Byer v. Szandrowski

Digges, J., delivered the opinion of the Court. The lull of complaint here considered was filed by the appellants against Alexander Szandrowski, and Marie Szandrowski. his wife. The defendants interposed a demurrer to the bill; and the chancellor sustained the demurrer of the wife and overruled that of the husband, with leave to him to answer. The appeal is from the order sustaining the demurrer on behalf of the defendant wife without leave to amend.

The allegations of the bill, which for a determination of the question presented arc assumed to be facts, may be briefly but substantially thus stated: In May, 1926, the plaintiffs Stanley I. Byer and Adolph J. Kadan and the defendant. Alexander Szandrowski verbally ²¹⁴ •agreed to enter and did enter into a partnership for the purpose of acquiring’ a tract of land in that section of Baltimore City known as Curtis Bay, particularly described in the bill ■of complaint and containing eleven acres, more or less; this land contained large deposits of sand and was also- suitable .and available for building sites, the purpose of the partnership and the contemplated purchase being to mine the sand •or dispose of it on a royalty basis and thereafter to sell the land for building sites. It was agreed that the parties should •each have an equal one-third interest in the partnership, sharing equally the losses or profits as the ease might be; that Szandrowski and Kadan should each invest the sum of $2,500 in cash, and that Byer’s investment in the partnership- business should be his services rendered and to be rendered. Such •services were in acquiring land for the benefit of the partnership-, arranging for the financing of the balance of the purchase price over and above the $5,000 which the other partners were to put in; also- in obtaining contracts or leases of the entire property or any part for the removal of sand on a royalty basis, in superintending the removal or excavation of the sand, generally supervising the operations, and in selling said land as and when the same was ready for division and .sale.

It was further agreed between the parties that when the land was acquired the title thereto should be taken in the name of Szandrowski and Kadan for their own benefit and the benefit of Byer, and to so hold said title until Byer had •obtained contracts or leases for the removal of sand, thereby placing the partnership on an income-producing basis; that upon obtaining such ‘ contracts or leases Szandrowski and Kadan would convey to Byer a one-third undivided interest in and to said land by á good and sufficient deed executed by them and their respective wives, after which conveyance Szandrowski, Kadan, and Byer should each own and hold .an undivided one-third interest in and to the whole of the land, and be entitled to one-third of the profits therefrom, bearing one-third of the- losses incurred. In pursuance of .such verbal agreement, Byer procured a contract for the pur ²¹⁵ chase of the land from the then owner, who agreed to sell and convey the same to Szandrowski and Kadan at and for the sum of $11,000. This contract is filed as an exhibit with the bill; and by its terms, arranged for and procured by Byer, it provided that Rosenthal, the vendor, should take a purchase-money mortgage for $6,000, being the balance of the purchase price after applying the $5,000 put in the partnership by Kadan and Szandrowski. It was further agreed by the parties that, upon the leasing of the land for the purpose of mining sand, all sums received as royalty should be applied first to the payment of the taxes, interest on the purchase-money mortgage, and»other charges and expenses of said property, and the balance of the income to he applied to the liquidation of the mortgage indebtedness as and when the same became payable, after which any further income was to be divided equally among the three.

In. pursuance of the contract so negotiated by Byer, Rosenthal and wife conveyed the land to Adolph <7. Kadan and Helen T. Kadan, his wife, and Alexander Szandrowski and Marie Szandrowski, his wife, in fee simple, which deed is also an exhibit filed with the bill of complaint. This deed conveyed to Kadan and wife as tenants by the entirety a one-half undivided interest in said land, and to Szandrowski and wife as tenants by the entirety the other one-half undivided interest therein. Contemporaneously with the execution of this deed, the grantees therein executed to Rosenthal a purchase-money' mortgage' for $6,000, which was the amount, remaining unpaid after applying the $5,000 contributed by Kadan and Szandrowski.

At the time of the conveyance by Rosenthal,, both Helen T. Kadan and Marie Szandrowski knew and were fully aware and advised of the agreement between Byer and their husbands, and agreed to hold the property with their respective husbands subject to the agreement of partnership and subject to the rights and equities of Byer in and to the same. Eo part of the consideration for the conveyance was paid by Airs. Kadan or Airs. Szandrowski; whatever interest they have in the property is by reason of their dower rights, subservient to the rights of the partnership. ²¹⁶ and .the partners comprising the same; their names were not inserted in the deed by any authority or direction of their respective husbands, and were inserted without the consent of Byer, having been inserted by the conveyancer who drew the deed and who was without any advice as to the existence ■of the partnership or the rights of Byer in the property.

After it was discovered that their names had been inserted, the wives agreed to hold title to the propery subject to the agreement of partnership and subject to the rights of Byer therein. Immediately after the purchase of the property Byer exerted his best efforts towards obtaining a lease for the ■digging of the sand, and as a result of such efforts and negotiations on the part of Byer an agreement was finally entered into with the firm of Blockston & Cremen for the removal ■of sand from the land on a royalty basis, which lease was dated August 16th, 1926, and was executed by the lessees, ■and by Kadan and Szandrowski, together with their wives, •as lessors; and is also filed as an exhibit. After the execution of the lease, and the business being put in operation at a profit, Byer requested the grantees in the deed from Rosenthal to execute to him a deed for an undivided one-third interest in the land referred to; in accordance with the agreement. Upon receipt of such request, Kadan and wife expressed their willingness to join in a deed so conveying such undivided interest to Byer, but Szandrowski and wife refused to sign said deed, claiming that Byer was not entitled to his •one-third interest until the mortgage on the property had been paid and released; thereupon Kadan and wife did execute and deliver to Byer a deed for an undivided one-sixth interest in the land, which deed is dated September 1st, 1926, duly recorded, and filed as an exhibit.

The- mortgage for $6,000 to Rosenthal has now been paid and released, but ■Szandrowski and wife still “wrongfully, fraudulently and unlawfully” refuse to execute-and deliver a deed to Byer conveying to him the remaining one-sixth undivided interest in .and to the land. ²¹⁷ Since the execution of the lease and the operation of the sand hank by the lessees, the enterprise has been highly profitable; the mortgage of $6,000 has been paid in full,, with interest thereon; all taxes for the year ending December 31st, 1929, hare been paid; and there is now being regularly received from the royalties on the sand removal a monthly sum of $250 to $300; the profits and income received, after the payment of the mortgage and expenses, have amounted to over $3,500, and there is still due from the lessees the sum of over $1,500 for royalties up to Eebruary 26th, 1930, the time of filing the bill of complaint. This profit and income has. been brought about and is the result entirely of the efficient management and careful attention to the business by Byer; and, although for the past three years or more the defendant Szandrowski has attempted to prevent the plaintiff from performing his duties, nevertheless he has performed them properly and fully, and his efforts have been largely instrumental in acquiring tbe profits mentioned and those now accruing. The bill then charges that Szandrowski is. unlawfully, wrongfully and fraudulently attempting to' deprive Byer of his rightful share in the property, as well as in the profit, and income arising therefrom; that, although Byer has been able to keep supervision of the work on the land, nevertheless Szandrowski, whenever he visits the property and finds Byer there, attempts to- order hini away, and di recta the men operating the business not to give him any information or to allow him on the premises; that Szandrowski is endeavoring to prevent Byer from performing his work as. agreed, and to unlawfully deprive him of the profits to> which he is entitled and his interest in the land; that irreconcilable differences have arisen between tbe parties, and that the business, under the circumstances, cannot be properly conducted, and that a receiver should be appointed to take charge of tbe property, business, and assets, collect the amounts due on the royalties as and when they become due, and apply the same to taxes and other expenses, and divide the balance equally among the respective parties in one-third portions; ²¹⁸ that the plaintiffs are entitled to have an accounting of the profits and income derived from the partnership, and to have Szandrowski pay over to Byer his just and rightful portion; that Byer, having fully performed his part of the agreement, is entitled