Kremen v. Rubin

Offutt, J., delivered the opinion of the Court. This case arises from a dispute between the parties as to the terms of a contract made by them for the sale of leasehold property, known as 14 N. Chester Street, in Baltimore City, by the appellant to the appellees for $7,200. Under the contract, $6,000 of the purchase price was to remain as a debt against the property to be secured by a mortgage. The appellant’s contention was that a mortgage could only be secured by paying a bonus of $650, and that under the contract ■of sale that expense should have been paid by the appellees in ⁶⁸⁵ addition to the purchase price, while they, on the other hand, contended that the only expense which they were recpiired to bear, over and above the amount of $7,200, was $52, for which amount they say the appellant agreed to procure the necessary mortgage loan.

In consequence, the appellant refused to consummate the transaction unless the appellees paid the $650 bonus, in addition to the price of $7,200, and that the appellees refused to do. Before the dispute arose the appellees had paid the appellant $700 on account of the purchase price of the property, and, when he failed to convey it to them, they demanded the return of that money, and when the appellant refused to return it they brought this action for its recovery. The action is in assumpsit, and the declaration originally contained only the six common counts. It was later amended by tbe addition of a special count, hut, at the conclusion of the plaintiff’s testimony, it was again amended by striking out that count, so that the case rested finally upon the declaration in the form in which it was originally filed.

Sixteen of the eighteen exceptions which we are asked to review relate to questions of evidence, and the other two to the court’s rulings on the prayers. Before discussing them, we will refer to so much of the evidence as is necessary to an understanding of the questions which these exceptions present. From the plaintiff’s evidence it appeared that, on January 26th, 1920, Alexander Kremen sold to I.ouis Rubin and Rose Rubin, his wife, the property to which we have referred, and which was then owned by Morris Xfibauer, for $7,200. The contract of sale, which was written by Mr. Kremen, and signed by tbe parties, provided in part as follows: “Kine hundred dollars cash, of which $500.00 should be paid February 10th and balance at day of settlement and balance in mortgage expense for procuring same should be paid by vendee. “And upon payment as above of the unpaid purchase money, a deed for the property shall be exe ⁶⁸⁶ cuted at the vendee’s expense by the vendor, -which shall convey the property by a good and merchantable title to the vendee. “Taxes, water rent, ground rent, to be paid or allowed for by the vendor to the day of transfer, nineteen hundred and “Settlement should take place within four months from date hereof.” When asked for whom he was acting when he signed that contract, Kremen said: “For myself — I was acting for myself as agent for Mr. Libauer.” Rubin, after he had paid $700 on account of the purchase price of the property, learned that Kremen was to got it from Libauer for $7,000.

He then, he said, went to Kremen and said to him: “Listen here, you were supposed to charge me $7,000. Mr. Libauer is really selling me the property, and you are acting as agent, and now you charge me $7,200.” And he said that Kremen replied: “I will tell you, I promised to get you the mortgage for nothing * * * now, I will get you the mortgage of $4,500” and then he said, “the second mortgage of $1,500, and only to cost you $52, and the rest of the expenses I will stand. This is just the reason I charge you these $200 and sold you the property for $7,200 — this $200 will practically be a bonus for securing the mortgages.” The appellee told Kremen he could only spare $1,200 in cash; that he only had $1,000 of his own, but that his mother intended to give him $200, which made up the amount of cash he agreed to pay. When the time came to settle for the property, Rubin, his wife, Mr. Weinberg, his attorney, and Mr. Heller, a friend, went to Kremen’s office.

When he arrived there Mr. Kremen told him that every one was there ready to settle for the house but he had not secured the mortgage, but that a man named Blum would lend him $5,000 on a first mortgage to run for one year and that he could secure a second mortgage for the balance, but that Rubin would have to pay $650 as a bonus for securing the mortgages. Rubin then ⁶⁸⁷ asked if the mortgage could not remain on the property for a longer time, so as to give him an opportunity of paying it off. Ho was told that that could not he done and he then said: “I can’t go ahead and settle the property. First, I Lave not got the money, I can’t get the amount of $650, and then I say, in a year, what could I do'in a year’s time, $5,000 in one year.

He said, ‘that is the only way you can do, that is the only way to settle,’ and I said, ‘nothing doing.’ I could not do it, not because I wanted to hack out — I could not do it.’’ Rubin also reminded Kremen that he agreed to take care of the mortgage for $200, hut Kremen told him to read the contract and advised him to “go ahead and pay it.” On May 26th, 1920, he went to Kremen and offered him $500, the balance of the cash payment provided for by the contract, and $52, which he said Kremen had told him would he the expense incident to procuring the mortgage. Kremen refused however to “put the deal through” unless Rubin paid $650 as a bonus for procuring the mortgages. As he could not do that, he demand'd the return of the $700 he had paid, and when Kremen refused to return it he brought this suit. Rubin paid the $700 lo Eli Hies, his brother-in-law, who was then in Kremen’s employ, and none of it was returned to him.

Morris Libauer, who owned the property at the time Kremen sold it to Mr. and Airs. Rubin, employed Kremen as a real estate agent to sell it for him for $7,000, and on February 2nd, 1920, be executed a written contract for the sale of it at that price to “Alexander Kremen, Agent,” and in that contract he agreed to pay Kremen a “commission of 2l/> per cent or $175,” and on May 10th, 1920, lie executed a deed conveying it to Kremen and received from him the purchase price of $7,000 less $175 commission. Pending the transaction, Kremen had told Libauer that he was buying the property for Rubin, and when Libauer heard from the Rubins that they were paying $7,200 for it, he asked Kremen how it was that he, Libauer’s agent, g’ot $7,200' for it, while Libauer only received $7,000, when the only gain Kremen was enti ⁶⁸⁸ tied to receive was his commission of $175, and Kremen told him “that for the extra money over the $7,000 he was supposed to get for them a mortgage.” The evidence offered by the appellant contradicts that of the appellees in most of its essential details. It tended to show these facts: Kremen, while engaged in the real estate business, was approached about the middle of January, 1920, by Eli Dies, then an agent for him, who told him he had a “sale for 14 N. Chester Street” and Kremen told him to sell it and also told him that the owner wanted $7,000 for it.

About a week later Dies returned and said he believed he was going to sell it to Rubin, his brother-in-law. Dies, who was his bookkeeper as well as his salesman, fixed the price for Rubin, and made the contract with him for Kremen. Kremen, himself, although he wrote the contract, did not see Rubin until about two months after the contract was made, and received no money from him except through Dies. When Dies brought him the contract of sale to sign, he gave Kremen $100, and told him that he, Dies, had kept $100 and had given $100 back to Rubin as “a gratuity on the purchase price.” He asked Dies why the contract called for $7,200, and Dies said: $100 I am giving back to brother-in-law and $100 is for my trouble, because the money I get from you is not enough for me to get along, and I will keep* $100, and $100 I will allow to Mr. Rubin.

After the contract had been executed he tried to procure a $5,000 mortgage loan on the property, but found only one person who was willing to make the loan and he demanded a bonus of $500. When he told Rubin it would cost him $500 to get the mortgage, Rubin said, in effect, he did not like it but would let him know later what he would do. Rubin came back later and asked Kremen if he could not get the mortgage for less money and he told him he could not, but that he, Kremen, would give him the commission he was to receive from Libauer and $50 in addition towards the expenses, and Rubin said, “all right, we will see you later.” About two weeks before the date of settlement Mr. Rubin and Mr. Weinberg, his attorney, came into Kre ⁶⁸⁹ men’s office and there agreed on a settlement, under which Kremen was to give him his commission of $1.75 and Dies ■was to return him the $100 which he had retained. A day was fixed for consummating the transaction, hut the matter was not .closed then because Mr. Libauer did not appear.

That meeting was at the office of Mr. Levin, attorney for the proposed mortgagor, and at Rubin’s suggestion the matter was postponed to the following Monday at five o’clock in the afternoon. Rubin did not keep that engagement and, after waiting for him for an hour, Kremen himself paid $7,000 for the property and took title to it. Before taking up in detail the several exceptions, we will consider a proposition advanced by the appellant, which relates not only to the relevancy of much of the testimony, but also to the right of the appellees to recover at all under the pleadings, and that, so far as we can gather, is that, since there was a written contract between the parties, and since the $700, which is the subject of the action, was paid under it, the appellees could only sue for the recovery of that sum in an action of special assumpsit for a breach of that contract, and that therefore, since this is in an action in general assumpsit on the common counts, the contract itself would be irrelevant, and the plaintiffs could not recover any sums paid by them trnder it. The vice of that proposition is that this is not an action to recover damages for the breach of a contract, but one to recover money which the appellant received from the appellees in payment for property which, it is contended, he refused to convey to them in accordance with the terms of the contract.

Where one party to a contract has received money in consideration of its performance, and then fails or refuses to perform it, the other party may either sue for the breach, or he may rescind the contract and sue in an action for money had and received for the recovery of the amount paid. Tn the one case he sues to recover the damages suffered as a result of the breach, while in the other he sues to recover money which ⁶⁹⁰ ill justice'and good conscience belongs to liim, and which'the defendant received under a contract which was rescinded as a result of his fault or failure to perform it. These' principles are generally accepted and abundantly supported by authority. In Cromwell v. Chance Marine Co., 131 Md. 105 , which was an action on' the common counts for the recovery of money paid for the purchase of a motor boat under a contract which the vendor failed to perform, this Court, speaking through Judge Briscoe, said: “The law is well established that in an action