY ARISING OUT OF THE OWNERSHIP, MAINTENANCE OR USE OF A MOTOR CYCLE OR MINI BIKE;____”

The issue is whether under the Maryland Insurance Code, the appellee could legally make such an exclusion.

Article 48A, § 539 of the Annotated Code of Maryland, provides, in part:

“(a) No policy of motor vehicle liability insurance shall be issued, sold or delivered in this State after January 1, 1973, unless the policy also affords the minimum medical, hospital and disability benefits set forth herein; or unless equivalent medical, hospital, and disability benefits are provided by a policy issued to the insured by a nonprofit health service plan or by an authorized insurer with the policy in each case subject to approval by the Commissioner. The benefits, or their equivalent, shall cover the named insured and members of his family residing in his household (except such persons as may be specifically excluded in accordance with § 240C-1 of this article) injured in any motor vehicle accident (including an accident involving an uninsured motor vehicle or a motor vehicle whose identity cannot be ascertained), other persons injured while occupying the insured motor vehicle as a guest or passenger, or while using it with the express or implied permission of the named insured (except as provided in § 240C-1 of this article), and pedestrians injured in an accident in which the insured motor vehicle is involved or individuals injured in, on, or alighting from any other vehicle operated by animal or muscular power in an accident in which an insured vehicle is involved.”

Section 545 allows the following possible exclusion from the above coverage:

“The coverages prescribed under § 539 of this article may exclude from benefits thereunder any person otherwise insured under the policy who:
(d) With respect to motorcycles, economic loss benefits required under § 539 may be excluded, or may be offered with deductibles, options or with specific exclusions.”

The appellant concedes that his motorcycle insurance policy legitimately excluded PIP coverage, but he argues that under the above provisions of the Maryland Insurance Code an automobile insurance policy may not exclude PIP coverage for an accident involving a motorcycle ridden by the insured party and another automobile.

In addressing the appellant’s arguments, the lower court said:

“As in most statutory construction cases in Maryland, there is no legislative history to indicate the intention of the Legislature. All that can be determined from a study of the statute as passed in 1972 (Chapter 73,1972 Statutes) is that the provision regarding exclusion of motorcycle coverage was inserted as an amendment, possibly at the last moment, but the Court has not been referred to any committee report or published statement as to why the amendment was being offered or why the Legislature accepted it.
The effect of a statute is to be determined by an application of the plain meaning of the words in the statute where no extrinsic guides are available. Following such a rule, it seems obvious that the exclusion of motorcycle coverage refers to economic loss benefits required under 539 and does not limit the exclusion simply to motorcycle policies. The reason for this conclusion is that the benefits of Section 539 are required to be in policies of motor vehicle liability insurance, and a motor vehicle is defined in the definition section of the Act as an automobile and/or any other vehicle operated or designed for operation upon a public road by any power other than animal or muscular power. See Art. 48A, Section 538(a). Obviously a motorcycle is included within such a definition. Therefore, when the Legislature indicated a desire to afford carriers the option of excluding with respect to motorcycles, the economic loss benefits otherwise required under Section 539, there is no logical basis to limit this exclusion to policies covering motorcycles only. The Legislature certainly did not say so, but could have if it had so intended. Therefore, the defendant in this case had the statutory authority to exclude motorcycle coverage in the 20 policy and in fact did so, and consequently the plaintiff is not entitled to personal injury benefits which would have been available to him had he been driving his Cadillac or any other type of motor vehicle other than a motorcycle, motor bike or minibike.”

We agree, and we hold that the Maryland Insurance Code, as now written, permits the exclusion by insurance companies in automobile insurance policies of PIP benefits to persons injured on a motorcycle in an accident with another motor vehicle.

The appellant argues that such construction of §§ 539 and 545 would lead to the undesirable result that there would be no PIP coverage for a pedestrian injured in an accident with a motorcycle. That issue, however, is not now before this Court, and we have carefully refrained from extending our holding to such a situation. We note, that PIP coverage would not necessarily be denied in such a situation by the terms of the insurance policy in the present case.

The appellant also argues that we should adopt the reasoning of Hoglin v. Nationwide Mutual Insurance Company, 144 N.J. Super., 474, 366 A. 2d 345 (App. Div. 1976), in which the Court allowed recovery of PIP benefits to a motorcyclist involved in a collision with an automobile under his automobile insurance policy. We have reviewed the case and we find that the New Jersey insurance provisions differ materially from those in Maryland. The New Jersey statute does not list possible exclusions from coverage. In addition, the wording of the main section is different. The Hoglin Court said:

“This section of the statute when originally enacted and approved on June 20,1972, limited the payment of the PIP benefits to the named insured and members of his household ‘who sustained bodily injury as a result of an automobile accident.’ ... It was amended, shortly after enactment to include broader coverage for ‘injury as a result of an accident involving an automobile.’ ” 366 A. 2d at 349.

Therefore, the reasoning of the New Jersey case is not apropos.

Judgment affirmed.

Costs to be paid by appellant.


text:
    RICHARD D. FULLER et ux. v. ALEXANDER B. HORVATH et al.
    [No. 1222,
    September Term, 1978.]

      Decided June 12, 1979.

    The cause was argued before Moylan, Lowe and Couch, JJ.

      Alfred L. Scanlan and Richard J. Leamy, Jr., with whom were William J. Harte and Shea & Gardner on the brief, for appellants.

      Thomas H. Carolan for appellees.
   Lowe, J.,

delivered the opinion of the Court.

Appellants (Richard D. Fuller and wife) filed suit in the Circuit Court for Montgomery County against Midami Corporation and several named defendants (who were officers and directors or shareholders of Midami — and are appellees herein), individually, for breach of contract and fraud. They alleged that two of the individuals, on behalf of the remaining defendants (including Midami), promised to pay the appellants a fee for procuring a buyer for Midami’s subsidiary, Mid Atlantic Corporation. This fee was to be in the form of forgiveness of the appellants’ promissory note, held originally by Mid Atlantic and transferred to Midami. At the close of appellants’ case below, the trial court directed a verdict for all defendants. The court assumed and conceded establishment of appellants’ causes of action but found that individual officers or directors of a corporation, as a matter of law, cannot be held personally liable for acts performed in the scope of their authority. The court further found that no agent of Midami Corporation was a party to the breached contract.

The first contention of appellants, who were plaintiffs below, provides a considerable dilemma. While the thrust of the appeal is that the judge erred in directing a verdict, the trial record is deficient in that regard. The only entry relevant thereto is the comment of counsel for appellees that he would

"... like to make a short motion.”

This was on the last page of the trial transcript prior to jury withdrawal and a short recess. It is followed by a concluding reporter’s note:

“Whereupon, motion for directed verdict was denied.” (emphasis added).

The record indicates that appellants moved this Court to correct the omission in the record pursuant to Md. Rule 1027 b. In denying that motion, we learned that that which intervened between the request “to make a short motion” and the reporter’s concluding note was unavailable through no fault of either party. See Md. Rule 1025 c. The post trial record reveals that the original stenographic notes of the entire proceeding following the recess, which related to the motion for a directed verdict, have been lost. Our review further indicates that the reporter’s entry in the record that the motion for directed verdict had been “denied” was in error. The docket entries and all of the post trial proceedings conducted before the judge who had decided the directed verdict motion, indicate that the motion was “granted.” Indeed, this entire appeal is predicated upon that presumption. In Shade v. State, 18 Md. App. 407, 410-411 (1973) , we stated that “[t]he transcript of the trial, unless shown to be in error, takes precedence over the docket entries, see Williams v. State, 7 Md. App. 241, 254 A. 2d 376 (1969), which are presumably made at a later point in time than the taking of a simultaneous transcript.” (footnote omitted and emphasis added). The cases dealing with a variance between a transcript and a docket entry have involved clearly erroneous docket entries, see Williams v. State, supra; Crowe v. Houseworth, 19 Md. App. 688, 693 (1974) , rev’d on other grounds, 272 Md. 481, 483 (1974) (following 19 Md. App. at 693 on variance question); or an ambiguous transcript and a docket entry, see Shade v. State, supra. In Coleman v. State, 231 Md. 220 (1963), the clerk entered a sentence in the docket that varied from that clearly given at trial, as verified by the transcript. The Court of Appeals stated:

“[TJhis Court has held that a docket entry must be taken as true until corrected, and the proper court to correct an erroneous docket entry is the court in which the error occurred.” Id. at 222-223 (citations omitted).

In the present case, the trial judge noted at the post trial proceeding that he had granted the motion for a directed verdict; his comments show that the stenographer’s notation at the prior proceeding was clearly in error. The docket entries stand as correct; the judge granted the defendants’ directed verdict motion.

Appellants filed, and personally argued, four post trial motions for new trial at a single hearing. The last filed, but first argued, concerned the lost record of the directed verdict motion, argument and opinion. The trial judge indicated that the unavailability of the record was not a ground for a new trial because an appeal court is concerned only with facts and testimony:

“What I have to say no one pays much attention to anyway.”

To this observation, Mr. Fuller hastily dissented, stating precipitately,

“I do.”

Well so do we, Mr. Fuller! Appellant points up his own attention to the judge by attacking upon appeal both the legal premise and the factual foundation of the reasons supplied by the trial judge whose succeeding colloquy with appellant fulfilled his promise to the court reporter, that if the stenographic notes were not found, his honor would put his reasons “back into the record” at the time of the hearing on motion for new trial, “or file a memorandum or opinion for the purposes of appeal.” The last two options were not taken. We must look then to his reasons as expressed for denying the motion for a new trial.

The post trial hearing record indicates that the judge’s reason for having granted the motion for directed verdict in favor of Midami and the individual defendants had been a release by Mr. Fuller of the individual directors of Mid Atlantic, and that the evidence did not indicate that an officer or director of Midami had agreed to the mortgage release as compensation for the sale.

“The question is what was the basis for the directed verdict, and the basis for my directed verdict at the conclusion of all of the testimony on behalf of the plaintiff was that in the plaintiff’s case in chief there was the agreement filed, a release of Mid-Atlantic and all its directors, stockholders, heirs, and assigns reserving, however, any right of action against Midami Corporation.
And then as all of the testimony came in as to which one of the individuals that you had any contact or relations with and that were called to testify as to who may have been an officer or director of Midami Corporation so as to represent them, there wasn’t any testimony that any of the officers or directors of Midami Corporation ever made any of the representations or agreements that you had alleged.”

The release upon which the court relied to relieve the individuals who had been officers or directors of Mid Atlantic was not a blanket release, however, and expressly applied only to what transpired after the settlement date of the purchase of Mid Atlantic by the Old Republic Insurance Company from Midami. Presumably, realizing this oversight at trial, the judge set forth alternate reasons. He held that:

1. Mid Atlantic had been released

“Consequently, my decision in granting the directed verdict was based upon the fact that all of your evidence taken in the light most favorable to you disclosed an agreement between the officers of Mid-Atlantic Corporation and that you had released Mid-Atlantic Corporation.”,

and that Midami was uncommitted by anyone.

“Therefore, the suit against Midami Corporation — there was no evidence whatsoever that any of their officers, directors, or anyone in authority to bind Midami Corporation had, in fact, in any way authorized the release of that indebtedness; that, in fact, the indebtedness was to Mid-Atlantic Corporation even though the note subsequently became transferred to Midami Corporation and assuming Midami Corporation is the one to bring suit on, or will proceed on it.
Finding that there had been no representations made by anybody, that the plaintiff established, that was authorized to act on behalf of Midami Corporation, there was no basis for the suit against Midami Corporation, and since that is a matter that can be done on the record based on the evidence, the fact that my specific statements or. holdings or any colloquy between counsel are not preserved for the record would be no different if then had I, after argument of counsel, taken the matter under advisement and then merely filed an opinion in the first place. The result would have been the same.”

2. The individuals named were shielded from liability as corporate directors and officers of Mid Atlantic.

“No. The question is Mid-Atlantic. I granted the motion for a directed verdict as to each of the individuals because the evidence established that at all times they were acting on behalf of the corporation. Therefore they’re not personally liable which I seem to have some difficulty getting you to understand that that’s the purpose of corporations.
The purpose of corporations, Mr. Fuller, the reason people incorporate is so they won’t have any personal liability.”

3. Finally, the court again found that there was no evidence that Midami was committed by any “officers, directors or agents of Midami Corporation,” and the judge therefore had granted the directed verdict.

“But in December when you released Mid-Atlantic you therefore released the only entity still left upon which you can sue. So, Mid-Atlantic is no longer — was never a party to this suit. It was released. I directed the verdict against the individuals. It leaves only Midami and then we get as the reasons I’ve already stated that all of the actions were by officers and directors of Mid-Atlantic Corporation. There was no testimony that any of the individuals that discussed with you or authorized allegedly the payment of the fee were at any time officers, directors or agents of Midami Corporation, but only Mid-Atlantic. Therefore, Midami Corporation must also be let out even though they weren’t released. So it makes no difference at all for what period of time your release to any of the individuals runs, you prove no case against them as individuals, and you’ve released Mid-Atlantic.”

The judge’s prior observation that upon review it is the facts and testimony we look to was correct; however, we do attend his own views in so doing, and find them of utmost assistance when seeking to review the legal and factual propriety of the directed verdict. Factually, for purposes of a directed verdict, we view the evidence in a light most favorable to the appellants, observing any and all legitimate inferences therefrom in their favor, unless there is but one inference permissible, Impala Platinum v. Impala Sales, 283 Md. 296, 327 (1978), and that unfavorable to them. Evidence, “however slight,” from which the facts in issue may be rationally inferred will require a jury determination, and all conflicts in the evidence must be resolved, if legitimately deducible, as supportive of appellants’ contention. Impala Platinum v. Impala Sales, 283 Md. at 328-329; Gleason v. Jack Alan Enterprises, 36 Md. App. 562, 565 (1977).

When our review discloses an evidentiary insufficiency that supports a directed verdict, our opinion can be factually brief. We need but point to the omitted evidentiary prerequisite in light of authority requiring such proof. When our review differs with a lower court’s verdict, directed upon motion, then rather than simply so state, it has been our custom to review that evidence from which we believe sufficient inferences may have been drawn to warrant a factfinder’s determination. The relevant evidence, synopsized in a light most favorable to appellants, was as follows:

Midami Corporation was a shell corporation holding, as its only asset, all of the outstanding stock of Mid Atlantic Corporation. The individual defendants served varying roles as officers, directors and shareholders of both Midami and Mid Atlantic Corporations. For purposes here, the two in the foreground were David Herndon who was counsel for both Midami and Mid Atlantic and had served as secretary at meetings of both corporations, and Daniel Donohoe, a director and shareholder of Mid Atlantic and a Midami shareholder. Others included Alexander Horvath, a director of Mid Atlantic Corporation and a shareholder of Midami; Gerald Cassidy, a director of Midami and a director and officer of Mid Atlantic; William Farris, a director and shareholder of Mid Atlantic and a director and shareholder of Midami Corporation; Francis A. Murray, Sr., at one time chairman of the board of Mid Atlantic and on the board of Midami Corporation; F. Alden Murray, Jr., chairman of the board of directors and president of Midami and Mid Atlantic; E. Kendall Lorenz, a shareholder of Midami and a director and shareholder of Mid Atlantic; and Guy T. Steuart, a director of Midami and a director of Mid Atlantic. The testimony of some of the above individuals evinced general confusion as to their exact capacities relative to the two corporations. We set their position forth based on our gleanings from the record extract as a whole.

Appellant, Richard D. Fuller, was first hired by Mid Atlantic Corporation as a consultant and became executive vice president and chief operating officer of Mid Atlantic in June of 1974. After ascending to the presidency, he eventually left its employ on December 30,1975. During his tenure there, Mid Atlantic had provided him and his wife with a mortgage loan on their home in return for their $25,000 promissory note. While appellant was still president of Mid Atlantic, an executive sales committee was formed with him as a member for the purpose of effecting a sale of the corporation.

After his . termination from Mid Atlantic in December of 1975, appellant was contacted by Messrs. Herndon, Horvath, and Cassidy. Appellant advised Mr. Herndon (who was attorney for, and had acted as secretary of, both Midami and Mid Atlantic) that he might be able to effect a sale of Mid Atlantic to a group of investors in New York or the Old Republic Ins. Co. Appellant advised Mr. Herndon that he would do so for a five percent commission. Herndon rejected this offer, but contacted appellant again in March of 1976. as did Alden Murray, Jr., Midami’s board chairman (who incidentally subsequently supplied financial data to Fuller for the prospective buyer). Herndon inquired whether Mr. Fuller would approach Old Republic and see if they were still interested. Herndon advised him that if he could effect a sale, his note, still held by the Corporation, would be forgiven. Herndon said they wanted a “cash for cash” deal plus a cash bonus. He reiterated that appellants’ note would be forgiven as his fee for procuring Old Republic as purchaser. Appellant immediately undertook efforts to effect such a sale, but the sale fell through in April of 1976.

Appellant continued, through May, June and August of 1976, to have “continuous” contact with Herndon, sometimes twice a week, discussing the sale of Mid Atlantic and related problems. Appellant concluded a feasibility study for Old Republic in May of 1976. During this period, Mr. Fuller entered into a ten week consultant contract with Old Republic. After his contract expired, he continued being paid on a week-to-week basis as a consultant, until June of 1976, and remained in contact with representatives of Mid Atlantic with regard to sale of the corporation.

At this time, Donohoe was one of the “trustees” of the Fuller note. Donohoe advised Fuller that he had discussed the matter with the other individual defendants and that the “same deal” applied, that is, if Fuller could procure a purchaser for Mid Atlantic’s assets, his note would be forgiven.

Fuller again contacted Old Republic concerning the sale and prepared several memoranda addressed to Old Republic personnel specifically outlining the advantages of the sale. Fuller continued to believe that his note would be forgiven.

Old Republic again contacted appellant and requested a complete financial picture of Mid Atlantic. Appellant contacted Donohoe, advising him of this request. Donohoe and Lorenz provided appellant with all the financial figures needed. These figures formed the basis of a second memorandum from appellant to Old Republic regarding the sale. Fuller was in “daily” contact with officers of Old Republic and with Herndon and Donohoe, pushing the sale.

On the first of September, 1976, Old Republic tentatively agreed to buy Mid Atlantic. Appellant contacted Herndon and advised him that the deal was set as negotiated, i.e., cash for cash, but as previously agreed, they would be unable to acquire any “bonus” over and above “cash for cash.” Herndon advised that he needed confirmation from Old Republic. Appellant provided confirmation from Old Republic, then helped draft Old Republic’s letter of intent, dated September 3,1976. He continued to understand that his fee would be forgiveness of the note held by Mid Atlantic.

The note had not been included in the assets to be sold to Old Republic; thus, on September 9, 1976, appellee Murray, Jr. contacted Old Republic and sought to have Fuller’s note included in the assets being purchased by Old Republic. This idea was rejected by Old Republic.

Old Republic’s purchase offer was accepted by Mid Atlantic at the end of September and was closed on December 10,1976. Up until this time, there had been no suggestion by any of the defendants that appellant’s fee was to be renounced. After the letter of intent sent by Old Republic on September 3, 1976, appellant ceased making payments on the note. No payment for September, October, November or December had been made. The payments were due by the 9th of each month. None of the appellees raised any question as to the delinquency.

On December 9, 1976, appellant was told by Herndon and Donohoe that he was to receive no fee. All of the defendants had been aware of the arrangements for appellant’s fee.

Appellant was present at the closing on December 10,1976, and he was “mad as hell” about the apparent renunciation of his fee. Mr. Chapman of Old Republic took him aside and advised that the sale would fall through unless Fuller would release Old Republic from any liability. Fuller agreed to do so and executed a release typed up at that time by Herndon and Chapman.

“In connection with the Closing today of the purchase by Old Republic of all of the outstanding stock of Mid Atlantic from MIDAMI CORPORATION, this will confirm to you that the release executed by me dated December 30, 1975, a copy of which is attached hereto as Exhibit A, is still in full force and effect as regards Mid Atlantic, and I hereby agree to the release and discharge of Mid Atlantic, its successors and assigns, and its Officers and Directors in office from and after the Closing today, and covenant not to sue any of said persons, as to any matters pertaining to my employment by or other relationship with Mid Atlantic prior to the Closing.
Notwithstanding this letter, I hereby reserve any and all rights which I may have with respect to the attached release or otherwise against MIDAMI CORPORATION, its Directors and Officers, their respective successors and assigns and any other person except Mid Atlantic, its successors and assigns and its Officers and Directors from and after the Closing as aforesaid.”

As can be seen, the release released those who were to become officers and directors of Mid Atlantic after the December 10th closing, i.e., Old Republic. The release did not release the individual defendants or Midami Corporation. On December 10, 1976, the day of settlement, appellant received a letter from Murray, Jr. who was present at the closing. That letter advised appellant that he was delinquent on his note, and that the note had been transferred to Midami Corporation.

In the offices that housed both Mid Atlantic and Midami Corporations, a collective meeting of Midami’s board of directors, shareholders and Mid Atlantic directors (who were substantially the same persons), was held on December 2, 1976, and the Fullers’ note was transferred from Mid Atlantic Corporation to Midami Corporation, in the trust of Herndon and Murray, Jr. Then the individual appellees, acting as the stockholders of Midami, reflect in the minutes an admission of a prior obligation or agreement but deny that appellant had performed.

“An extended discussion was held concerning the status of Mr. Fuller’s obligation. It was the consensus of the meeting that Mr. Fuller remains fully obligated on this note, and that Mr. Fuller was not in any way responsible for the proposed sale of Mid Atlantic Mortgage Insurance, Inc. to Old Republic Insurance Company.
Mr. Donohoe and Mr. Johnson advised the stockholders of their discussions with Mr. Fuller indicating a different interpretation on his part. The consensus of the meeting was that the representatives should not forgive any of Mr. Fuller’s obligation, but, if necessary to complete the transaction, were authorized to negotiate with Mr. Fuller to the total amount of his obligation to the Corporation.”

Much of the testimony, which was given primarily by appellant, was supported in part by that of other witnesses, including individual appellees themselves. For example: Herndon, in his testimony, conceded that Fuller was to receive a fee but took issue with the conditions precedent; Herndon corroborated appellant’s testimony that Donohoe went to the appellees and raised the question of paying appellant a fee for procuring a buyer; Herndon also testified that he personally asked Donohoe to come to the meeting of December 2, 1976, to discuss appellant’s fee; Herndon suggested to the directors that Fuller be contacted regarding the sale of the company; Donohoe and Lorenz confirmed appellant’s testimony that they provided him with all the financial figures necessary to make his presentation to Old Republic; Murray, Jr., the chairman and president of both Mid Atlantic and Midami testified that he knew appellant had not paid on his note for three months (September, October, November). He admitted that, in his mind, there was a correlation between the suspension of payments and appellant’s claim to a fee, yet he did nothing until the sale was consummated. On the date of closing, he advised appellants of their delinquency; and the Midami minutes themselves implicitly admit some form of agreement but denied compliance with its conditions by appellant.

In explaining our holding, it is prefatorily important to note that appellants’ declaration alleged fraud as well as breach of contract:

“The allegations of fact hereinabove set forth are incorporated herein and made a part hereof, and further,
Plaintiffs believe, and therefore aver, that in March of 1976, when defendant MIDAMI Corporation made its offer to plaintiff Richard D. Fuller, and afterwards, defendant MIDAMI’s officers, directors, and agents Gerald K. Cassidy, William S. Farris, Sheldon Magazine, Francis A. Murray, Sr., F. Alden Murray, Jr., Daniel T. Donohoe, Alexander B. Horvath, E. Kendall Lorenz, Guy T. Steuart, and David L. Herndon never intended to honor that offer, and moreover agreed and conspired amongst themselves to conceal their true intentions from the plaintiffs, so as to fraudulently induce plaintiff Richard D. Fuller to expend the great amount of time, energy, and expertise needed to arrange the purchase of Mid Atlantic by Old Republic, and to thus unjustly enrich themselves at the expense of the plaintiffs. In furtherance of this fraudulent intention, the said defendants knowingly permitted plaintiffs to cease their payments under the Second Trust, without protest, luring them along until the sale of Mid Atlantic had been accomplished.”

Had that not been so, or had there been no facts sufficient from which an inference of fraud could be inferred, the trial judge would have been correct in holding that the individual defendants were protected by a corporate veil. However, there is an exception to the personal liability protection of corporate officers, directors and shareholders that the judge missed here, which provides a chink in such corporate armor. When officers, directors or shareholders have participated in fraudulent schemes, their individual liability may be exposed.

“It will suffice to reflect that a corporation will be regarded as an independent person, Bruñe, Maryland Corporation Law and Practice, § 371 (rev. ed. 1953), and its shareholders will not be held personally liable for the debts or other obligations of the corporation except where necessary to prevent fraud or to enforce a paramount equity. Damazo v. Wahby, 259 Md. 627, 633. A similar rule provides that the corporate veil protects officers and directors from personal liability. Cf. A. B. Corporation v. Futrovsky, 259 Md. 65, 79; Ace Development Co. v. Harrison, 196 Md. 357. 366-367; Ex Parte Garey, 202 Md. 11, 17.” Rosenbloom v. Electric Motor Repair, 31 Md. App. 711, 720 (1976).

See also Bart Arconti & Sons v. Ames-Ennis, 275 Md. 295 310-311 (1975):

“Although a number of variations upon the same theme may be found, the most frequently enunciated rule in Maryland is that although the courts will, in a proper case, disregard the corporate entity and deal with substance rather than form, as though a corporation did not exist, Md. Trust Co. v. Tulip Realty, 220 Md. 399, 414, 153 A. 2d 275 (1959), shareholders generally are not held individually liable for debts or obligations of a corporation except where it is necessary to prevent fraud or enforce a paramount equity. Damazo v. Wahby, 259 Md. 627, 633, 270 A. 2d 814 (1970); see Gordon v. SS Vedalin, 346 F. Supp. 1178, 1181 (D.C. Md. 1972).”

This is so even though such fraudulent action was conducted in furtherance of corporate business. 37 Am.Jur.2d Fraud and Deceit § 322. Ace Development Co. v. Harrison, 196 Md. at 366-367.

Fraud is a scienter tort consisting of the representation of a material fact that is false, deceptive and injurious. 37 C.J.S. Fraud § 3. Although fraudulent intent is a necessary element, Lamm v. Port Deposit Homestead Association, &c., 49 Md. 233 (1878), a legal inference of fraud is permissible from the conduct of the parties, without regard to their intent. Sisk, et al. v. Garey, 27 Md. 401 (1867). Fraud is not a single fact but a conclusion to be drawn from all of the circumstances of the case. Brogden v. Walker’s Ex’r., 2 H. & J. 285 (1805); Green v. Lombard, 28 Md. App. 1, 12 (1975), cert. denied, 276 Md. 743 (1975).

While a jury should be apprised that something more than a mere preponderance of the evidence of fraud should be produced, Rent-A-Car Co. v. Fire Ins. Co., 161 Md. 249, 268 (1931), i.e., the evidence must show clearly and satisfactorily the fraudulent participation, Loyola Fed. S. & L. v. Trenchcraft, 17 Md. App. 646 (1973), those standards are for the ultimate factfinding. All that is necessary at the directed verdict stage, despite the high ultimate standard, is that there be some competent evidence “however slight”. Impala Platinum v. Impala Sales, 283 Md. at 323, 328-329. But see Dixon v. Process Corp., 38 Md. App. 644 (1978).

The facts are such in this case that a strong inference of fraud was available to a factfinder. The individual defendants first acquiesced in the agreement, permitted Fuller to believe until the end that he had complied, and then, upon renouncing the agreement, sought to avoid complications and still profit from the scheme by offering the note for a bargain sale to Old Republic. Upon being refused, they transferred it from Mid Atlantic which was sold, to Midami which they owned and changed trustees in the doing. Inferentially this conduct carried the appearance of fraudulently using and profiting by appellant’s services, with every intention from the inception of the agreement to avoid their obligation to him upon his noncompliance with the agreement. Whether such conduct, circumstantially proved, was fraudulent is a factfinder’s question, but the inference was available within appellant’s evidentiary collage. Brogden v. Walker’s Ex’r, supra; Green v. Lombard, supra.

It could follow that neither the corporate veil of Mid Atlantic which was not a party, nor that of Midami which was, is available as a matter of law to the individuals in this case, who served reciprocally between the two corporations and met simultaneously in regard to the subject matter of the suit. Such conduct is of itself suspect absent explanation.

Furthermore, as regards Midami, Herndon’s partially admitted contractual agreement inferentially could have been on behalf of either corporation as he was attorney and had acted as secretary to both, or indeed more likely on behalf of both, considering the wholly owned interwoven relationship of the one by the other. Additionally, Herndon’s second contact was made with, or soon followed by, Alden Murray, Jr., who had also served dually as president and board chairman of both corporations.

“The appointment of an agent for a corporate principal, as for an individual principal, need not be in writing, and may be presumed or inferred from circumstances. The powers of corporate agents and the scope of their authority also depend on the same principles as in the casé of agents for individuals. In general an agent who has been ‘held out’ as possessing certain powers is authorized to exercise such powers.” Bruñe, Maryland Corporation Law and Practice, § 233 (rev. ed. 1953).

Midami then, was inferentially committed to the contract by Herndon and Murray (as well as Donohoe) and the inferentially fraudulent conduct of the individual appellees was sufficiently evident to sustain a verdict against Midami as well as themselves, by a reasonable factfinder in the absence of any explanation or defense of the conduct.

Individually, the evidentiary implications warranting submission to a jury were substantially greater as to Herndon, Murray and Donohoe than to the others. The remaining individual appellees are implicitly tied in by the testimony of their ratification of Herndon’s agreement to solicit appellant’s services, and their subsequent renunciation as reflected by the testimony and corporate minutes. But these are matters of weight of the evidence, just as will be appellants’ credibility when contrasted by appellees’ defense. That is precisely what the jury should have been permitted to decide. The primary error of the court below was in overlooking the allegations of fraud and its effect upon the individuals cloistered behind the corporate entities.

Unfortunately, appellees addressed the issues raised by appellants as if defending a verdict in their favor by a factfinder on a sufficiency of the evidence basis. But, as we pointed out, that is not the question; it is quite the reverse. The issue here is not what was in the record favorable to appellees, but rather had appellants produced enough evidence, even to warrant a factual determination. We hold that appellants did. But it should be made clear that is all we hold! Our opinion should not reflect a factual preference, especially when all the facts are not in.

Judgment reversed.

Case remanded for retrial.

Costs to be paid by the appellees.

      . The release was signed by Mr. Fuller only. The court did not consider what effect his release would have had on Mrs. Fuller’s right to sue Mid Atlantic as a third party beneficiary of the alleged contract.

      . The prior release confirmed by reference in the December 10, 1976 document was offered and filed at the post trial motion hearing but was not evidence before the court at the trial. On its face, it appeared to release the directors/officers of Mid Atlantic only as to causes of action accruing prior to December 30,1975, the date of Mr. Puller’s termination from Mid Atlantic.

      . In Impala, the Court of Appeals reviewed the correctness of the denial of a directed verdict motion to a count of fraud, using the standard we have set forth. In Dixon, this Court discussed a motion to dismiss a charge based on fraud in terms of clear and satisfactory proof. However, the Court had already noted that the judge below had expressly found that not even a modicum of evidence existed to support a finding of fraud, regardless of the standard used.