author: Melvin, J.,

text:
    C. S. BOWEN COMPANY, INC. T/O/U and T/U/O HARTFORD ACCIDENT & INDEMNITY COMPANY et al. v. MARYLAND NATIONAL BANK
    [No. 449,
    September Term, 1976.]

      Decided May 12, 1977.

    The cause was argued before Davidson, Melvin and Mason, JJ.

      Michael L. Schwartz with whom were David K. Ebersole and Richard Bloch on the brief, for appellants.

      Gordon C. Murray and Leonard A. Orman, with whom was L. Keith Simmer on the brief, for appellee.
   Melvin, J.,

delivered the opinion of the Court.

In this case the appellant (plaintiff below), C. S. Bowen Co., Inc. (Bowen), claims that the appellee (defendant below), Maryland National Bank (Maryland National), is liable to it for negligence and conversion. More specifically, Bowen claims that Maryland National wrongfully credited to the checking account of “Mrs. Patricia M. Andrews and Charles S. Bowen” at Maryland National checks belonging to Bowen and has failed to reimburse it for the full amount of those checks. It is claimed that Mrs. Andrews, Bowen’s employee, stole the checks from Bowen and that Maryland National accepted them for deposit in spite of a restrictive endorsement on all of them reading “For Deposit only, C. S. Bowen Company”. After a jury verdict in favor of Maryland National in the Superior Court of Baltimore City (Ross, J., presiding) and a judgment entered thereon, Bowen appeals, presenting us with three questions for decision:

(1) Did the trial court err in not granting Bowen’s motion for a directed verdict “on the issue of Maryland National’s liability”?
(2) Did the trial court err “in failing to instruct the jury that if they found the checks deposited by Andrews in the Andrews account at Maryland National were stamped ‘For Deposit Only, C. S. Bowen Company’, they would have to find Maryland National liable”?
(3) Did the trial court err “in admitting irrelevant and prejudicial activities of the president of C. S. Bowen”?

The Evidence

-Bowen is described in the testimony as a “small” Maryland corporation located in Baltimore City engaged in the business of selling and servicing paint spray equipment and sandblasting equipment. Mrs. Andrews was hired by Bowen in October 1965 as a bookkeeper. Her duties were “to pick up the mail, to make deposits, keep the books and do some filing, those type of things”. According to Bowen’s president (Mr. Whitaker), with reference to deposits, “If a check came in the mail she was supposed to take it out, stamp it with ‘Deposit only to C. S. Bowen’ and then she would post it to the ledger card to whatever account it was to show that the invoice had been paid and then, of course, that posting, was posted into the cash receivable ledger and the check was put on a deposit slip and taken to” the Union Trust Company for deposit in Bowen’s checking account at that bank. Bowen had no account at Maryland National.

On 20 March 1967, Mrs. Andrews, without the knowledge or authority of Bowen, went to a branch bank of Maryland National in Baltimore City and opened a “regular” joint checking account in the names of “Mrs. Patricia M. Andrews and Mr. Charles S. Bowen”. She signed her name to a signature card and was asked to have Mr. Charles S. Bowen do the same. As “Charles S. Bowen” did not exist, Mrs. Andrews could not comply with this request. Instead, she took the card out of the bank, wrote the name “C. S. Bowen” on the card and returned it to the bank. Mrs. Andrews’ bank statements and deposit slips, introduced in evidence, showed that thereafter, between March 1967 and September 1968 Mrs. Andrews periodically deposited in the “joint” account checks totalling in the aggregate approximately $80,000.00, and that she drew on the account for her personal wants and needs.

Bowen claims that all the checks deposited by Mrs. Andrews were checks she had stolen from it, and that Maryland National is liable to it for their face amounts because, according to Bowen, all the checks were restrictively endorsed with a rubber stamp reading “For Deposit Only, C. S. Bowen Company ”.

Maryland National does not contest the fact that Mrs. Andrews stole checks from Bowen or that some of the stolen checks may have been accepted by it for deposit in her “joint” account. Maryland National does, however, vigorously contend that Bowen has failed to meet its burden of showing which checks deposited by Mrs. Andrews belonged to Bowen or how they were each endorsed. Maryland National further claims that the evidence is such that the jury could have reasonably believed that Mrs. Andrews had repaid to Bowen the amounts of whatever checks she had stolen from Bowen and therefore that, in any event, no damages have been proven.

As its principal witness, Bowen called Mrs. Andrews to testify. She admitted that she had stolen checks from her employer and deposited them in her “joint” account. Her scheme for covering up her peculations was daring, if not ingenious. When a Bowen customer was billed, one of Andrews’ duties was to receive a “green copy” of a numbered five-piece invoice. She was supposed to post the amount shown by the invoice on the customer’s individual ledger card and place the green copy, in numerical sequence, in a loose-leaf monthly notebook. Two copies of the invoice were sent to the customer when he was billed for his purchase; another copy was used for “back orders” when necessary, and the fifth, or “gold copy”, was placed in a “customer file” to facilitate filling a customer’s re-order of the same item. The “green copy” was the “control copy”.

Mrs. Andrews said that her scheme was, from time to time, to hide the green copy of the invoice and not post the amount due on the customer’s ledger card or anywhere else among Bowen’s records. Thus, when Bowen’s accountant made his customary monthly examination of the company’s books, he would find no record of the customer’s order (which was kept with the “gold copy” and not ordinarily checked by the accountant, or anyone else unless there was a re-order) and no record of an account receivable from that customer. Mrs. Andrews, however, in furtherance of her scheme, kept a notation of her own of the “green copy” of the invoice she had hidden, listing the customer’s name and the amount he had been billed. Then, when the customer’s check arrived in the mail, instead of depositing the check in Bowen’s account at the Union Trust Company, she deposited it in her “joint” account with the fictitious “Charles S. Bowen” at Maryland National. She said she repaid Bowen for some of the checks but she did not know how much was “involved” and had “no idea” how much she owed Bowen. She said her method of repayment was to “go to the bank and purchase money orders and put them back in, but I don’t know how much”.

In September 1968, Mr. Whitaker discovered Mrs. Andrews’ dishonesty while she was on vacation. By letter dated 19 September, Bowen’s attorney notified Mr. John O. Montgomery, Maryland National’s security" officer, that Mrs. Andrews “has apparently misappropriated funds of the Corporation by employing the use of an account in the Maryland National Bank” and “that under no circumstances should any of the funds which you presently have on hand be released to anyone without authority of Mr. Whitaker”. Mr. Montgomery received the letter 20 September and on the same date ordered that the account be “frozen to prevent any further payment from the account”. At that time the balance in the account was $4,353.06, Despite the “freeze” order, however, Maryland National continued to honor some checks drawn on the account that were outstanding at the time the “freeze” order was given.

On 21 September, Mr. Montgomery interviewed Mrs. Andrews. She gave him a list of seven checks she said she had deposited in her “joint” account. This list (Defendant’s Exhibit No. 1) contained only the amount of each check with the payor’s name noted after six of the amounts. The payor of one of the checks, in the amount of $3,909.08, was Bethlehem Steel Corporation. The evidence is uncontroverted that the named payee of this check was “C. S. Bowen Company, Inc.”, that its only endorsement was by a rubber stamp reading, “For Deposit Only, C. S. Bowen Company”, and that it was accepted for deposit by Maryland National to the credit of Mrs. Andrews’ joint account on 18 September 1968. It is also uncontroverted that on 19 November 1968, Maryland National repaid to Bowen the amount of the check because, according to Mr. Montgomery, Mrs. Andrews had told him at his 21 September interview with her that “This was money that belonged to C. S. Bowen and Company”. It is clear that this check is not one of the checks for which Bowen seeks damages in conversion or negligence.

With respect to the payees of the checks she “took from C. S. Bowen”, Mrs. Andrews said “some were made out to C. S. Bowen Company, some were made out to Patricia Andrews”. At another point in her testimony she said, “They were all made out to C. S. Bowen”.

Regarding the endorsements, Mrs. Andrews testified she used a rubber stamp that belonged to Bowen on all the checks she stole. According to her, the rubber stamp read, “ ‘For Deposit Only, C. S. Bowen Company, Inc.’ ” or just “ ‘C. S. Bowen’ ”.

In a pre-trial deposition, Maryland National’s security officer, Mr. John 0. Montgomery, testified that Mrs. Andrews told him that “some of the checks she had put in her account belonged to the company, and some of them didn’t”. At trial, Mrs. Andrews testified that, except for “several” of her pay checks legitimately received from Bowen, all of the checks she deposited were checks belonging to Bowen. Her cancelled pay checks, however, for the period covering the life of the “joint” account do not show that she deposited any of them at Maryland National. Thus, there is some evidence that Bowen was indeed the owner of all the checks deposited by Mrs. Andrews.

I

At the close of all the evidence, Bowen, the plaintiff below, moved for a directed verdict. The motion was denied. On appeal, Bowen argues that the trial court erred in not granting the motion “on the issue of Maryland National’s liability” and asks that we remand the case for a new trial on the issue of damages only. We first consider whether this precise issue is properly before us. It is properly before us only if it was properly presented to the trial court and decided by it in the first instance. Md. Rule 1085.

Maryland Rule 552 a provides that in a jury case,

“. . .. any party may move ... at the close of the evidence, for a directed verdict in his favor on any or all of the issues. Such motion shall state the grounds therefor .... ” (Emphasis added.)

The motion in this case was general in nature and was not limited to any one issue. Rather it seems to have been directed to “all of the issues” considered by Bowen to be necessary to render Maryland National liable to it for the aggregate amount of all checks deposited by Mrs. Andrews in her “joint” account. The facts, claimed by Bowen to be established by the evidence, were that 1) all the checks deposited by Mrs. Andrews in her “joint” account were “C. S. Bowen Company checks”; and 2) all the checks were restrictively endorsed with a rubber stamp, “For Deposit Only, C. S. Bowen Company”, and were improperly applied by Maryland National to the “joint” account. Bowen argued that, having established those facts, there was “[no] issue to be submitted to the jury”. Although Bowen’s counsel also argued that “[t]here is just nothing for the jury to determine with reference to the liability of the bank”, we find nothing in the stated grounds for the general motion for a directed verdict indicating that the motion was limited to the issue of liability alone, leaving the issue of damages to be determined by the jury. Here, there was no concession that there was any issue left for determination by the fact finder. On appeal, however, Bowen seems to concede that the matter of damages is one properly for the jury and asks that we remand the case for a new trial on that issue alone. But, as we have indicated, whether that issue alone should have been submitted to the jury is not a question that was either presented to or decided by the lower court. The question is therefore not properly before us in this appeal. Md. Rule 1083.

Moreover, even if the question were properly before us as having been presented to and decided by the trial judge, we would hold that the motion was properly denied. This is so because the evidence claimed by Bowen to establish Maryland National’s liability, vel non, as to all the checks deposited by Mrs. Andrews is not uncontroverted. Bowen argued to the trial court that it is the true owner of “each and every” check deposited by Mrs. Andrews. We need go no further than to point out that this argued “fact” is not uncontroverted. Although the evidence may support such a factual finding, it does not compel it.

While it is well settled that under Rule 552 a, a trial court may grant a directed verdict to a plaintiff as well as a defendant “on any or all of the issues”, where the court is considering whether to grant such a motion to a plaintiff on any issue as to which he has the burden of proof, the motion should be denied unless the facts are uncontroverted (as opposed to merely uncontradicted) or the parties have agreed as to the facts and such facts and the circumstances surrounding them permit of only one inference with regard to any issue presented by the motion. See, Alexander v. Tingle, 181 Md. 464, 30 A. 2d 737 and Pennsylvania R. Co. v. Stallings, 165 Md. 615, 170 A. 163. In the latter case, at 619, the Court said:

“ .... Nor it is true that the court can say as a matter of law that one upon whom the burden rests has discharged that burden merely because testimony offered by him was not contradicted. To so hold would be to override the decisions in a long line of cases that the jury has the right to disbelieve a witness even when uncontradicted, [citing cases] In Harrison v. Central Construction Co., 135 Md. 170, at page 180, 108 A. 874, 878, it was said: ‘When the facts have been ascertained and agreed upon by the parties, or are undisputed, and there is no dispute as to the inferences to be drawn from the facts, the question becomes one of law and may be decided by the court’.
“This was said in a case where there was an agreed statement of facts. And it will be found, on examination of all the cases where like language is used there was no controversy about the facts, [citations omitted]. ‘Undisputed’, as used in these cases, must be taken to mean “uncontested’, rather than ‘uncontradicted’.”

II

Bowen excepted to the court’s instructions as follows:

“.... I requested an instruction, that Your Honor, instruct the jury that if the jury finds that the checks, For Deposit Only, C. S. Bowen, then the jury would have to find the bank was negligent. Therefore, the jury would have to find the bank could not necessarily defend under preclusion section or under the other section that Your Honor read to them.” (Emphasis added)

On appeal Bowen contends that,

“the court below erred in its instructions to the jury which failed to instruct the jury that if they found the checks deposited by Andrews in the Andrews account at Maryland National were stamped ‘For Deposit Only, C. S. Bowen Company’ they would have to find Maryland National liable”. (Emphasis added)

Here again, we find a material difference between the issue actually submitted to the trial court and the issue which we are asked to decide on appeal. Md. Rule 554 e provides that,

“Upon appeal a party assigning error in the instructions, shall be restricted to (1) the particular portion of the instructions given or the particular omission therefrom or the particular failure to instruct distinctly objected to before the jury retired and (2) the grounds of objection distinctly stated at the time, and no other errors or assignments of error in the instructions shall be considered by the appellate court.”

As the “particular failure to instruct” now argued on appeal was not “distinctly objected to” in the trial below, we are not permitted to consider it.

Moreover, we note that Bowen in its brief to us, after stating the contention, goes on to say that “C. S. Bowen does not contend that the lower court failed to properly recite the language of the pertinent statutory sections [of the Uniform Commercial Code], but complains that the mere citing of the language was too confusing for the jury to understand”. As no such “complaint” was made to the trial court, it cannot be considered here. Rule 554 e.

The reason why we think there is a material difference between the exception actually taken to the trial court’s failure to instruct and that which is argued on appeal is this:

The Uniform. Commercial Code requires that a depositary bank that is the transferee of a restrictively indorsed instrument “must pay or apply any value given by [it] for or on the security of the instrument consistently with the indorsement”. Md. Uniform Commercial Code, § 3-206 (3). This section and other sections of the U.C.C. dealing with restrictive indorsements make it clear that a depositary bank that does not apply an instrument consistently with a restrictive indorsement is liable in conversion. Salsman v. National Community Bank of Rutherford, 246 A. 2d 162 (N.J. 1968); In Re Quantum Development Corp., 397 F. Supp. 329 (D.V.I.), aff'd on other grounds, 534 F. 2d 532 (3rd Cir. 1976).

In the case ht bar, it will be recalled that one of the joint owners of the account was, so far as Maryland National knew, “Charles S. Bowen”, whose signature card bore the name “C. S. Bowen”.. Therefore, with respect to any such checks, (i.e., with an indorsement reading “For Deposit Only, C. S. Bowen”) it is at least a jury question whether Maryland National applied the value thereof consistently with the indorsement “For Deposit Only, C. S. Bowen”. If it did, then it is not subject to what Bowen contends to be the absolute liability imposed upon a depositary bank that fails to honor a restrictive indorsement. Thus, in the unusual circumstances of this case, the trial court was correct in not granting the particular instruction requested.

We observe that even if Maryland National could be said to have applied the proceeds of a particular check “consistently with the indorsement”, it might still be liable in conversion to Bowen. As the trial court correctly instructed the jury, “Except as provided in the Uniform Commercial Code, a bank which takes checks from a person, who is not the true owner of those checks, and who has no authority [from the true owner] to transfer or negotiate the checks, is liable to the true owner of the checks for the conversion”. See, National Union Bank v. Rubber Co., 148 Md. 449, 129 A. 688 (1925), a pre-U.C.C. case in which the basic pre-U.C.C. rule was stated thusly:

“If a negotiable instrument having a forged indorsement come to the hands of a bank and is collected by it, the proceeds are held for the rightful owners of the paper, and may be recovered by them, although the bank gave value for the paper, or has paid over the proceeds to the party depositing the instrument for collection.”

Section 3-419 (3) of the Maryland Uniform Commercial Code (Md. Code, Commercial Law Volume, §§ 1-101 through 10-104, effective 1 February 1964), described in the Official Comments as “new”, would appear to provide a depositary or collecting bank a complete defense at the suit of a true owner for conversion or negligence if the defendant bank can show 1) that it has in good faith and in accordance with reasonable commercial standards dealt with the instrument alleged to have been converted or negligently handled, and 2) that it has no proceeds of the instrument remaining in its hands at the time suit is filed. Whether this section is indeed available to a collecting-depositary bank to limit its liability for conversion at the suit of a true owner has never been decided in this State and the issue is not before us for decision now. We mention it only because, upon remand, it is an issue that may require resolution by the trial court.

We further observe that any defense afforded by § 3-419 (3) would not be available to a depositary or collecting bank that applies the proceeds of a check inconsistently with a restrictive indorsement. This is so because of the express language of the section rendering its entire content “subject to” all provisions of the U.C.C. concerning restrictive indorsements, including § 3-206 (3).

III.

During the cross-examination of Bowen’s president, John Whitaker, counsel for Maryland National sought to explore the non-corporate use by Whitaker of corporate funds. A timely objection was interposed, and a bench conference followed:

“(The Court) May I see counsel, please.
* * *
(The Court) What’s this all about?
(Mr. Orman [Maryland National’s Counsel]) Your honor, I am going to proffer, because I think that Mrs. Andrews — I talked to Mrs. Andrews and got a statement from her and she advised me that in addition to her duties as set out by Mr. Whitaker, that Mr. Whitaker also had her do various other matters on company time and with company money, including payment of rent for his girlfriend’s apartment, taking them to dinner and doing various other items, buying them furniture, charging all that to the corporation, as corporate expenditures.
(The Court) What does that have to do with this case?
(Mr. Orman) I believe it has to do with, first of all, the atmosphere he set up in the company and the use of the money for noncorporate events and that he said that all the money that was in the corporation was used only for corporate purposes and that the duties of Mrs. Andrews included just the duties he said.
Now, she had these other duties which were actually noncorporate in nature but were for his own personal use as part of her duties. I believe I can use this to impeach the witness’ credibility.
(The Court) ft’s all collateral.
(Mr. Orman Jit may be collateral.
(The Court) Well, if it is collateral, that answers it.
* * *
(The Court) Well, what bearing does that have on this case, other than to prejudice the jury on matters that are collateral to any of the issues before the Court?
(Mr. Orman) Well, I think, Your Honor, it is not collateral, as I said before. He has set up himself a fraudulent atmosphere of writing off noncorporate obligations or noncorporate bills with corporate money. He has set up the use of corporate moneys to allegedly rent apartments and purchase furniture for his girlfriends, all of which were done by Mrs. Andrews at his request.
(The Court) And the theory is that that gave her apparent authority to take whatever she wanted for her own use?
(The Court) That’s what I say. You haven’t indicated anything to me, other than an attempt on the part of the Defendant to introduce evidence purely to prejudice the jury in an attempt to present [irrelevant evidence. This jury is already getting restless.
(Mr. Orman) Your Honor, I would proffer that we have testimony to show that Mr. Whitaker, on his own, played with the corporate funds and took cash out of the corporation, ostensibly to pay corporate bills but, in fact, the payment of these moneys were used to put cash in his own pocket which would be nontaxable income.
We should be able to ask Mr. Whitaker about this and I would proffer also that we have evidence that Mr. Whitaker used corporation funds for non-corporate uses and paid the noncorporate bills with corporate funds through Mrs. Andrews, who prepared the checks and that he had Mrs. Andrews, on corporation time and with corporation money, squire around certain of his lady friends and pay for their apartments, furniture and other related expenses and I feel, Your Honor, that since we are in the — well, I am just repeating myself, but since we are looking at credibility and since we are looking at contributory negligence under the Uniform Commercial Code, it seems to me, if he testified in regard to everything that Mrs. Andrews did or was to do or what her obligations or duties were, all of this would be admissible.
(The Court) The ruling remains the same.” (Emphasis added)

On cross-examination, despite repeated objections and a motion to strike, Mrs. Andrews was allowed to testify to precisely these matters, despite the exclusion by the trial court of similar testimony by Mr. Whitaker. This testimony provided a basis for Maryland National’s closing argument to the jury, in which it was repeatedly argued that Whitaker “created a dishonest atmosphere”, avoided payment of taxes and misused corporate funds, and that this “dishonest atmosphere” enabled Mrs. Andrews to steal the checks. Based upon our review of the testimony and the applicable law, we conclude that this testimony was irrelevant, erroneously admitted, and prejudiced the appellant.

Maryland National in its brief does not directly argue the relevancy of the challenged testimony, stating only that the “dishonest atmosphere” allegedly created “by the manner in which the corporate funds were spent for non-corporate activities ... involving Andrews in tax avoiding schemes — his [Mr. Whitaker’s] absences from the office and lack of sobriety when in office” precluded Bowen from any recovery because of the provisions of § 3-404 and § 3-406 of the U.C.C. Suffice it to say that we are not perguaded by the statement. It was error to admit the challenged testimony and in light of the lengthy cross-examination on these irrelevant matters, the extent to which they were emphasized to the jury in closing argument, and the initial recognition by the trial judge of the prejudicial nature of the testimony, the error was not harmless. We must therefore reverse the judgment and remand the case for a new trial. Blondes v. Hayes, 29 Md. App. 663, 350 A. 2d 163 (1976).

Judgment reversed.

Case remanded for new trial.

Costs to be paid by appellee.

      . Hartford Accident & Indemnity Co., Bowen’s bonding company, is a use-plaintiff in the case whose interest is to recover $25,000 (the limit of its fidelity bond) paid to Bowen for its alleged losses resulting from Mrs. Andrews’ alleged dishonesty.

      . Typical of a large portion of the evidence in this case, there is considerable confusion concerning the appellant’s precise corporate name. In its original pleadings, the name is “C. S. Bowen and Company, Inc.” At trial, Mr. John E. Whitaker, the president and sole owner of the corporation, testified on cross-examination:
      “Q____What is the corporate name of C. S. Bowen? A. C. S. Bowen and Company, Inc.
      Q.' C. S. Bowen Inc? A. If that’s the way you want it, I-N-C.
      Q. Well, what is- it, I-N-C? A. C. S. Bowen, capital C-o, for company, Inc.
      Q. And that is the way it is set up with the Department of Assessments and Taxation? A. That’s the .way it is set up on the invoices there [The invoices referred to carry the name as “C. S. Bowen, Co. Incorporated”.].
      Q. And that’s the way it has always been set up? A. Yes, sir.”
      At the end of the case, following the court’s instructions to the jury and before final arguments, appellant’s counsel moved, out of the presence of the jury, to amend the name in the pleadings to “C. S. Bowen Co., Inc.”, although he said he was “not positive of the exact corporate name”. The motion was granted and the Clerk was instructed to “note the change where necessary”.

      . A later signature card was furnished on 11 May 1967 on which Mrs. Andrews had printed the signature “Charles S. Bowen”.

      . Section 3-419 (3) reads: “Subject to the provisions of Titles 1 through 10 of this article concerning restrictive indorsements a representative, including a depositary or collecting bank, who has in good faith and in accordance with the reasonable commercial standards applicable to the husmeas of such representative dealt with an instrument or its proceeds on behalf of one who was not the true owner is not liable in conversion or otherwise to the true owner beyond the amount of any proceeds remaining in his hands.”

      . See, Cooper v. Union Bank, 507 P. 2d 609 (Calif., 1973), where the California Supreme Court adopted an interpretation of “proceeds” which effectively eliminated the availability of the defense. For criticism of this holding, see Comment, Depositary Bank Liability Under 8 3-419 (3) of the Uniform Commercial Code, 31 WASHINGTON AND LEE LAW REVIEW 676; Recent Developments, Section 3-419 (3) of the U.C.C. Does Not Limit

        the Liability of a Depositary Bank to the True Owner of a Check Paid on a Forged Indorsement. 74 COLUMBIA LAW REVIEW 104. See also, Taylor v. Equitable Trust Co., 269 Md. 149, where the Court of Appeals, at 155, in a case not involving the precise issue, quoted with apparent approval from a Comment in 2 Bender’s U.C.C. Service, Hart and Wilder, § 12.35, at 12-129 (1972): “ , ... Section 3-419 (3) limits recovery against collecting banks for conversion only if they acted in good faith and followed ‘reasonable commercial standards’ ’’.

      . As to whether there are any other defenses available to a depositary or collecting bank shown to have applied the proceeds of a check inconsistently with a restrictive indorsement, we need not decide in this appeal. It would seem doubtful that, short of payment to the true owner, there are any such defenses. See, 2 Anderson, Uniform Commercial Code, §§ 3-206.6, 3-404.4, 3-404.9, and 3-406.5; Taylor v. Equitable Trust Co., 269 Md. 149 at 158; Salsman v. National Community Bank, 246 A. 2d 162 (Pa.), aff'd, 251 A. 2d 460.

      . “§ 3-404. Unauthorized signatures.
      (1) Any unauthorized signature is wholly inoperative as that of the person whose name is signed unless he ratifies it or is precluded from denying it; but it operates as the signature of the unauthorized signer in favor of any person who in good faith pays the instrument or takes it for value.
      (2) Any unauthorized signature may be ratified for all purposes of this title. Such ratification does not of itself affect any rights of the person ratifying against the actual signer.”
      “§ 8-406. Negligence contributing to alteration or unauthorized signature.
      Any person who by his negligence substantially contributes to a material alteration of the instrument or to the making of an unauthorized signature is precluded from asserting the alteration or lack of authority against a holder in due course or against a drawee or other payor who pays the instrument in good faith and in accordance with the reasonable commercial standards of the drawee’s or payor’s business.”


source: Caselaw Access Project

author: Morton, J.,

license: Public Domain

text:
    JOHN RAMSEY, JR. et al. v. PHYSICIAN’S MEMORIAL HOSPITAL, INC. et al.
    [No. 559,

    September Term, 1976.]

      Decided May 12, 1977.

      The cause was argued before Morton, Menchine and Mason, JJ.

      Henry E. Weil, with whom were Belli, Weil & Jacobs on the brief, for appellants.

      M. Wayne Munday, with whom were James C. Tucker and Mudd,, Mudd, Munday & Heinze on the brief, for appellees.
   Morton, J.,

delivered the opinion of the Court.

Appellants, parents of infant children Ernest Lee Ramsey (deceased) and Kenneth W. Ramsey, brought suit in the Circuit Court for Prince George’s County against Physician’s Memorial Hospital, Inc., A. Del LaPaz, M.D., S. Azer, M.D., and Om P. Chhabra, M.D., charging that although the defendants had held themselves out to be qualified and competent to render medical treatment, they negligently failed to diagnose the disease of Rocky Mountain Spotted Fever which the infant children were suffering and from which disease Ernest Lee Ramsey, age one year, died and Kenneth W. Ramsey, age two years, became seriously ill. The case was subsequently removed to the Circuit Court for Calvert County where it was tried before a jury (Bowen, J., presiding).

At the close of the presentation of evidence, the court reserved defendants' motions for directed verdicts in accordance with Maryland Rule 552 (c) and allowed the case to go to the jury. The jury returned a verdict for appellants against Physician’s Memorial Hospital, Inc., and Dr. Azer, appellees herein, and in favor of Dr. Del LaPaz and Dr. Chhabra. Damages were assessed at $75,280 for Ernest and $5,000 for Kenneth. Thereafter, pursuant to Maryland Rule 563 (a) (2), the court entered judgments n.o.v. in favor of the hospital and Dr. Azer.

The single issue on appeal is whether the trial judge erred in entering the judgments. The verdicts rendered in favor of Dr. Del LaPaz and Dr. Chhabra are not challenged.

According to the evidence, the Ramseys lived in a rural area of Charles County known as Gallant Green. In early .May, 1974, Mrs. Ramsey removed two ticks from her son Kenneth. Several days later she noticed a rash on both Ernest and Kenneth. The rash started on "the chest and head and was accompanied by a high fever. This prompted Mr. and Mrs. Ramsey to take their two boys to the emergency room at Physician’s Memorial Hospital.- While there, Mrs. Ramsey told the nurse on duty that she had removed two ticks from Kenneth, one from his head and one from his stomach. This testimony was confirmed by Mr. Ramsey and not contradicted by other witnesses. According to the attending physician, Dr. Del LaPaz, he asked the parents about ticks and was told nothing. He also ordered a search for ticks which proved fruitless. The nurse did not tell Dr. Del LaPaz of the tick history which Mrs. Ramsey had related to her.

In diagnosing their condition, Dr. Del LaPaz decided the children were suffering from measles and prescribed that the boys take aspirin and be kept in a darkened room. Two days later the rash had spread to the arms and legs of the two boys and the fever had not subsided. On that day, May 14, 1974, the Ramseys returned to the emergency room at Physician’s Memorial Hospital where the children were examined by Dr. Azer.

Dr. Azer, not a pediatrician himself, was unsure of his tentative diagnosis of measles and consulted with the Ramsey’s pediatrician, Dr. Chhabra. Thereafter, Dr. Azer instructed the Ramseys to see Dr. Chhabra and not to come back to the emergency room as there was nothing else that could be done there. Dr. Chhabra examined the'boys the following day while they were still suffering from a generalized rash and high fever. Again measles was tentatively diagnosed. Dr. Chhabra advised that the boys be kept in a dark room and that he be notified of any change.

Four days later the children’s condition had greatly worsened, but the Ramseys were unable to reach Dr. Chhabra. On the following day Ernest was found dead. Kenneth was taken to Cafritz Hospital where two ticks were removed from him. He was subsequently treated and cured of Rocky Mountain Spotted Fever. The only injury he sustained was a limp which was gone within six months. The autopsy performed on Ernest showed that he died of Rocky Mountain Spotted Fever.

In a definitive opinion refashioning the standards of care by which the conduct of a physician or a hospital is to be appraised in medical malpractice cases, Judge Irving A. Levine announced for the Court of Appeals in Shilkret v. Annapolis Emergency Hosp., 276 Md. 187 (1975):

“ [A] physician is under a duty to use that degree of care and skill which is expected of a reasonably competent practitioner in the same class to which he belongs, acting in the same or similar circumstances. Under this standard, advances in the profession, availability of facilities, specialization or general practice, proximity of specialists and special facilities, together with all other relevant considerations, are to be taken into account.” Id. at 200-01.
“ [A] hospital is required to use that degree of care and skill which is expected of a reasonably competent hospital in the same or similar circumstances. As in cases brought against physicians, advances in the profession, availability of special facilities and specialists, together with all other relevant considerations, are to be taken into account.” Id. at 202.

I. Dr. Azer

According to the medical evidence Rocky Mountain Spotted Fever is a relatively rare disease caused by the bite of an infected tick. In 1970 there were 270 cases in the United States of which approximately ten percent occurred in Maryland. It is a difficult disease to detect since there are several differential diagnoses which must be considered because certain symptoms are common to a number of various diseases. These differential diagnoses usually include Rocky Mountain Spotted Fever, measles, endemic typhus, meningococcemia, typhoid fever, early smallpox and certain intra viral infections with rash.

In the case of the Ramsey boys, the diagnosis, according to the testimony, was particularly difficult. None of the doctors had any knowledge of the tick history given to the nurse in the emergency room on May 12, 1974. The rash began as it would in measles,, on the head and chest, spreading peripherally toward the extremities; whereas, the rash typical of Rocky Mountain Spotted Fever ordinarily begins on the hands and feet and spreads toward the center of the body. The rash was reddish in color and could only be distinguished from measles when it turned purple. The high fever is characteristic of both measles and Rocky Mountain Spotted Fever. To complicate the diagnoses further, neither boy had been vaccinated against measles. Since measles is a contagious disease, it would be common to find two brothers exhibiting symptoms of measles at the same time. Rocky Mountain Spotted Fever, on the other hand, is not contagious and simultaneous infection is very unusual. These factors led each of the three doctors who saw Ernest and Kenneth to diagnose the illness as measles or something related thereto. Appellants argue that once several diagnoses were considered, it was a violation of the acceptable standard of medical practice not to have hospitalized the children for observation and, assuming further manifestation of Rocky Mountain Spotted Fever, eventually treatment.

Appellants endeavored to establish this standard through the following testimony of their expert witness, Dr. Walter E. Goozh, M.D.:

“JUDGE BOWEN: Why don’t you ask it this way. You are a pediatrician, you are practicing in Charles County. Two people are brought to you of the ages of these children, one of which you have received a call from the hospital about before. They displayed the fever as described in the question, 104 or 105 degrees rectally. They had a generalized rash consistent with a measles rash. There is no history of any rash commenced on their hands or feet or at their wrists. There is no history of tick bite. You consider this problem. What do you think meets the minimum standard of care at that point?
* * *
“THE WITNESS: What I would do is with a patient with this type of problem is what we did with the last patient of this sort. The patient was hospitalized with the diagnosis of fever of undetermined origin and testing was done to eliminate the possibility of Rocky Mountain Spotted Fever along with other diagnosis. It was not started on treatment immediately. It was determined he did not have Rocky Mountain Spotted Fever and was not treated for it.
BY MR. WEIL [Appellants’ attorney]:
Q. Dr. Goozh, the patient, assuming this is a hypothetical question, had presented himself to a physician in Charles County, Maryland, on May 15, 1974 with high fever with generalized macular papular rash on the body, predominant on the face and the back of the ears but also on the arms and on the legs but no history of tick bite with this particular physician, do you have an opinion based on reasonable medical certainty as to whether or not it was in violation of the minimum standard of care to which the patient was entitled not to admit him in the hospital for observation?
* * *
“THE WITNESS: I would say it would be very difficult to have a definite opinion to really give a yes or no opinion, I have feelings about it but I didn’t see the patient, It is very difficult to know, I could go on and say that a patient who is now being febrile for three or four days has been seen — is now being seen for the third time by a physician in this period is still quite sick, at least appears to be from the information I have been given, I think serious consideration should be given to hospitalization. I personally would probably hospitalize such a patient.
MR. EHRMANTRAUT [Appellees’ attorney]: We are not dealing with what Dr. Goozh may personally do under the standard of care and I would move that the last part of his answer be stricken.
JUDGE BOWEN: I think he has explained his answer to the Jury. The difference of what he would do and what is required to be done to meet the minimum standard of care is two different things.”

In determining whether the trial judge properly entered the judgment n.o.v., we turn to Miller v. Michalek, 13 Md. App. 16, 17-18 (1971), where this Court articulated the standards by which a trial court is bound when considering a motion for judgment n.o.v.:

“The trial court is governed by the same considerations in determining a motion for a directed verdict as it is in determining a motion for judgment n.o.v. It ‘must assume the truth of all credible evidence on that issue and of all inferences fairly deducible therefrom, and consider them in the light most favorable to the party against whom the motion is made * * *.’ ‘If there is any competent evidence, however slight, leading to support the plaintiffs right to recover, the case should be submitted to the jury,’ and a motion for judgment n.o.v. denied.” (Citations omitted.)

See also Fleming v. Prince George’s County, 277 Md. 655, 658 (1976).

Upon a careful analysis of Dr. Goozh’s testimony, we concur with the trial court’s conclusion that Dr. Goozh, while stating that he personally would have hospitalized the children in the present situation, did not assert that the failure to hospitalize was violative of the minimal standard of care to which appellants’ children were entitled. When he was asked the question:

“[D]o you have an opinion based on reasonable medical certainty as to whether or not it was in violation of the minimum standard of care to which the patient was entitled not to admit him in the hospital for observation?,”

he replied:

“I would say it would be very difficult to have a definite opinion to really give a yes or no opinion.”

Thus, appellants failed to produce medical evidence from which the jury could find that Dr. Azer violated his duty “to use that degree of care and skill which is expected of a reasonably competent practitioner in the same class to which he belongs, acting in the same or similar circumstances.” We find no error in the trial judge’s granting Dr. AzePs motion for judgment n.o.v.

II. Physician’s Memorial Hospital, Inc.

On the other hand, our perusal of the record compels us to the conclusion that the trial judge erred in granting the judgment n.o.v. with regard to the hospital. There was testimony from both Mr. and Mrs. Ramsey that the nurse on duty in the emergency room at the time the children were first taken to the hospital was told that two ticks had been removed from Kenneth. This testimony was uncontradicted. There was also evidence that the nurse failed to relate this information to Dr. Del LaPaz, the attending emergency room physician.

Dr. Goozh, appellants’ medical expert, was asked the following question:

“Through your familiarity with that custom and usage, do you have an opinion based upon reasonable medical certainty as to whether or not assuming that the parent notified the nurse that she had removed two ticks from one of the boys several days earlier and that this information was not communicated to the attending physician, whether that failure to communicate by the nurse to the doctor was in violation of the minimum standard of care to which this patient was entitled? ”

The doctor replied:

“My opinion is that it is incumbent upon an emergency room staff, be it nurse or even recording secretaries signing the patient in to record significant medical data. I feel that the knowledge by a nurse that ticks were removed from a patient in the spring, in the season, and that season of the year represents significant data. If this were not passed on I would consider that a failure to apply an adequate level of conformance as to standards, yes.”

Thus, there was ample evidence that the failure of the nurse to communicate this element of the patients’ history to the attending physician was a serious violation of her duties as a nurse, That she was an agent or employee of the hospital is conceded and it is, of course, well settled that a hospital, under the doctrine of respondeat superior, is liable for the negligent conduct of its nurses when committed within the scope of their employment. Fleming v. Prince George's County, supra; Thomas v. Corso, 265 Md. 84 (1972), See generally, Rusnack v. Giant Food, Inc., 26 Md. App. 250, 261-65 (1975).

There was further evidence that the failure of the nurse to relate the information to the attending physician was a contributing proximate cause to the death of Ernest Lee Ramsey and the serious illness of Kenneth W. Ramsey.

It is at once apparent that the jury could have found from the evidence before it that the hospital, as a result of the negligent conduct of the emergency room nurse, did not “use that degree of care and skill which is expected of a reasonably competent hospital in the same or similar circumstances” and that the failure to provide the proper degree of care and skill resulted in the damages sustained by appellants. By entering the judgment n.o.v., the trial judge improperly invaded the province of the jury. Accordingly, the judgment n.o.v. is hereby vacated and the verdict of the jury against the Physician’s Memorial Hospital, Inc., and in favor of appellants is reinstated.

Judgments affirmed as to Dr. Azer; judgments n.o.v. vacated as to Physician’s Memorial Hospital, Inc., and judgments entered in favor of appellants on the verdicts; costs to be divided between appellants and Physician’s Memorial Hospital, Inc.


text:
    JEROME H. HINTON v. STATE OF MARYLAND
    [No. 658,
    September Term, 1976.]

      Decided May 12, 1977.

    The cause was argued before Morton, Powers and Mason, JJ.

      H. Gregory Skidmore, Assigned Public Defender, with whom was A. Gwynn Borne, Jr., Assigned Public Defender, on the brief, for appellant.

      Leroy Handwerger, Assistant Attorney General, with whom were Francis B. Burch, Attorney General, Warren B. Duckett, Jr., State’s Attorney for Anne Arundel County, and Ronald M. Naditch, Assistant State’s Attorney for Anne Arundel County, on the brief, for appellee.
   Morton, J.,

delivered the opinion of the Court.

Appellant, Jerome H. Hinton, was convicted in a bench trial in the Circuit Court for Anne Arundel County on two counts of assault, the charges being contained in two separate multi-count indictments. He was sentenced to concurrent ten year terms. In this appeal the single issue is presented:

“Did the lower court err when it ruled that Appellant’s conviction of receiving stolen property in the Criminal Court of Baltimore City did not bar subsequent prosecution and convictions of assault alleged to have occurred when the same property was stolen during the course of an armed robbery?”

Prior to trial, appellant filed a motion to dismiss all counts in each indictment (which ranged from armed robbery and related charges to assault and battery and assault) on the ground that he had previously been convicted in the Criminal Court of Baltimore of receiving stolen property, namely, a Colt .357 magnum revolver which was the same weapon he was alleged to have taken in the course of the robbery of Santoni’s Liquor Store in Anne Arundel County, which robbery formed the basis of the charges on which he was about to go to trial. The trial judge granted appellant’s motion to dismiss as to all counts in each indictment except those charging assault and battery and assault.

The trial then proceeded on the basis of an agreed statement of facts which counsel for appellant has summarized as follows:

“At approximately 3:30 P.M. on July 2, 1975, two black males, each armed with a pistol, entered Santoni’s Liquor Store in Anne Arundel County and announced a holdup. Three individuals were in the store at the time: Thomas Vaise, who was working the counter, and Richard Linkenhoker and Donald Glenn, who were in the rear of the store. During the course of the robbery, two other persons entered the premises. All five were required by the robbers to place their hands behind their heads.
While one of the robbers searched the victims, the other, allegedly Appellant, jumped the counter and removed cash from the register and two handguns (including a .357 magnum Colt revolver) from a shelf underneath the counter. The robbers then left the store.
Later the same day, Appellant was arrested in Baltimore City while allegedly attempting to commit an armed robbery at Cookie’s Liquors. He was armed during this alleged attempted robbery with a magnum revolver, later identified as one of the handguns taken during the Santoni Liquor Store robbery and belonging to Mr. Linkenhoker. Appellant was identified from a lineup folder by Mr. Linkenhoker (and would be at trial) as being the individual who had jumped the counter and removed the cash and handguns as well as one of the individuals who had held Mr. Glenn and him at gun point during the course of the robbery.
Following recitation of the statement of facts, Appellant moved for a judgment of acquittal and submitted. The motion was granted as to the two counts of assault and battery, but Appellant was found guilty of the two counts of assault and was sentenced to ten years.
In addition to the above, it is important to reiterate that Appellant had been convicted on November 6, 1975, following a plea of guilty in the Criminal Court of Baltimore City, Part 1, under Indictment No. 57521707 of receiving the stolen Colt .357 magnum revolver which was, and the State so conceded, one of the handguns taken from Mr. Linkenhoker during the course of the Santoni Liquor Store robbery.” (References to transcript pages omitted.)

At the conclusion of reading the statement of facts, the trial judge granted appellant’s motion for judgment of acquittal on charges of assault and battery; denied the motion on the charges of assault; and entered a finding of guilty on each count of assault.

The principle of double jeopardy is firmly fixed in American jurisprudence, but it is often difficult to delineate its proper application to a particular case. The Fifth Amendment to our Federal Constitution mandates that no person “be twice put in jeopardy of life or limb” for the same offense. The United States Supreme Court in Benton v. Maryland, 395 U. S. 784 (1969), made it clear that the fifth amendment guarantee against double jeopardy is binding upon the states through the fourteenth amendment. That Court in Ashe v. Swenson, 397 U. S. 436 (1970), held in no uncertain terms that the doctrine of collateral estoppel “is embodied in the Fifth Amendment guarantee against double jeopardy.” Id. at 445.

The single issue in this appeal is whether the case in the factual posture it reaches us properly compels an invocation of the doctrine of collateral estoppel. We think it does.

As Mr. Justice Stewart, who wrote for the Court in Ashe v. Swenson, supra at 443, stated:

“ ‘Collateral estoppel’ is an awkward phrase, but it stands for an extremely important principle in our adversary system of justice. It means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit. Although first developed in civil litigation, collateral estoppel has been an established rule of federal criminal law [and now state criminal law] at least since this Court’s decision more than 50 years ago in United States v. Oppenheimer, 242 U. S. 85.”

Counsel for appellant properly points out in his brief that the collateral estoppel doctrine is addressed to “issues” and not to “offenses.” Thus, it is not confined in its application to successive prosecutions for the same or identical offense but may be invoked where other and different offenses involve an issue of ultimate fact that has once been determined by a valid and final judgment.

In the case at bar, appellant had been previously convicted in the Criminal Court of Baltimore on a charge of receiving stolen goods. The subject of the charge was the very same gun he was charged in the Anne Arundel County Circuit Court indictments with having stolen in the course of the holdup of the Santoni Liquor Store. This Court said in Osborne v. State, 4 Md. App. 57, 60 (1968):

“We think it clear beyond any question that, like the thief in a larceny, the principal in a robbery who actually takes and carries away the property from the victim cannot be convicted of the crime of receiving the property stolen. See 45 Am. Jur. Receiving Stolen Property, § 10; Clark and Marshall on Crimes, § 12.37; Perkins on Criminal Law, p. 275; Wharton’s Criminal Law and Procedure (Anderson Edition), Vol. 2, § 576.”

Notwithstanding this flat statement of the law, it is a fact that appellant was convicted of receiving stolen goods, viz., the magnum revolver, even though the statement of facts produced at his trial in Anne Arundel County Circuit Court, and agreed to by appellant, demonstrated that he acquired the gun while participating in the armed robbery of the liquor store, which also involved the assault for which appellant was convicted.

And so we are confronted with the question of whether the conviction of appellant for receiving stolen goods precludes the conviction of appellant for armed robbery and assault when the facts indicate his guilt of those crimes. The-trial judge apparently thought appellant could not be convicted of armed robbery, under the circumstances, for he granted appellant’s motion to dismiss that charge and related counts in the indictments but for reasons not articulated he convicted appellant on two charges of assault, which assaults were an integral part of the armed robbery.

We think that under the doctrine of collateral estoppel, which is not to be applied with a “hypertechnical or archaic approach” but with “realism and rationality,” Ashe v. Swenson, supra at 444, the issue of ultimate fact should be resolved in favor of appellant.

The conviction in the Criminal Court of Baltimore established that appellant was the receiver of the gun taken in the course of the robbery. On the record before us he could not be both the unlawful receiver of the gun and the robber of the gun at the same time. Implicit in the conviction of receiving stolen goods is the fact that he was not a participant in the liquor store robbery. If he was not a participant, he could not be found guilty of the assault which occurred during the course of the robbery. The state cannot be permitted, on the one hand, to establish an ultimate fact in order to convict an accused in one case and then deny that fact in order to achieve a conviction against the accused in another case on charges arising out of the same set of facts. Accordingly, we think the trial judge erred in denying appellant’s motion to dismiss the counts in the indictments charging assault.

Judgments reversed; costs to be paid by Anne Arundel County.

      . Osborne does not stand for the proposition that a robbery conviction is necessarily inconsistent with a receiving stolen property conviction if both charges result from the same incident. Rather, as we stated, at 60-61:
      “When one accused of receiving stolen property is a mere aider or abetter in the commission of the robbery, other than an accessory before or after the fact, the decisions are in conflict as to whether the circumstances can ever be such that he can be convicted of receiving the property stolen. The inquiiy in such cases would appear to be whether the participation in the robbery by one accused of receiving the goods is of such character and extent as to make the receiving a part of the theft itself, or whether the receiving is, under the circumstances, so distinct as to constitute the separate offense of receiving stolen property. * * * In this connection, it has been held, in larceny cases, that if the receiving takes place subsequent to and after the completion of the larceny, one who has participated in such crime as a confederate of the thief may nevertheless be convicted of receiving stolen property, but that the rule is otherwise if the receiving is embraced in the caption and asportation.”
      We observe, however, that the record is silent as to whether vel non the caption and asportation of the gun occurred simultaneously with appellant’s reception of it. Since the burden rests with the state to negate, beyond a reasonable doubt, all defenses, once fairly generated, we cannot conclude that the present case is one in which appellant could have both stolen and received the gun.


author: Powers, J.

text:
    THOMAS JOHN HUTCHINSON v. STATE OF MARYLAND
    [No. 682,
    September Term, 1976.]

      Decided May 13, 1977.

      The cause was argued before Morton, Powers and Mason, JJ.

      George E. Bums, Jr., and Martha Villmoare, Assistant Public Defenders, with whom was Alan H. Murrell, Public Defender, on the brief, for appellant.

      Gilbert H. Robinette, Assistant Attorney General, with whom were Francis B. Burch, Attorney General, William A. Swisher, State’s Attorney for Baltimore City, and Harvey Greenberg, Assistant State’s Attorney for Baltimore City, on the brief, for appellee.
   Powers, J.

, delivered the opinion of the Court.

The facts in this case are simple, because they are uncomplicated, yet bizarre, because they defy explanation. The appellant, Thomas J. Hutchinson, was a prisoner in the Maryland Penitentiary, serving a 20 year sentence imposed after his conviction in 1970 of armed robbery. On 15 December 1973, he was a member of a work detail in the dietary department of the prison. Sgt. Purnell, a correctional officer in charge of the work detail, testified that he saw the appellant at 5:40 P.M. that day when he ordered the work detail, including appellant, to return to the West Wing where they were housed. Sgt. Purnell watched Hutchinson and the rest of the detail leave the dietary department, a separate building within the prison confines, and enter the rotunda, an area leading to the West Wing cell house. Once through the doors to this building, Hutchinson and the detail were out of Sgt. Purnell’s view.

The group was instructed to proceed from the rotunda through two sets of doors, past the Traffic Control Office and on to a storeroom where Sgt. Jednorski awaited them. Sgt. Jednorski’s duty that evening was to check off the names of the prisoners assigned to the dietary department work detail, as they returned to the West Wing. This check was made to insure that the inmates actually did return from work. Sgt. Jednorski testified that all the members of the detail returned from the kitchen area except Hutchinson. When the appellant did not appear, the officer testified that he telephoned Sgt. Purnell in the dietary department to inquire about Hutchinson. Upon being told that appellant had already left, Sgt. Jednorski requested a search of the prison. A search was made. The appellant was not to be found. In fact, he was not seen at the penitentiary again until he returned on 16 May 1975. He had been taken into custody in Los Angeles, California.

Hutchinson testified, and said that he did not escape, but that he was actually released from prison. He said that after leaving the kitchen area he returned to his cell in the West Wing. A few minutes later an officer came for him, took him to the “I. C. Department”, and processed his release. He said that he signed for his money in the prison account, and upon his release, he went home. He said he remained at his home for one and one-half months, and then traveled to New York and Los Angeles. Although he realized he had not completed his twenty year sentence, he assumed his release resulted from his constant correspondence to the judge who presided at his armed robbery trial.

The State was unable to explain how. the appellant escaped. The evidence would make it appear that every conceivable exit between the dietary department and the West Wing was well guarded and that other avenues of escape were inaccessible. No evidence of any of the conventional means or implements of escape was found.

In the trial in the Criminal Court of Baltimore the jury found the appellant guilty of escape. The judge sentenced him to a term of seven years, to run consecutively to his prior twenty year sentence. From this conviction, Hutchinson appeals, arguing five separate errors. His issues on appeal are:

1. Was adequate foundation laid for the admission of hearsay under the business records exception?
2. Did the trial judge err in admitting testimony on the contents of documents not introduced into
evidence?
3. Was the evidence sufficient to find the Appellant guilty beyond a reasonable doubt?
4. Was the trial judge’s charge to the deadlocked jury coercive?
5. Did the trial judge abuse his discretion in refusing to grant Appellant’s Motion to View?

We find no error in the rulings by the lower court, and therefore shall affirm the judgment.

1.

The appellant argues that the court improperly admitted his commitment papers in evidence under the business records exception to the hearsay rule. Specifically, Hutchinson contends that the State did not not lay a proper foundation for the admittance of the record through Captain Rossman, the witness who identified them. The witness did not create or supervise the records of the .appellant and was not charged with their custody. He testified that he was familiar with such records, because he used them on a day to day basis. Appellant says that is an insufficient foundation for admitting the records.

Although it seems that familiarity through frequent use would enable a witness to say whether a record is authentic, and is kept in the ordinary course of business, it is not necessary to resolve that question in this case. The only significance of the commitment papers was to show that the appellant was lawfully confined. The appellant himself conceded that when he testified that on 15 December 1973 he was housed at the Maryland Penitentiary as a result of a twenty year sentence he received for armed robbery.

2.

The appellant next contends that the lower court erred in admitting testimony that appellant’s “base file”, not introduced into evidence, did not contain a release from the penitentiary. He asserts that although conclusions or opinions drawn from data contained in a file may be admissible under Maryland law, see Smith v. Jones, 236 Md. 305, 309, 203 A. 2d 865 (1964), “the records in which the conclusions are based must first be introduced into evidence”. Here, the base file was not in evidence when Captain Rossman testified to the absence of a release.

Because the fact sought to be shown was negative, we think the lower court ruled correctly in permitting Captain Rossman to testify as he did. This view finds support in 4 J. Wigmore, Evidence, § 1244 (Chadbourn Rev. 1972), where the author expresses the opinion that:

“[T]he fact that an entry in a record or account book does not exist, while in a sense it involves the document’s terms, yet is usually and properly regarded as not requiring the book’s production for proof...”

The basis for this view is lodged in the underlying rationale of the business records exception to the hearsay rule. Regularly maintained business records are admissible in evidence as an exception to the hearsay rule because the circumstances under which they are maintained by the company or agency assures accuracy not likely to be enhanced by “introducing into evidence the original documents upon which the records are based.” United States v. DeGeorgia, 420 F. 2d 889, 893 (9th Cir. 1969).

In our view, the circumstances of the present case offer a like assurance that if a prison record, maintained for the purpose of noting each administrative action taken by the prison officials, contains no notation of a release, no such release occurred. That assurance is not likely to be enhanced by any other means of proving such a negative, such as introducing the base file into evidence. Appellant or his counsel had the right, of course, to examine the file.

The Court of Appeals has approved the admission of testimony showing a negative fact without the admission of the records themselves. In Summons v. State, 156 Md. 382, 144 A. 497 (1929), the Court reviewed the admissibility of testimony concerning corporate records and documents, where the papers had not been introduced into evidence. The Court stated, at 387:

“[A] competent witness, who has investigated and is familiar with the contents of the entire mass, may testify that certain entries in the corporate records or accounts do not exist.”

Although the witness in Summons had knowledge of the creation of the records, the Court emphasized that the basis for its decision was the likelihood of the accuracy of the statement. When a witness draws conclusions or gives opinions based on information in the record, the situation is quite different, and the records must be admitted into evidence. Smith v. Jones, supra; Queen v. State, 26 Md. App. 222, 337 A. 2d 199 (1975); Hyman v. State, 4 Md. App. 636, 244 A. 2d 616 (1968); Goodman v. State, 2 Md. App. 473, 235 A. 2d 560 (1967).

3.

Appellant’s third asserted error is^that the evidence was insufficient to support his conviction. In reference to sufficiency of the evidence, we recently stated, in Isaacs v. State, 31 Md. App. 604, 358 A. 2d 273 (1976), at 619:

“To be insufficient in law to sustain the conviction, the record must demonstrate that there was no legally sufficient evidence or inferences rationally drawable therefrom upon which a jury could conclude that the accused, beyond a reasonable doubt, did, in fact, commit the crime alleged. James v. State, 14 Md. App. 689, 288 A. 2d 644 (1972); King v. State, 14 Md. App. 385, 287 A. 2d 52 (1972).”

See also State v. Devers, 260 Md. 360, 272 A. 2d 794 (1971), cert. denied, 404 U. S. 824, 92 S. Ct. 50, 30 L.Ed.2d 52 (1972); Spease v. State, 21 Md. App. 269, 319 A. 2d 560 (1974), aff'd. 275 Md. 88, 338 A. 2d 284 (1975).

In the present case, there was sufficient evidence from which the jury could reasonably have concluded that the appellant escaped from the Maryland Penitentiary. The only basic facts necessary to be shown were shown: that Hutchinson was lawfully confined in the penitentiary; that he was supposed to stay there; and that he left there. The State was not required to show how Hutchinson got out — only that he did get out. Intriguing as Hutchinson’s explanation may have been, the jury was not required to believe it. It presented a question of credibility, not of sufficiency.

4.

An hour and twenty minutes after the jury began deliberating, they reported back to the judge that they were deadlocked. The judge then gave the jury an Allen-type charge, as recommended by the American Bar Association, and as approved by the Court of Appeals in Kelly v. State, 270 Md. 139, 310 A. 2d 538 (1973), but coupled with prefatory and explanatory remarks. Appellant contends that the additional comments and the premature timing of the charge were such plain error as should be recognized under Maryland Rule 756 (g). As suggested in Kelly v. State, supra, we have carefully scrutinized the judge’s remarks, and we do not believe that they constituted prejudicial error. See also Burnette v. State, 280 Md. 88, 371 A. 2d 663 (1977). There was no objection below that the additional instruction was prematurely given and we do not entertain that question here.

5.

Appellant’s final issue is that the judge erred when he refused to grant a motion to view the prison. The granting or denial of such a motion is discretionary. The Court of Appeals in Corens v. State, 185 Md. 561, 45 A. 2d 340 (1946), said, at 573:

“But we must follow the general rule, accepted both in this country and in England, that the granting or refusing of a request to allow the jury to view the premises where a crime is alleged to have been committed is within the discretion of the trial court. Commonwealth v. Chance, 174 Mass. 245, 54 N. E. 551, 75 Am. St. Rep. 306. In support of this rule, Professor Wigmore wrote that the inconvenience of adjourning court until a view can be had, or of postponing the trial for the purpose, may suffice to overcome the advantages of a view, particularly when the nature of the issue or the object to be viewed renders the view of small consequence. 4 Wigmore on Evidence, 3d Ed., Sec. 1164,”

We cannot say that the trial judge abused his discretion here.

Judgment affirmed.

Appellant to pay costs.

      . The “base file” is a group of documents that contain generally copies of all administrative actions pertinent to an inmate’s imprisonment.

      . Hutchinson’s explanation probably failed the credibility test for several reasons. He said that an officer came to his cell, and from there, took him for processing and release. Yet Hutchinson’s ring, watch, and hair pick were left in his cell. He said that he signed for his money in the prison account, but the record of that account showed a credit, not a withdrawal, on 15 December 1973.


author: Menchine, J.,

text:
    HEMISPHERE PICTURES, INC. v. BERNIE LUST, etc. et al.
    [No. 822,
    September Term, 1976.]

      Decided May 13, 1977.

    The cause was argued before Morton, Menchine and Mason, JJ.

      Barnett Rosenberg, with whom were Mesdtte & Rosenberg, P.A. on the brief, for appellant.

      John C. Keating for appellees.
   Menchine, J.,

delivered the opinion of the Court.

Hemisphere Pictures, Inc. (appellant) obtained a monetary judgment for $6,188.84 against Sidney Lust Limited Partnership (Lust) on December 16, 1975, in the Circuit Court for Montgomery County. An attachment on that judgment was laid in the hands of John C. Keating, receiver of Lust, as garnishee on January 6,1976.

The receiver filed a plea in the attachment case acknowledging that he was in possession of funds in excess of the amount of the judgment of appellant but alleging that such funds were held by him as trustee in custodia legis subject to order of the Circuit Court.

Treating the receiver’s plea as a confession of assets (Maryland Rule G52), appellant moved for judgment of condemnation absolute. Maryland Rule F3.

The receiver filed a document entitled “Opposition to Motion for Judgment of Condemnation” in which he denied that his plea had constituted a confession of assets and reasserted his prior claim that the funds were in custodia legis.

The trial court conducted a hearing upon the motion for judgment of condemnation absolute and on July 9, 1976, denied the same.

The attachment on judgment was not issued or served upon the receiver until after the order for his appointment had been passed in the equity cause. More, the receiver came into actual possession of the assets of Lust prior to the issuance and service of that attachment.

In Forest Lake Cemetery v. Baker, 113 Md. 529, 538, 77 A. 853, 857 (1910), it is said:

“The possession of a receiver, who is the agent of the Court appointing him, is the possession of that Court, and while prior liens are not divested by the appointment of a receiver, and he takes the property subject to all existing liens, lien creditor's cannot enforce their claims and thus disturb his possession without the permission of the Court.”

In the subject case there is no proof that execution of the writ of attachment occurred prior to the time that the receiver came into possession of the assets of Lust. This is fatal to appellant’s present appeal. Compare Obrecht v. Ensor, 162 Md. 391, 394, 159 A. 899, 901 (1932).

In effect, the appellant seeks to attack the validity of the appointment of the receiver collaterally.

In 1 Clark, Receivers, Ch. IX, § 305 (3rd Ed., 1959), it is said:

“When the court appointing the receiver had jurisdiction of the necessary parties to the suit and of the subject matter of the controversy and the court in the exercise of its jurisdiction has appointed a receiver, such appointment of the court is not open to collateral attack, and even if the order was made improvidently it is not open to attack in a collateral suit.”

This principle is the law of Maryland. See Obrecht, supra, at 393 [900].

Corporations and Associations Article § 10-109 provides in pertinent part as follows:

“§ 10-109. Rights of a limited partner.
(a) A limited partner shall have the same rights as a general partner to:
(3) Have dissolution and winding up by decree of court."

The equity action in which the receiver was appointed had been initiated by a limited partner and had sought; dissolution of the limited partnership and the appointment of a receiver to wind up its affairs. See Lust v. Kolbe, 31 Md. App. 483, 356 A. 2d 592 (1976). There was jurisdiction in the appointing court. The funds of Lust were in custodia legis.

Order denying judgment affirmed.

Appellant to pay the costs.

      . Partial summary judgment upon the issue of liability had been given on August 26,1975.

      . An order had been passed on August 22, 1975, in the Circuit Court for Montgomery County in a cause entitled Kolbe v. Lust, Equity No. 45,933, in which John C. Keating was “appointed Trustee in Liquidation of the partnership to take control of all assets and operation thereof and proceed to dissolution of the partnership." This Court in Lust v. Kolbe, 31 Md. App. 483, 356 A. 2d 592 (1976), declared that, We hold that the trustee m liquidation, in the matter now before us, is a receives? within the meaning of the law of this State." Id. at 491 [597-98],

      . Ellicott v. U.S. Ins. Co., 7 Gill 307 (1848), principal reliance of appellant, is inapposite. The creditor in Ellicott proceeded by petition in the equity proceedings. Compare Albert v. Winn, 7 Gill 446, 448 (1849).


author: Lowe, J„

text:
    UNITED ELECTRIC SUPPLY COMPANY v. GREENCASTLE GARDENS SECTION III LIMITED PARTNERSHIP
    [No. 855,
    September Term, 1976.]

      Decided May 13, 1977.

      The cause was argued before Thompson, Menchine and Lows, JJ.

      Thomas L, Craven, with whom were Lynott & Craven, P.A. on the brief, for appellant.

      Roy I, Niedermayer, with whom was Cathy A. Simon-Rose on the brief, for appellee.
   Lowe, J„

delivered the opinion of the Court.

Lochinvar’s Web

Interlocking close corporate control often provides singular benefits, including the diffusion of legal and contractual responsibility. For whatever reason they were originally spun, fair or foul, the convoluted ownership arrangements of the parties in this case prepared the path followed by the chancellor below. The webs became so entangled that, like Arachne’s, they ultimately ensnared their creators.

Appellee Greencastle Gardens Section III Limited Partnership (Greencastle) employed Della Ratta, Inc, (Della Ratta) as general contractor to construct an apartment project. Joseph M. Della Ratta, the president of Della Ratta, Inc., is also one of the general partners in Greencastle, In his capacity as the former, he subcontracted the electrical work In the apartment project to Bruno’s Electrical Contractors, Inc, (Bruno’s). The project was to be constructed in Montgomery County, and there was In force at the time a provision of the county code that, before any electric work could be done there, the electric contractor be licensed:

“(a) It shall be unlawful for any person, firm, company, corporation or partnership engaged in business as an electrical contractor to install, repair or maintain any electrical circuit, electrical equipment or electrical apparatus unless such person, firm, company, corporation or partnership shall have first been granted by the county, a business license, entitling the licensee to perform such work.” Mont. Co. Code, Ch. 17, § 17-19 (a).

Bruno’s was not a licensed electrical contractor in Montgomery County, nor, incidentally, did it have in its employ a master electrician, which is a further requirement of the Montgomery County Code:

“(b) All installations, repairs, maintenance or other work done under a business license issued pursuant to this chapter shall be by, or under the ultimate supervision of the master electrician or master electrician limited regularly employed by said licensee and designated on such business license as responsible for the work performed thereunder whose active status in accordance with section 17-24 has been certified by the board. For the purpose of this subsection, the words, ‘regularly employed’ shall mean that the master electrician or the master electrician limited shall be available to supervise the installation whenever such work is being performed by any electrician under his supervision for whose work he is responsible. Non-availability on the job for more than a two hour period of any master electrician, or master electrician limited, to supervise the performance of any electrical work performed under the authority of an electrical permit issued to him, shall be cause for the suspension or revocation of his license.” Mont. Co. Code, Ch. 17, § 17-19 (b).

When Mr. Della Ratta sought assurance from the president of Bruno’s, Mr. Bruno Tarabocchia, that he could handle the job, the licensing obstacle was disclosed:

“A It was a very brief conversation, and Mr. Della Ratta asked me, he said, ‘Bruno, can you handle the job?’
Q What was your response?
A ‘Yes, Joe. I can handle the job. Just I don’t have the license.’, and he said —”

Mr. Della Ratta’s further inquiry prompted Mr. Tarabocchia’s suggestion of what appeared to be an acceptable solution:

“ ... So he asked me who is supplying the license. ... I told him Joe Penovich was supplying me with the license.”

“Joe Penovich” is the president and owner of Redwood Electric Company (Redwood), which company is licensed to do electrical work under Montgomery County Code § 17-19 (a). It was thus able to obtain the necessary electrical work permit and, in order to comply with subsection (b), Mr. Penovich agreed to “supervise” since he also had a master electrician’s license. But the agreement was not without a motivating thread tying together some of these webs. All of the electrical equipment purchased for the project was to be bought from United Electric Supply Company (United). Perhaps not coincidentally, Joe Penovich was also the owner and president of United. There was evidence to show that for Redwood’s “quid”, United would receive the material business as its “quo”. Although Penovich equivocated on whether his securing of the permit was contingent upon Bruno’s purchases from United, Mr. Tarabocchia did not:

“Q Did you have any discussions with Mr. Penovich concerning your purchase of the equipment of United Electric insofar as that related to obtaining an electrical permit?
A Yes, we had.
Q What was that discussion?
A He said he will supply all the material and will do the supervision in the job, and he will put his permit, he will take out the permit.
Q Was it your understanding that unless you purchased all the equipment from him you would not get the electrical permit?
A Yes.
Q Was it your understanding you could not get the electrical permit, then buy your equipment elsewhere?
A No, the way we was talking, no, I had to buy the material from United Electric Supply.
Q You had to buy it from United Electric Supply?
A Yes, because he was doing the supervision and he was supplying the materials.”

Presumably the webs could not support all of their arachnids, and problems arose concerning electrical equipment, installation acceptance by the power company, and conformity with the original plans. Equipment other than that called for by the plans was placed in the apartment project, and Greencastle failed to pay United for it.

The problems culminated in a hearing before the Circuit Court for Montgomery County on United’s bill of complaint to enforce its mechanics' lien. The chancellor declined to enforce it and entered judgment on behalf of Greencastle. His opinion was convincingly reasoned, but it created, then vaulted, an obstacle the chancellor did not have to face.

The opinion commenced with the fundamental principle that an agreement in violation of a regulatory statute is illegal and void, citing generally Marburg v. Mercantile Bldg. Co., 154 Md. 438 and Goldsmith v. Mfgrs’ Liability I. Co., 132 Md. 283, and quoting from Kirschner v. Klavik, 186 A. 2d 227, 229, a District of Columbia Municipal Appeals case:

“Generally, a contract made in violation of a Maryland statute designed for police or regulatory purposes is void and confers no rights upon the wrongdoer. Neither can the wrongdoer sue in quasi-contract for the value of his services or for the value of the benefits conferred upon the other party. This is true even where, as was shown here, the appellants entered into the contract with appellee knowing ....”

Building on this foundation, the chancellor pointed out that a mechanics’ lien must be based upon an underlying contract, express or implied, between the contractor whom the materialman is supplying, and the owner. Moreland v. Meade, 162 Md. 95, 104-105; Treusch and O'Connor v. Shryock & Clark, 51 Md. 162. If the contract is an illegal one, reasoned the chancellor, the enforceability of the demand for payment connected with it depends upon “ ‘whether the plaintiff must resort to the illegal transaction to aid in establishing his case.’ ” Van Meter v. Wilkinson, 187 Md. 492, 499.

In order to apply that law, the chancellor was compelled to state his factual conclusions. He first found that:

“There was no evidence of any direct contract between United Electric and Greencastle.”;

and then reasoned:

“Thus, United Electric is forced to rely upon the illegal contract between Bruno’s and Greencastle to enforce its lien.[] This, it cannot do; and if it cannot use that contract, what other contract is available as a foundation for the enforcement of the lien? ”

To further emphasize his point the chancellor pointed to Snodgrass v. Immler, 232 Md. 416 and Harry Berenter, Inc. v. Berman, 258 Md. 290.

In Snodgrass, a contract between a property owner and a licensed architect provided that an unlicensed architect would perform the actual services under the supervision of the licensee. The two architects then contracted that the unlicensed architect receive the lion’s share of the fee. The Court noted that the contract between the owner and the licensed architect was valid standing alone, but that:

“ ... when the facts surrounding this contract and its companion contract [were] examined, it [was] at once apparent that the contracts were a subterfuge employed in an attempt to circumvent the licensing statute.” Id. at 422.

The unlicensed architect was denied relief against the licensed architect on his suit as a third party beneficiary of the owner-licensed architect contract.

In Berenter, the lienor sought enforcement of a mechanics’ lien, although it was not licensed under the Maryland Home Improvement Law. The Court refused to enforce the lien, stating that:

"... even though the mechanic’s lien is created by statute, nevertheless, such a lien is provided for the enforcement of a contract for work done and materials furnished .. ..” Id. at 296.

The Court would not allow recovery for either material or work because it refused to aid a party in enforcing a contract to perform that which is forbidden by a regulatory statute. For the same reason, it would not permit quantum meruit recovery.

From these cases the chancellor concluded that:

“If there is a common thread running through Snodgrass, Thorpe [], and Berenter, it is that those involved in an illegal contract will not be able to enforce that contract either directly (through thé contract itself) or indirectly (e.g. mechanic’s lien or third-party beneficiary).”

The chancellor than made his leap without constructing the necessary bridge, although he concluded his opinion in a commendable vein for a court of conscience:

“United Electric Supply Company would have this Court view the case as one where it, as materialman and separate legal entity, supplied materials which were incorporated into the building project and it should be paid since the violative transactions took place between other entities.
Sitting in equity, this Court would do an injustice to its name if it did not look through such a diaphanous veil. Mr. Penovich, as president of both Redwood Electric and United Electric, used Redwood’s business license to secure a permit for Bruno’s Electrical Contractors and used United Electric to supply materials to Bruno’s. Mr. Penovich also provided his master electrician’s license for the purpose of complying with the supervision requirements of the Montgomery County Code. (Montgomery County Code, Chapter 17, Section 17-19 (b) demands that the work done under the business license shall be under the ultimate supervision of the master electrician or master electrician limited regularly employed by the licensee. The Court questions the manner in which Mr. Penovich used his master electrician’s license, but finds no need to decide whether it violated the statute.)
The relationships in this case are too tainted and the entanglements too great for this Court to do anything but leave the parties where it finds them.”

Holding

The appellant raises the following two contentions upon appeal:

“1. THE VALIDITY OF A SUPPLIER’S MECHANIC’S LIEN CLAIM DOES NOT REST ON WHETHER OR NOT A SUBCONTRACTOR TO WHOM THE SUPPLIER SOLD MATERIALS CAN ENFORCE CLAIMS AGAINST THE OWNER OR GENERAL CONTRACTOR.
2. THERE IS NO ILLEGALITY CONNECTED WITH APPELLANT’S CLAIM OF A NATURE WHICH WOULD JUSTIFY A DENIAL OF RELIEF.”

The chancellor apparently responded to the first issue with logic more appropriate to the second. As is apparent from his opinion, he felt that because the Greencastle — Bruno’s contract was illegal, a bridge necessary to support United’s claim against Greencastle was barred. It is not clear whether he felt that path would be barred even if United were not tainted by the Bruno’s — Redwood contract. This latter contract he also found illegal, but only by implication. Inasmuch as it purported to do precisely what the Greencastle — Bruno’s contract did, viz., circumvent the prohibition against installing, repairing, or maintaining electrical circuits, equipment and apparatus without the requisite license, it plainly is illegal. No contention to the contrary is made on appeal.

Other than observing the contractual link from Greencastle through Bruno’s to United, we need not and do not decide what effect, if any, the Greencastle ~~ Bruno’s contract has on United. Rather, we view United’s involvement with the Redwood — Bruno’s contract as dispositive of United’s claim against Greencastle. In doing so, we adopt the reasoning and recognize the authorities upon which the chancellor relied; but we do so without becoming ensnared in the parties’ final web.

The gravamen of appellant’s position is that its contract with Bruno’s is wholly independent and distinct from Redwood’s contract with Bruno’s, and that United should not be tainted by the illegality of Redwood. Furthermore, it argues that even if the two contracts can be treated as one, each portion is severable, see Baldwin, Etc. v. Grymes, 232 Md. 470, 473, and the valid portion (i.e., the portion to supply material) should be enforced. It stresses that at issue is United’s claim for materials, not Redwood’s claim for labor.

We first note the general rule that each corporation is an entity separate from its stockholders, Ace Development Co. v. Harrison, 196 Md. 357, even if its stock is owned solely by one person or another corporation. Lopez v. Lopez, 250 Md. 491, 503; Quinn v. Quinn, 11 Md. App. 638, 648. But that general rule — like most general rules — is subject to an exception:

“When there is fraud, or some other ground for its action, in furtherance of the ends of justice, it is true that a court has the power to go behind the legal entity and treat the corporation and the owners of the capital stock and assets as identical.” (emphasis added). Steel Co. v. Concrete Pile Co., 141 Md. 67, 81.

See also Md. Trust Co. v. Tulip Realty, 220 Md. 399, 414.

Bruno’s was obviously in violation of the statute by permitting its employees to perform electrical work without a business license. Redwood knowingly covered that illegality by using its business license as a shield to obtain a permit under which Bruno’s perpetrated its statutory violation. And while a contract between Bruno’s and United for material supplied would, standing alone, have been perfectly legal as the chancellor observed, factually it relied upon the illegal contract between Bruno’s and Penovich’s Redwood, as so clearly shown by Mr. Tarabocchia’s testimony quoted above and the record as a whole.

In light of these facts the corporate veils are indeed “diaphanous”, as characterized by the chancellor, and are obscured by facts, which if not overtly fraudulent, smack thereof sufficiently to preclude United from recovery in an equity court by the doctrine of “clean hands”. Having soiled one of his hands, Mr. Penovich cannot obscure the blemished one while supplicating with the other.

Mr. Penovich, who solely owned both corporations, would have us wink at the fact that the valid contract of one, was conditioned upon an illegal act of the other. Although justice is depicted with vision obscured, she can see through such a flimsy blindfold. Corporate veils were not intended to provide false fronts as conveyances for pecuniary gain made from conduct that is statutorily proscribed. In Crocker v. Pitti, 179 Md. 52, 58,

“The alleged chief actor in the fraud [was] asserted to have dominated and controlled intervening corporate entities and, through that domination and control, to have accomplished his personal ends and enterprises.”

The Court of Appeals would have none of it and held that:

“It [was] appropriate that equity should deal with him according to the verities and not to his simulations.”,

noting that:

“Where fraud exists, equity is equal to the occasion no matter how fair and regular the disguise it may assume.”

We need not decide if the conduct between Penovich (in the form of Redwood) and Bruno’s was fraudulent. It is enough that it was in violation of a statute for an equity court to refuse to aid United’s real party in interest — Penovich. In Bayne v. Suit, 1 Md. 80, 86, well over a century ago, the Court of Appeals said:

“This court will not extend its aid to a party, who bases his cause of action upon an immoral or illegal transaction. If it should appear to the court, that the cause of action arose directly or indirectly, ex turpi causa, or in violation of any positive statute, in either case the court will withhold from the plaintiff all aid or assistance.”

But we hasten to add, in light of the facts here:

“The court’s refusal is not for the sake of the defendant, but because it will not aid such a plaintiff.” 2 Restatement Contracts § 598; Thorpe v. Carte, supra, 252 Md. at 529.

We, therefore, affirm the chancellor who would not permit his court to be used for rewarding such conduct.

Judgment affirmed.

Costs to be paid by appellant.

      . See Marmion (Lochinvar, Canto VI, Stanza 14) — Sir Walter Scott.

      . There is no contention but that the provisions at issue here are other than regulatory, and intended to protect the public.

      . United does not claim that this contract is not illegal.

      . The court also relied upon Thorpe v. Carle, 252 Md. 523, but since recovery there was denied because a statute expressly precluded recovery, the language relied upon below was primarily dicta.

      . But see Bart Arconti & Sons v. Ames-Ennis, 275 Md. 295, where the Court declined to pierce a corporate veil to proscribe its avoidance of a legal obligation, which took the form of a debt. However, in the instant case we do not pierce the veil for that purpose. Rather, we ignore the corporate guise only insofar as it is necessary to enforce the public policy of a regulatory statute.