Green Manor Corp. v. Tomares

⁴⁷³ Digges, J., delivered the opinion of the Court. This Court is once again called upon to decide whether a written document is a bilateral contract or “[o]ne of that strange breed of agreements relating to the sale and purchase of land which flourishes in Montgomery County” that in fact and in law is an option. Dixon v. Haft, 253 Md. 692, 696 , 253 A. 2d 715 (1969). The ownership of a $20,000 deposit awarded to the purchasers by the trial court is largely dependent upon this determination.

More precisely, we must decide whether an agreement entered into by Aaron Tomares, Robert E. Stein and Ellis Barron, appellees, relating to the purchase of a parcel of real estate in Bethesda from Green Manor Corporation, appellant, was a contract of sale or a sale of the privilege to purchase. This distinction becomes critical because time, even if not specified, is of the essence in an option contract, Dixon v. Haft, supra; Shea v. Marton, 214 Md. 539 , 136 A. 2d 247 (1957) ; Clarke v. Lacy, 213 Md. 482 , 132 A. 2d 478 (1957) ; Foard v. Snider, 205 Md. 435 , 109 A. 2d 101 (1954) ; while in a bilateral contract, it is not unless specifically made so by the provisions of the agreement. Kasten Co. v. Maple Ridge Co., 245 Md. 373 , 226 A. 2d 341 (1967) ; Doering v. Fields, 187 Md. 484 , 50 A. 2d 553 (1947) ; Soehnlein v. Pumphrey, 183 Md. 334 , 37 A. 2d 843 (1944). Green Manor first became acquainted with the purchasers when they responded to a newspaper advertisement for the sale of a parcel of land located on Fernwood Road between Greentree Road and Democracy Boulevard in Bethesda, Maryland.

On October 21, 1970 the parties entered into an agreement concerning the sale of this property with an agreed purchase price of $420,000.00. The dispute in this case centers around the following paragraphs of the contract: “3. Deposit. To assure Purchaser’s faithful compliance with the provisions of this Agreement, Purchaser has this day deposited the sum of TWENTY THOUSAND DOLLARS ($20,- ⁴⁷⁴ 000.00), which deposit shall be held by Commonwealth Land Title Company, 1828 L Street, N. W., Washington, D. C. If the Purchaser consummates settlement, the deposit as aforesaid shall be applied to the cash down payment required to be made by Purchaser at the time of settlement.

If Purchaser shall refuse or fail to make settlement, although all conditions precedent to settlement have been complied with, said deposit of TWENTY THOUSAND DOLLARS ($20,000.00) shall be retained by the Seller as agreed as liquidated damages, and Purchaser shall have no further rights or liabilities hereunder, and the parties shall be relieved of further liability hereunder. * * * 10. Sewer Moratorium. The parties recognize and agree that -there presently exists governmental prohibition of development of the Land in the form of a temporary moratorium in the installation of sanitary sewer facilities to the Land. In the event such sewer moratorium has not terminated on or before the date of settlement, the Purchaser shall have the right to terminate this Contract, in which event their deposit shall be refunded and the parties relieved of further liability hereunder, it being expressly understood and agreed that the Seller shall in no way be obligated for any expenses incurred by the Purchaser in the event of termination. * * * 12.

Tests, Studies. The Purchaser shall have the right, for a period of thirty (30) days commencing as of the date hereof, to make such engineering tests, economic studies and/or evaluation of the Land with respect to development. The Purchaser shall have the right, for any reason, including unsatisfactory results of any of the foregoing tests, studies and/or evalúa ⁴⁷⁵ tions, at any time during the thirty (30) day period commencing as of the date of execution hereof to cancel and terminate this Contract by sending written notice thereof to the Seller at 8120 Fenton Street, Silver Spring, Maryland, with a copy to Grossberg, Yochelson, Fox & Beyda, 1707 H Street, N. W., Washington, D. C., by certified mail, in which event the parties shall be relieved of further liability and the deposit refunded to the Purchaser.” It is apparent that at the time the contract was executed the parties anticipated that the sewer moratorium would be lifted by February 21, 1971, the latest date authorized for settlement within the 120 day period provided for by the agreement. When the moratorium was not lifted by that date and settlement was not made, Green Manor notified appellees on March 18 in writing that since they had not made timely settlement the contract was terminated and the deposit would be retained in accordance with the terms of the agreement.

The purchasers responded by letter on March 23 requesting the immediate return of their deposit in conformity with paragraph 10 of the agreement. When the request was refused, appellees instituted this suit to recover the deposit. In Dixon v. Haft, 253 Md. 692 , 253 A. 2d 715 (1969) this Court, relying on Schlee v. Bryant, 247 Md. 689 , 234 A. 2d 457 (1967) and Messina v. Moeller, 214 Md. 110 , 133 A. 2d 75 (1957), held that the following language made an agreement concerning the purchase of land an option contract: “Time is of the essence of this Contract and within ninety days