Dixon v. Haft

Singley, J., delivered the opinion of the Court. This is an appeal from a judgment for costs in favor of the defendant, Herbert H. Haft, entered on a jury verdict in an action at law brought by William E. Dixon and Joseph Schwartz for damages for breach of a contract to purchase real estate. 1 We shall reverse and remand for a new trial because we are satisfied that the court below erred in denying an instruction requested by the plaintiffs Dixon and Schwartz. This case was before us just two years ago, Dixon v. Haft, 253 Md. 692 , 253 A. 2d 715 (1969). There we reversed an order sustaining Haft’s demurrer, treating it as an order sustaining the demurrer without leave to amend, and remanded the case for trial.

At trial, Dixon and Schwartz proved essentially what they had alleged in their declaration, which was summarized in Dixon v. Haft, supra and need only be briefly noted here. ⁶¹³ On 6 January 1966, Dixon and Schwartz, the owners of a tract of some 25 acres in Anne Arundel County, entered into an agreement under which they agreed to sell the tract to Haft for $300,000, of which $5,000 consisted of a deposit made at the time the agreement was signed. The remainder of the purchase price, to be paid at settlement, which was to be 90 days from the date of acceptance of the agreement, was to be represented by $85,000 in cash and a deed of trust securing a purchase money loan of $215,000, with interest at 6%. Paragraph 8 of the agreement dealt with damages payable in event of default: “Time is of the essence of this Contract and within ninety days from the date of acceptance hereof by the Seller, or within ninety days after all contingencies have been eliminated or as soon thereafter as a report on the title can be secured if promptly ordered, and an appointment can be made with the Title Company for settlement, the Seller and Purchaser are required and agree to make full settlement in accordance with the terms hereof. If the Purchaser shall fail to do so, the deposit herein provided shall be forfeited as the sole remedy of the Seller and the Purchaser shall thereby be relieved from further liability hereunder.” (Emphasis supplied) In Dixon v. Haft, supra, we described the effect of this provision: “* * * The so-called ‘Memorandum of Sale’ of January 6, 1966, was one of that strange breed of agreements relating to the sale and purchase of land which flourishes in Montgomery County where seemingly it is regarded as a contract of sale although in fact and in law it is essentially ‘an option given for a valuable consideration.’ Messina v. Moeller, 214 Md. 110, 113 [133 A. ⁶¹⁴ 2d 75 (1957)]; Schlee v. Bryant, 247 Md. 689, 694 [ 234 A. 2d 457 (1967)].

Under such an agreement generally as well as in this case, the purchaser has the absolute right under the contract language (‘if the Purchaser shall fail [to settle] the deposit * * * shall be forfeited as the sole remedy of the Seller * * *,’) to choose between consummating the purchase on the agreed upon terms or of walking away, for any reason or no reason, with no obligation or liability whatever save the loss of his deposit.” 253 Md. at 696 It would appear that Haft authorized the ordering of an examination of title on 17 March 1966, and arranged for settlement to be made on 6 April 1966 at the offices of Capitol Title and Escrow Corporation in Washington. Dixon appeared at the settlement; Haft did not. Instead, Arthur L. Content, an attorney and a member of a firm, one of the partners of which held a general power of attorney from Mr. Haft, which was admitted in evidence, appeared and asked Dixon to extend the time within which settlement had to be made under the agreement. At trial, Haft, called as an adverse witness, acknowledged that Content was acting for him.

This was confirmed by Content, who said that he had been instructed to obtain an extension or forfeit the deposit. After some discussion with Dixon at Capitol Title, Content prepared the following letter, which was written on the stationery of the title company and signed by Content and Dixon: “This letter will confirm the understanding of the parties that settlement of the purchase contract dated December 20, 1965 by and between Herbert H. Haft as buyer and William E. Dixon and Joseph Schwartz as sellers, which was scheduled for settlement on April 6, 1966, shall be extended to Monday April 11, 1966. The ⁶¹⁵ reason for the extension is that undersigned desires to confirm that method of payment as set forth in proposed deed of trust and note is in accord with the understanding of the sellers and that price should not be adjusted since no survey was made. “All adjustments shall be made as of April 6, 1966 and the deed, deed of trust and purchase money note shall be dated April 6, 1966. Until April 11, 1966 all documents shall remain at Capitol Title & Escrow Corporation.

Very truly yours ARTHUR L. CONTENT on behalf of buyer, Attorney at Law. Accepted: WILLIAM E. DIXON on behalf of Seller” In Dixon v. Haft, supra, 253 Md. at 696 , we concluded that the effect of this letter was to bring into being a new bilateral executory contract, something to this effect: “If you will deliver the deed, agree to the settlement sheet figures as of today and will extend the time for actual settlement five days, we will agree to give up our right not to perform and will exercise our option to take and pay for the land on the terms agreed on and will settle five days later on today's figures; unless within, the five days we find the terms of the deed of trust and the matter of the surveys were not as agreed upon.” relying on Schlee v. Bryant, 247 Md. 689 , 234 A. 2d 457 (1967) where a similar result followed an oral notification by the purchaser under an option agreement that he was ready to proceed to settlement and on Messina v. Moeller, 214 Md. 110 , 133 A. 2d 75 (1957) which held that when a purchaser under an option agreement ⁶¹⁶ brought suit for specific performance a new bilateral ex-ecutory contract came into being. Of the arguments which Dixon and Schwartz make on appeal, we propose to consider principally only one: that the trial court erred in submitting the following special issue to the jury: “Was there a new contract entered into at the title company on April 6th between the plaintiff and Mr. Content, whereby the defendant exercised the option to purchase the land under the original December 1965 contract, as the plaintiff contends; or was there merely an extension of the settlement date from April 6th until April 11th, as the defendant contends took place? “If you determine that there was no such agreement to exercise the option, your answer must be ‘No’ thereto, and you need not answer any remaining issues. If you determine that there was such a new agreement entered into on April 6th between the plaintiff and Mr. Content, your answer to Issue One must be ‘Yes,’ and you must then determine the second issue.” Instructing the jury on the special issue, the trial judge said: “With respect to Issue One, whether a new contract was entered into at the title company on April 6th between the plaintiff and Mr. Content whereby the defendant exercised the option to purchase the land under the original December 1965 contract; or whether there was merely an extension of the settlement date from April 6th until April 11th, the Court instructs you that to establish a contract it must appear that the minds of the parties have met.

In order that there may be an agreement, or mutual assent, the parties must have a distinct intention com ⁶¹⁷ mon to both and the minds of both parties must meet as to all the terms; and if any portion of the proposed terms is not settled, or no mode is agreed on by which it may be settled, there is no agreement or mutual assent such as is necessary to create the contract.” This was the heart of the case, because it was this first special issue which the jury answered in the negative. The point was put squarely to the court by a motion for a new trial made by Dixon and Schwartz, assigning these reasons: “1. Because the Court erred in refusing to instruct the jury that if they found that the letter of April 6, 1966 was signed on that date by Mr. Arthur Content and by Mr. William E. Dixon, that their answer to issue one should be ‘yes’. “2. Because the Court erred in its ruling by not instructing the jury as a matter of law that the legal effect of (a) the Defendants’ allowing settlement under the contract to be called on April 6, 1966; (b) attending the aforesaid settlement through a person purporting to be the Defendants’ agent; [c] entering into an agreement as expressed in the letter dated April 6, 1966 (Plaintiff’s exhibit 9), and directing that an executed deed for the subject property be left in escrow, regardless of any secret intent or instructions, the agent operated under on April 6, 1966, constituted an exercise of the option under the original agreement dated December 20, 1965.

See Schlee vs. Bryant, 247 Md. 689 , where oral notification of purchaser’s intent to the broker representing the seller constituted sufficient evidence of the option to purchase. “3. Because of error in the Court’s instruction on special issue one (1), when the Court instructed (see page 7 of instructions) that: ‘. . . to establish a contract, it must ap ⁶¹⁸ pear that the minds of the parties have met. In order that there may be an agreement, or mutual assent, the parties must have a distinct intention common to both, and the minds of both parties must meet as to all the terms; and, if any portion of the proposed terms is not settled, or no mode is agreed on by which it may be settled, there is no agreement or mutual assent such as is necessary to create the contract.’ The instruction as given was not an applicable statement of the law because it permitted the jury to assess subjective views of Arthur Content as to his secret intent and they were not given proper instructions to clarify the legal doctrine surrounding ‘mutual assent’.” Ground 2, which raised the question, was rejected along with ground 1 at the conclusion of argument on the motion. Unfortunately the opinion filed by the Court gives no reason for its action.

For the purposes of our consideration of the problem, we can only assume that the denial of the motion as to ground 2 was bottomed on the reason given for the rejection of ground 3, a failure to comply with Rule 554 d and a failure to object to the instructions before the jury was charged. Rule 554 d provides: “d. Objection. “If a party has an objection to any portion of any instruction given, or to any omission therefrom, or to the failure to give any instruction, he shall before the jury retires to consider its verdict make such objection stating distinctly the portion, or omission, or failure to instruct to which he objects and the ground of his objection. Opportunity shall be given to make the objection in open court out of the hearing of the jury upon application either orally or in writ ⁶¹⁹ ing, made before or after the conclusion of the charge.” Under our practice, objections to instructions may be made either before or after the jury is charged, but must be made before the jury retires, Brown v. Bradshaw, 245 Md. 524 , 226 A. 2d 565 (1967); Merritt v. Darden, 227 Md. 589 , 176 A. 2d 205 (1962).

The trial of this case commenced on Wednesday; continued on Thursday; was resumed on Monday, and was concluded on Tuesday. Before adjournment on Wednesday, the court asked counsel to submit written requests for