Brown v. Hogan

Boyd, C. J., delivered the opinion of the court. The bill of complaint was filed in this ease by the appellee to have a deed from David Shaffer to Walter Brown and wife, and a mortgage from them to Frank Brown, set aside, and to have a contract entered into between George P. Mc-Oeney, attorney for 'Shaffer, and Harry F. Frost on behalf of the appellee, specifically enforced. A decree was passed in accordance with the prayers of the bill and this appeal was taken by Walter Brown and wife and Frank Brown‘from that decree. A contract was entered into between “George P. McOeuey, attorney for David Shaffer,” of the first part, and William A. Hogan, of the second part, by which the party of the first part undertook to sell to Hogan a house and lot in Laurel for the sum of $850, of which $150 had been paid before the signing of the agreement, and the balance was to be paid upon the delivery of the deed, the purchaser to have thirty days in which to complete the purchase, and examine the title.

The agreement, which was signed and sealed by “George P. Mc-Oeney” and by “H. F. Frost for' W. A. Hogan,” was dated October 20, 1919, and followed a verbal arrangement, made a few days before betumeen Mc'Ceney and Hogan. On the 26th of October, David Shaffer, who lived in Baltimore, agreed to sell the property to Walter Brown and Sarah Blown, his wife, for $900, and accepted $50 as part payment, on that day, and later conveyed the property to them. Frank Brown loaned them, on a mortgage, $S00 to be used in payment of the purchase money. ²⁵⁹ There can be no doubt that Mr. and Mrs. Brown knew before they purchased the property from Shaffer, and "Frank Brown had ample notice before he loaned the money to them, that McCeney had, as Shaffer’s attorney or agent, undertaken to sell it to Hogan. We will not, therefore, discuss that question, but will treat it as settled that the contract of sale executed by McCeney with Hogan is binding on all of them, if he had authority to make it.

The important question, then, is whether McCeney was authorized to enter into that contract of sale, so as to be binding on Shaffer. His right- to sell the property, of course, cannot be based merely on the fact that he was the. attorney for Shaffer in the settlement and division of his father’s estate or in other matters, unless he had some authority other than that arising from the ordinary relation of attorney and client, but the plaintiff relies on what is spoken of as a power of attorney, and also on a special power to sell this property given McCeney in September, 1919. On September 17, 1917, Shaffer borrowed some money from McCeney and gave him a mortgage on all of his interest in the property which he inherited from, or was left to him by the will of, his father, and another property he owned, to secure $ 125, which was payable three months after date. The mortgage included the usual covenants and power of sale in case of default and then immediately following the power of sale was the power of attorney relied on by the plaintiff'.

Although there is no copy of the mortgage in the record the terms referred to without objection and the power of attorney was read into the record by Mr. McCeney when he was on the stand which is as follows: “Or in case of default as hereinabove set forth, instead of having the said property sold, the said mortgagee, his successors or assigns, may elect as long as he or they choose, to take possession of, manage and conduct the mortgaged property under the following power: i. e., I do hereby constitute, nominate and appoint George P. McCeney, of Prince George’s County, ²⁶⁰ State of Maryland, to be my true, sufficient and. lawful attorney, irrevocably for me in my name and stead to sell, exchange, convey, mortgage or lease, and in all manner to dispose of, charge and manage any and all of the real estate, leasehold or other property mentioned in this mortgage for the purpose of satisfying this mortgage, or the two preceding mortgages mentioned in this mortgage, and for me and in my name and stead to execute and acknowledge according to law, any and all conveyances and contracts which he may deem necessary and expedient for the above purposes or what may he required by law for the purpose of this power of attorney, and also to collect all rents or sums of money which may be or become due to me, and to give receipts therefor in my name and pay all taxes H ' It then concludes in what may he said to be the usual form of such instruments. Without feeling called upon in this case to determine how far a mortgagee would be permitted to take possession of mortgaged property and act under such a power of attorney, inserted in the mortgage, it is clear that MeCeney did not take possession of the property and act under that power. It is shown that at the time the mortgage was given there was an equity proceeding for a partition or division of some kind which resulted in certain properties, including the one in controversy, being conveyed to David Shaffer by the executors of his father’s estate about the middle of June, 1919. At that time the properties which were allotted to David Shaffer were valued at $11,000, and were subject to about $5,000 of liens.

The mortgage to MeCeney was in default from its maturity, but it would have been very inequitable for him to take possession of all these properties and hold them until his mortgage was paid. M'cOene.y did not attempt to so hold the properties and he did not sell any of them under that power. He testified that several persons approached him about purchasing some of them, and he talked to Mr. Shaffer, but he would not sell them, -and “that wit ²⁶¹ ness did not sell any property when a man came to see him unless he asked Mr. Shaffer, because he was his attorney as well as mortgagee.” In the sale of what he spoke of as the Beall purchase, Mr. Shaffer refused to let him sell it at the price Beall offered, and then afterwards sold it himself to Beall for that price. Mr. McCeney added “that was the only property sold that I participated in.” In point of fact he examined the title for Mr. Beall.

The mortgag’e had been in default for nearly two years, when McCeney agreed to sell this property to Hogan, hut there is no: reference in the contract of sale to the power of attorney, or intimation that he was selling by virtue of it-. It was proven that William C. Shaffer, a brother of David, collected rent from Walter Brown, who was the tenant, made the repairs and had been negotiating for some time with the Browns for the sale of the property. Indeed, on October 14, 1919, he wrote to his brother “that W. Brown wants to buy the house where he lives and thinks he should have first chance on it.” In the absence of his brother, who lived in Baltimore, he represented him, and judging from what he did, the public might well have regarded him, and not McCeney, as the hill alleges, as the agent of the property — especially as he was one of the executors of their father’s estate and had been collecting the rents from Brown both before and after the deed was made to David. But as we think it is clear that the contract of sale was not entered into by virtue of tbe power of attorney in the mortgage, we will not discuss that branch of the case further, but will call attention to> the fact that the language of the letter which Mr. MeOenev wrote to Mr. Shaffer does not indicate that he wanted to sell the property under the power of attorney.

That letter was dated December 22, 1919, and addressed to Shaffer in Baltimore. It is as follows: “Will you please let me know if you desire to sell the little house on Montgomery Street that you own and is occupied by Brown? The property was ap ²⁶² praised at $750.00. If you desire to sell this property; please let me know what your lowest cash price is and I believe that I may be able to sell it.” McCene}r testified “that in response to that letter Hr.

Shaffer came to his office, and after a conversation he agreed to sell it for $850; that the party to whom he was talking at that time did not take it; he thought it was too high.” On cross-examination he was asked: “Do you recall exactly what he said about selling the property ? A. I could not tell you verbatim.. I know he came into my office and wanted to talk about that piece of property. He said it ought to bring $850.

That is what he would take for it.” He said he did not think that any time was mentioned within which lie wanted it sold, but “I am positive there was no time mentioned as to how long a time was given me to sell or close this deal.” He was asked: “Did he give you the exclusive right?” and replied: “He did not give any exclusive right. When he came into my office he told me the price was $850; and he told me practically, “Go ahead and sell it.’ ” When he wrote the letter to1 Shaffer another man was inquiring about the property. He declined to take it and shortly afterwards Hogan called to see him about it, and he .(McOeney) signed the contract in duplicate and sent the two copies to Mr. Nrost, who signed them for Hogan and sent them and a check for $150, the cash payment, to him, but- he did not actually receive them until October 25, as he was away from home. He did not notify Mr. Shaffer what he had done until after Mr. Shaffer had sold the property to the Browns, not until he did by his letter of October 29, when he told him he had sold it to Hogan.

Mr. Shaffer testified that he went to' see McOeney after he received the letter of September 22, that he said to him: “Mr. McOeney, in case you can close this deal, when will I hear from you ? He studied a little bit and he said, 'Why, I think, Daye — or Mr. Shaffer — inside of two weeks I think we can close the matter up.’ Just that- way. ' I said, 'All right, Mr. ²⁶³ MeCeney, go ahead. Let it go.’ We walked out to the elevator. We talked about this deal.

I told him I would like to have the money, and let me hear from him as soon as possible.” lie said he heard nothing more about, it until Mrs. Brown came to see him on October 26th, and in reply to her inquiry, he told her it was not sold. He said he took it for granted he would have hoard if it had been sold and he did not hear from M r. MeCeney until the letter of October 29th; that if MeCeney made a sale he expected to hear .from him and to sign the contract. There is no very material difference between the two as to what was said about the sale of the property? except Shaffer testified that MeCeney said he thought it could he sold within two weeks, while MeCeney did not remember stating the time, but he was positive be was not limited to two weeks in which to make the sale, and the statement of Shaffer quoted above only shows that MeCeney thought it could be closed in two weeks.

If MeCeney had notified Shaffer, as he ought to have done, that he had sold the property, it would have probably avoided this controversy, although, if Shaffer had acted more prudently, and inquired of MeCeney whether he had sold the property, before selling it to the Browns, he might have avoided trouble. As Mr. MeCeney testified that Mr. Shaffer did not give him an exclusive right to sell, and he knew he was anxious to have that property sold at once1, he- ought to have notified him -what he had done. He testified that he told Hogan on the 13th of October that he could have the property and, either that night or the next day, he prepared the contract in duplicate, signed the two copies and left them with Mr; Frost, who was to act for Hogan, to he signed. As it had then been about three weeks since Shaffer authorized him to sell the property, it was not only fair to the purchaser but to Mr. Shaffer that he should be notified of what he told Hogan, and he could have sent the contracts to Shaffer to be signed.

He lived in Laurel, which is a short distance from ²⁶⁴ Baltimore, and lie liad an office in Baltimore, where Shaffer lived. He knew Hogan had to arrange with the building association from which he was to borrow the money, and there need not have been any delay in the matter from sending the contracts to Shaffer. They were not dated until the 20th day of October by Hr. Frost, and Hr.

HeCeney did not, by reason of his absence, get them until the 25th. He was asked on cross-examination, “This isi the first sale that you actually consummated yourself of any of his property ? A. Well, yes. The other was sold for the same figure, but he closed it be>hind me.

I disclosed the name of the purchaser and he closed the deal. In this case he did not know the name of the purchaser, or probably he would have gone behind me.” That reply is very suggestive of a reason for not disclosing the name of the purchaser, and he did not notify his client of the verbal agreement he made on the 13th day of October, or of the written agreement, until by his