Ganley v. G & W LTD. PARTNERSHIP

Lowe, J., delivered the opinion of the Court. This appeal from the judgment of the Circuit Court for ⁵⁶⁹ Frederick County is before us for the second time. Appellants complain that although they won in that court, the amount recovered was insufficient. The suit was for a real estate commission and the issue to be decided was whether there was an agreement upon the amount of commission and, if so, what was that agreement.

At the trial on May 2, 1978, the Honorable Samuel W. Barrick held that the appellants failed to meet their burden of proof to show that there was an agreement to pay an 8% commission. The judge awarded a 4% commission to the appellants without adequate explanation for us to review for evidentiary sufficiency although appellants did appeal that decision to this Court on May 29,1978. By per curiam opinion filed on March 7, 1979, we remanded the case to the Circuit Court for Frederick County for the trial judge to “enter on the record a clear statement of his factual findings and the basis, in law, for the judgment entered.” The Honorable Samuel W. Barrick, by Memorandum dated March 28, 1979, found that while the appellants did not expressly agree to a 4% commission, they did in fact agree to that commission by Ganley’s silence when there had arisen a duty to speak. The appellants have taken this appeal from that decision. 1 Because the primary question asked on appeal is predicated upon factual findings, we will reproduce the court’s opinion in the pertinent part which contains significant findings of fact.

Doing so serves the added purpose of setting the factual background in some perspective. “MEMORANDUM Paul B. Ganley (Ganley) and David W. Kornblatt Associates, Inc. plaintiffs, brought this suit against G & W Limited Partnership, Martin R. Grunley (Grunley) and William V. Walsh (Walsh), Defendants, in a two-count declaration. The first count alleges breach of contract, and the second ⁵⁷⁰ count is based on quantum meruit, each count claiming compensatory damages in the amount of 10% commissions on a sale price of $217,800 ($21,780) plus punitive damages in the amount of $65,000. The court awarded damages to the Plaintiff in the amount of $8,712 (4% commissions) plus interest from date of settlement which was held on June 22, 1977, and costs of suit. The Plaintiffs appealed that decision, and the Court of Special Appeals has remanded the case without affirming or reversing with directions that the trial judge enter on the record a clear statement of his factual findings and the basis, in law, for the judgment entered.

Ganley and the defendants had several business transactions concerning the sale of real estate prior to this sale. In each of the previous cases the commissions had been negotiated. Ganley’s testimony as to commissions due in this sale is somewhat confusing. On page 14 of the record he was asked, 'When did you have a discussion with Mr. Grunley and Mr. Walsh with respect to commissions to be paid with regard to the sale of ten acres of property to Thomas Foods?’ He answered ‘— Mention of a commission had never come up until our meeting on April 14th when a price was agreed upon per acre’.

At the bottom of page 21 and at page 22 Ganley indicated that he talked with Mr. Grunley or Mr. Walsh, or both of them, a week prior to the April 14th meeting concerning commission for the sale of the subject property, at which time he stated that he would accept 8% commission, but there was no response concerning that amount by either or both of them. When examined on cross-examination as to his recollection of telling Mr. Walsh at the meeting prior to April 14th of the 8% commission, he seemed somewhat unsure. There is, however, undisputed testimony that a listing agreement setting forth the commission was never signed by the Defendants or either of them. Furthermore, there was testimony by ⁵⁷¹ Walsh that the Commissions due Ganley on all transactions between the parties were negotiated after Ganley found a buyer in relation to the purchase price.

The court made a finding of fact that this was their method of operation, commissions were negotiable. The court further finds as a matter of fact that the parties Ganley, Walsh and Grunley did enter into a discussion at a meeting of April 14th and did agree in accordance with the testimony of Walsh and Grunley that the property should be sold at the reduced price of fifty cents per square foot and that Ganley should accept a commission of 4% because the owners were reducing the selling price. To support this finding, it would seem, as testified to, that it would be to the advantage of all parties to get the first sale on this property; and the fact that Thomas would put in certain improvements which would benefit all concerned. The court further finds that although Ganley did not in words agree to the 4% commission, he did in fact agree to that commission by his silence.

As a general rule, mere silence will not raise an estoppel. However, under the circumstances which require a silent party to speak so that the injured party may take steps to protect himself against loss which might otherwise result, the silent party will be estopped from asserting the defense which he would have had but for his silence. Laurel Race Course v. Regal Construction, 274 Md. 142, 156 . Wilson on Contracts recognizes this principle.

See Sec. 91. At the conference of Ganley, Walsh and Grunley during the meeting of April 24th, Ganley in effect accepted a 4% commission while Grunley and Walsh accepted a reduced selling price. Although Ganley did not accept the 4% commission in words, he did by his silence.” ⁵⁷² The primary question asked by appellants is whether the trial court erred “in finding that there had been an acceptance by silence of Appellees’ offer to accept a 4% real estate commission since there was no legally sufficient evidence to support this finding or to apply this principle of law.” Because we find that the evidence was legally sufficient, we do not reach the alternate question asked. Appellants concede that silence can serve as an acceptance when the circumstances impose a duty to speak.

And well they might so concede since the Court of Appeals has said: “As a general rule, mere silence will not raise an estoppel, Savonis v. Burke, 241 Md. 316, 320 , 216 A. 2d 521 (1966); Mohr v. Universal C.I.T. Corp., 216 Md. 197, 205 , 140 A. 2d 49 (1958). Where, however, the circumstances are such as to require a silent party to speak, so that an injured party may take steps to protect himself against a loss which might otherwise result, the silent party will be estopped from asserting the defense he would have had but for his silence, Mohr v. Universal C.I.T. Corp., supra; Union Trust Co. v. Soble, 192 Md. 427 , 64 A. 2d 744 (1949); First Nat. Bank v. Wolfe, 140 Md. 479 , 117 A. 898 (1922); see Furst v. Carrico, 167 Md. 465, 468 , 175 A. 442 (1934). This principle has been approved by the commentators and text writers.

See, e.g., 1 Williston on Contracts, § 91 (3rd Edition 1957); 1 Corbin on Contracts, § 75 (1963); Restatement of Contracts 2d, § 72 (1973). These authorities recognize, as one of the limited exceptions to the general rule that silence does not operate as an acceptance of an offer, this proposition: Where the offeree with reasonable opportunity to reject offered services takes the benefit of them under circumstances which would indicate to a reasonable person that they were offered with the expectation of compensation, he ⁵⁷³ assents to the terms proposed and thus accepts the offer.” Laurel Race Course v. Regal Constr., 274 Md. 142, 156 (1975). The principle is as indicated one of equitable estoppel, the essence of which was synopsized by Judge Orth for the Court of Appeals in Impala Platinum v. Impala Sales, 283 Md. 296, 322-323 (1978): “The Court has upheld and consistently applied the definition of equitable estoppel contained in 3 J. Pomeroy, Equity Jurisprudence § 804 at 189 (5th ed. 1941): ‘Equitable estoppel is the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed, either of property, of contract, or of remedy as against another person, who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse, and who on his part acquires some corresponding right, either of property, of contract, or of remedy.’ See Dahl v. Brunswick Corp., 277 Md. 471, 487 , 356 A.2d 221 (1976); Savonis v. Burke, 241 Md. 316, 319 , 216 A.2d 521 (1966) and cases therein cited. ‘Estoppel is cognizable at common law either as a defense to a cause of action, or to avoid a defense....’ Bitting v. Home Ins. Co., 161 Md. 56, 60 , 155 A. 329 (1931) and cases therein cited.

There may be an estoppel to prevent a party from relying upon a right of property or contract, or of remedy both at law or in equity. Kline v. Lightman, 243 Md. 460, 474 , 221 A. 2d 675 (1966). See Machovec v. Shipley, 171 Md. 339, 344 , 189 A. 223 (1937). ‘Equitable estoppel operates as a technical rule of law to prevent a party from asserting his rights where it would be inequitable and unconscionable to assert those rights.... It is essential for the application of the doctrine of ⁵⁷⁴ equitable estoppel that the party claiming the benefit of the estoppel must have been misled to his injury and changed his position for the worse, having believed and relied on the representations of the party sought to be estopped.’ Savonis, 241 Md. at 319 -320 and cases therein cited.

Mere silence will generally not raise an estoppel against a silent party. See Mohr v. Universal C.I.T. Corp., 216 Md. 197, 205 , 140 A.2d 49 (1958) and cases therein cited. ‘[T]he doctrine is only applicable when there is a duty imposed upon the party remaining silent to speak....’ Mason v. Dulaney, 144 Md. 108, 114 , 124 A. 390 (1923). Whether an estoppel exists is a question of fact to be determined in each case.