Bellevue Club, Inc. v. Punte

Walsh, J., delivered the opinion of the Court. This suit was brought to- compel the specific performance of a renewal clause in a lease for a “shore” on Middle River in Baltimore County, the bill having been filed by the Bellevue Club, Incorporated, the appellant here, against Joseph E. Punte, Margarethe M. Punte, and Pauline Thelan (since deceased), the appellees. The lease in question was made in 1901 to the Bellevue Club, a different corporation from the appellant, and reads • as follows: “This lease made this 22nd day of March, 1901, by and between Pauline Thelan, widow, of Baltimore County, of the first part, and the Bellevue Club, a body corporate of Baltimore City, in the State of Maryland City, in the State of Maiyland, of the second part. “Witnesseth, that the said Pauline Thelan, party of the first part, does hereby lease to the aforesaid party ⁵⁹¹ of the second part, all that tract of land situate on Middle River, in Baltimore County, and known as the Chesapeake Fishing Club or Shore. “Being the same tract of land heretofore leased by the party of the first part of the Chesapeake Fishing Club, with all the improvements thereon and the rights and privileges of the water fronting thereon, boats, outhouses, etc., now upon the premises for the term of five years from the date hereof, with the privilege of renewal for twenty-nine (10) years more, with the same conditions and agreements and with the privilege of the use of the woods to the open land in the rear. The p’arty of the second part .paying a yearly rental of twenty-five ($25.00) dollars in advance on the first day of July in each and every year during the continuance of lease for five years, and the yearly rental of fifty dollars thereafter.

And the party of the second part do hereby agree to the aforesaid conditions, and they will pay the yearly rent aforesaid when due. “Witness our hands and seals this day and date above written. “Pauline Thelan. (Seal) “Wm. J. Cunningham, (Seal) “President Bellevue Club. “Wm. H. H. Sultzer, (Seal) “Secretary Bellevue Club. “This is to certify that the alteration from 10 years to 29 years was made before signing. “Chas.

Reviol, “Justice of the Peace.” This lease was properly acknowledged, and duly recorded among the land records of Baltimore County. At the expiration of the five year term in 1906 no renewal lease was executed or demanded, but the increased rent of fifty dollars per year was regularly paid until 1920, in which year, as well as in 1921, it was tendered by the tenant but refused by the owners. In 1913 the original Bellevue Club assigned the lease to a Mr. Moreland and five others, and later, by various mesne conveyances, their entire interest be ⁵⁹² came vested in Moreland and one William Oster, who remained in possession of the “shore” and paid the rent until June 2nd, 1920, when they conveyed their interest to Lewis Hax and his wife. These parties had been acting as caretakers of the property since 1918, and on June 3rd, 1920, they undertook to convey the property to the appellant by a fee simple deed, the description in this deed being by metes and bounds^ and including part of “the woods to the open land in the rear.” According to the testimony, the appellant paid $2,250 for the property at this time, which money went to Moreland and Oster, and did not go- to Hax and his wife, so that these latter two- appear1 to have acted as mere conduits for the transfer of the title.

At the time the lease was made in 1901, and for some time prior thereto-, Mrs. Thelan owned a tract of about one hundred acres of land in Baltimore County, which tract included the “shore” in dispute. In 1897, Mrs. Thelan moved to Baltimore City, leaving her adopted daughter, Mrs. Margarethe M. Punte, and the latter’-s husband, Joseph E. Punte, in charge of the Baltimore County land, and in 1909 this land was conveyed to Mr. and Mrs. Punte^ subject to- an annuity of $250 in favor of Mrs. Thelan, and at the time this suit was brought Mr. -and Mrs. Punte still owned about sixty acres of the land, which sixty acres included the part leased by the ap-pellant. In December, 1919, the appellees notified the caretaker Mrs. Hax that, beginning with July 1st, 1920, the rent for the “shore” would be $200 per year, and when the appellant tendered the $50 rent in June or July, Í920, it was refused, and it was again refused in 1921. • In May, 1920,- James F. Illecka of Baltimore City became interested in the “shore,” and he- arranged through Hax, who was the janitor of the building in which his office was located, to purchase the property for the appellant. Klecka examined the property and the various improvements on it, and he then had a lawyer in his office, Mr. Jefferson D. Norris, examine the title-.

Norris testified that he first ⁵⁹³ made a physical examination of the property, and found that its southern boundary was the division linej between the Punte property and that of the adjoining owner on the south, Mr. Weber, that the eastern boundary was iVIiddle- River, the shore frontage being about eighty-five feet, and that the western and northern boundaries were pointed out to- him by Hax and a man named Poster, lessee of the adjoining shore on the north. According to Norris they told him the western boundary included the woods back to- “the open land in the- rear,” though the width narrowed-on the western boundary to about twenty-five feet, and the northern boundary was along the side of a small ravine running back from the river, and was marked by the remains of an old wire fence. With this information Norris secured a surveyor and had him run the lines as they had been ascertained by and pointed out to- him, and with the description thus furnished by the surveyor, and the knowledge acquired by his examination of the paper title, ho prepared the fee simple deed whereby Hax and his wife undertook to convey the land to the appellant. The deed from Tlax and his wife having been secured, a mortgage of $10,000 was obtained on the property from a building association in Baltimore, of which association James F. Kleeka was counsel, his father was president, and his- brother vice-president. $2,250 of the proceeds of this mortgage was, according to James E. Kleeka, used to pay the $2,250 purchase price, and the balance was expended in renovating and adding to the improvements on the property.

It also appeared that the appellant corporation was organized in the office of James E. Kleeka, that Kleeka, Norris, and one Conrad Schroeter were the incorporators, that the charter provided that the company was to have no- capital stock, and that the certificate was not filed with the State- Tax Commission until July 30th, 1920, and it purports to have- hee-n signed and acknowledged'on that date. On July 1st, 1920, Kleeka tendered the- $50 annual rent to Joseph E. Punte, and upon his declining to accept it, Kleeka gave him a written notice, signed by Kleeka as presi ⁵⁹⁴ dent of The Bellevue Club, Incorporated, stating that the club intended to redeem the rent by paying him the sum which the rent would amount to if capitalized at six per cent., and some time afterwards this amount ($833.33 1/3), with interest, was tendered to Punte by Norris, acting as counsel for the club, and was refused. Kleeka also testified that he made several similar tenders, and on one occasion offered to pay Punte $2,500 for a deed for the ground, but all these tenders and offers were declined. At the time the property was taken over by the appellant, the club house and other improvements appear to have been in a bad state of repair, and the appellant undertook to fix up the place.

The extent of these improvements and the exact times at which they were made does not clearly appear from the record, but according to the weight of the testimony the money expended on them was between $3,500 and $7,000, and most of the improvements were made during the months of June, July and August, 1920. Being unable to get Punte to- accept rent for the property or to permit the rent to be redeemed, the appellant, on January 16th, 1922, filed a bill in equity in the Circuit Court for Baltimore County, asking that Punte and his co-owners be compelled to allow the appellant to redeem the rent in accordance with the provisions of section 95 of article 21 of the Code of 1924. The only description of the property in this proceeding was that contained in the lease, a copy of which was filed with the bill as an exhibit, and a demurrer to the bill was sustained on the ground that this description-was too vague and uncertain, and the action of the parties too negligent, to justify the court in granting the relief prayed. On May 23rd, 1922, the appellant filed an amended bill of complaint describing the property by the metes and bounds set out in the Hax deed heretofore mentioned, and asking for the specific performance of the clause in the original lease providing for a renewal of the lease for twenty-nine years, and for general relief.

The appellees demurred to this amended bill on the grounds of lack of equity, laches. ⁵⁹⁵ and claim barred by limitations, and the demurrer being overruled they filed answers setting up chiefly the following defenses: 1. That the description by metes and bounds contained in the bill was purely fictitious, and that it was impossible to obtain a description of the property sufficiently definite and certain to justify a court in decreeing specific performance. 2. That the appellant was guilty of laches in asserting its claim. 8. That the appellant, because of its conduct in accepting an apparent fee simple deed from Hax, and because of Klecka’s activity in connection with this deed, did not come into equity with clean hands.

A voluminous mass of testimony was taken, and after a full hearing and argument the learned court below declined to grant any relief, on the ground that the description of the property, as disclosed by the lease and the testimony, was too uncertain to support a decree for specific performance, and The Bellevue Club, Incorporated, thereupon appealed. At the argument before this Court counsel for appellant stated that they did not rely on the original bill of complaint, but stood entirely on the case made by the amended bill and the testimony, so that we can disregard this original bill and the lower court’s action in sustaining the demurrer to it. The appellant contends that, although no renewal lease was ever executed, the various tenants of the property always understood that they were holding under the lease, and that their continuous possession and the payment of the $50 annual rent from 1906 to 1919, together with the recognition by the owners of the various assignees of the lease as tenants, was ample evidence to prove a holding under the renewal clause of the original lease. It also contended that it had no knowledge of the notice given to Mrs. Hax regarding the increase in the rent beginning July 1st, 1920; that it acquired possession from Mr. and Mrs. Hax, and also acquired under the Hax deed the entire interest in the original lease, ⁵⁹⁶ in elm ding the right to enforce the renewal clause; that in reliance upon these rights; and with the knowledge of Joseph E. Punte, it expended large sums of money in repairing and increasing the improvements on the property; that the boundaries of the land, as proved by the testimony, coincide with the lines set out by metes and bounds in the Hax deed, and include a strip of woods extending back to the, open land in the rear; and that it would be highly inequitable to hold that the appellant has no1 rights in the property other than as a tenant from year to year, and thus cause it to lose the money it has expended in improving the property.

The appellant also claims that, if the Court finds that the boundaries of the land in dispute do not include “the woods to the open land in the rear,” it is at least entitled to a decree for the shore frontage and the land covered by the improvements, and shown to have been occupied by the appellants and the preceding tenants. The appellees', on the other hand, say that just prior to the expiration of the original lease in 1906, Joseph E. Punte asked the tenants then in possession if the renewal lease was to be taken by them, that he was told that the club had not decided the matter but some one would probably see him about it, that no one ever did see him about it, and that he accepted the rent thereafter on the theory that the tenants were merely holding from year to year. They further allege that the various assignees who1 took possession of the property, including the appellant, had notice from the land records that there had been no renewal of the lease, that none of them ever asked him about the matter and that they therefore took the property, at their own risk.