Maryland Construction Co. v. Kuper

On the 18th day of January, 1897, the Maryland Construction Company, through its agent, J.D. McCubbin, Jr., and John Kuper entered into an agreement for the sale by the former to the latter of some lots on Park avenue (formerly called Grundy street) and one on Preston street, in the city of Baltimore. Kuper paid $25.00 on account of the purchase money, which was to be returned in the event that the title should be found to be not marketable. Thirty days was allowed for the examination of the title, upon the completion of which and the execution of a deed for the property the balance of the purchase money was to be paid. Kuper having declined to accept the deed and pay the purchase money, a bill was filed by the appellants for the specific performance of the contract, which, after hearing, was dismissed by the decree of the Court below. From that decree this appeal was taken. Several objections to the title of the lots are urged by the appellee, and it is also contended that there was no mutuality of contract between the parties. We will first consider the latter question.

1. It appears from a petition of the receivers of the Baltimore and Ohio Railroad Company, filed in the Circuit Court of the United States for the District of Maryland, a copy of which is by agreement of counsel made a part of this record, that the Maryland Construction Company undertook the construction of the Baltimore Belt Railroad, which connected the main line of the Baltimore and Ohio Company at Camden station with its Philadelphia branch, near Bay View. The Baltimore and Ohio held all the stock of the construction company and made large advances to it. The construction company acquired a number of parcels of land which it did not convey to the Belt Railroad, and which were not within the right of way of that company, including the lots now in controversy. The United States Court, after hearing the counsel representing various interests affected by the petition, passed a decree authorizing the receivers to issue certificates of indebtedness to an amount not exceeding $956,000.00, to be dated December 1, 1896, payable three years thereafter, and redeemable on the first of June, 1897, or on any interest day thereafter, the proceeds of which were to be applied as therein directed. The decree provided that the receivers, as a condition precedent to the issuance of the certificates, should require the construction company to execute to them an agreement or declaration of trust, acknowledging and agreeing that it did and would hold all its property for the benefit and protection of said receivers and that it would in no case sell or in any way dispose of any of its property without their consent in writing, and that it would upon the request of the receivers sell, lease, convey, transfer, assign or dispose of in any way the whole or any part of said property and assets as the receivers might direct — they being authorized to receive and receipt for all moneys derived from such sales. On the 27th day of November, 1896, the construction company executed the declaration of trust in accordance with that decree, which was duly recorded. It is by reason of it that the appellee contends there was no mutuality o contract, as the agreement for the sale to him was not signed by the receivers, but only by the construction company.

The appellee has referred to the cases of Geiger v. Green, 4 Gill, 476; Duvall v. Myers, 2 Md. Ch. 401; Gelston v.Sigmund, 27 Md. 344, and King v. Warfield, 67 Md. 246, in support of his contention. In Geiger v. Green, the Court, after referring to a number of authorities, including the doctrine as stated by LORD REDESDALE in Lawrenson v. Butler, 1 Schoale and Lefroy's Reports, 18, said: "It is now established that unless there is to found in the contract this essential ingredient of mutuality, a Court of Equity will not compel its specific execution." In Duvall v. Myers the Chancellor said: "The right to a specific execution of a contract, so far as this question of mutuality is concerned, depends upon whether the agreement itself is obligatory upon both parties, so that upon the application of either, against the other, the Court would coerce a specific performance." And in the other cases referred to similar expressions are used. But, without in any wise questioning the doctrine as established by them, do they interfere with the right of the construction company to maintain this bill ? By the very terms of this agreement that company has obligated itself to sell and convey the property and the appellee to purchase and pay for it. The uncontradicted evidence shows that Mr. McCubbin was the agent of the company and was authorized to make the sale. There is nothing on the face of the agreement to show lack of mutuality, and "it is obligatory upon both parties." The doctrine announced in the above cases therefore does not prevent the construction company from maintaining its bill for specific performance.

It is said, however, that it was not in a position to convey the property by reason of the declaration of trust, and as the receivers were not parties to the agreement there was the lack of mutuality complained of. But the title to the property was not conveyed to the receivers. The company still held the title, and the declaration of trust only prevented it from conveying it, without the consent in writing of the receivers. It, in reality, was no greater incumbrance on the property than a mortgage, for when the indebtedness intended to be thereby secured was paid it had the unquestioned right to be relieved from the effects of its provisions. It was a declaration that it held the property for the security of the debt and was very similar to a mortgage with a provision in it that the mortgagee should have the use and control over the property until the debt was paid. The testimony shows that Mr. McCubbin was also agent of the receivers, and that he was authorized by them to make the agreement. It is true that he does not say whether he had, in advance, that authority in writing, but if that was deemed material the appellee could have asked him the question, but the receivers did unite in the deed that was tendered the appellee, and there is no suggestion in the record that there was ever any question about their willingness to do so. The deed executed by the construction company and the receivers, who thereby gave their consent in writing, if they had not done so before, was tendered to the appellee, and he refused it, giving no other reason for doing so than he thought when he agreed to make the purchase that the two ground-rents were redeemable, and after wards ascertained they were not, but there was nothing in the contract on that subject. There was no objection then made on the ground of lack of mutuality in the contract, or for any defect in the title.

While it is true that a vendor must be ready and able to convey a marketable title to the purchaser, it is not necessary that he possess such a title at the time the contract is entered into — provided he shows that he made the contract in good faith and was able to convey it when called upon by his agreement to do so. The great weight of authority is that he is only required to be able to convey it by the time the decree is entered, if time is not of the essence of the contract, and he acts in good faith. Hepburn v. Auld, 5 Cranch, 262; Hepburn v. Dunlop, 1 Wheat, 179;Mason v. Caldwell, 10 Ill. 196; Dresel v. Jordan,104 Mass. 407; Luckett v. Williamson, 37 Mo. 395; Jenkins v.Fahey, 73 N, Y. 355; Oakey v. Cook, 41 N.J, Eq. 350;Miller v. Cameron, 45 N.J. Eq. 95; Guild v. R.R. Company,57 Kan. 70 (s.c. 33 L.R.A. 77); Reformed Dutch Church, v.Mott, 7 Paige, 77, and many other cases cited in 22 Ency. ofLaw, 960. So far as the cases in this State reflect upon the question they are in accord with that view. In Buchanan v.Lorman, 3 Gill 77, it was said: "The ability of the vendor to convey should exist when his duty by the contract arises to convey, or at the time of a decree for a conveyance, where time is not of the essence of the contract." That is repeated in Dorsey v. Hobbs, 10 Md. 417, and again in Foley v. Crow, 37 Md. 59. In Linthicum v. Thomas, 59 Md. 574, the parties had agreed to exchange properties free from incumbrances, except those specified, and Thomas executed a deed, which was without his authority put on record, but Linthicum's property was not clear and he had not acquired the legal title to part of it. Thomas proceeded in equity to have the deed annulled and the agreement declared void. The Court said that Linthicum's title when the bill was filed "was so manifestly defective, that a Court of Equity would not for a moment have considered it such as a purchaser would be bound to accept, in a case of specific performance. * * * As against these bills he could not take the ground that he could have his title ready at the time of thedecree, as is allowed the complainant in a bill for specificperformance."

The authorities are therefore ample to establish the doctrine that the mere fact that the vendor's property is encumbered, or his title is defective, at the time the contract of sale is made, will not prevent his enforcing the contract in equity, if he has removed the incumbrance and perfected the title by the time he is required by his contract to convey it, and, generally, when he has acted in good faith relief will be granted him, if he is ready to furnish a clear title at the time of the decree, provided the delay has not prejudiced the purchaser and time is not of the essence of the contract. If this were not so, an owner of land who has incumbrances upon it might pay them off for the purpose of giving the purchaser a clear title and then not be able to enforce the contract of purchase, or he might be subjected to heavy costs in order to have his title cleared and then not be able to require the purchaser to perform his part of the contract. In this case there is no evidence of any difficulty in the way of the construction company giving a clear title (so far as this declaration of trust is concerned), as the receivers had consented to the sale and actually joined in the deed before any objection now urged had been made, so far as known to the company.

2. The first objection to the title is based on two alleged errors in the description of lot No. 3, on the plat filed.

[EDITORS' NOTE: PLAT IS ELECTRONICALLY NON-TRANSFERRABLE.]

They arise in the deed from William H. Geiman to the construction company. One of them is that the beginning of the lot is described to be "on the southwest side of Grundy street at the distance of forty-five feet northwesterly from the corner formed by the intersection of the southwest side of Grundy street with the northwest side of Preston street, and at the centre of thedivision wall of the house to be erected on the lot adjoiningthereto, to the northwest thereof." The expression "to the northwest thereof" is what causes the difficulty. If that means a house to be erected on an adjoining lot which is to the northwest of the lot being described, the beginning, instead of being forty-five feet from the corner of Preston and Grundy streets, would be sixty feet, and starting from that point a lot would be described which is entirely beyond the one intended to be conveyed. The beginning cannot be at forty-five feet from the corner of those streets and in a division wall of a house to be erected on the lot northwest of No. 3. There is, therefore, manifestly an error and we must examine the whole description to ascertain, if possible, where the error is and whether it is such a defect as to prevent the property from being marketable. In the first place, the beginning at forty-five feet from the corner of the two streets was a call that could at the time be definitely and accurately ascertained, as the streets were in existence, but the house was "to beerected," and hence is not described as there at the time. If it never was erected it would be impossible to ever start at the centre of the division wall, and hence the beginning as first described is more accurate than the other and should for that reason be followed. But the rest of the description conclusively demonstrates that the beginning as first described is the correct one, for the lines of the deed run "northwesterly binding on Grundy street fifteen feet, thence southwesterly parallel with Preston street sixty-three feet; thence southeasterly parallel with Grundy street fifteen feet to the lot secondly above described, and thence northeasterly binding on said lot andparallel with Preston street, and through the centre of saiddivision wall sixty-three feet to the place of the beginning." It therefore not only shows that the second line of this lot is intended to be only fifteen feet from No. 2, but the last line calls to run not only with that lot, but "through the centre ofsaid division wall to the beginning — thus conclusively showing that the division wall spoken of, in describing the beginning, was the one along the line of lot No. 2. Then again, the last line could not run with lot No. 2 and the division wall, and reach the beginning if the beginning was at the northwest corner of lot No. 3. It is therefore perfectly clear that the beginning was intended to be at the point forty-five feet from the corner of those streets, which point is also the end of the first line of lot No. 2, as will be seen from the description.

The second error in this deed is in the third line, which is "thence southeasterly parallel with Grundy street fifteen feet to the lot secondly above described." This lot is supposed to have a depth of sixty-three feet, while No. 2 is only sixty feet — a three-foot alley being taken off — hence it is said that the call "to the lot secondly above described," which is No. 2, requires the line to go to lot No. 2, which would leave a triangular piece of No. 3 out of the conveyance. This objection might be answered by reference to the contract, in which lots Nos. 1, 2 and 3 are described together, as a fee-simple lot adjoining the one on the corner of the two streets, "having a front on Park avenue of about forty-five feet with an even depth of about sixty feet tothe alley above mentioned." The agreement therefore does not require the company to convey a lot of greater depth than from Park avenue to the alley, and if the appellee's construction of this deed is correct the company offered to convey him more than he is really entitled to. That certainly would be no objection to the bill for a specific performance. But is his construction correct? The general rule is that a call to an artificial or natural object prevails over courses and distances when they conflict, and it is for the reason that a call is supposed to be more accurate than courses and distances. But there are no courses given to the lines of this deed, they only give their general direction. This third line is said to run "southeasterly," and that alone might be gratified either by running to the corner of No. 2, or in any other southeasterly direction. But it calls to run "parallel with Grundy street" and it cannot so run if it must go to the corner of No. 2. It is not as if it had said, for example, south sixty degrees east, for in such a description a mistake is easily made, but when it calls to run parallel with a street only sixty-three feet away there is not much room for a mistake, as the street is there. The deed shows that the two short lines of all the lots are intended to be parallel to each other and the two long lines to be also parallel. If, as appears by the plat filed, Grundy street and Preston street are at right angles to each other, all three of the lots in this deed were intended to be parallelograms, and the construction contended for by the appellee would not only be in opposition to the manifest intention of the parties in that respect, but it would leave out of the conveyance a little triangle, three feet wide at the widest point, and would shorten the distance of the last line from sixty-three to sixty feet. As one call must be abandoned — either to run parallel with Grundy street or to go to lot No. 2 — and both cannot be gratified, we must take that which the whole deed shows was evidently the intention of the parties. As was said in Thomas v. Godfrey, 3 G. J. 151, "Where there are two inconsistent expressions or calls, both of which cannot be gratified, but either of which, standing alone, would be imperative, that which appears to be the most certain and most consonant to the intention apparent upon the face of the patent, should, in the construction of it, be preferred, for the same reason that calls are preferred to courses and distances, because more certain. Or, if there is anything on the face of the patent to explain or qualify one of them, so as to show that the other was intended to be the governing or imperative call, it should be so treated." And in Kelso v. Stigar, 75 Md. 392, the Court, through CHIEF JUDGE ALVEY, said: "Now, according to * * * well-established principles of location in this State, as well as elsewhere, where there is manifest error in the grant in regard to descriptions of objects, courses or distances, the Court will inquire into the probabilities of mistake, as to the objects or courses called for, and look to the consequences which would result from rejecting the one or the other. * * * An error of description in a survey, says this Court in Wilson v. Inloes, 6 Gill, 121, 165, 166, adopted in a patent or grant, manifestly founded in mistake or false hood, is insufficient to control other calls and expressions inconsistent therewith, and where the assumption of mistake in a single description, harmonizes all the rest of the grant, the Court will make such assumption." Following those authorities and treating the expression "parallel with Grundy street" as acall (as it is) and not as a mere course, it is as imperative as the call to lot No. 2, and as it "appears to be the most certain and most consonant to the intention appearing upon the face of the deed" it should be preferred and obeyed.

3. The other objection to the title is the error in the third line of lot No. 5. It calls to run "northwesterly parallel with Preston street." A line cannot be run "northwesterly parallelwith Preston street," as that street runs northeasterly andsouthwesterly. As the fourth and fifth lines are "thence southeasterly parallel with Grundy street fifteen feet to the northwest end of said alley, and thence still southeasterly bounding on it and with the use in common thereof forty-five feet to the place of beginning," a northwesterly line from the end of the second line would not close the survey. It is therefore perfectly manifest that "northwesterly," as used in this line, was a mistake and that it should be "northeasterly." The case ofKelso v. Stigar, where it was said that "north" should be read "south" is conclusive of this point.

4. Another objection made is that the contract called for the sale of "about forty-five feet" in the property on Park avenue, and "about sixteen feet" in the lot fronting on Preston street, while there are only forty-four feet on the former street and fifteen feet six inches on the latter. The use of the word "about" indicates that the parties only contracted for a number of feet that would be a near approximation to those mentioned, and negatives the conclusion that entire precision was intended. The difference is not sufficient to justify the Court in disturbing the contract. Baltimore Per. B. . L. Society v.Smith, 54 Md. 187; 1 Ency. of Law, (2nd Ed.) 196.

It was suggested at the argument that considerable time had elapsed since the contract was made, that the property was not worth the price agreed to be paid, except for the immediate use the appellee had for it, and that the change in the mechanics' lien law, as applicable to Baltimore city, had put an entirely different aspect on such a deal by a builder. But there is absolutely nothing in the record to show that the company was in any way responsible for the delay, and what we have already said of the title sufficiently indicates our views as to the reasonableness of those objections. Indeed, as we have seen, none of those objections were made to the representatives of the company when he called on the appellee for the performance of the contract and tendered the deed. There have been so many cases in this Court on the subject of specific performance, that it would be useless to attempt to cite many of them, but if it be conceded that there was any doubt as to the title to any part of the property, the case of Levy v. Iroquois Co., 80 Md. 300 is applicable. It was there said, "it is not every doubt or suggestion, or even threat of contest that will be sufficient" to defeat a demand for specific performance of a contract to buy, but the doubt must be a reasonable one; "otherwise an assailing purchaser might in every case raise or make such an objection."

The decree will be reversed and the cause remanded in order that a decree may be passed requiring the appellee to perform his contract.

Decree reversed and cause remanded, costs to be paid by theappellee.

(Decided January 10th, 1900).