author: Lowe, J.,

text:
    SAPERO & SAPERO et al. v. BEL AIR PLUMBING & HEATING CONTRACTORS, INC. et al.
    [No. 527,
    September Term, 1978.]

      Decided January 16, 1979.

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

      Robert Allen Sapero, with whom were Sapero & Sapero on the brief, for appellants.

      Paul G. Leiman, with whom were Clarence L. Fossett, Jr., and Fossett & Brugger on the brief, for appellee Maye H. Irwin.
   Lowe, J.,

delivered the opinion of the Court.

The beneficent effort of a trial judge to overcome a clerk’s procedural oversight which precluded appellants’ right of review by this Court provides a provocative scenario for an otherwise bland appeal. Except to the litigants, the $4,000 in controversy is not nearly as important as the possible procedural loss of appellate review. We are asked by appellants to decide if the trial judge’s factual decision was correct, but our right to hear this appeal, from the Circuit Court for Harford County, is challenged by appellee as well as the trial judge below. We will attempt to simplify the confusing scenario by restricting the recitation of facts to the specified issues upon appeal. Because the factual issue and the procedural obstacles are interwoven, we will face the appellants’ substantive question first, obviously indicating that we will ultimately find that we have jurisdiction to hear the appeal. Upon review of the evidence, we had no difficulty in affirming the trial judge on what amounts to an attack on the sufficiency of the evidence under Md. Rule 1086.

The case involves judgment creditors seeking to attach funds of appellee Irwin, contended to be those of the judgment debtors. Appellants were judgment creditors of appellees, Bel Air, Inc. and of the Lovelaces who had previously contracted with appellee Irwin (and others) for the purchase of real property. The sale of the property was never consummated. Seeking to satisfy their judgment, appellants sought to attach the deposit paid by the judgment debtors to Irwin at the time they contracted to buy that property. Contending that upon default by the buyers they had forfeited that deposit to her, Mrs. Irwin responded with a plea of nulla bona, that she had no assets of Bel Air or the Lovelaces in her hands. The very narrow sufficiency question justifying a very thick record extract condenses to whether the language used in a letter written by Mrs. Irwin’s attorney to the buyers (appellants’ debtors), in response to a letter advising that the buyers could not settle, was sufficient to declare and effect a forfeiture of the deposit money. After declaring the inability to settle to be a breach, and declining to consent to a rescission, there followed in the Irwin response the sentence in controversy which appellants contend was insufficient to declare a forfeiture:

“Although only a partial deposit (and not the full deposit set forth in the contract) was made, Sellers will retain this deposit.”

A judgment creditor seeking to attach assets by garnishment is limited to the rights of the judgment debtor as against the garnishee. Messall v. Suburban Trust, 244 Md. 502, 506-507 (1966). The issue of whether the evidence (including that language) effected a forfeiture, is therefore essential to appellants’ case. If it did, the deposit would become funds of the garnishee who would then have no funds of the debtors for which the debtors themselves could have sued; and consequently, none subject to attachment by a creditor of the debtors. Walsh v. Lewis Swim. Pool Constr., 256 Md. 608, 610 (1970). Concisely (if elliptically) providing the historic legal background culminating in that forfeiture question, appellants point out that the common law rule is recognizably harsh:

“[Wjhere the vendee of real property makes part payment on the purchase price but subsequently fails to fulfill the contract without justifiable excuse, he cannot recover the payment if the vendor is ready and willing to fulfill his part of the contract, even though the vendor may have made a profit by reason of the default.” Great United Realty Co. v. Lewis, 203 Md. 442, 446 (1954).

This forfeiture right prevails, “even though the vendor may have made a profit by reason of the default.” Quillen v. Kelley, 216 Md. 396, 402 (1958).

Appellants contend, however, that because of the availability of elective remedies the default does not effect a forfeiture until the forfeiture is declared. Although the cases they cite for that principle were decided upon the specific language in the contracts in those cases, Chas. H. Steffey, Inc. v. Derr, 275 Md. 121, 125 (1975); Casey v. Jones, 275 Md. 203, 205-206 (1975), we will accept appellants’ premise for purposes of this case.

In doing so, we must affirm the trial judge nonetheless. The above quoted language in its context, together with all the other evidence in the case, was sufficient to support the factual conclusions of the factfinder. Operations Research v. Davidson, 241 Md. 550, 556 (1966). Although the factfinding judge here did not expressly state that he had concluded that a forfeiture was effected, it was implicit in his ruling in favor of appellee, especially since the issue was pointedly argued as part of appellants’ case below.

But we have put the cart before the horse. Appellee Irwin contends that we have no right to decide this case, even in her favor. The trial judge whose nunc pro tunc order gave birth to this issue, no longer holds that view; however, he has chosen consistency over prudence and invoked Md. Rule 1013 to strike the order for appeal, thereby strengthening appellee’s contention. The events leading to this state of confusion came by way of a simple oversight.

The trial judge decided this case and entered judgment nisi causa on September 23, 1977, presumably causing an entry of final judgment “as of course” by the clerk upon expiration of three days. No motion for new trial having been filed, Md. Rule 567 a and f, appellants filed an order for appeal on September 27, 1977. There followed the series of events in which appellants have become entangled.

1) Nearly three months later, on November 22, 1977, the Circuit Court for Harford County entered “Judgment Absolute Nunc Pro Tunc as of September 29, 1977,” presumably hoping to avoid a dismissal of the appeal.

2) Four days later, on November 26,1977, we dismissed the appeal as premature, no final judgment having been entered to our knowledge.

3) On December 1,1977, notwithstanding the nunc pro tunc entry, the clerk entered anew a “Judgment Absolute ... in accordance with the Mandate of the Court of Special Appeals.”

4) On December 9,1977, appellants again filed an order of appeal.

5) Meanwhile, appellee moved to strike the December 1, 1977 docket entries and to strike or not receive the order for appeal.

6) Given the opportunity for reflection, the trial judge correctly assessed the problems and by a well thought out opinion pointed out the problems as well as his own errors. The trial judge correctly observed that he had erroneously ordered entry of the judgment nunc pro tunc.

“My ruling, if allowed to stand, would have the effect of denying the Plaintiffs the right to appeal because their order for appeal, filed December 9, 1977, would have been more than thirty days after the effective date of the judgment absolute. The garnishee has urged me to pursue this result by modifying the December 1st docket entry to delete reference to a redundant second judgment absolute.
After reading the cases, I am convinced that my ruling from the bench was wrong. The statute, Courts and Judicial Proceedings Article, Section 12-301 provides that a party may appeal from a final judgment ‘entered in a civil or criminal case by the Circuit Court’. Maryland Rule 1012.a., however, provides that the order for appeal shall be filed within thirty days from the date of the judgment appealed from, no mention being made of the question of whether or not ‘entry’ is a necessary prerequisite of a judgment absolute. The cases are not particularly helpful as to the specific problem. Merlands Club v. Messall, 238 Md. 359 (1965) set forth the general rule, holding, in the language of the case, that the order of appeal filed ‘prior to the entry of the judgment absolute was premature and ineffective’. In that case, however, the judgment absolute was duly entered at the end of the three day period. In Aronstamn v. Coffey, 259 Md. 47 (1970), an appeal was taken before the actual entry of the judgment absolute although the clerk should have entered the judgment. The appeal was deemed premature but the Court of Appeals considered the case in order to avoid expense and delay. In that case, however, the entry of the judgment absolute should have been made, not because of the passage of time, but because the Court overruled a motion for new trial. But again, the entry by the clerk was a ministerial act, just as it was here, yet the Court of Appeals impliedly ruled that the crucial event was the entry by the clerk.
My direction of November 22, 1977, directing entry of judgment absolute as of September 29, 1977, was entered in the spirit of Keystone Engineering Corporation v. Sutter, 196 Md. 620 (1950) but, unlike the situation there, here there was no agreement of counsel and the appellate court was not aware of my action when the mandate was issued.
Under the rationale of Lang v. Catterton, 267 Md. 268 (1972), it seems that a trial court may retain jurisdiction after an appeal has been entered if the retention of such jurisdiction does not affect the status of the appeal. The entry of November 22,1977 would have the effect of foreclosing the Plaintiffs’ right of appeal because more than thirty days would have elapsed since the rendition of judgment absolute. This being the case, I now feel that the direction of that entry may have been beyond my power. But the deed is done and the extent of a trial court’s powers can only be decided by appellate courts.”

But presumably overtaken by the hobgoblin of consistency, he struck the order of appeal invoking Md. Rule 1013 and “corrected” the December 1, 1977 docket entry.

“I will, nonetheless, GRANT the motion of the garnishee to strike the order for appeal, under Rule 1013, and will correct the December 1 docket entries as suggested by the garnishee. Hopefully, this will place the matter in a position for consideration by the Court of Special Appeals of the issues previously presented, in such a way as not to again cause the Plaintiffs to be thrown out of the appellate court, this time for failure to comply with the time limits of Rule 1025.”

7) Appellants prudently appealed everything.

To the trial judge’s erudite opinion we must add a few hindsight reflections. That there be no further question, the right to appeal is a substantive right statutorily given from a “final judgment entered,’’ not a final judgment rendered. That was implicit in the holding of Eastgate Associates v. Apper, 276 Md. 698 (1976) which held that there was no appellate jurisdiction when there was no entry of a final judgment. Id. at 699.

“In the instant case, the appeal was taken from the instruction granting a directed verdict. Such an instruction is equivalent to a jury verdict, see Rule 552 e, and is analogous to the entry of a judgment nisi in an action tried by the court, Merlands Club, Inc. v. Messall, supra, 238 Md. at 362; Rule 564 b 1. As with a judgment nisi, a verdict, whether reached by jury or directed by the court, is not a final order. See Rule 567 f. ‘[I]t is indisputably clear that there is no right to appeal from a verdict,’ Montauk Corp. v. Seeds, 215 Md. 491, 502, 138 A. 2d 907 (1958). See, additionally, Hawkins v. GMAC, supra, 250 Md. [146] at 148; Merlands Club, Inc. v. Messall, supra, 238 Md. at 362-363; Md., Del. and Va. Rwy. Co. v. Johnson, 129 Md. 412, 99 A. 600 (1916).” Id. at 701-702.

The procedural implementation of the right to appeal by the Court of Appeals under its rule making authority, (Md. Const, art. IV, § 18), had neither the intention of affecting the language of that statutory right nor authority to expand appellate jurisdiction when it used the term “judgment” generally in Md. Rule 1012 a. There must first be an appealable judgment for the rule to be applicable. Recognizing that prerequisite, the Court of Appeals prefaced its rule with the cautionary phrase: “Whenever an appeal... is permitted by law.” It is “permitted by law” after judgment has been entered.

Judge Cameron’s reflections upon Aronstamn v. Coffey, 259 Md. 47 (1970), may be somewhat misleading. In that case the Court of Appeals clearly held that the case must be dismissed because

“[a]s of the time of appeal no final judgment had been entered, although the clerk should have entered judgment.” Id. at 48.

That the Court answered the issue raised by way of dicta does not change the effect of the dismissal. Although Aronstamn was not mentioned in Eastgate v. Apper, it is in accord with the closing language in Eastgate.

“In exceptional circumstances, however, a court may express its views on the merits of a case as dicta. See, e.g., Hawkins v. GMAC, supra. However, where appellate jurisdiction is absent, such statements by the appellate court can logically be no more than dicta, and it is improper for the order of the appellate court, and the opinion on which the order is based, to be made conclusive as to the points discussed.” Eastgate v. Apper, 276 Md. at 704.

Only two further matters discussed by the trial judge need be mentioned. We do not agree that Keystone Eng. Corp. v. Sutter, 196 Md. 620 (1951), can any longer be authority for a nunc pro tunc entry of judgment to “correct” the record, even by agreement to expedite the hearing of an appeal prematurely entered. The court’s power to change the record is severely restricted:

“To make the Record speak the truth and conform to the facts is a common law power, and is incident to all courts of record, and essential to their efficient existence. This power may be exercised at any time, even if the Record has been transmitted on appeal to a superior court and the appeal is there pending. Hays v. P., W. & B. R. R. Co., 99th Md. 420; 17th Enc. Pl. and Pr., 922; Waters v. Engle, 53 Md. 179. But in the exercise of such power the Court is authorized to make only such corrections as will make the record conform to the actual facts occurring in the progress of the cause, or in other words, make the Record speak the truth. It cannot so change the Record as to make it inconsistent with the facts, or make it state what is not true.” Md., Del. & Va. Rwy. Co. v. Johnson, 129 Md. 412, 416 (1916).

The “actual fact” in this case is that final judgment was not entered on September 2, 1977; the “truth” is, that it should have been, but that it was not Nor was final judgment entered on November 22, 1977. That which was entered on that date was an improper order nunc pro tunc. Thus, no appeal could properly be taken then either. No final judgment was entered until December 1, 1977. As indicated, the right to appeal is activated after a final judgment is entered, not the time final judgment ought to have been entered. The circuit court lacked any authority to change those facts by retrospective rulings, which are suspect even when ordered within the limited authority to so act.

Although Keystone appears to be precedential authority for permitting us to hear premature appeals (at least by adding mutual assent), it could not be considered as such, even if all of the additional contingent factors acknowledged in that case had been complied with in this case.

“In the case before us, there is no motion to dismiss the appeal. On the contrary, after argument, when counsel became aware of the lack of a judgment, application was made to the Judge of the Circuit Court for Kent County who heard the case, and, on December 21,1950, a judgment was entered in favor of the defendant against the plaintiff for costs, nunc pro tunc, May 2, 1950, and an agreement of counsel is filed in the case to the effect that the docket entries showing the record of this judgment be included in the transcript sent to this court. As the case was fully argued, and all parties desire its decision on the merits, and as the effect of dismissing the case would only result in the appellant having to file a new appeal, with the consequent additional expense and delay, or, because of such expense, being denied an appeal, we think it is in the interest of justice to treat the appeal before us as one from the judgment entered nunc pro tunc, and we will so consider it.” Keystone Eng. Corp. v. Sutter, 196 Md. at 626-627.

Both Keystone Eng. Corp. v. Sutter, supra, and the case it relied upon, Kendall Lumber Co. v. State, 132 Md. 93 (1918), were cited in Eastgate Associates v. Apper, supra, as unexplainable contradictions to the premise that jurisdiction cannot be conferred by consent. 276 Md. at 700-701. That Judge Eldridge, writing for the Court in Eastgate, flagged those cases as such in the Court’s first recognition of jurisdictional problems of premature appeals, indicates that the Court would disapprove them as authority for consensual circumvention just as it disapproved Dackman v. Dackman, 252 Md. 331 (1969) and Blocher v. Harlow, 268 Md. 571 (1973), as authority to circumvent utilizing the remand rules. Eastgate Associates, supra, at 703.

Prior to Eastgate Associates v. Apper, supra, various devices had been employed by the Court of Appeals and by this Court

“to save judicial time and unnecessary [litigation] expense and in the belief that our action is in the best interest of the administration of justice.” Apper v. Eastgate Associates, 28 Md. App. 581, 586 (1975).

The Court of Appeals acknowledged that both Courts had done this in the past despite the premature nature of the appeals, but pointed out that in none of the previous cases had there been any discussion of the devices relied upon to do so (in Eastgate Rules 871 and 1071) — “or of the jurisdictional problems involved.” Eastgate Associates v. Apper, 276 Md. at 703. The Court of Appeals then expressly denounced the previous authority they had used to wink at the technical jurisdictional defect implicit in appealing prematurely.

“To the extent that the above-cited cases support an assumption of appellate jurisdiction in the absence of an appealable order, they are disapproved.” Id.

In light of the recognition that premature appeals are jurisdictional defects, we predict the same fate will befall any device used to acquire jurisdiction where none has been legislatively granted. Even appellate courts cannot grant jurisdiction to themselves.

It appears then that Judge Cameron was right that he was wrong, but wrong that he was wrong for the reason he stated. He was qualifiedly right that a trial court may retain jurisdiction for limited purposes after an appeal, Lang v. Catterton, 267 Md. 268, 283-286 (1972), but, if we are right, he was wrong in believing that Keystone Eng. Corp. v. Sutter, supra, was authority to bestow jurisdiction where there was none.

We will, therefore, vacate the nunc pro tunc order of November 22, 1977, and the supplemental order of February 9, 1978 granting garnishee Maye H. Irwin’s Motion Ne Recipiatur or To Strike Order for Appeal, striking and dismissing appellants’ December 9, 1977 appeal pursuant to Md. Rule 1013, granting Motion “To Correct Docket Entries and Related Relief,” and striking the docket entry of December 1, 1977 entering final judgment. Vacating those orders leaves intact the docket entry of final judgment on December 1, 1977 and the propitious appeal from that judgment. We affirm that final judgment.

Orders dated November22,1977and February 9, 1978, vacated.

Judgmen t en tered December 1,1977, affirmed.

Costs to be divided equally.

      . Maye H. Irwin.

      . Robert Allen Sapero and Sapero & Sapero.

      . Bel Air Plumbing & Heating Contractors, Inc.; Fielden Lovelace and Mary Lovelace.

      . Although the appellants’ brief alludes to the fact that appellee may have suffered no loss by virtue of a subsequent sale, the issue of unjust enrichment was not pressed by appellants. Certainly the evidence did not prove that the deposit retained exceeded appellee’s damage, especially in light of the 7% deposit. Chas. H. Steffey, Inc. v. Derr, 275 Md. 121, 125-126 (1975).

      . “Please enter an Appeal to the Court of Special Appeals of Maryland on behalf of the Plaintiffs in the above captioned matter from the following:
      1. The Trial Court Order of February 10, 1978, striking the Order of Appeal filed December 9, 1977.
      2. The Trial Court Order of February 10, 1978, striking the Docket Entry of Judgment Absolute on December 1, 1977, which was preserved by the Order of Appeal filed on December 9, 1977.
      3. The entry on November 22, 1977, of Judgment Absolute, Nunc Pro Tunc to September 29,1977, which was preserved by the Order of Appeal filed on December 9, 1977.
      4. The decision of the Trial Court on the merits entered Judgment Nisi Causa September 23, 1977, and made Judgment Absolute on either September 29, 1977, November 22, 1977, December 1, 1977, or February 10, 1978.”

      . The precise limitations and express reasons upon which a trial court has the authority to strike an appeal should not pass unnoticed.
      “If the order for appeal has not been timely filed or if the clerk of the lower court has prepared the record as required by Rule 1026 (Record on Appeal) and the appellant has neglected or omitted to pay for such record, or has failed to deposit with the clerk of the lower court the filing fee as required by section d of Rule 1011 (How Appeal To Be Taken), or by reason of any other neglect or omission on the part of the appellant, the record has not been transmitted to this Court within the time prescribed pursuant to Rule 1025 (Record — Time for Transmitting), the lower court may sua sponte or upon motion, strike the order for appeal and take all proceedings as if such order for appeal had not been filed.” Md. Rule 1013.


source: Caselaw Access Project

author: Wilner, J.,

license: Public Domain

text:
    WORLD WIDE IMPORTED CAR COMPANY, LTD. et al. v. THE SAVINGS BANK OF BALTIMORE
    [No. 556,
    September Term, 1978.]

      Decided January 16, 1979.

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

      Russell D. Karpook, with whom were Power & Mosner on the brief, for appellants.

      Dorothy A. Beatty, with whom were Franklin G. Allen and Francis B. Burch, Jr., on the brief, for appellee.
   Wilner, J.,

delivered the opinion of the Court.

The Circuit Court for Baltimore County concluded that the claims of World Wide Imported Car Co., Ltd. (appellant) against The Savings Bank of Baltimore (appellee) were barred by the doctrine of res judicata, and for that reason it entered summary judgment in favor of the Bank. Was it correct in doing so? Partly, we think.

World Wide, until its fiscal demise, was an automobile dealer; it was owned and operated by one Charles Ziegler. In 1972 and 1973, it entered into two financing agreements with the Bank, each of which led to a lawsuit. The issue before us arises from the relationship between these twó agreements, and, thusly, from the relationship between the two lawsuits spawned by them.

The first agreement was a Dealer’s Agreement signed on June 9,1972. This agreement had to do with the purchase by the Bank of notes and other types of deferred payment obligations given to World Wide by customers who bought cars from it. In essence, then, it provided for the financing of World Wide’s sales, rather than its purchases.

The agreement recites that World Wide desires the Bank to purchase notes, conditional sales contracts, leases, and mortgages evidencing the sale of new and used motor vehicles, such agreements ordinarily being endorsed by World Wide “without recourse”. In consideration of the Bank puifchasing or otherwise acquiring such agreements, World Wide agreed that the Bank could tender to it for purchase any motor vehicle repossessed by the Bank by reason of any breach of an agreement purchased by the Bank. The tender would be on an “as is” basis for the balance due on the defaulted agreement; however, if, at the time of delivery, the default existed for 90 days or more, the price to be paid by World Wide would be based upon the National Automobile Dealers Association official used car guide, rather than merely the balance due on the agreement. World Wide retained the right to decline to purchase a tendered vehicle, but if it did so, the Bank could then sell the vehicle at public or private sale, and World Wide was obliged to reimburse the Bank for the difference between what it would have had to pay if it had purchased the vehicle and what the Bank recovered from its own sale.

World Wide agreed that, from the proceeds due it from any transaction, the Bank could retain, for World Wide’s account, an amount to be agreed upon. This would constitute a reserve account. With respect to it, the Dealer’s Agreement provided, in relevant part:

“So long as we [World Wide] are not in default hereunder or under any other obligation to you [the Bank], you will pay to us on request on or after the first days of January, April and July of each year, the .amount of such account in excess on those dates of 10% of the original amounts of the then outstanding agreements heretofore and hereafter purchased or acquired by you.... We further agree that you shall have the right to apply the proceeds of this account either in part or in full, or to hold same for the purpose of security, against any liability of ours under this or any other contract either actual or contingent, now existing or hereafter contracted, of any nature whatsoever arising hereunder or otherwise. ” (Emphasis supplied.)

Charles Ziegler and his wife Barbara signed a separate agreement on the same day guaranteeing the faithful performance by World Wide of its obligations under the Dealer’s Agreement.

The second agreement between the corporate parties was entitled a Continuing Dealer Floor Plan Agreement, signed on August 1, 1973. This agreement dealt with the financing of World Wide’s acquisitions rather than its sales. Under this agreement, the Bank was authorized to disburse funds directly to the manufacturer or other seller of vehicles sold to World Wide. Paragraph (c)(1) provided:

“As security for the payment of all loans now or hereafter made by Bank to Dealer hereunder and all other present or future indebtedness of Dealer to Bank, matured or unmatured, direct or contingent, Bank retains title to each unit of Merchandise for which Bank shall have paid the manufacturer or distributor until Dealer has discharged his obligations to Bank hereunder with respect to such unit, and Dealer grants Bank a continuing security interest in all new and used Merchandise now owned or hereafter possessed by Dealer, whether inventory or equipment, together with Manufacturer’s or importer’s Certificates of Origin and Certificates of Title or Ownership relating thereto and all proceeds thereof including but not limited to accounts receivable and chattel paper arising from the sale of Merchandise by Dealer not otherwise assigned to Bank.”

This agreement also was guaranteed by Charles and Barbara Ziegler.

On August 12, 1975, the Bank sued World Wide and the Zieglers in the Circuit Court for Baltimore County, claiming a breach of the second agreement — the Continuing Dealer Floor Plan Agreement. This action was docketed as No. 91808, and will hereafter be referred to as the “first action.” In Count I, the Bank asserted that World Wide had sold motor vehicles subject to the Bank’s security interest without making the required payments to the Bank, and that, as a result, the Bank sustained damages of $36,797. In Count II, it was alleged that, as a result of this breach, the Bank was required to repossess and sell those vehicles, and that because of a “shrinkage in value” of the repossessed vehicles, the Bank suffered an additional loss of $14,246. Accompanying the Declaration was a motion for summary judgment and an affidavit purportedly in support of it.

World Wide, which by then was out of business, never answered either the Declaration or the motion for summary judgment. The Zieglers, however, answered both. Filing a general issue plea to -the Declaration, they asserted in their answer to the motion that there was a “controversy of fact for the following reasons:

a. That the Declaration does not show how the amounts claimed in Counts 1 and 2 are arrived upon. That it does not have a computation attached thereto to show that this is a definite sum due and owing.
b. That there is a reserve for the benefit of World Wide Imported Car Co., Ltd. held by the Savings Bank of Baltimore which contains an amount in excess of the amounts claimed in Counts 1 and 2 and there is no reference in the Declaration to show that this reserve was taken into account in arriving at the amounts claimed.”

A similar averment, with respect to this reserve account, was made in an affidavit of Mr. Ziegler that accompanied this answer — that “there were ample funds contained therein to pay all amounts claimed” by the Bank.

Faced with this defense, obviously grounded upon the reserve account created and maintained pursuant to the Dealer’s Agreement, the Bank withdrew its motion for summary judgment and substituted another such motion. There was no difference in the motions themselves, but the second motion was supported by an elaborate affidavit explaining in great detail how this reserve account operated and concluding, in the end, that rather than there being ample funds in the account, it actually had a “negative balance.” Accompanying and supporting this affidavit were copies of World Wide checks returned for insufficient funds, the Dealer’s Agreement, documents used in connection with that agreement, and ledger accounts showing running balances in the reserve account (the last such balance being minus $2,381.81).

On January 27, 1976, the court granted the Bank’s motion for summary judgment. Judgment became final in the principal amount of $49,777.46 on February 2,1976; no appeal was taken.

On September 30, 1977, World Wide and Ziegler filed this action. Count I, on behalf of World Wide, alleged four common counts and a special count claiming that “the Defendant agreed to purchase from the Plaintiff ‘notes and/or contracts of conditional sale and/or leases and/or mortgages ..., evidencing the sale of new and used motor vehicles ’ ” and that the Bank breached that agreement by,

“refusing to purchase said notes and/or contracts of conditional sale and/or leases and/or mortgages from Plaintiff, and by failing and refusing to pay sums due Plaintiff from Defendant under the provisions of said ‘Dealer’s Agreement’ ”. (Emphasis supplied.)

As a result of these breaches, World Wide asserted that its business suffered irreparable injury resulting in its inability to continue to operate its automobile dealership.

In Count II, Ziegler, asserting that he was the president and sole stockholder of World Wide, claimed that as a result of the Bank’s breach of the Dealer’s Agreement, as alleged in Count I, he lost his employment with World Wide and also suffered other and sundry forms of injury.

The Bank, with ultimate success in the lower court, moved for summary judgment on Count I based upon res judicata and interposed a preliminary objection under Maryland Rule 323 to Count II upon the basis that Ziegler lacked legal capacity to sue. Ziegler has not appealed from the adverse judgment against him on Count II, so all that is before us, as noted earlier, is the judgment on Count I.

The essence of appellant’s argument on appeal is that the two agreements were separate and distinct from each other, dealing with entirely different matters. Thus, it contends, the first action, involving only the Continuing Dealer Floor Plan Agreement, was not the “same cause of action”, did not settle any questions pertaining to the Dealer’s Agreement, and therefore would not bar the second suit. The court concluded, however, that the issue of monies allegedly due under the Dealer’s Agreement was a defense in the nature of a set-off to the Bank’s action for monies due under the Continuing Dealer’s Floor Plan Agreement, and that:

“[w]hen judgment was rendered for the Plaintiff Savings Bank against the Defendant Ziegler for the breach of the ‘Continuing Floor Plan Agreement’ without any allowance for set-off on the basis of the defense of monies due under the Dealer’s Agreement, that defense was adjudicated and obviously denied by the Court.”

We had occasion recently to discuss the allied doctrines of direct estoppel (res judicata), collateral estoppel, and collateral attack in Klein v. Whitehead, 40 Md. App. 1 (1978), cert. den., 283 Md. 734. See also Singer v. Steven Kokes, Inc., 39 Md. App. 180 (1978). The doctrine of collateral attack is clearly not involved here. The question is whether, and to what extent, this second action is barred by either direct or collateral estoppel.

As we pointed out in Klein, in order for either of these to apply, the second action must be between the same parties or those in privity with them. World Wide concedes in its brief that this “initial threshold” has been crossed. For direct estoppel to apply, the two causes of action also must be the same; if that is shown, the judgment in the first action is conclusive “not only as to every matter which was offered and received to sustain or defeat the [initial] claim or demand, but as to any other admissible matter which might have been offered for that purpose.” (Emphasis supplied.) LeBrun v. Marcey, 199 Md. 223 (1952), quoted in Klein at p. 13. If the two actions are not the same, collateral estoppel may be applicable, but that would pertain “only with respect to issues of fact actually determined in the earlier proceeding.” Klein, at p. 15.

We start by looking at the instant action: what is appellant complaining about; what cause or causes of action has it stated? Putting aside the four common counts lumped into Count I, which neither appellee nor the circuit court has addressed, we turn to the “special” count, also included in Count I as paragraph 5 thereof. In this paragraph, appellant alleges the Dealer’s Agreement, and claims that “by said ‘Dealer’s Agreement' the Defendant agreed to purchase from the plaintiff ‘notes and/or contracts of conditional sale and/or leases and/or mortgages ..., evidencing the sale of new and used motor vehicles’ by Plaintiff”. It claims then that the Bank breached that agreement “by refusing to purchase said notes ..., and by failing and refusing to pay sums due Plaintiff from Defendant under the provisions of said ‘Dealer’s Agreement’ ” (emphasis supplied) and that appellant’s losses arose from “said action.”

A careful reading of this paragraph thus indicates that two rather distinct complaints are included in it — first, that the Bank breached the agreement by refusing to purchase notes that it had agreed to purchase, and second, that it failed to pay appellant sums due under the agreement.

We look now to the first action, and consider (1) to what extent, if any, was it the “same” as the second thus making direct estoppel applicable, and (2) to what extent, if any, were issues of fact raised in the second action actually determined in the first, thus making collateral estoppel applicable?

Appellant addresses only the first question, and argues that the two actions are not the same because they arose out of and dealt with “separate and distinct independant [sic] transactions." (Brief, p. 13.) This is too simplistic. When, in the first action, Ziegler attempted to defeat the Bank’s claim by contending, as a set-off, that monies were due to World Wide under the reserve account, that question became very much a part of the first action. Upon reception of the Bank’s extensive reply to Ziegler’s contentions, the factual correctness of which was not disputed by either World Wide or Ziegler, the court necessarily had to conclude, in rendering judgment in favor of the Bank, that, as a matter of fact, no monies were due to World Wide by virtue of the reserve account. Whether, as to that claim, we conclude that the actions were the “same” is therefore immaterial. Even if the actions were not the same, that claim asserted by appellant would nevertheless be barred by collateral estoppel, as it involves and indeed is founded upon “issues of fact actually determined in the earlier proceeding.”

This is not necessarily true, however, with respect to appellant’s contention that the Bank breached the agreement by refusing to purchase notes that it had agreed to purchase. This allegation has nothing to do with the reserve account, which emanated from notes and other obligations that the Bank had purchased. There is no indication from any of the pleadings or docket entries in the first action that this claim, or any facts necessary to its resolution, were ever raised by the parties or considered by the court in that action. That fact would preclude the application of collateral estoppel with respect to this claim. Left open, however, is whether the claim may yet be barred by direct estoppel upon the premise that the two actions are the same; and this requires, initially, that we consider, in the context of this second contention, that which was unnecessary for us to consider with respect to the first — whether the causes of action are the same.

The criterion by which this is to be judged is whether the same evidentiary facts would sustain both actions. MPC, Inc. v. Kenny, 279 Md. 29 (1977). In Klein, quoting from 2 Freeman on Judgments, § 687, we noted, at p. 18:

“ 'The cause of action is the same when the evidence will support both actions; or, rather the judgment in the former action will be a bar, provided the evidence necessary to sustain the judgment for the plaintiff in the present action would have authorized a judgment for him in the former.’ If this identity of evidence is found, it will make no difference that the form of the two actions is not the same.”

Notwithstanding appellant’s assertions to the contrary, it is clear that, with respect to any question as to monies due under the reserve account, that test has been satisfied, and, to that extent, the causes of action are the same. The evidence necessary to support Ziegler’s set-off claim in the first action was precisely that necessary to support World Wide’s claim pertaining to the reserve account in this action.

This raises what appears to be a seeming conflict in the law, involving the relationship among three different principles. First, it is clear, having been often repeated by the Court of Appeals, that, where direct estoppel applies, the first judgment bars a party from subsequently raising not only matters that were, in fact, decided in the first action, but also those “which could have been decided in that case.” See MPC, Inc. v. Kenny, supra, 279 Md. 29; Sterling v. Local 438, Etc., 207 Md. 132 (1955), cert. den., 350 U. S. 875 (1955). Certainly, the claim that the Bank had breached the Dealer’s Agreement by refusing to purchase notes could have been raised in the form of a counterclaim in the first action, although it was not required to be so raised in that action. Maryland Rule 314a. provides, in relevant part:

“In any action any party, against whom a claim, counterclaim, cross-claim or third-party claim has been asserted, may plead as a counterclaim any claim he has against any opposing party.
“The counterclaimant may claim relief exceeding in amount or different in kind from that sought in the pleading of the opposite party, and need not diminish or defeat the recovery sought by the opposing party.” (Emphasis supplied.)

Had appellant raised this issue in the first action, as a counterclaim, the evidence necessary to support it in that form would have been the same as that necessary to support it in this action. Thus, on the one hand, it appears that, because there is the sameness of actions regarding the reserve account and because this issue could have been raised, it too is precluded by direct estoppel.

It has been generally, if not universally, recognized, however, that this aspect of direct estoppel does not apply with respect to a counterclaim arising from an independent cause of action not raised and not required to be raised in defense of the earlier action. A succinct statement of this principle was provided in 8 A.L.R 694, 695 (Anno. — Failure to Assert Claim by Set-Off, Etc.):

“The general rule is that a defendant, having a claim available by way of set-off, counterclaim, or cross petition, has an election so to plead it, or to reserve it for a future independent action, and a prior action in which a claim might have been asserted as a set-off, counterclaim, or cross petition is no bar to a subsequent independent action thereon.”

See also Restatement of the Law of Judgments, § 58, p. 230:

“Where the defendant does not interpose a counterclaim although he is entitled to do so, he is not precluded thereby from subsequently maintaining an action against the plaintiff on a cause of action which could have been set up as a counterclaim.”

Another expression of the rule, indicating more clearly the rationale behind it, is found in 2 Freeman on Judgments, § 786 (5th Ed.), pp. 1665-66:

“It has already been noticed that while a defendant must bring forward all purely defensive matter, he is not barred by a former judgment against him as to any matter which he was not bound to present and which was not in fact litigated. A judgment is not conclusive of those matters as to which a party had the option to but did not in fact put in litigation in the action. The statutes of set-off and counterclaim are for the benefit of defendants, and plaintiffs cannot compel defendants to avail themselves of those benefits. Everyone should have the right to try his own case in his own way. It may require time for the development and discovery of the nature and extent of the damage arising from a cross-demand, and a rule requiring him to litigate it at the option of his adversary might deprive him of the value of it. The general rule, therefore, in the absence of a contrary statute, is that a defendant having an independent claim available as a cross-demand, whether in contract or tort, has the option either to plead it as such or to reserve it for a future independent action, and in the latter event the former judgment will not operate as a bar or estoppel.” (footnotes omitted.)

See, as well, 50 C.J.S. Judgments, § 684b. (3), p. 136.

This principle, as expressed in these treatises, has been followed by courts throughout the country, apparently without exception. The Maryland Court of Appeals, without stating the rule quite so directly as these other courts, nevertheless gave recognition to it in Davidson Chem. Co. v. Miller Co., 122 Md. 134 (1913); c.f. Impervious Products Co. v. Gray, 127 Md. 64 (1915). We concluded in Singer v. Steven Kokes, Inc., supra, 39 Md. App. at 182-83, that “[i]f a matter is not in the nature of a defense but constitutes a counterclaim, the general rule is that the party is not required to assert the claim unless the subject matter is such an integral part of the issue being litigated that a judgment would necessarily negate the existence of facts essential to its maintenance.”

This brings into play the third principle — that which disfavors the splitting of causes of action. In Ex Parte Carlin, 212 Md. 526 (1957), the Court stated, at pp. 532-33:

“It is well established that a single cause of action or an entire claim cannot be split up or divided and separate suits maintained for the various parts thereof. A judgment or decree in a suit for a part only of a single cause of action or entire claim permits res judicata to be successfully relied on if the remainder is sued on later. The rule is intended to prevent multiplicity of litigation and to avoid the vexation, costs and expenses incident to more than one suit on the same cause of action. Its bases are the maxims ‘that it is the interest of the State, there should be an end to litigation’ and that ‘no man should be twice sued for the same cause.’ ”

See also Frontier Van Lines v. Md. B. & Tr. Co., 274 Md. 621 (1975); Singer v. Steven Kokes, Inc., supra, 39 Md. App. 180.

The question is whether this claim arising from the Bank’s alleged failure to purchase notes which (1) is different from that based upon the reserve account but arises from the same agreement, and (2) could have been raised as a counterclaim in the first action but was not raised, is nevertheless barred because the failure to raise the issue earlier constitutes an improper splitting of actions. We think not.

The two claims by World Wide, though arising from or out of the same contract, are quite different. They rest on entirely different theories and, to succeed, would require proof of wholly different sets of facts. They are not, as was involved in Carlin, “a single cause of action” or “an entire claim”. This also distinguishes this case from Singer, supra, which involved a series of claims of the same type and based upon the same theories of law.

It thus becomes evident that appellant’s claim for damages arising out of the Bank’s alleged refusal to purchase notes in breach of the Dealer’s Agreement is not precluded by application of direct (or collateral) estoppel. This claim is independent of the Bank’s claim against appellant, and is also independent of World Wide’s attempted set-off to it raised in the first action.

In summary, then, it appears that so much of Count I as is premised upon monies being owed to appellant from the reserve account is barred by both direct and collateral estoppel, and summary judgment was properly entered as to it. However, to the extent that there may be in Count I a well pleaded claim based upon the Bank’s alleged refusal to purchase notes from appellant (a point we do not decide here), such a claim would not be barred by direct or collateral estoppel. As to that claim, therefore, the summary judgment, which rested solely upon the application of res judicata, was inappropriate and will, to that extent, be reversed.

Judgment affirmed in part, reversed in part, and remanded for further proceedings.

Costs to be divided equally between the parties.

      . There is nothing in the record in either case to show that this “reserve for the benefit of World Wide Imported Car Co., Ltd. held by the Savings Bank” is anything other than the reserve account established under the Dealer’s Agreement. Indeed, appellant’s counsel conceded at oral argument that he knew of no other reserve account to which this phrase may have referred.

      . With respect to its motion for .summary judgment, appellee has defended against Count I of the Declaration solely on the basis that it is barred by the earlier judgment; and that is the only issue that the lower court considered (as to Count I) or that we will consider. We express no opinion as to whether any other .pleading or substantive defenses might have been available to appellee.

      . For the reasons stated by the Court in MPC, Inc. v. Kenny, supra, we do not consider the fact that the set-off claim was raised in the first action by Ziegler rather than by the defaulting World Wide, given the relationship of the two defendants, to prevent the application of direct estoppel on the premise that the parties to the two actions were not the same.

      . See, by way of example, Frank M. Herbert, Inc. v. M & P Scrap Iron & M. Corp., 247 N.Y.S.2d 193, 197 (1964); Seager v. Foster, 169 N. W. 681 (Iowa, 1918); Meyer v. Vance, 406 P. 2d 996 (Okl., 1965); Leslie v. Brown Bros. Incorporation, 283 P. 936 (Cal., 1929); Buck v. Mueller, 351 P. 2d 61 (Ore., 1960); Graham v. Sisco, 449 S.W.2d 949 (Ark., 1970); Jackson v. Farmers Union Livestock Commission, 181 S.W.2d 211, 221 (Mo., 1944); Mechanical Devices Co. v. General Builders, 99 A. 2d 605 (N.J. Super., 1953), rev. on other grounds, 105 A. 2d 673; State v. Calhoun, 93 N.E.2d 317, 320 (Ohio, 1950); Stoner v. Stoner, 115 N.E.2d 103,106 (Ill. App., 1953); Strunk v. Bennett, 258 S.W.2d 517 (Ky., 1953); Maramen v. Thompson, 243 So. 2d 34 (Ala., 1971).