Allers v. Klein

Pattison, J., delivered the opinion of the Court. Morris Klein, one of the appellees, acquired title to the leasehold property, Bo. 1429 Hoffman Street, Baltimore, Md., by deed dated June 10th, 1927, though not recorded until the 17th day of Bovember of that year. In order to finance the purchase, he borrowed from the Paderewski Building Association the sum of $1,800, and, to secure the payment of this loan, he executed to that association a mortgage upon the property. On the 16th day of Bovember, he conveyed this property to the Utility Finance Company, as that company had advanced to him a part of the purchase money therefor. ¹⁹⁶ At or about the time of its purchase by Klein, Howard Henry Allers and Elizabeth Margaret Allers, his wife, appellants, were occupying the property as tenants, and their occupancy of it continued through the period of the execution of said mortgage and deed.

While so occupying it, Klein, on the 23rd day of November, 1927, sold the property to them for the sum of $2,700. By the terms of the written agreement of sale, signed by Klein, Allers, and his wife, the sum of $50 of the purchase money was to be paid in cash, and the payment of the balance was to be secured “by 1st and 2nd mortgages,” and, upon the payment of the unpaid purchase money, Klein was to convey unto Allers and wife a good merchantable title in and to said property, subject only to an annual ground rent of $40. In the agreement of sale, Klein also agreed “to paper the house and put in electricity.” About two weeks after the agreement was signed, and before the execution of the mortgages mentioned therein, Klein called upon Allers and his wife, at their home. It was then and there agreed between Klein, as vendor, and them, as vendees, as claimed by them, that instead of securing the payment of the balance of the purchase money by first and second mortgages, as provided in the agreement, they should pay eight dollars per week, payable every two weeks, a part of which was to be applied to the payment of interest, a part to the payment of the expense of maintenance, and the balance to the payment of the unpaid purchase money; while the claim is made by Klein that the amount which was then agreed upon to be paid every two weeks was to be paid as rent for the property, and that the sale that had hitherto been made was then abrogated or canceled, because, as stated by him, Allers and wife were not able to consummate the sale, and so told him.

The amount agreed upon was, in the most part, paid by Allers and wife, with reasonable promptness, to August, 1929, failing only in a few of said payments. On August 1st, 1929, they sold the property for the sum of $3,000, as shown by a receipt given by them to one George Shields for the cash pay ¹⁹⁷ ment made upon the purchase money for said property, which receipt or contract of sale was duly executed and acknowledged and filed for record on the following day, August 2nd, 1929. Shields, it seems, was only a straw man, the real purchaser being Morris Macht, a real estate broker of Baltimore City. In July, 1929, the Utility Finance Company and Morris Klein conveyed the property in question to Bernard Klein, the son of Morris Klein.

The consideration therefor, as stated by Morris and Bernard Klein, was the payment to the company by Bernard Klein of the loan made by it to Morris Klein to enable him to finance the purchase of the property in 1927, and for which Morris Klein had conveyed the property to that company. On August 2nd, 1929, Bernard Klein entered into an agreement with one Walter J. Pugh, a representative of William Martien & Co., for the sale of the property to him for the sum of $3,500. The firm of Martien & Co., brokers, was acting, in the purchase of the property, for the Union Railroad Company of Baltimore. After the execution of the contract between Allers and wife and Shields, made by Marion Cox acting for Macht, Cox and William B. Davidson, representing Macht, called at the home of Morris Klein, carrying with them a deed to be executed by him, conveying the property in question to Allers and wife.

At that time, they tendered to Morris Klein the sum of $2,550, the amount of balance owing by Allers and wife to Klein upon the purchase money therefor, and at the same time presented the said deed to him with the request that he execute it. He refused to accept the money and declined to execute the deed, saying that he had transferred the property to his son. Uo point was made as to the sufficiency of the tender. It was upon Klein’s refusal to accept the money and convey the property to Allers and wife that the bill in this case was filed.

The bill was filed against Morris Klein, Paderewski Building Association, Inc., Morris Realty Building & Loan Association, Inc., and Bernard Klein, and by it the court was asked to pass a decree specifically enforcing the written agreement, by which Morris Klein sold the afore ¹⁹⁸ said property described in the bill, as modified by the oral agreement thereafter made, or if it should be found that a bona fide intervening interest or right in the property had been acquired by another without notice, making it inequitable to specifically perform the said agreement, that it decree a personal judgment against the defendants in favor of the plaintiffs. The bill was answered by the defendants, and the case was then heard on bill, answer, and testimony taken before the chancellor, who, as disclosed by his opinion found in the record, held that the contract between Morris Klein, vendor, and Allers and wife, vendees, was enforceable by specific performance; but, as stated by him, he “in the exercise of the discretion allowed in cases of this class, and exercising that discretion in view of intervening rights” was “of the opinion that real equity in this particular case may best be done by awarding compensation alone,” and in his decree he refused to specifically enforce the contract, but retained the bill, as he states, “for the purpose of awarding compensation to the plaintiffs,” and then decreed that the “defendant, Morris Klein, pay to the plaintiffs, Howard Henry Allers and Elizabeth Margaret Allers, his wife, the sum of four hundred sixty-one dollars and ninety-one cents ($461.91) with interest from August 23, 1929.” This amount of $461.91 decreed to be paid by Klein was composed of $161.91, the amount that was found to have been paid by Allers and wife upon the purchase money, and the balance, $300, the difference in the amount they were to pay for the property and the amount they were to receive for it in the sale of it to Macht. Tjie chancellor regarded the sum decreed to be paid Allers and wife as the amount of damages suffered by them in Klein’s failure and refusal to specifically perform his contract with them. In the third paragraph of the original bill filed in this case, the agreement between the parties, made about two weeks after the written agreement was signed by them, was regarded as a cancellation of the original contract of sale, as shown by the allegation therein, where it is said: “Your ¹⁹⁹ orators and the said Klein mutually agreed to a cancellation of said written agreement, and simultaneously therewith, orally mutually agreed with each other, that said Klein sell the said property unto your orators, who1 thereby agreed to purchase same, at and for the sum of $2,700.00, of which $50.00 was allowed on account of such purchase price, thereby reducing the balance and the purchase price to the sum of $2,650.00,” which was to be paid “by the by-weekly payment of the sum of $16.00, out of which payment, an agreed portion thereof, was to be applied to the reduction of the balance of the purchase price and the balance of such payment (by weekly) was to be applied to the curtailment of expense accruable in connection with the maintenance of the property, and to the payment of the accruing interest on the balance of the delayed payment.” After much evidence had been taken, the court, upon the petition of the plaintiffs, granted them leave to> amend this paragraph of the bill.

In their petition it was alleged: “That through inadvertence, the third paragraph of said bill of complaint fails to set forth the correct and true conditions of the transaction, inasmuch as it appears therefrom, that the written contract was cancelled, and án entirely new oral contract made, in relation to the sale and purchase of said premises; whereas, in fact, the written contract was not cancelled but its indefinite terms therein contained were later modified by' an oral agreement making definite its otherwise indefinite terms.” The third paragraph was amended to conform to the facts and conditions of the transaction, as stated in the petition. The defendants objected to the allowance of the amendment, and their objection being overruled, they excepted to the ruling of the court thereon, and, after the amended bill was filed, they demurred thereto'. The court to which the application to amend is made must of necessity judge of the propriety of the proposed amendment. It may be said, generally, that in passing upon applications to amend, the ends of justice should never be sacrificed to mere form, or by too rigid an adherence to technical rules of practice (Miller’s Equity Proc., sec. 182), but “a ²⁰⁰ plaintiff is not at liberty to abandon tbe entire case made by bis bill and to make a new and different case by way of amendment.” Miller’s Equity Proc., sec. 186; Bannon v. Comegys, 69 Md. 411 , 16 A. 129 ; Benscotter v. Green, 60 Md. 327 ; Fooks v. Williams, 120 Md. 440 , 87 A. 692 .

In tbis case, tbe contention is made by tbe defendants tbat tbe contract alleged in tbe amended bill is not tbe contract alleged in tbe original bill, tbat tbey are separate and distinct contracts. Tbis, in our opinion, was not tbe effect of tbe amended bill; it did not, we tbink, allege a new contract. In tbe original bill, tbe appellants not only alleged tbe execution of tbe written contract, but tbey also alleged tbat there was a subsequent oral agreement between tbe parties in relation to the subject-matter of tbe written contract. In their original bill, tbey treated tbe written contract as canceled by tbe subsequent oral agreement, while by tbe amended, bill tbe oral agreement was regarded as a modification of tbe written contract and not a cancellation of it, and tbe amendment was made to make tbe allegations of tbe bill conform to tbe proper interpretation and meaning of the oral contract as to its effect upon tbe written contract, which was in accord with tbe established practice in tbis state.

Whether a plaintiff will be permitted to amend bis bill of complaint is in tbe discretion of tbe court, and tbe action of tbe court in tbe exercise of tbat discretion must depend largely upon the special circumstances of each case, and ordinarily no appeal lies from its action thereon. Miller’s Equity Proc., sec. 182. Tbe real questions presented by tbis appeal, as it appears to us, are: (1) Was tbe contract enforceable by specific performance, and (2) were there any intervening rights acquired by any person or persons tbat would render it inequitable to enforce specific performance of tbe contract ? Tbe evidence in tbis case, in our opinion, established tbe existence of a contract between tbe parties, capable of enforcement by specific performance.

By tbe written contract executed on tbe 23d day of November, 1927, and signed by all tbe parties, tbe property ²⁰¹ was sold by Klein to the Allers for a definite sum. of money, so much to bo paid in cash, and the balance to be secured by first and second mortgages, and, upon the payment of the balance of the purchase money, Klein was to convey to the vendees a good and merchantable title in and to said property. The contract was either drawn by or at the instance of Klein. The mortgages were not, at the time, presented to the