Bank v. Hurst Estate

Markell, J., delivered the opinion of the Court. This is an appeal by the plaintiff from a decree dismissing a bill for specific performance of an option to a tenant to purchase leasehold property, No. 3502 Cotwood Place, in Baltimore. In 1932 the property was leased to plaintiff by defendant Cityco Realty Company (appellee), agent for defendant John J. Hurst Estate (appellee) at $35 a month. After an increase in rent, plaintiff in June, 1942, was paying $37.50 a month.

By an agreement under seal dated July 15, 1942, between Cityco, agent, and plaintiff, Cityco let to plaintiff for two years, beginning July 20, 1942, the property in question, subject to a $78 ground rent at $12 per week payable in advance. The agreement gave plaintiff the right at any time during the tenancy to purchase the property. In case of such purchase plaintiff was, in the settlement, to be charged with $3,300 purchase money, $200 having been paid for the option, and with interest on $3,300 and all expenses of the ³³⁶ property, ground rent, water rent, taxes, insurance and repairs from July 15, 1942, to date of settlement and to be credited with all rent paid by him up to the time of settlement and upon payment of the difference between the debits and credits, was to be entitled to a conveyance. By a contemporaneous letter from Cityco to plaintiff it was agreed that “if at the expiration of the two years * * * it is impossible to obtain a Building Association mortgage to take care of the balance that you owe on the property, we will extend the above referred to agreement until such time as a Building Association may be obtained.” On December 28, 1945, plaintiff filed his bill of complaint, with the contract of July 15, 1942, as an exhibit, alleging the making of the “option purchase agreement” that “on several occasions” during the term of the agreement plaintiff made demand upon defendants to carry out the terms of the agreement, which defendants failed and refused to do, that subsequently Cityco was in frequent communication with plaintiff and “continued to assure the plaintiff that they were making efforts to secure a mortgage upon said property” for $3,300, “as required by the terms of said option purchase agreement in order to carry out the same,” and to that end sent numerous representatives of building and loan associations to inspect and examine the property for the purpose of arranging such loan, that on December 10, 1945, defendants, “instead of complying with the terms of said option purchase agreement and the promises thereunder continually made to the plaintiff,” advertised the property for sale.

The bill prayed (1) that defendants “be required to specifically perform their agreement” with plaintiff and to transfer the property to. plaintiff for $3,500 and to “provide a purchase money mortgage of $3,300 in connection with, said transfer of said property,” (2) that defendants be enjoined from advertising the property for sale or doing anything to dispose of it other than to plaintiff, and»(3) general relief. ³³⁷ The Hurst estate answered that it had sold the property to Cityco and no longer had any interest in it. Cityco answered that plaintiff had breached the agreement by failing since December 14, 1942, to pay $12 a week and paying only $37.50 a month and before breach had never made demand upon it to carry out the agreement, and that the agreement did not require defendant to secure any mortgage on the property but defendant gratuitously made efforts to secure a mortgage for $3,300 and requested representatives of building and loan associations to inspect and examine the property for this purpose but they were unwilling to make plaintiff a loan as great as $3,300 on the property, and that the entire purpose and plan of the agreement had been defeated by plaintiff by failing to make the payments of $12 a week called for by the agreement, by which plaintiff would have substantially reduced the unpaid purchase price of $3,300 and would have been enabled to obtain a building association mortgage for the reduced amount. When the agreement of July 15, 1942, was made the O. P. A. maximum rent regulations were in force. Supplementary Amendment 8 to these regulations (Federal Register, October 21, 1942, page 8506) provided that where in connection with a housing lease entered into