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Associated Acceptance Corp. v. Bailey

Decided: October 23, 1961.

ASSOCIATED ACCEPTANCE CORP.
v.
BAILEY ET UX.



Appeal from the Circuit Court for Baltimore County; Turnbull, J.

Henderson, Hammond, Horney, Marbury and Sybert, JJ. Sybert, J., delivered the opinion of the Court.

Sybert

The question presented in this case is whether a Maryland retail installment sales contract is void in the hands of an assignee without notice because the copy furnished to the buyers by the seller was not completely signed by the seller, although the copy of the contract delivered to the assignee by the seller was completely executed and contained an acknowledgment by the buyers that they had received a "true, executed copy" of the contract at the time they signed it.

The facts are not disputed. The appellant, Associated Acceptance Corporation (plaintiff below), is a licensed sales finance corporation of the Commonwealth of Pennsylvania. In the usual course of business it purchased from Pen Del Farms of Maryland, Inc., a Maryland retail installment sales contract dated September 25, 1956, completely executed on its face, evidencing the sale of a freezer and food plan by Pen Del Farms to the appellees, Mr. and Mrs. Bailey (defendants below), for the cash price of $715.55. The contract showed a time balance of $822.36 and required payments in monthly installments commencing on November 24, 1956.

In the copy of the contract handed to the buyers at the time they executed it, the following had been inscribed by hand on the line provided for the seller's signature: "Pen Del Farms of Md., Inc." When the seller's copy of the contract was subsequently assigned to the appellant, the signature of an

authorized representative of the seller had been added immediately under the inscribed name of the corporation. Below the signatures to the contract proper, the following appears in bold print above additional signatures of the Baileys: "Purchaser acknowledges receipt of true, executed copy of this contract at time of execution hereof."

The contract was assigned by Pen Del Farms to appellant on October 15, 1956, prior to the due date of the first payment by appellees. The Baileys made two payments under the contract and then defaulted by failing to pay further installments. The appellant sued in the Circuit Court for Baltimore County to recover the amount due under the contract, and the appellees defended on the sole ground that the lack of the signature of an authorized representative of the seller on the contract at the time of its delivery to the buyers (or on a copy delivered within 15 days) rendered it void and therefore unassignable under the Retail Installment Sales Act, enacted as Chap. 851 of the Acts of 1941 and codified as ยงยง 128 to 153 of Art. 83, Code (1957). The parties stipulated that in connection with the assignment the plaintiff had received a "fully and properly executed copy" of the contract without knowledge of any defects in the copy which the defendants had received or of any other defects in the transaction, and that the defendants had never notified the plaintiff of any defects in their copy. The trial court held that the paper signed by the buyers did not constitute a contract because it bore no authorized signature on behalf of the seller, and that because a copy of the entire alleged contract was not given to the buyers, the contract was void. From a judgment entered for the defendants for costs, the plaintiff brought this appeal.

Section 128 of the act reads, in pertinent part:

"(a) Writing signed by parties. -- Every installment sale agreement shall be evidenced by an instrument in writing containing all of the agreements of the parties. It shall be signed by all the parties before the seller delivers to the buyer any of the goods covered by the agreement.

" (b) Seller to deliver copy to buyer. -- At or before the time the buyer signs the instrument, the seller

shall deliver to him an exact copy of it. If that copy was not executed by the seller, then unless the seller within fifteen (15) days after the buyer has signed, delivers to him a copy of the instrument signed by the seller, the agreement and the instruments signed by the buyer shall be absolutely void without any action by the buyer, and the ...


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