Excel Company, Inc. v. Freeman

Marbury, J., delivered the opinion of the Court. In January 1965, the appellees, Leona H. Gibbons Freeman, and eight other owners, listed with Smith-Brooke Realty Inc. the unimproved property under consideration at 80 cents per square foot for the entire tract which consisted of approximately 12.02 acres. Around March of 1965 the appellant, Excel Company, Inc. (Excel), made an offer to buy the property, and after negotiations, the parties finally signed a contract in July 1965. As a condition precedent to the transfer of the property, Excel was to apply for two zoning changes at its own expense.

The contract price was set at the rate of “70 cents per square foot of portion zoned.” The front portion of the property (approximately 1.32 acres) wTas to be rezoned C-2 and the rear portion (approximately 10.70 acres) was to be rezoned R-10. Before the contract was signed, counsel for the appellees submitted to the appellant a series of five questions related to the interpretation that appellant gave to certain of the contract provisions. One question read: “Is .70‡ per square foot a combination price for the total acreage, that which is zoned C-2 and R-10? What about the portion that receives neither of these classifications?” Appellant’s answer was “Yes” to the first of these interrogatories.

Its answer to the second was, “Any portion designated as road dedication — and thus eliminated and/or not zoned, to be eliminated from sales price. Any other part of the property not zoned and not useable to be eliminated and/or kept by seller.” The original contract offer was then retyped and modified by appellees’ counsel, who added a new sheet to the reverse side of the contract incorporating the questions and ²⁴⁴ answers. Paragraph 1 of this new sheet stated: “The combination price for the total Zoned acreage shall be $.70 per sq. ft.” Unknown to either the appellant or the appellees, the Park and Planning Commission had released, under date of July 1, 1965, a “Land Use Map” which indicated that the rear part of the subject parcel had been selected by the Prince George’s County Board of Education as a proposed elementary school site. A few days after the contract was signed the appellant instituted the necessary proceedings to obtain the contemplated rezonings.

On November 2, 1966, the County Commissioners of Prince George’s County, sitting as the District Council for that portion of the Mary land-Washington Regional District lying within Prince George’s County, granted the zoning petition for C-2 for 1.22 acres (rather than the 1.32 acres applied for). The zoning petition for R-10 was continued until January 4, 1967, when it was denied “inasmuch as the Board of Education is planning to take the entire property.” By December 16, 1966, the Board of Education had filed against the appellees a suit for condemnation of the rear portion of the subject property. As a result of that suit the appellees received a jury award of approximately $197,000 for the 10.7 acres of unrezoned property. On March 9, 1967, the appellant filed a bill of complaint for specific performance and other relief, seeking to obtain the 1.22 acres that had been zoned C-2 for the contract price of 70 cents per square foot.

After a full hearing, on February 12, 1968, the chancellor filed a memorandum and order of court denying specific performance, with costs to be paid by the appellant. On appeal the appellant raises five questions. (1) What was the intention of the parties under the language of the contract concerning any land not rezoned ? (2) Against which party’s interest should any ambiguity in language be construed ?

(3) Considered in the light of the answers to questions 1 and 2, was performance under the contract rendered impossible by virtue of the School Board taking ? ²⁴⁵ (4) Was the contract between appellant and appellees sufficiently definite to allow specific performance as to that portion of the property that was commercially rezoned ? (5) Did the chancellor err in considering facts not properly before it, to wit: the low award given by the jury in the School Board condemnation? Where doubt arises from the language of a contract as to general intention of the parties extrinsic evidence is admissible to enable the court to make a proper determination. Schuman v. Gordon Investment Corp., 247 Md. 265 , 232 A. 2d 256 ; Sommers v. Dukes, 208 Md. 386 , 118 A. 2d 660 .

On the question of intention, the lower court stated: “It is clear to the Court, from hearing testimony in open court and the reading of the contract, as well as plaintiff's exhibit % 1 [the five questions and answers], that the parties did not contemplate that nearly 90 °/o of the total property involved in the transaction would be taken by the Board of Education as a site for an elementary school. Neither party had knowledge nor any reason to believe that there would be such a taking. It is just as clear, and is reflected