Hoffman v. McColgan

Roberts, J., delivered the opinion of the Court. The appeal in this case is taken from a decree of the Circuit Court No. 2, of Baltimore City. The material facts are, that on April 3d, 1894, the appellee executed a ninety-nine years’ lease, in the usual form, to a certain Thomas F. B. Clarke. The consideration therein was stated to be one dollar, and the rent reserved was at the rate of six dollars per front foot.

The lease was recorded on the day of its execution, and shortly thereafter, on the same day, the.appellee and. said Clark entered into an agreement, by the terms of which Clark was to build certain houses upon the leased premises, according to the specifications in said agree ³⁹⁴ ment particularly set forth. By the terms of said agreement, the appellee promised to pay to said Clark, “as a bomis and not as a loan,” the sum of $500.00 upon each of said houses, during the progress of the work, in seven equal instalments, and upon the completion of said houses by said Clark, the appellee covenanted to deliver to said Clarke a full release for all ground-rent due and payable to the first of October, 1894. It was further stipulated therein, that upon the completion of said houses in all respects, according to the requirements of said agreement, and within ninety days thereafter, and upon thirty days’ notice from said Clarke, the appellee would loan, or procure to be loaned to said Clarke, the sum of seven hundred dollars upon each of said lots so improved; provided said lots should be clear of all lien claims, charges and incumbrances, other than the ground-rent reserved thereon. Shortly after the date of said agreement, Clarke commenced the erection of the buildings mentioned therein, and on May 26th, 1894, informed the appellant of the terms of his lease from the appellee, which was then on record, and thereupon he agreed in writing with the appellant to purchase from him a large lot of bricks, which were delivered by the appellant, and used in the erection of said buildings.

In the course of construction of said houses, the appellee was, by the terms of his agreement with Clarke, required to make certain payments to him, which he accordingly did. Clarke becoming financially embarrassed, discontinued work on the buildings when the appellant filed his lien, for the purpose of subjecting the reversion of the appellee in said lots to the payment of his claims. So that the question, which we are now called upon to determine, is whether the appellee’s reversion in said leased premises can be subjected to the payment óf the claim of the appellant for the brick furnished by him and used in the construction of said buildings. It is, we think, very clear that the appellee had no knowledge of the financial condition of Clarke at.the time he contracted with him for the erection of the houses; and ³⁹⁵ that before making said contract, he made such inquiries as were well calculated to favorably impress him with his ability to execute his contract.

The appellant’s own testimony shows that he knew from Clarke the nature of his contract with the appellee, and it was his duty, before delivering the bricks, to have satisfied himself as to the state of Clarke’s title to the lots built upon. Certainly he was not misled by any act or representation of the appellee, with whom he had no intercourse whatever. Although the bill charges bad faith, arising out of the alleged fact that the rent reserved by the appelleewhollydisproportionedtothevalue of theproperty, we fail to discover in the record anything justly tending to sustain any such contention. In this State little difficulty ought to be experienced in the determination of the question arising on this appeal.

Section nine of Article sixty-three of the Code provides that “where