Mattingly v. Mattingly

Pattison, J., delivered the opinion of the Court. J. Benjamin Mattingly, owner of a tract of land near Laurel, in Howard 'County, Md., became indebted unto the Eastern Shore Trust Company in the sum of $11,000, and, t-o secure its payment, he confessed judgment in favor of the company for that amount, which was thereafter reduced to $9,000. After the entry of the judgment, J. Benjamin Mattingly and wife, on tlie 12th day of September, 1916, executed unto Joseph L. Donovan a mortgage on said land for the sum of $1,500 to secure an indebtedness from, bim to- Donovan. The mortgage was thereafter assigned unto Joseph C. Mat-tingly and W. Mitchell Digges, who, on the 17th day of December, 1917, sold thereunder the lands therein mentioned, and, with Walter Mitchell, became the purchasers thereof.

Upon the ratification of the sale so made James Clark was appointed trustee to convey the lands to the purchasers, which he did, by deed dated the 27th day of August, 1918. As we gather from the record, the land, after said sale, remained in the possession of J. Benjamin Mattingly under an oral agreement between him and the purchasers, whereby ²²⁹ it was agreed that the latter, at any time within one year from the day of sale, would sell and convey said land unto I. Benjamin Mattingly, or to. whom he might wish, upon being paid “the amount of tbe Donovan mortgage, with interest on same, together with interest on the Eastern, Shore Trust Company’s judgment (which still remained a lien upon the lands, sold), plus $1,000.00,” which was spoken of by Mr. Digges as a fee to them. That there was, such an agreement between the purchasers a ad J. Benjamin Mattingly is not only shown by the evidencie of J. Benjamin, Mattingly, but also by a letter written by W. Mitchell Digges to. him, which is. as follows: “La Plata, Md., June 24, 1918. “J. Benjamin Mattingly, Esq., “Laurel, Md. “Dear Mr. Mattingly: “I received your two letters enclosing checks and should have acknowledged receipt before, but was uncertain as to whether or not it was proper for me to accept these checks. The agreement which we had with you in Mr. Joseph C. Mattingly’s office was to the effect that upon your paying the amount of the Donovan mortgage with interest on same, together with interest on The Eastern Shore Trust Company judgment, plus $1,000.00, we would convey the Laurel property to your or whomsoever you might wish.

I would therefore request that you meet me at Joe Mat-tingly’s office at eleven o’clock next Thursday, at which time we will put the agreement in writing, and I will bring the two checks with me, which as yet I have not used. “Yours very truly, “W. Mitchell Digges.” In addition to the above letter, Mr. Digges testified that on the afternoon of the day of the sale, after they had returned from the sale to the office of J. O. Mattingly, Mr. ²³⁰ Walter Miteliell said, in the presence of Mr. Joseph O. Mat-tingly and Mr. J. Benjamin Mattingly, “we ’agreed with Mr. Benjamin Mattingly that he could either purchase the property back or make a sale of it at a sum sufficient to pay the outstanding indebtedness against it, to- pay us the D'onovam mortgage with interest, and a fee- of $1,000.00 within one year.” The checks: mentioned -in Mr. Digges’ letter of June 24th, 1918, which he was uncertain whether ox not it was proper for him to accept until the agreement was put iu writing, were, so far as we can gather from the record, for interest on the indebtedness against the property .and for taxes thereon. The written agreement referred to in the letter was never, it seems, executed by the parties, nor were the checks ewer returned to J. Benjamin Mattingly, as shown by the record. The sale made by Mr. Digges- and others under the mortgage was thereafter ratified and confirmed -on the 22nd day of August, 1918. It appears that efforts were made by J. Benjamin Mattingly to- sell .the property to different parties, hut it was not until the fall of 1919 that 'he was a.t all successful in his efforts.

He testified that in 'September of that year -he sold the property to- the Brightwoo-d Sanitarium Company,, though the agreement of sale was not in writing, nor does it appear -that the terms- of sale were L in detail definitely fixed and determined, hut possession, of the property was given the sanitarium company, and it, in December, 1919, paid to W. Mitchell Digges the interest on the indebtedness that J. Benjamin Mattingly had assumed to pay in the event of the sale of the- property under -the aforementioned agreement. It is true this sale was mot made within the year in which it was -to- he made under their agreement with J. Benjamin Mattingly, but the fact that they thereafter received the interest, which was one of the essential features of the agreement, was, we think, a waiver of ²³¹ the requirement that T. Benjamin Mattingly should exercise the right to purchase or sell to another within the time named in the agreement, especially in view of the subsequent conduct of said purchasers. And it is true the purchasers at the mortgage sale thereafter entered into an agreement with Francis E. Mattingly for the sale of the property, but w'e think it is sufficiently shown, from the evidence in the ease, that this was not done in derogation, but in furtherance of the sale already made to the Brightwood Sanitarium Company hy J. Benjamin Mat-tingly. The agreement or option, as it is called, gave to him the right to purchase the property at and for the sum of $11,-500, payable as follows : “1. $1,000.00 upon the signing of this option, less the following amounts, the sum of two hundred and two dollars and seventeen cents ($202.17), which has heretofore been paid on account of interest due in December, 1919, on a judgment held hy The Eastern Shore Trust Oo. against said property, the county and State taxes upon said property, for the levy of 1919, and the insurance premium to date, upon the insurance on the improvement upon said property. “2.

The sum of four thousand dollars ($4,000.00) on or before two months from the date of this option. “3. The sum of five thousand dollars ($5,000.00) on or before six months from the date of this option. “4. An amount sufficient to pay the balance of said principal sum of said $11,500 and all interest, taxes and insurance premiums to date, on or before nine months from the date of this option.” It thou provided for the conveyance of said property upon a full compliance with the terms of the option, hut, in default thereof, the payments made thereunder were to he forfeited and Francis E. Mattingly was to1 have no- claim upon the property because of said payments. ²³² On the 25th day of Marcah, 1920, and, as claimed by Francis E. Mattingly, on the day of the execution of tibe option from Digges and others to him, and simultaneously therewith,, he gave an option to the Brightwood Sanitarium Company to purchase sa,id property at and for the sum of $30,-000, to be paid as follows.: “1. $1,000 upon the signing of this option, less the following amounts: The sum of two hundred two and seventeen-hundredth ($202.17) dollars, which has heretofore been paid on account of interest on a judgment held by The Eastern Shore Trust Co. against the property. The county and State taxes on said property for the levy of 1919, and the insurance premiums to, date upon the insurance on the improvements on said property.

The said payment of insurance and taxes to he evidenced by receipts for same turned over to the said Francis E. Mattingly. “2. The sum of fifteen thousand dollars ($15,-000.00) in preferred stock of the Brightwood Sanitarium Co. to he delivered to the said Francis E. Mat-tingly. “3. The sum of four thousand dollars ($4,000.00) on or before two months from the date of this option. “4. The sum of five thousand dollars ($5,000.00) on or before six months from the date of this option. “5.

The sum of five thousand dollars ($5,000.00) on or before nine months from the date of this option.” It, too, provided for the conveyance of said property upon a full compliance with the terms of the option agreement, hut, in default thereof, the payments made thereunder were to be forfeited, and the Brightwood Sanitarium Company was to have no claim upon the property by reason of said payments. It will be seen that the option to Francis E. Mattingly and the one from him to the Brightwood Sanitarium Company were executed several months after’ the sale of the property by J. Benjamin Mattingly to the Brightwood Sant-i ²³³ tariuin Company and the payment to Dig'ges and others by said company of the interest above mentioned. Stock of the company to> the amount of $15,000 was issued or transferred to Francis E. Mattingly under the option agreement and the first installment of purchase money was paid thereunder to Digges and others through Francis E. Mattingly. It was, however, claimed by J. Benjamin Mattingly that, although it appeared from the written agreement that the option to purchase the property was given to Francis E. Mattingly, it was in fact given to him or for his benefit and it was so understood at the time by the parties interested therein.

After the option agreements were signed and delivered to the parties entitled to them, it was. suggested by J. Benjamin Mattingly that Francis E. Mattingly should execute unto him an agreement, in writing, showing that the option was given to Francis E. Mattingly as the agent, or for and on behalf, of J. Benjamin Mattingly, but this was not done and the latter, on the 21th day of May, 1920, assigned unto William E. Mattingly, a half brother, all his “right, title and interest in and to the proceeds of sale of the prop1erty, as set, forth in the agreement or option, made on the 25th day of March, 1920,” which was appended to and made part of the assignment. The consideration for this assignment was money borrowed by J. Benjamin Mattingly from William E. Mattingly, which was still owing to the latter, amounting, as it was stated, to more than $1,100. William E. Mattingly on the 25th day of May, 1920, filed his bill, in the Supreme Court of the District of Columbia, against the Brightwood Sanitarium Company, Ealph E. Walker, its treasurer, and Francis E. Mattingly, alleging that the Brightwood Sanitarium Company had become the purchaser of the laud hereinbefore mentioned, through an option agreement in which Francis E. Mattingly was “nominal grantor” but who in fact was merely acting as agent of J. Benjamin Mattingly, his brother; and that he, as assignee of ²³⁴ J. Benjamin Mattingly, was entitled to the proceeds of the sale of the property. The bill then asked that Francis E. Mattingly be restrained from receiving, and the sanitarium company from paying over to’Francis E. Mattingly, any of the proceeds of the sale of said property that were yet to be paid under the option agreement.

Upon the bill, an order was passed on the said 25th day of May, 1920, requiring the defendants to show cause upon the day therein named, why the prayer of the bill should not be granted. The record does not show that anything more was done in those proceedings, and, on the 25th day of January, 1921, the bill in this case was filed by the Brightwood Sanitarium Company against W. Mitchell Digges, Walter J. Mitchell, Joseph C. Mattingly, Francis E. Mattingly and J. Benjamin Mattingly, asking: “1. That the said W. Mitchell Digges, Walter J. Mitchell and Joseph C. Mattingly be compelled to convey the aforesaid property to the plaintiff under the terms of the contract of March 25, 1920. “2. That the said defendants, Walter J. Mitchell, W. Mitchell Digges and Joseph C. Mattingly, be declared to hold title as trustees of said property in trust for J. Benjamin Mattingly, Francis E. Mat-tingly or any other party entitled as beneficiaries .thereunder, and that they be required to give bond in accordance with provisions of sec. 237 of art. 16 of the Code of Public General Laws of Maryland.” The bill alleged that the plaintiff, the sanitarium company, had paid the first installment of $1,000, and had delivered to Francis E. Mattingly the stock of the company, in accordance with the terms of the agreement, and that, on the 25th day of May, 1919, it was ready to pay the installment of $4,000 due on that day, but “was prevented from making said payment by reason of the injunction issued out of the Supreme Court of the District of Columbia.” And that it ²³⁵ was then ready to fully comply with the terms of said agreement of purchase.

Upon the petition of William E. Mattingly, he was made a party defendant to the proceedings, and both he and J. Benjamin Mattingly answered the hill, while Francis E. Mat-tingly demurred thereto. The defendants, W. Mitchell Digges, Walter J. Mitchell and Joseph 0. Mattingly also answered, hut not until a decree pro confesso was obtained against them. At this stage in the proceedings a decree was passed hy consent of the parties, hy which the Brightwood Sanitarium Company was ordered to bring into court the balance of the purchase money owing hy it, with interest thereon, amounting to $14,268.34.

And the decree provided that, when this amount was paid therein, the defendants, W. Mitchell Digges, Walter J. Mitchell and Joseph C. Mattingly were to convey said property and all the right, title and estate of all the defendants therein, to the Brightwood Sanitarium Company, and hy the decree it was further ordered and decreed that the said sum of $14,268.34 should he paid and disposed of as follows: 1. $9,486.00 to The Eastern Shore Trust Co. in payment of its judgment against J. Benjamin Mat-tingly. 2. $2,896.25 to W. Mitchell Digges, Walter J. Mitchell and Joseph C. Mattingly in payment of their fee and in payment of the amount of the mortgage and interest under which the property was sold. 3. $750.00 to the Citizens’ National Bank of Laurel in payment of a judgment held hy that hank against J. Benjamin Mattingly. 4. “The balance of * * * $1,136.09, less costs of the case, shall be retained hy the clerk of this court for a final determination of this cause as to the respective rights of J. Benjamin Mattingly and Francis E. Mattingly to the said sum.” ²³⁶ On the 5th day of May, 1922, nearly a year after the passage of the consent decree of June 3rd, 1921, Francis E. Mattingly obtained leave of the court to withdraw his demurrer to the bill filed by the sanitarium company, and, on that day, filed his answer thereto, in which he denied that he acted as agent of J. Benjamin Mattingly in obtaining the option agreement from Mr. Digges and others for the purchase of said land and averred “that he was the real party in interest,” and that he procured the option with the intention of reselling it to the sanitarium company. The question presented in the lower court upon the petition of William E. Mattingly, and the answer thereto of Francis E. Mattingly, and the one presented in this Court upon the appeal, is who is entitled to said sum of $1,136.09, William E. Mattingly, assignee of J. Benjamin Mattingly, or Francis E. Mattingly. The court below held that Francis E. Mattingly was entitled to it, after the payment of the costs of the proceedings, and it was from the order of the 3rd day of November, 1922, directing the clerk of the court to pay it to him, after first deducting the costs therefrom, that the appeal in this case was taken. The inquiry should first be made, was Francis E. Mat-tingly acting for himself or as agent of his brother, J. Benjamin Mattingly, in procuring the option for the purchase of the land from the purchasers at the mortgage sale and in signing the option for the sale of it to the Brightwood Sanitarium Company ?

To decide this question it will be necessary for us to consider the evidence found in the record reflecting thereon. It is an undisputed