Maryland City Realty, Inc. v. Vogts

Barnes, J., delivered the opinion of the Court. This appeal involves the alleged sale of a lot of approximately one acre at the intersection of Old Annapolis Road and the New Fort Meade Road in the P'ourth Election District of Anne Arun ²⁹⁴ del County (the property). It has been owned in fee simple since 1954 by Chewisco Franklin Vogts and his wife, Carrie Lee Vogts (the Vogts). The case arose in the Circuit Court for Anne Arundel County upon the amended bill of complaint of Maryland City Realty, Inc. (Realty Company), for specific performance of an alleged option contract dated December 8, 1962 between the Realty Company and the Vogts to purchase the property for $45,000.

In addition to the Vogts as defendants, Nicholas Andrew (Andrew) was joined as a party defendant. Andrew was alleged to have a subsequent contract of sale to purchase the property for $50,000. In addition to specific performance of the December 8 contract, the plaintiff prayed for injunctive relief, for compensatory damages of $100,000, for punitive damages of $100,-000 and for other relief. A cross bill of complaint was filed by the Vogts against the Realty Company seeking compensatory damages as well as of $25,000 as punitive damages and for other relief.

After taking the testimony for two days of some fourteen witnesses produced by both the plaintiff and the defendants, the Chancellor, Judge Duckett, dismissed both the amended bill of complaint and cross bill of complaint and required the Realty Company to pay the costs. Judge Duckett did not file a memorandum opinion in the case. He offered to do this if there was an appeal. Counsel for the plaintiff indicated that a formal written request for the filing of a memorandum opinion would be filed (see Maryland Rule 18 c), but no such formal written request was ever filed.

The Chancellor, however, indicated the general basis of certain rulings and of his final conclusion. These will be referred to later in this opinion. The testimony and exhibits indicate the following: In 1959 or 1960, Nicholas Andrew, a neighbor and friend of the Vogts, offered to purchase the property from them for $25,000. This offer was refused by Mr. Vogts, who indicated that he did not wish to sell the property at that time.

The Realty Company has its office at 701 Washington Boulevard, Laurel, Maryland. The Vogts property is not far from Laurel, Maryland, but is in Anne Arundel County as indicated. ²⁹⁵ During the afternoon of Saturday, December 8, 1962, Ernest C. Pierce, an agent of the Realty Company, interviewed the Vogts on behalf of his principal to purchase the property. He obtained the signatures of the Vogts to a written option contract (first option contract) which for a recited consideration of $1.00 granted the Realty Company an exclusive option to purchase the property for a period of 60 days from the date of the contract, December 8, 1962, for $50,000. This first option contract was on a typewritten form which was typed prior to its presentation to the Vogts.

The typing was apparently not done by a professional typist. The blanks were filled in in ink by Mr. Pierce but no metes and bounds description was set forth in the space provided for the description of the property to be purchased. In paragraph 5 there was a provision that the option might be extended for an additional period of 30 days upon written notice by the grantee prior to the end of the first option period, the grantee’s check for the further sum of $1.00 to accompany any such notice. Paragraph 6 provided that in the event the option was not exercised by the grantee during “the time or times above stipulated, then it shall have no further right or option to purchase said property and the option consideration shall become the sole property of the grantor.” In paragraph 7 it was provided that the grantee should be given possession of the property upon delivery of the deed or 120 days after the date the grantee elected to purchase, whichever occured later.

In paragraph 10 it was provided that all notices required or which might be given under the option contract should be considered properly given if delivered in writing personally or sent by certified mail, postage prepaid with a return receipt requested, addressed to the grantor or grantee, as the case might be, at the address first recited in the option contract, and that notice given by mail “shall be deemed given on the date on which such notice is deposited in the United States mail.” There is nothing in the first option contract in regard to the payment of any real estate commission to the Realty Company of $5,000 or in any other amount. It is clear that the Vogts were not obligated to pay any real estate commissions. William D. Miller, President of the Realty Company, was not available on December 8, 1962 so that Mr. Pierce took the ²⁹⁶ matter up with him the following Monday, December 10. Either on or sometime after December 10, Mr. Pierce on behalf of the Realty Company obtained the signatures of the Vogts to another exclusive option contract for the property (second option contract).

This second option contract is upon a mimeographed form quite similar to the form of the first option contract except that it has a form number “B-55” and is on two longer sheets of paper instead of the three somewhat shorter pages of the typewritten form of the first option contract. The mimeographed language is identical with that of the typewritten language except in paragraph 5 in which the notice for the additional option period in the typewritten form must be “written,” whereas in the mimeographed form the word “written” is left out. In the blanks in the second option contract, the additional terms were typed in by Mr. Pierce. Instead of the 60 day option given in the first Realty Company option contract, the second option contract provided for 90 days; instead of a $50,000 purchase price a $45,000 purchase price was inserted; and, instead of a 120 day possession period in paragraph 7, a 90 day possession period was inserted.

The date inserted by Mr. Pierce was December 8, 1962. This appears in ink, as do the signatures of the Vogts and the signature of Mr. Pierce as the witness to their signatures. A metes and bounds description appears on the back of the first mimeographed page, there being a notation “Legal Property Description on back of page” appearing in the blank left on the first page for the purpose of inserting the description of the property. As already indicated no such notation and no metes and bounds description appear in the first option contract.

No copy of either option contract was left with the Vogts, who at no time prior to their execution had legal or other advice in regard to the contracts. The Vogts are elderly, unsophisticated persons with limited education. The only explanation Mr. Miller was able to give as to why the Vogts would reduce the $50,000 purchase price to $45,000 was “the people thought they would have to pay a commission and they were willing to sign a second agreement for $45,000 because they wouldn’t have to pay a commission.” Mr. Miller had already admitted that the Vogts were not obligated ²⁹⁷ to pay any real estate commission “because I was the purchasing company in this case.” When asked whether his Company’s salesman, Mr. Pierce, explained to the Vogts that they did not have to pay a commission, Mr. Miller replied, “I believe he did. Not on the first one but on the second one he did.” Mr. Pierce, however, when asked “* * * did you explain to them why the price was fixed in the second paper at forty-five thousand dollars?”, replied “There again I do not recall.” He further stated that he did not remember any discussion with the Vogts on the occasion of his second visit to them.

Mr. Vogts testified that he understood that he was to receive $50,000 and not $45,000. He was willing to settle for $50,000, based on the original representation that this was the purchase price. He testified that he did not receive the $1.00 mentioned in either option contract. This is uncontradicted.

There is evidence which would support a finding that the Vogts understood that the only change in the second option contract was in the time of the option and possession periods. Mr. Vogts also testified that at the time of the negotiation of the first option contract it had been represented to the Vogts that the contract would contain provisions that the Realty Company would move them to a trailer park or put them in an apartment free of charge, and when they got their house built, the Realty Company would pay for the moving van. This evidence was also uncontradicted. There is nothing in either the first or second option contract containing these agreements.

The 90 day option period under the second option contract expired on Friday, March 8, 1963. Mr. Miller testified that on March 7 his salesman, Mr. Pierce, prepared two letters addressed to the Vogts and signed by him as President of the Realty Company. One stated: “Enclosed please find my check in the amount of one dollar as payment for the thirty day extension of our option agreement dated 8 December, 1962 as stipulated in the agreement.” The other letter stated: “In reference to our option agreement dated December 8, 1962, and continuing for a period of ninety ²⁹⁸ days. In accordance with this agreement I desire to exercise my option and purchase your property for the stipulated price of Forty-Five Thousand ($45,-000.00). “Respecting settlement and conveyance of this property I will be in contact with you in the near future to establish a date and time for said conveyance.” Mr. Miller further testified that he placed a $1.00 check of Realty Company in the extension letter and mailed it to the Vogts, registered mail with a return receipt requested near the noon hour on March 7.

Shortly after posting this extension letter, he ordered a cup of coffee at a drugstore but before he drank it, decided to mail the second letter exercising the option. He mailed it right after he mailed the first one by registered mail, with a return receipt requested. The return receipts are numbered 5524 and 5525 respectively and both indicate delivery to Mr. Vogts on March 8, 1963. Mr. Pierce, who went to the hospital the afternoon of March 7, denied that he prepared the two letters.

He testified that he spelled “extension”, “e-x-t-e-n-s-i-o-n.” Mr. Miller, on the other hand, testified on cross examination that he spelled “extension” “e-x-t-e-n-t-i-o-n”, the way it is misspelled in the extension letter. It was pointed out that in the answers to interrogatories filed on behalf of the Realty Company in the case, counsel for the Realty Company had spelled “extension” “e-x-t-e-n-t-i-o-n.” There was some confusion in Mr. Vogts’ testimony as to what he received on March 8. Originally he stated that he received the extension letter in one envelope and the $1.00 check (dated March 4, 1963) in the other. Later Mr. -Vogts seemed to indicate that he had received two letters and a check.

In any event, Mr. Vogts mailed back all the papers he received on March 8 in a registered letter to the Realty Company on March 11. Judge Duckett ruled that the option was not properly exercised because of the two conflicting letters sent the same day. We are of the opinion that there was sufficient evidence to support his ruling. We are also of the opinion that the power to extend the option for an additional 30 days (if such an additional option pe ²⁹⁹ riod validly existed in view of Mr. Vogts’ position that no such additional option period was intended or agreed to by the Vogts) was also not validly exercised by the conflicting letters.

The Realty Company also contended, however, that the Vogts at a later date called for settlement and thereby waived the failure of the Realty Company to exercise its option. The facts in regard to this contention are as follows: The Vogts, on March 7, 1963, not having heard from the Realty Company in regard to the option contract consulted with Lester Mallonee, an attorney in Laurel, who had been a friend of the Vogts for many years, with a view of preparing a contract of sale for the property to Mr. Andrew for $50,000. Shortly after March 7, Mr. Mallonee prepared the contract of sale which was executed by the Vogts and Mr. Andrew on April 8, 1963. $1000 of the purchase money was paid at that time. The Andrew contract provided that $49,000 balance be paid at the time of settlement which was fixed for June 7, 1963.

On June 6, Mr. Sachs, attorney for the Realty Company, wrote the Vogts advising them of his representation, referring to the option contract of December 8, 1962 and stating that the Realty Company “exercise fsic] the option to purchase in accordance with the terms of the said option grant.” Settlement was stated to take place at Mr. Sachs’ office on June 12, 1963 at 2:00 P.M. D.S.T. It was further stated that the Realty Company “agrees to waive all of the conditions set forth in the said option grant and will require you to execute a general warranty deed conveying the subject property free and clear.” This was sent by certified mail. After a telephone conference with Mr. Sachs, Mr. Mallonee indicated that settlement with Andrew would not go forward and he would obtain assurance from the Vogts to that effect. Letters dated June 7 were obtained from the Vogts indicating that they would not settle for the property without Mr. Sachs’ prior approval, but these were never delivered as the Vogts discharged Mr. Mallonee as their counsel. Mr. Sachs was advised by Mr. Mallonee of the discharge on Saturday, June 8, by telephone, and this was confirmed by letter on June 10.

In the meantime, Charles J. Atas, counsel for Mr. Andrew, ³⁰⁰ gave the Vogts notice by letter dated June 7, 1963 that they should “not execute any settlement for your property under penalty of a law suit for breach of contract with Mr. Andrew.” A copy of this letter was sent to Mr. Mallonee and to Mr. Sachs. Mr. Sachs had a personal conference with Mr. Vogts at the property. Mr. Vogts advised Mr. Sachs that he had no attorney and that he would not settle on June 12, as requested by Mr. Sachs, because of the Andrew contract. There were discussions about a possible settlement of the matter.

Later Mr. Sachs conferred with Mr. Atas about a possible settlement but these negotiations were not