Gibbs v. Meredith

Markell, J., delivered the opinion of the Court. This is an appeal from a decree, on demurrer to a bill for specific performance of a contract of sale of real estate, sustaining the demurrer and dismissing the bill. The bill was filed by the purchaser against the vendors. The demurrer was sustained on the ground that “the contract is too vague and indefinite to be enforced and no amendment of the bill could remedy this defect.” The contract was prepared on a printed form of “sales contract—Maryland” supplied by a Washington printer, said by plaintiff at the argument to have been “drafted over a long period of time, with many changes from time to time,” and to have been filled in by defendants’ agent.

On its face the form was prepared for real estate brokers. Whatever the merits or demerits of ⁵⁶⁸ the printed form, in this instance it was not filled in very carefully. The contract, dated January 16, 1946, was signed by plaintiff’s agent and “accepted” and countersigned by plaintiff and defendants as their “contract.” It acknowledges receipt from plaintiff of a “deposit” of $500, “to be applied as part payment of the purchase” of specified property at Landover Hills, Md., “upon the following terms of sale: . “Total price of property Eight Thousand Four Hundred . . . Dollars ($8400.00). “The purchaser agrees to pay Three Thousand Four Hundred . . .

Dollars ($8400.00) cash at the date of conveyance, of which sum this deposit shall be a part. “The purchaser is to [assume, give,] place, [take] title subject to, a first deed of trust secured on the premises of same as above Five Thousand and 00/100 . . . Dollars ($5,000.) due Monthly, 1946, bearing interest at the rate of 5 per cent per annum, payable-. “The balance, of deferred purchase money is to be secured by a XXXXXXXX deed of trust on said property, to be paid in monthly installments of XXXXXXXX Dollars ($XXXXX) or more, including interest at the rate of XXXX per cent per annum, each installment when so paid to be applied, first to the payment of interest on the amount of principal remaining unpaid and the balance thereof credited to principal. «I» *|» H» «H “Within day of settlement days from the date of acceptance hereof by the owner, or as soon thereafter as a report on the title can be secured if promptly ordered, the seller and purchaser are required and agree to make full settlement in accordance with the terms hereof.” * * * (Printed words stricken out shown in brackets, and matter filled in italicized.) The full “terms of sale” in the printed form cover a familiar method of finance, which was effective in stimulating real estate “booms” before 1929 and in impoverishing “developers” after the booms collapsed. The purchase money was provided for in three unequal ⁵⁶⁹ parts, (1) cash, in an amount inadequate to make the balance secure, (2) a first mortgage (e.g., to a savings bank or insurance company), believed to be adequately secured, which furnished additional cash for the vendor, and (3) a junior purchase-money mortgage for the balance, which was not adequately secured. This printed form contains a separate paragraph for each of these three elements.

Supra. If the purchaser “assumes” or “takes title subject to” such a first mortgage, the vendor in effect receives the amount of the mortgage. If the purchaser “gives” or “places” such a mortgage to a third person, it is not in terms stated that the proceeds shall be paid to the vendor, but this is clearly implied when the sum of items (1), (2) and (3) is the amount of the “total price of property.” If the terms are part cash with a purchase-money mortgage for the entire balance, the second paragraph should be stricken out and the third filled in—or the third might be stricken out and the second filled in as a mortgage to be given to the vendor. If the terms are all cash, the second and third paragraphs should be stricken out, since the vendor is not then interested in where the purchaser gets the money.

In the instant case we think the terms are all cash, but plaintiff expected to obtain part of the money by “placing” a mortgage on