Davidson v. Katz

Smith, J., delivered the opinion of the Court. In this case plaintiff-appellant (Davidson) thought he had acquired “something for nothing” and is upset because the trial court did not believe his witnesses. More precisely, he contends he paid $1.00 for $200.00 plus 50% of an option contract calculated to produce a profit of 25 cents a foot for 270,000 square feet of ground ($67,500.00) along with an option worth an additional $43,683.00. Defendant-appellee (Katz) in August of 1966 became an employee of a photocopy business owned by Davidson.

He had previously been an employee of S.C.M. Corporation, the severance of which connection produced litigation in the United States District Court for the District of Columbia against Davidson, Katz and Davidson’s corporation. In September of 1966 it is claimed that Katz told Davidson that he was owed a favor by Samuel DiMaggio and Norman M. Tayler who owned certain ground in Montgomery County, Maryland, and could obtain this ground under favorable conditions and terms at a price of $1.50 per square foot. In October of 1966 Davidson and Katz agreed to acquire this property jointly. They went to the office of the District of Columbia attorney who was representing them in the above mentioned litigation.

He prepared a contract between the owners of the real estate and Davidson and Katz. It was agreed that Katz would handle the negotiations because he knew all of the parties. The land consisted of 6.2 acres or approximately 280,-000 square feet. The purchase price was to be $130,680.00 or $1.50 per square foot.

The contract called for a deposit of $100.00. ⁷² Davidson testified that at one point Katz told him the contract had been signed by all parties except DiMaggio, and that DiMaggio was in Texas and would sign upon his return. Davidson claims to have seen the contract with all signatures on it except that of DiMaggio. Davidson further testified that subsequently Katz told him that DiMaggio had signed. Peter Paul, an employee of Davidson, testified that in November, 1966, he heard Katz say the contract had been signed by all owners except Mr. DiMaggio and that during the first part of December, 1966, Katz said he had obtained the DiMaggio signature.

He further testified that on the latter occasion Katz handed the contract with all signatures on it to Davidson who returned it to Katz, although he couldn’t recall whether the contract “was one page or two or ten.” In , December, 1966, Davidson and Katz were not as friendly as they had been when Katz left the employ of S.C.M. Corporation. Employment of Katz by Davidson terminated November 23, 1966. They had reached the point where relations were strained. Katz said, “We left on very disagreeable terms and I didn’t see any sense in having any conversation with him whatsoever.” The attorney who was representing them in the litigation in the United States Court and who had prepared the contract arranged a meeting in his office for December 19.

The Katz version of that meeting is: “We sat down. We talked about the problems they were having with the photocopy business and I told him any problem they had I could help I would help them out within the next couple of days. And Mr. Davidson brought up, what about the contract. * * * They told me that this contract was made out to both of us and I, in order to separate any relationship between myself and Mr. Davidson, I would have to assign my interest in that contract to Mr. Davidson. They had to give me the sum of one dollar.

That was the first part.” ⁷³ An assignment was prepared and executed by Katz. It was in the following form: “In consideration of the receipt of One Dollar ($1.00), the receipt of which is hereby acknowledged, and for other good and valuable consideration, I, the undersigned, to (sic) hereby sell, assign, transfer and convey all my right, title and interest in and to a certain contract for the purchase and option to purchase unimproved real estate located at Randolph Road, Montgomery County, Maryland, presently owned by Norman Tayler, et al., to Herbert L. Davidson. This Assignment includes an assignment of the $200 deposit heretofore tendered by the undersigned with the contract to the present sellers.” The deposit specified in the purchase contract was $100.-00, not $200.00 as stated in the assignment. One month and one day after the execution of this assignment Davidson filed suit against Katz in the Circuit Court for Montgomery County.

The declaration was captioned “Breach of Fiduciary Relationship, Fraud”. It recited the joint venture to purchase the Tayler-DiMaggio property, that Katz had advised Davidson that the contract of sale was signed by all parties and exhibited the contract which had the signature of all parties except DiMaggio, that Katz subsequently advised Davidson that DiMaggio had signed, that acting upon those representations Davidson made numerous business contacts to secure an offer to purchase the property, that Davidson made demand upon Katz for production of a copy of the signed contract which he refused to do, and that Mr. and Mrs. DiMaggio and Mr. and Mrs. Tayler said they never signed the contract. Davidson demanded compensatory damages of $160,000.00 and punitive damages of $100,-000.00. He also requested Katz be required to turn over to Davidson the DiMaggio contract “if, in fact, it even exists”. ⁷⁴ A realtor and real estate broker gave an opinion that the land which the parties were proposing to buy for $1.50 per square foot had a fair market value of $2.00 per square foot.

Messrs. Tayler and DiMaggio were called as witnesses by Davidson. Tayler testified that Katz did approach him relative to purchase of the property. He denied that there was ever a tender of a deposit.

He did recall that Katz handed him a contract with no signatures thereon in November, 1966, a contract that called for purchase at $1.50 per square foot. This document was admitted into evidence. It is an original. It is unsigned by anyone.

Tayler said he returned the contract to Katz in the latter part of November or December. Davidson said it was returned to him after suit was filed. DiMaggio testified that he was never tendered a deposit and never signed any contract for sale of the property. Davidson claimed that after Katz assigned the contract to him he proceeded to attempt to sell the contract.

He claims that he ultimately contacted Mr. Samuel J. Gorlitz. No contract was entered into because by calling Mr. DiMaggio, Davidson ascertained that DiMaggio had signed no contract. This all took not more than three to four weeks, so Davidson said, from the time of the contract assignment. Gorlitz was called as a witness by Davidson.

He corroborated receipt of a telephone call from Davidson with an indication that they were talking about a price of $1.75 per square foot. He said this took place “somewhere in November or December”. No agreement was ever entered into. The telephone conversation took “perhaps five minutes”.

Gorlitz said he next had contact with Davidson “a month or two afterwards”. Davidson then claimed that a problem had developed when Gorlitz made inquiry relative to this land. The matter was tried before the court without a jury. At the conclusion of the trial the trial judge filed a writ ⁷⁵ ten memorandum in which he reviewed the case and the testimony.

At the conclusion thereof he said: “After weighing the evidence including the demeanor of the witnesses, it is the Court’s view that the plaintiff has not proven by a fair preponderance of the evidence the elements that govern actionable deceit and fraud. Therefore, the Court finds for the defendant.” Davidson then requested the trial judge “to set forth by memorandum the names of the witnesses whose demean- or materially affected the decision of the Court, and what in the demeanor of said witnesses was felt to be inappropriate”. Davidson said this was filed under Maryland Eule 18 c. The trial judge denied the request as unanswerable, finding it “presumptuous and impertinent”.

Davidson on appeal to this Court claims as error by the trial court (1) “permitting the introduction of oral evidence to contradict a valid assignment supported by lawful consideration”, (2) “the extended period of time between the trial of this matter and the court’s decision rendered nugatory the court’s weighing of the evidence on the basis of the demeanor of the witness”, and (3) “the evidence