Gilbert v. Banis

Singley, J., delivered the opinion of the Court. This is an appeal from an order of the Circuit Court for Prince George’s County, dismissing a bill of complaint filed by Gilbert for the rescission of a contract for sale of Gilbert’s house in Accokeek Groves to Banis. The bill contained two counts: The first alleged that Gilbert was not competent at the time he entered into the contract. The second complained that the contract was too vague and uncertain to be enforceable.

The testimony showed that in July of 1967, Mr. Gilbert, then 81 years of age, called at the office of Mr. Banis, an insurance agent and real estate broker to talk about insuring his house. Banis told Gilbert he wanted to see the property, and two days later Banis went to the property with Gilbert and Gilbert’s son. Banis described the conversation: “* * * At the time I went into the house the ¹⁸¹ house was vacant. There was a few things laying around; not much of anything. [Gilbert] said he had given most of the things away to his granddaughter.

I asked him what he was going to do. He said — he mentioned something about selling. I asked him if I could handle it for him and he said yes. “Then I made — well, I put up a sign and I called up the next day and asked him if he wanted to sell it to me and he said he would. I made him an offer.

Well, I asked him how much he wanted, rather, and he told me. “Q What did he say, sir ? “A About $8,000. * * ❖ “Q And when did you get together again after that? “A Well, we got together on it, I think it was on the 18th that we got together. “Q What was the purpose of the getting together at that time ? “A To sign the contract, because over the phone I made him a counter offer of $7,500 for the property. He said that would be acceptable, and I told him I would be down, we would sign the contract. I went down there and I gave him the deposit. * * * “Q And you took a contract with you ? “A Yes, I did.” The contract was introduced in evidence. The portion which is germane to the controversy is as follows: “July 18, 1967 “RECEIVED FROM THEODORE W. BANIS a deposit of ONE HUNDRED AND NO/100 Dollars ($100.00) in the form of CHECK to be applied as part payment of the purchase of Lot ¹⁸² 12 in Block in a subdivision of land known as ACCOKEEK GROVES, with improvements thereon (including heating, plumbing, and lighting fixtures, stove and refrigerator, awnings, screens, storm doors and windows, Venetian blinds and shades, as now installed on the premises) known as 15858 LIVINGSTON ROAD, ACCOKEEK, P.G., COUNTY, MARYLAND upon the following terms of sale: Total price of property SEVEN THOUSAND FIVE HUNDRED AND NO/lOO Dollars ($7,500.00) The purchaser agrees to pay ONE THOUSAND AND NO/lOO Dollars ($1,000.00) cash at the date of conveyance, of which sum this deposit shall be a part. “The Purchaser is to PLACE a first deed of trust secured on said premises of $6,500.00 due ...................... and bearing interest at the rate of SIX per cent per annum, payable $65.00 PER MONTH SELLER TO TAKE BACK 1st TRUST T.W.B., R.T.G. “The balance of deferred purchase money amounting to $ NIL is to be secured by a NIL deed of trust on said premises to be paid in monthly installments of $ NIL or more, at maker’s option, including interest at the rate of NIL per cent per annum, each installment, when so paid to be applied, first, to the payment of interest on the amount of principal remaining and the balance thereof credited to principal, which deed of trust the Sellers agree to accept as a part of the purchase price, in case of default in any payment, the entire amount then remaining unpaid, shall immediately become due and payable.

Trustees in all deeds of trust are to be named by the parties secured thereby.” ¹⁸³ The text of the contract was either printed or typewritten, except for the phrase “Seller to take back 1st trust” which was handwritten and initialled “T.W.B., R.T.G.” Mr. Banis explained this: “Q And you are saying that this written notation ‘seller to take back first trust,’ * * * was written at the same time and on the same day ? “A Yes, sir. It was written on the 18th of July at the home of Mr. Gilbert. “Q Now, was there some conversation at that time which led up to making this notation ? “A No. On this — this was done at the — this was done over at his home in Accokeek. We discussed that, and I told him I probably would have a little difficulty then getting money to finance it, and I asked if he was willing to take back a trust on it and he said — well, he said, ‘It all depends. What per cent?’ 1 told him, ‘Six’ and he said, ‘That will be fine.’ “Q So, the original contract you took to the house contained the notation ‘the purchaser is to place a first deed of trust,’ and you are saying that after you arrived at Mr. Gilbert’s apartment you made the notation ‘seller to take back first trust’ ? “A Yes, because 1 failed to type it in and I just put it in by hand.” The chancellor found no evidence to support Gilbert’s claim that he was incompetent at the time the contract was entered into.

This is not challenged on appeal. What is questioned is the finding that the contract is neither so vague nor so uncertain as to be unenforceable. It is argued in Gilbert’s behalf that the provisions of the contract which purport fco provide for the payment of the deferred purchase price leave important questions unanswered: What portion of the principal debt is the deed of trust to secure? Upon what property is the lien ¹⁸⁴ to attach?

What provisions in case of default shall apply? And, how, and by whom are payments of taxes and insurance to be made? We regard as misplaced Gilbert’s reliance on a series of our prior decisions which have held contracts for the sale of real estate unenforceable because of uncertainties or ambiguities for, as will be later developed, in each of them there was a patent ambiguity, apparent, on the face of the contract, which could not be explained by parol. What we are dealing with in the case before us is an agreement with respect to financing, inexpertly drawn to be sure, which Gilbert finds unacceptable not because of what it states, but because of what it omits.

To us, it requires' no strained interpretation to conclude that by the insertion of the handwritten clause, Gilbert agreed to take back a first trust of $6,500, secured by a lien on the premises, to be paid at the rate of $65 per month accounting from the date of settlement, the monthly payments to be applied first to the payment of interest at the rate of 6% on the unpaid balance of principal, and the remainder to be applied to the reduction of the principal of the debt until the debt should be paid in full. Had the third paragraph of the printed form, intended to provide for purchase money debt, been utilized this would have been abundantly clear. That the parties chose a simpler approach does not, under the criteria set forth in our decisions, clothe the transaction with invalidity. Maryland Code (1957, 1966 Repl.

Vol.) Art. 21, §§ 68 if. provide forms “sufficient to convey real or personal property.” § 71 sets forth the form of a deed of trust “to secure debts * * : “This deed, made this.......day of ............, in the year........., by me,.................................., witnesseth, that whereas (here insert the consideration for making deed,) I, said ............., do grant unto .................................., as trustee, the following property, (here describe the property,) in trust for the following purposes (here ¹⁸⁵ insert the purposes of the trust, and any covenant that may be agreed upon). “Witness my hand and seal. “Test: [SEAL.]” A.B. More elaborate provisions may be, and customarily are, inserted by agreement of the parties; but the fact that they fail or neglect to do so casts no cloud on the effectiveness of the lien. A substantially similar question was disposed of in Quillen v. Kelley, 216 Md. 396 , 140 A. 2d 517 (1958), where the contract provided for the sale of property for $257,500, of which a specified portion was to be paid in cash, the balance to be represented by “bills obligatory” secured by “purchase money mortgage, mortgage bill of sale or such other instrument as may be necessary * * * to secure said bills obligatory.” Judge (later Chief Judge) Prescott, speaking for the Court, rejected the purchasers’ contention that the agreement of sale was so vague, ambiguous and indefinite that it was void: “It needs little, if any, citation of authority to sustain the statement that if an agreement be so vague and indefinite that it is impossible to collect from it the full intention of the parties, it is void, Strickler Eng. Corp. v. Seminar, 210 Md. 93, 101 , 122 A. 2d 563 , Robinson v. Gardiner, 196 Md. 213, 217 , 76 A. 2d 354 , and the vendee is entitled to a refund of any payments made upon the purchase price. Globe Home Impvt.

Co. v. Brothers, 204 Md. 73, 74 , 102 A. 2d 748 . But courts are reluctant to reject an agreement, regularly and fairly made, as unintelligible or insensible. The agreement will be sustained if the meaning of the parties can be ascertained, either from the express terms of the instrument or by fair implication. The law does not favor, but leans against the ¹⁸⁶ destruction of contracts because of uncertainty; therefore, the courts will, if possible, so construe the contract as to carry into effect the reasonable intention of the parties if that can be ascertained.

Middendorf, W. & Co. v. Milburn Co., 134 Md. 385, 387, 388 , 107 A.7. Cf. Trotter v. Lewis, 185 Md. 528 , 45 A. 2d 329 ; Schloss v. Davis, 213 Md. 119 , 131 A. 2d 287 . “The appellants further argue that the agreement fails to state the terms and conditions of the purchase money mortgage and what amount of insurance on the property must be carried by the vendees, and these facts are fatal to its validity under the ruling of this Court in Applestein v. Royal Realty Corp., 180 Md. 274 , 23 A. 2d 684 . That case dealt with what the Court considered an ambiguous clause in a contract relative to the payment of principal under a mortgage required to be given by a contract of sale of real estate.

The Court concluded that this clause contained inconsistent requirements; but, when the case again came to this Court, 181 Md. 171 , 28 A. 2d 830 , it was held that parol evidence and the proof of custom and usage were admissible to clear up the ambiguity. The opinion in the first case, 180 Md. at page 277 , specifically pointed out that covenants to be placed in a mortgage, when they go beyond providing for the mere creation of a lien, are necessarily the subject of agreement between the parties; that matters such as whether the interest is to be paid annually, who is to be obligated to pay the taxes, or that the buildings should be insured are not essentially involved in a valid mortgage; and, if the contract between the parties be silent on such points, a provision therein for the execution of a mortgage is fully complied with by the execution of a mortgage con ¹⁸⁷ taining no such covenants. See also Hartsock v. Mart, 76 Md. 281, 291 , 25 A. 303 . Compare Triebert v. Burgess, 11 Md. 452 ; Caplan v. Buckner, 123 Md. 590 , 91 A. 481 ; Fifer v. Hoover, 163 Md. 381 , 163 A. 848 ; Rocklin v. Eanet, supra, 200 Md. 358 . “Of course, if an attempt be made in the agreement of sale to set out a term or terms of a mortgage provided for therein such must be done by clear, definite and certain language; but additional terms, not essentially involved in creating the mortgage or lien, are not prerequisite to the agreement being clear and definite.

If additional terms have been agreed upon, they, unquestionably, should be included in the contract, Kikas v. Baltimore County, 200 Md. 360, 365 , 89 A. 2d 625 ; but, simply because additional terms have not been agreed upon does not, of itself, render the contract vague and uncertain.* * *” 216 Md. at 407-09 . Less than a week after the decision in Quillen v. Kelley, Chief Judge Brune filed the Court’s opinion in Baker v. Dawson, 216 Md. 478 , 141 A. 2d 157 (1958), portions of which are equally relevant: “Indefiniteness as to the Terms of the Deed of Trust. The absence from the contract of many usual terms found in deeds of trust or mortgages, such as covenants to pay taxes or insurance (the latter of which appears of trifling importance in this case) and provisions with regard to foreclosure is not fatal. * * * “In many respects a deed of trust is a mortgage (Manor Coal Co. v. Beckman, 151 Md. 102 , 133 A. 893 ), but in some respects there are differences. (LeBrun v. Prosise, supra.) [ 197 Md. 466 ].

Recently, they have been brought more closely into line with each other through extend ¹⁸⁸ ing the same priorities to a purchase money deed of trust as to a purchase money mortgage. (Acts of 1955, Ch. 369, effective shortly before the contract here involved was made; Code (1957), Art. 66, Sec. 4.) “Some terms of the deed of trust are spelled out. It is to be on the premises sold and is to secure an aggregate of $29,000, payable ‘on or before’ eleven years from date of settlement, with interest at the rate of 5 % per annum, and ‘payable $2,000 or more each year, plus interest.’ In addition, there are the release provisions set forth in Schedule A, and any amounts paid pursuant to those provisions are, we think, to be in addition to the minimum payments of $2,-000 a year. Any balance remaining unpaid at the end of eleven years is then due.

All of these provisions can readily be covered by the deed of trust, and we find no inconsistency between them. This case falls under the second decision (based upon an amended declaration) in Applestein v. Royal Realty Corporation, 181 Md. 171 , 28 A. 2d 830 , rather than under the first decision in that case which is reported in