Bob Holding Corp. v. Normal Realty Corp.

Horney, J., delivered the opinion of the Court. The Normal Realty Corporation (Normal or purchaser), having purchased property at a foreclosure sale made under the Land Installment Contracts Law (Code [1957], Art. 21, §§ 110-116, 1 inclusive), filed exceptions to the ratification of the sale. When the chancellor sustained the exceptions and ordered the trustee to return the deposit, the Bob Holding Corporation (Bob or vendor) appealed to this Court. By a land installment contract dated May 13, 1959, Bob sold to Cardell T. Farmer and Verdella Farmer, his wife (Farmers or vendees), the leasehold property at 4116 Norfolk Avenue in Baltimore City.

On August 6, 1959, the Farmers, being in default under the contract, Myles R. Fisenstein, attorney for Bob, notified them that the contract had been turned over to him for foreclosure and that he would institute proceedings for that purpose unless all payments then in arrears (aggregating $121.58) as well as “all current payments” ²⁶³ were made within a thirty day period. Such notice was intended to be in compliance with the notice of “intention to terminate” required by the provisions of § 113 when a contract is in default. The vendees, being still in default on September 10, 1959, the vendor, by its attorney, pursuant to the provisions of § 115, filed a petition for foreclosure, which also embodied the affidavit of compliance required by § 113(3), and the attorney was appointed trustee to sell the property. On October 20, 1959, the property was sold to Normal.

Subsequently the purchaser filed exceptions to the ratification of the sale. Therein it was averred that the termination notice was defective in that it was given by the attorney instead of the vendor and did not set forth the intention of the vendor to terminate the contract; and that the failure of the vendor to comply with the statutory requirements made it impossible for the trustee to deliver to the purchaser a good and merchantable title to the property. The Farmers never complained of the alleged defects in the notice nor did they object to the ratification of sale. The chancellor, in sustaining the exceptions, in effect ruled that the trustee was without authority to make the sale because the vendor had failed to comply with the applicable provisions of §§ 113 and 115.

The vendor on appeal contends (i) that the purchaser had no standing to avail itself of the statutory provisions since such provisions affect only the rights of the vendor and vendees (as those terms are defined in the statute) and (ii) that the termination notice was in substantial compliance with the provisions of § 113. (i) Section 110(5) states that: “ ‘Vendee’ means the person (other than a corporation) who purchases property subject to a land installment contract, or any legal successor (other than a corporation) in interest to such person, * * *.” It seems that the purchaser at a foreclosure is neither a “vendee” within the statutory meaning of that term nor a person who was meant to be protected by the statute. Moreover, it may be that the applicable provisions of the statute ²⁶⁴ may have been waived by the failure of the vendees to assert the alleged defect in the termination notice. But, even if we assume without deciding—and we do not so decide—that the vendees could not waive the provisions of § 113 2 and that the purchaser had standing to challenge the sufficiency of the termination notice, we think it is clear that the notice as given was in substantial compliance with the statutory requirements.

(ii) The primary objections to the termination notice were that the notice was given by the vendor’s attorney instead of by the “vendor” and that the notice did not designate a definite date for the termination of the contract. Section 113 provides in part: “(1) Notice of intention to terminate.—When the vendee is in default in the payment of any sum due under a land installment contract, or under any covenant, condition or requirement thereof, the vendor shall, as a condition to the exercise of his remedy, first serve written notice on the vendee of intention to terminate, at least thirty (30) days before such action may become effective. “(2) Contents of notice.—The notice shall state: (a) The amount of the payments in default, and (b) That the contract shall terminate on a designated day not less than thirty (30) days after the ²⁶⁵ delivery or mailing of such notice, unless prior thereto the vendee shall have complied with the terms and conditions in regard to which the default has occurred. “(3) Delivery or mailing notice.—Such notice must be delivered to the vendee personally or be sent to him by registered mail to his last known address, and compliance with this subsection shall be certified to by appropriate affidavit filed in proceedings.” The notice (signed by “Myles R. Eisenstein”) actually given to the vendees by the vendor read: “Your contract of sale with the Bob Holding Corporation has been turned over to me for immediate foreclosure. This is to advise you that your payments are now $121.58 in arrears and that unless this amount with all current payments are brought up to date within 30 days I will be forced to institute foreclosure proceedings.” The purchaser asserts—since the attorney was not the vendor’s attorney of record when the notice was sent—that Maryland Rule 5 (d) providing that: “‘Attorney’ means attorney at law of record, solicitor in equity of record or other counsel of record in an action,” operates to modify Rule 3 (a) that provides: “Where in these Rules it is provided that a party may act, such act may be performed by his attorney except as otherwise provided. Where any notice is to be given, by or to a party, such notice may be given by or to the attorney of such party.” Be that as it may, the purchaser seems to have overlooked the fact that these rules of practice and procedure do not affect or control the extrajudicial acts of an attorney as an agent of his client.

In this instance, the attorney was clearly the agent of the vendor for the purpose of making a sale of the property described in the contract. The general rule is that an attorney, on behalf of his client, has implied authority to do all acts necessary or incidental to the accomplishment of the purpose for which he was employed or retained. See 3 M.L.E., Attorney and