Livingston v. Green Properties, Inc. ( 1960 )

Henderson, J.,

delivered the opinion of the Court.

This appeal is from a judgment for costs entered in favor of the appellee, after the court sustained a demurrer, without leave to amend, to a declaration claiming damages for breach of a contract to purchase real estate.

The contract of sale was filed with the declaration. The demurrer not only failed to challenge the plaintiffs’ right to file the contract, but relied upon its terms to set up its defense. Cf. Christian v. Johnson Construction Co., 161 Md. 87. The contract was executed on October 14, 1957, recited that in consideration of one dollar and the performance of the terms, covenants and conditions set forth, the vendors “do hereby bargain, sell and agree to convey”, and the purchaser to purchase, a certain described lot, as shown on a plat of record. The declaration alleges that said lot was improved by a building in which was conducted a business known as “State Line Restaurant”. The contract provided that the vendors should convey the property subject to the “debts, mortgages, judgments or claims” set out therein. There follows a list of seventeen creditors, including “Bank of Fruitland—$7,537.50”, and totalling $18,273.95. It was stated that the amounts shown were not the exact balances due, but the vendors guaranteed that the total indebtedness owed by them on said property would not exceed the amounts shown. The purchaser agreed to assume the liabilities shown and save the vendors harmless from any claim or demand upon them by reason of said liabilities. It was further agreed that the property was sold subject to a lease, and that prepaid rent, in the amount of $600.00, forms part of the purchase price and should be retained by the vendors. The purchaser agreed to pay all unpaid State and County taxes, and the fire insurance premium then due and payable. It was agreed that rent be adjusted as of October 31, 1957, and that the purchaser pay all expenses of “title, papers, revenue and recordation stamps”. The vendors covenanted and agreed to pay all debts, claims and judgments other than those shown “which may now or hereafter be or become liens on said property or will secure a waiver thereof as to said property.”

The declaration alleges that the Bank of Fruitland held a mortgage in the amount listed in the agreement, and that “by reason of the failure of Green Properties, Inc., to pay the aforementioned mortgage” it was assigned and foreclosed, and the property sold at public auction, along with plaintiffs’ home in Delmar. By reason of the failure to carry out the terms of the agreement, assume the liabilities listed, and save the plaintiffs harmless, the plaintiffs have lost the property mentioned and their home, together with $12,000.00 in indebtednesses which they paid or for which they remain liable to the creditors listed, seriously impairing their credit, all of which “loss of said property, money, credit and standing in the community was caused by the failure” of the purchaser to abide by and carry out the contract. It further alleged that the plaintiffs were “at all times prior to the forced sale * * * ready, willing and able to abide by the terms of the aforementioned agreement”.

The trial cottrt took the view that the declaration was defective in not alleging performance or tendered performance by the plaintiffs. But this overlooks, we think, the allegations that the foreclosure, which made it impossible for the vendors to convey, was caused by the failure of the purchaser to perform its agreement to assume this indebtedness and save the vendors harmless, and that the vendors at all times prior to the foreclosure were ready, willing and able to execute a conveyance of their interest in the property. It seems clear that the agreement contemplated an immediate transfer of the beneficial interest in the property to the purchaser. Cf. Brewer v. Herbert, 30 Md. 301, 311, and Kinsey v. Drury, 146 Md. 227, 232. The purchaser assumed the payment of unpaid taxes and insurance. Rent under the lease was to be adjusted as of October 31, 1957. Nothing remained for the vendors to do except to execute a deed prepared at the purchaser’s expense. Their covenants as to claims in excess of, or other than, the claims listed have nothing to do with the case presented by the declaration, and in any event would seem to be matters of defense. Under the circumstances, we think the purchaser cannot set up the failure of the vendors to convey or tender a conveyance which was only prevented by its own breach. As was said in McKeever v. Washington Heights Realty Corp., 183 Md. 216, 226, “A party may commit breach of contract, not only by failing to perform it in whole or in part or by disabling himself from performing it, but also by making it impossible for the other party to perform his part.” In Alois v. Waldman, 219 Md. 369, 375, we said: “It is well settled that, where cooperation is necessary to the performance of a condition, a duty to cooperate will be implied, and that a party owing such a duty cannot prevail if such failure operates to hinder or prevent performance of the condition. See Restatement, Contracts, § 351(1) and § 395, Comment c; Williston, Contracts, (Rev. Ed.) §§ 1293, 1293A. Cf. Black v. Woodrow, 39 Md. 194, 215; Milske v. Steiner Mantel Co., 103 Md. 235, 249; Vanadium Corporation v. Fidelity & Deposit Co., 159 F. 2d 105, 108 (C. C. A. 2d); Griffith v. Scheungrab, 219 Md. 27, 34.” See also 3 Corbin, Contracts, § 570; Note 41 Harv. L. Rev. 398. In the instant case we think the declaration sufficiently alleges a breach by the appellee that prevented performance by the appellants. We think the declaration states a cause of action and the demurrer should have been overruled.

Judgment reversed and case remanded for further proceedings, costs to be paid by the appellee.