Everhart v. Miles

Weant, J., delivered the opinion of the Court. The appellees, Bruce A. Miles and Sharon Miles, his wife, have sued the appellant, Edwin L. Everhart, on the theory ¹³² of unjust enrichment. We shall affirm the trial court (Circuit Court for Allegany County, Naughton, J.), which awarded restitution to the appellees in the amount of Thirty-three Thousand, Seven Hundred Ninety-four Dollars and Two Cents ($33,794.02) on the ground that the appellant had been unjustly benefited by the actions of the appellees. In so doing, we have' considered the following questions propounded by the appellant: 1.

Did the Court err in overruling the demurrer of the Respondent to the Bill of Complaint? 2. Are the Complainants entitled to compensation in equity under the unjust enrichment doctrine where Complainants entered into possession of a farm for which they were negotiating, without a contract, and while without a contract, did without the knowledge and consent of the Respondent, make extensive improvements and repairs to the structures and machinery on the farm, and then countermanded the original offer and substituted a new offer therefor, and upon rejection, terminated their possession and withdrew from the farm without any demand for compensation? 3. Is Complainant entitled to reimbursement for sileage [sic] placed in the two silos prior to his rejection of the contract and subsequent departure? Doctor Leslie Miles and his son Bruce negotiated with Doctor Edwin L. Everhart in March and April of 1978 for the purchase of some one hundred one acres of land, including barns, silos, and farmhouse for One Hundred, Seventy-nine Thousand Dollars ($179,000.00), along with seventy-five head of Holstein cattle for Fifty Thousand Dollars ($50,000.00) and certain equipment and farm machinery for Fifty Thousand Dollars ($50,000.00), making a total purchase price of Two Hundred, Seventy-nine Thousand Dollars ($279,000.00).

The purchasers were to make a Twenty-nine Thousand Dollar down payment ($29,000.00), with a security agreement to cover the cattle and equipment. The cattle ¹³³ and equipment were to be paid for over a ten year period in monthly installments of Eight Hundred, Eighty Dollars and Three Cents ($880.03); the real property was to be acquired through a lease purchase agreement over a period of ten years, with a monthly rental of One Thousand, Three LIundred One Dollars ($1,301.00). At the end of this ten year period, the appellees were to be able to exercise an option to purchase this land. In this regard a purchase money mortgage was to be executed by the appellees in the amount of One Hundred, Seventy-nine Thousand Dollars ($179,000.00), with monthly mortgage payments of Two Thousand, Two Hundred Nineteen Dollars and Forty Cents ($2,219.40).

In May of 1978 Bruce Miles and his wife traveled from North Carolina to the Allegany-Garrett Counties area for the purpose of taking over their proposed purchases. They moved onto the farm on or about 1 June 1978, at which time they made a down payment of Ten Thousand Dollars ($10,000.00) in lieu of the originally agreed upon amount of Twenty-nine Thousand Dollars ($29,000.00). On this same date, a contract of sale was to have been executed; however, for various reasons this was never accomplished and negotiations continued. Nevertheless, the appellees lived on the farm, ran the dairy business, and made certain improvements; for example, they fixed the barn roof, renovated the farmhouse, installed a septic system, and replaced the house pump, despite the absence of a written agreement.

Further, they made repairs to a tractor, a silo loader, and a field chopper. Also, through their efforts, approximately six hundred tons of silage were put into the silos; this silage remained behind when the appellees vacated the farm on 21 September 1978. During the appellees’ stay on the farm, efforts were made by the parties to have a written contract prepared that was agreeable to all parties but this never came about. Eventually, the appellees lowered their total offer for the purchase of the farm, equipment, and cattle to One Hundred and Eighty-nine Thousand Dollars ($189,000.00); this offer was flatly rejected by the appellant, thereby causing the appellees to depart forthwith. ¹³⁴ I. Initially, the appellant demurred to the appellees’ bill of complaint alleging that the appellees had an adequate remedy at law, that the equity court had no jurisdiction over the matter, and that the appellant would have no right to set-off or counter-claim in equity.

The docket entry of 1 May 1979 indicates that this demurrer was overruled. In responding to the appellant’s contention that the trial court erred in overruling his demurrer, we will, for purposes of argument, consider as valid the proposition that the equity court did not have jurisdiction originally. In the case of Mayor of Landover Hills v. Brandt, 199 Md. 105 , 85 A.2d 449 (1952), the Court of Appeals considered a situation wherein an action was improperly brought in equity under a statute that did not confer jurisdiction in that forum. The Court determined this problem by saying at pages 107-08, 85 A.2d at 451 : "However, the case could have been removed from equity to law, ... and heard before the same judge.

Under the circumstances we are constrained to pass on the merits of the case without remanding it.” (Citations omitted). Along the same vein, the case of Burns v. Bines, 189 Md. 157 , 55 A.2d 487 (1947), involved a situation wherein the litigation was pursued in the wrong court, with the Court nevertheless noting the following at page 164, 55 A.2d at 490 : This case, which was improperly brought at law, could have been properly brought in equity in the same court before the same judge. If found meritorious, it could have been removed from law to equity. ... We should, therefore, pass upon the merits as if the case had been so brought or removed and should not require a new suit in equity. [Citation omitted].

In each of the above-cited cases, there existed statutory authority for the Court holding that although the suit was instituted in the wrong forum, it could nevertheless be disposed of therein. See Maryland Annotated Code (1939) article 75, section 124, and Maryland Annotated Code (1951) ¹³⁵ article 75, section 125, entitled "Removal of Cases from Courts of Law to Courts of Equity and Vice Versa.” Despite the repeal of this particular provision by Acts 1957, chapter 399 § 1, the underlying rationale of said statute has survived through Rule 515 of the Maryland Rules of Procedure. As Chief Judge Brune speaking for the Court of Appeals in Dormay Construction Corp. v. Doric Co., 221 Md. 145 , 156 A.2d 632 (1959) stated, at page 153, 156 A.2d at 637: [T]he existence of a right to bring an action at law will not oust the jurisdiction of equity if there is any ground upon which relief in equity may be invoked. See also Union Passenger Ry.

Co. v. City of Baltimore, 71 Md. 238 , . . . holding that the then existing statutory provisions for discovery at law did not oust equity jurisdiction... .[ 1 ] Because we find that there is a "ground upon which relief in equity may be invoked,” i.e., in section II, infra, we determine that the doctrine of unjust enrichment has been recognized in our equity courts, we are persuaded that even if a court of law would have been the proper forum in which to institute the present case, an equity court could nevertheless exercise jurisdiction. The complaint that the appellant would be deprived of his right to set-off or a counter-claim seems even less persuasive. We know of no rule of law that prohibits such pleading in a court of equity. In fact, the court’s award provided for a set-off on behalf of the appellant.

We shall therefore hold that the trial court did not err in overruling the demurrer of the appellant to the appellees’ bill of complaint. II The second question posed by the appellant can succinctly ¹³⁶ be expressed as whether, under the circumstances which existed in this case, the trial court erred in awarding compensation to the appellees on the basis of the doctrine of unjust enrichment. Unjust enrichment is defined as the unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity and good conscience. A person is enriched if he has received a benefit, and he is unjustly enriched if retention of the benefit would be unjust.

Unjust enrichment of a person occurs when he has and retains money or benefits which in justice and equity belong to another. 66 Am. Jur. 2d Restitution and Implied Contracts § 3 (1973) (footnote omitted). Similarly, Williston on Contracts § 1479 (3rd ed. 1970) sets forth the three elements that must be established to sustain a claim based on unjust enrichment; these are: 1. A benefit conferred upon the defendant by the plaintiff; 2.

An appreciation or knowledge by the defendant of the benefit; and 3. The acceptance or retention by the defendant of the benefit under such circumstances as to make it inequitable