Housing Equity Corp. v. Joyce

Singley, J., delivered the opinion of the Court. These two appeals, consolidated for purposes of argument, had their genesis in a single real estate transaction : the purchase by Housing Equity Corporation (Housing Equity) from William T. Joyce, Stephen N. Jones and Alma M. Burns (the Sellers) of some 101 acres of land in Montgomery County for $2,859,659.66, of which $625,000.00 was paid in cash and $2,234,659.66 was represented by notes, secured by two purchase money deeds of trust. ⁵⁷⁴ When Housing Equity defaulted in the payment of a purchase money note for $220,000.00 which evidenced part of the unpaid balance of purchase money, the Sellers made demand on James F. Tomes and H. Hughes Spragins for the release of $45,000.00 which had been placed in escrow with them by Housing Equity at time of closing to guarantee the construction of a road and payment of the purchase money notes. Tomes and Spragins refused to release the fund, and the Sellers brought an equity suit in the Circuit Court for Montgomery County against Tomes, Spragins and Housing Equity, in which they sought to enforce payment of the fund held by Tomes and Spragins in trust. Tomes and Spragins answered, offering to pay the escrowed fund into the registry of the court, which was ultimately accomplished under order of court.

Housing Equity’s answer asserted that the deed of trust which the Sellers claimed to be in default did not conform to the intention of the parties. In a counterclaim, it demanded that the agreement for the sale of the property, as modified by an addendum, the deeds of trust and the notes issued under the deeds of trust be reformed to reflect the alleged intention, and cross-claimed, alleging that Tomes and Spragins, the trustees under the deeds of trust, had refused to institute foreclosure proceedings, and prayed that they be directed to do so. 1 Joyce, Jones, and Mrs. Burns moved for summary judgment as regards the escrowed fund. Joyce and Jones answered Housing Equity’s counterclaim and prayed that it be dismissed; Mrs. Burns demurred, and Tomes and Spragins in their answer to Housing Equity’s cross-claim sought the court’s instruction and direction. In an order entered on 23 November 1971 the court granted the Sellers’ motion for summary judgment.

On petition by Housing Equity, this order was amended by an order entered 14 January 1972 which dismissed both the counterclaim against Joyce and Jones and the cross-claim against ⁵⁷⁵ Tomes and Spragins, and sustained Mrs. Burns’ demurrer without leave to amend, all nunc pro tunc as of 23 November 1971. The purported thrust of Housing Equity’s appeal in No. 353 challenges the summary judgment entered in respect of the escrowed fund, as well as the order, as expanded, which dismissed its counterclaim and cross-claim, and sustained Mrs. Burns’ demurrer without leave to amend. The Sellers’ appeal in No. 10 is from a second order entered 14 January 1972, allowing Tomes and Spragins a fee of $500.00 for their services as escrow agents, to be paid from the escrowed fund then held in the court’s registry. An effective disposition of the issues involved in the cases requires the sorting out of a tangled skein of facts.

When negotiations began in the summer of 1967, the Sellers were the owners of a tract of about 125 acres, which had been assembled during the preceding 10 years. Housing Equity, lacking the resources to purchase and develop a tract of substantial size, proposed to purchase some 15 acres immediately and to acquire options to purchase the remainder of the tract in parcels over a period of years. The Sellers, for understandable tax reasons, were unwilling to commit themselves to a series of sales, and would only agree to make a single sale of 101 acres. 2 The negotiations were integrated into an agreement of 11 January 1968, which although examined by the chancellor is not a part of the record before us. It seems to be conceded by all parties that this contemplated the sale of 101 acres for $2,859,659.66, which is consistent with the memorandum of the settlement held on 25 March 1969.

Sometime between the January, 1968 agreement of sale and the March, 1969 closing, Housing Equity was successful in negotiating a sale to Ford Motor Company, for $1,050,000.00, of some 15 acres of the tract ⁵⁷⁶ which it had under contract. Settlement for this sale appears to have been had simultaneously with the closing for the purchase of the entire tract, and the proceeds of the sale to Ford made possible the payment of that portion of the sale price which the Sellers received in cash. Here again, the deeds of trust are not before us, but it seems clear that they contained partial release provisions intended to release from the lien of the deeds portions of the tract as the purchase money debt was partially satisfied. It would appear that the cash payment made at the closing was consideration for the Sellers’ release of the Ford tract, as well as of a small amount of additional acreage.

At the March, 1969 settlement an addendum to the January, 1968 contract was entered into. The addendum provided, in the only part which we have before us: “12. Purchaser [Housing Equity] covenants and agrees with Sellers that at date of settlement to give Sellers a performance and completion bond in the amount of $45,000.00, from a reputable bonding company, guaranteeing that the lead road shown on the attached plat will be constructed by Purchaser between the points designated on said plat as A through F, or if Purchaser cannot obtain a performance and completion bond as aforesaid, then and in that event Purchaser shall at time of settlement set forth in Paragraph 2 of this addendum place in escrow with the settlement attorney the sum of $45,000.00, which sum shall be turned over by the settlement attorney to the Sellers as final and liquidated damages for Purchaser’s default, upon the happening of either of the following events whichever first occurs, namely: (1) Default in payment of the first installment of Purchase Money Note(s) in Paragraph 6 (a) of this addendum constituting a default of the Purchase ⁵⁷⁷ Money Trusts in Paragraph 7 (a) and (b) of this addendum. (2) Failure by Purchaser to complete said road within twenty (20) months from date of settlement.

If said road is completed as aforesaid, said $45,000.00 shall be turned over to Purchaser.” The sum of $45,000.00 was, in fact, reserved at closing, and held in escrow by Tomes and Spragins. In response to a demand for admission of facts, Housing Equity on 19 January 1971, conceded that the road had not been constructed. This admission obviates the necessity of any extended consideration of whether there had or had not been a default in the payment of the notes. 3 Before considering the three narrow issues presented by the appeals, there should be some discussion of the procedural posture in which No. 353 reaches us. There, the lower court filed an opinion and entered an order on 23 November 1971.

While a reading of the opinion indicates that the prayer of Joyce and Jones for the dismissal of the counterclaim would be granted; that Mrs. Burns’ demurrer to the counterclaim would be sustained; and that the cross-claim would be dismissed, the formal order appended to the opinion granted only the Sellers’ motion for summary judgment. On 17 December 1971, Housing Equity appealed from the order of 23 November 1971. On 10 January 1972, Housing Equity filed a petition to revise the November order nunc pro tunc, alleging that the order failed to state whether Mrs. Burns’ demurrer was sustained with or without leave to amend, and that while the opinion impliedly disposed of the demurrer, it failed to deal with Housing Equity’s counterclaim against Joyce and Jones and its cross-claim against Tomes and Spragins, which remained before the chancellor on bill and answer. As we have indicated, on 14 January, the court entered ⁵⁷⁸ an order in substantially the form consented to by Housing Equity’s counsel, sustaining Mrs. Burns’ demurrer without leave to amend and dismissing Housing Equity’s counterclaim and cross-claim, “all nunc pro tunc as of 23 November 1971.” No appeal was taken by Housing Equity from the 14 January order.

Ordinarily, we would have no choice but to confine our consideration to the order of 23 November which was the only order from which an appeal was taken. While there may be instances where a court may exercise revisory powers over an order or decree, on a motion made in timely fashion before the order or decree is enrolled, Maryland Rules 671 and 625; Accrocco v. Splawn, 264 Md. 527 , 287 A. 2d 275 (1972), or even after a decree has been enrolled, to correct an error apparent on the face of the decree, Rule 681; Jackson v. Jackson, 260 Md. 138 , 271 A. 2d 690 (1970), in most instances the trial court loses jurisdiction over a case once an appeal has been entered. If a motion for the revision of a decree or judgment is made after an appeal has been taken, the moving party is put to an election between his motion and his appeal. If the appeal is dismissed before the hearing on the motion, the motion stands for hearing as though no appeal had been entered.

If the appeal is not dismissed, the court lacks the power to act on the motion, McGinnis v. Rogers, 262 Md. 710, 735-736 , 279 A. 2d 459 (1971); Visnich v. Wash. Sub. San. Comm., 226 Md. 589, 590-591 , 174 A. 2d 718 (1961); Tiller v. Elfenbein, 205 Md. 14, 19 , 106 A. 2d 42 (1954).

There can be no doubt that the entry of the summary judgment, awarding the Sellers the escrowed fund, was correct. The Sellers alleged that the road had not been built; Housing Equity admitted that it had not. There was no dispute as to a material fact, Rule 610 d 1, Rooney v. Statewide Plumbing and Heating—General Cont ractors, Inc., 265 Md. 559 , 290 A. 2d 496 (1972); Sherman v. Am. Bankers Life Assur., 264 Md. 239, 241-242 , 285 A. 2d 652 (1972); Brown v. Suburban Cadillac, Inc., 260 Md. 251, 254 , 272 A. 2d 42 (1971); Lipscomb v. Hess, 255 ⁵⁷⁹ Md. 109, 257 A. 2d 178 (1969), and judgment was properly entered accordingly.

Had the focus of the briefs which were filed and the arguments which were made been limited to the order entered on 23 November, we would have confined our consideration of the case to the affirmance of the summary judgment and perhaps would have remanded the case for the entry of an order disposing of Mrs. Burns’ demurrer, as well as the counterclaim and the cross-claim, which were before the court on bill and answer. However, since these questions are before us and were fully briefed and argued, we shall consider the issues as presented in order to serve the ends of justice by avoiding the delay and expense which would follow a remand for the amplification of the earlier order and a new appeal. We entertain no doubt that Mrs. Burns’ demurrer to