McGinnis v. Rogers

Finan, J., delivered the opinion of the Court. Upon the first argument of this case before this Court, the appellants were Arthur J. McGinnis and Charles Dudley, who, as complainants below and as the named contract purchaser and assignee had filed a bill for specific performance of a contract for the sale of land against John J. Rogers and Helen A. Rogers, his wife, and Thomas E. Chance. Also joined as defendants were Helen L. Clarke, Joseph Urciolo, John V. Arban, Pascal della Badia and Florence E. Urciolo whose relationship to the subject property will become apparent later in this opinion. Service was not obtained on the Rogerses.

In ⁷¹³ that action, the court below having granted the motion of Chance for summary judgment, dismissed the bill of complaint. We reversed and remanded, being of the opinion that there existed a genuine dispute as to material facts which rendered summary judgment inappropriate. We directed that further proceedings be taken in the nature of additional testimony and additional finding of facts. McGinnis v. Chance, 247 Md. 393 , 231 A. 2d 63 (1967).

In order to provide an understanding of the roles played by the various parties, we shall endeavor to consolidate the facts of McGinnis v. Chance, supra, with those of the record of this case in its present posture on appeal. In the court below, Judge E. Mackall Childs, in a well reasoned opinion, performed an able task of unravelling an intricate web of evidence, for which we are duly grateful. Mr. John L. Rogers, who at the most recent trial was 69 years of age, is a man whose formal education terminated after the sixth grade. In 1936, he and his wife, now deceased, purchased from Anne Arundel County a 48 acre tract (the subject property) which the County had acquired at a tax sale in 1932.

However, it was not until 1940 that a deed was executed by the county treasurer. Rogers has receipted tax bills for the years 1941 through 1964. There is no question that he, although not living on the property, exercised many acts of dominion over it. On April 4, 1963, McGinnis, for the consideration of $200, obtained from the Rogerses a thirty day option to purchase the tract for $50,000.

On May 3, 1963, Mc-Ginnis gave notice of his intent to exercise this option and shortly thereafter, with the Rogerses’ permission, removed timber from the property which McGinnis sold for $1700; however, he did not settle as required and attempted to sell his option to one Hurd. Hurd obtained information concerning the questionable validity of the tax sale held in 1932 and returned the contract to McGinnis. When McGinnis mentioned the title problem to Mr. ⁷¹⁴ Rogers, Rogers said “Well, look, if you want to get the title cleared up you go ahead. I don’t want to spend any money.” McGinnis did not pay any of the $1700 which he received from the timber to the Rogerses, and in a sense this may have set the flavor of his dealing with them.

Thereafter, McGinnis employed William Dixon, Esq., President of Monumental Title Company, a real estate attorney and developer, and a member of the Maryland Bar, who prepared a new contract for his client, Mc-Ginnis. That contract, entered into on September 23, 1963, between Rogers and McGinnis provided for a deposit of $200 (which was not paid) and a purchase price of $50,000 to be paid by a $10,000 down payment and a $40,000 four per cent purchase money mortgage back to Rogers. With regard to the defective title, the contract provided in pertinent part: “Settlement to be on or before ninety (90) days from the date that the sellers are able to give such title as a title insurance company permitted to do business in the State of Maryland will approve and insure * * * * * “Buyer will immediately proceed with due diligence to clear title to said property but in no event will the time of this contract exceed eighteen (18) months.” Approximately one week later (October 1, 1963), Mc-Ginnis assigned his contract to Charles Dudley for a named consideration of $10,000, of which $6,000 was paid. Dixon then represented Dudley in all matters relating to the contract.

Dixon caused a search of the title to be made by Garrett Larrimore, Esq., a member of the Maryland Bar, and also had a survey made by Mr. Edward Hall. This was in the early part of 1964. Also, about this time Hall notified Dixon that he had learned that Mr. Thomas E. Chance, a person known to deal in tax delinquent properties in Anne Arundel County, had evinced considerable interest in the property and was en ⁷¹⁵ deavoring to obtain quitclaim deeds from the heirs of William H. Queen, the individual who had been vested with title to the property prior to the tax sale in 1932. Dixon telephoned Chance and informed him of the existing contract between the Rogerses and McGinnis and of the assignment to Dudley, and advanced the opinion that the Rogerses’ title was valid based on adverse possession.

Dixon, however, did not communicate this development to the Rogerses, who were unaware of Chance’s activities. Dixon was hopeful that the defect in the tax sale would be remedied by the passage of Chapter 182 of the Laws of Maryland of 1964, which provided that all tax sales prior to 1944 in Anne Arundel County could not be subject to further attack after June 1, 1966. However, this policy of watchful waiting exposed McGinnis, Dudley and Dixon to the risk that the McGinnis contract would expire on March 23, 1965, as the contract expressly provided for final settlement within eighteen months from its date of September 23, 1963, and if no extensions were granted by the Rogerses, the McGinnis contract would terminate. The record reveals that the McGinnis-Dudley-Dixon combination did little or nothing to prepare for the final settlement date, and it was not until late in 1964 (the evidence not being clear as to the exact date) that Dixon sought the advice of John P. O’Ferrall, Esq., a title specialist in Baltimore.

O’Ferrall observed that the Rogerses might well sustain a title based on adverse possession, having been in possession and control of the property under a deed from the county treasurer from 1940 to the date of his report; however, he also cited the curative effect of Chapter 182 of the Laws of 1964. Dixon, however, states that he was apprehensive about filing legal action lest the case be lost, thereby exposing Dudley and McGinnis to a possible suit for damages by the Rogerses. Meanwhile, on June 23, 1964, Thomas Chance had obtained deeds from the Queen heirs in favor of his nominee, Helen L. Clarke, and on July 21, 1964, she, as agent for Chance, filed a bill of complaint (Equity No. 16,484) ⁷¹⁶ in the Circuit Court for Anne Arundel County asserting the invalidity of the 1932 tax sale and alleging that she was vested with title and should be entitled to the property upon payment of past due taxes. On October 19, 1964, the Circuit Court for Anne Arundel County entered a decree setting aside the tax sale.

However, prior to the determination of that case there was yet another chapter being played out which affected the course which the instant case was to follow. The equity suit filed by Helen Clarke against the Rogerses caught that couple completely unaware. Mr. Rogers states that it was the first time in his life that he had ever been sued. He did not know that anyone had designs on the title to his property and to compound his troubles his wife at this time was seriously ill with cancer.

In desperation, he turned to his long-standing friend and spiritual advisor, Father Hugh O’Neil. Father O’Neil urged that Rogers retain Winson G. Gott, Jr., Esq., a member of the Maryland Bar from Anne Arundel County, to try to delay proceedings until Raphael Urciolo, Esq. (Urciolo) a member of the District of Columbia Bar, returned from Europe. Father O’Neil had a transcendent opinion of Urciolo, whom he had taught in college, and upon the latter’s return to this country Father O’Neil-immediately introduced him to Mr. Rogers.

Rogers, with complete faith, placed his affairs totally in the hands of Urciolo. We digress for a moment to point out that when this case was first heard by this Court we had misgivings as to whether the Clarke v. Rogers equity suit was of a true adversary nature. The evidence produced on remand clears this up completely and as Judge Childs unequivocally states: “[He] has no hesitancy in pronouncing it to be so. There was no evidence whatsoever that Chance’s nominee, Helen L. Clarke, nor Chance, nor C. Osborne Duvall, Esq., who was representing Clarke, had ever known Rogers before the suit was filed.” ' At Uricolo’s behest, the Rogerses entered into an agreement with Clarke to the effect that, regardless of the out ⁷¹⁷ come of the equity case, the property would be titled in the name of Clarke and the Rogerses—one-half interest in each—and that this agreement was reached “either prior to or simultaneously with” the taking of testimony in that case.

Urciolo also explains that he advised settlement because he thought it might be difficult for the Rogerses to rest their title on adverse possession and that he had misgivings about the validity of the tax deed. At the close of the Clarke v. Rogers equity case, upon Ureiolo’s advice, the Rogerses executed an agreement dated September 17, 1964, whereby both they and Helen L. Clarke agreed to convey the subject tract to Chance and Joseph Urciolo (brother of Raphael) as “joint tenants to be held by them for the benefit of the parties to this instrument (the Rogerses and Clarke) as hereinafter set forth.” It must be noted that this agreement between the Rogerses and Clarke recognized the existence of the Mc-Ginnis contract and the testimony revealed that Urciolo and Chance were both of a mind that Clarke and the Rogerses were to be bound by whatever decision Mc-Ginnis would make as to a settlement on or before March 23, 1965. However, they wanted nothing to be filed in the land records referring to this outstanding contract commitment pending the expiration of the McGinnis option, which they hoped would expire and which eventually did expire. It is obvious that Urciolo viewed the McGinnis contract with ambivalence, expressly recognizing its existence in the Rogers-Clarke agreement, yet testifying that he considered that the contract could be easily “set aside” because neither McGinnis, Dudley nor Dixon had done anything affirmatively to clear the title, as required under the contract.

When the case was previously heard by this Court we noted that Dixon made numerous attempts between early January and March 1, 1965, to contact Raphael Urciolo, attorney for the Rogerses. Urciolo admitted that he received many messages that Mr. Dixon had called, but re ⁷¹⁸ turned none of the calls. He also acknowledged receipt of a telephone call on March 2, 1965, wherein Dixon outlined to him the questions raised in the O’Ferrall memorandum and the recommendation which it contained advising that the best way to perfect the Rogerses’ title was to wait until June 1, 1966. Urciolo replied to Dixon: “Well, send me a copy of the memorandum and I’ll be in touch with you.” Dixon, in response to this request of Urciolo, sent him a copy of the memorandum on March 3, 1965, and in the accompanying letter stated: “We would like to go through with this contract but would like to postpone it until after June 1, 1966.” Dixon, not having heard further from Urciolo, made efforts to contact both him and Mr. Rogers.

He did contact Rogers, who referred him to Urciolo, and having heard nothing further, he apparently sought to relieve his frustration by recording on April 4, 1965, the contract between McGinnis and the Rogerses dated September 23, 1963. Further efforts to contact Urciolo having failed, Dixon wrote on April 22, 1965 (almost a month after the expiration of the contract) informing him that the contract had been recorded and that he was interpreting Urciolo’s failure to contact him as an acquiescence in an extension of the settlement date of the agreement. The evidence also reveals that after some fifteen months of silence, McGinnis telephoned Rogers in December of 1964, or January of 1965, the testimony as to the exact date being unclear, and informed him that he was desirous of discussing a third extension of the final settlement date. Rogers referred him to his attorney, Urciolo.

Again, about 7 or 10 days prior to the expiration date of the contract, McGinnis contacted Rogers requesting Urciolo’s telephone number and address. On March 24, 1965 (one day after the expiration date of the McGinnis contract) Rogers and Helen Clarke executed their deed conveying title to Chance and Joseph Urciolo as joint tenants. This deed was recorded the following day. On May, 26, 1965, Chance and Joseph Urciolo ⁷¹⁹ sold the subject property to a combine composed of John B. Arban, Pascal della Badia, and Florence Urciolo, wife of Raphael, for $94,600. 1 A purchase money mortgage was executed in favor of Chance and Joseph Urciolo in the amount of $70,000 and $24,600 was paid in cash.

Seventy one hundred dollars ($7100) of the cash down payment was paid to Thomas Chance (Chance and Rogers compromised and dismissed their claims against each other during the trial below) and the balance has apparently been retained by one or more of the Urciolos. On June 11, 1965, Dixon learned from Hall, the surveyor, that some deeds had been recorded affecting the Rogerses’ title. Dixon ordered a run-down of the title which disclosed not only the deed from the Rogerses and Helen Clarke to Chance and Joseph Urciolo on March 24, 1965, and the subsequent conveyance by Urciolo and Chance to John B. Arban, et al, on May 26, 1965, but also the 1964 equity proceeding of Clarke v. Rogers, of which McGinnis, Dudley and Dixon had been unaware (but of which they most assuredly would have been aware had they caused a run-down to have been made of the title in preparation for final settlement in March of 1965). Whereupon, Dixon contacted Chance on June 15, 1965, and informed him that, in his opinion, the Clarke v. Rogers equity proceeding was a nullity.

Thereafter, Mc-Ginnis and Dudley filed their bill of complaint on July 2, 1965, wherein they requested specific performance of their contract with the Rogerses and asked that the court declare null and void the Clarke v. Rogers equity proceeding and the deeds subsequently executed affecting the property. 2 ⁷²⁰ After our opinion in McGinnis v. Chance, supra, the following efforts of the litigants to improve their positions transpired in the lower court: Chance attempted to have William Dixon brought in as a party in interest, but this was denied by the court. Service was obtained on John J. Rogers, and he filed an answer. Rogers then filed a cross bill of complaint against McGinnis, Dudley, Joseph J. Urciolo, Raphael Urciolo (who had not been named in the original bill of complaint) , Arban, della Badia, and Florence Urciolo. Raphael Urciolo cross-claimed against Chance.

Chance in turn counterclaimed against Rogers and cross-claimed against Raphael Urciolo. Arban, della Badia, and Florence Urciolo cross-claimed against Rogers, Chance, and Joseph J. Urciolo, requesting a rescission of their deed and purchase money mortgage and the return of their $24,000 down payment. Rogers also counterclaimed against McGinnis and Dudley for failure to act with due diligence to clear the title to his property in keeping with their contractual obligations. As already noted, Chance and Rogers compromised and dismissed their claims against each other by an agreement dated August 7,1969, and Chance agreed to assign his interests in the purchase money mortgage to Rogers.

Also, a decree pro confesso was entered in the claim of Rogers against Raphael and Joseph Urciolo. It should also be noted that upon remand before Judge Childs it became known that none of the payments of principal or interest called for under the purchase money mortgage from Arban et al, had been made during the six years that they had held title to the property. The chancellor properly held the mortgage to be in default. It was further demonstrated that Rogers had never received one penny of the proceeds from the sale of his property.

After a plenary hearing on this matter, in ⁷²¹ which the chancellor had the customary opportunity to view and assess the demeanor and credibility of witnesses during three days of testimony, and on the facts as we have outlined them, the court entered a decree in which it dismissed McGinnis’ and Dudley’s bill of complaint requesting specific performance of their contract for the purchase of the property from the Rogerses; upheld the validity of the deed executed by Mr. and Mrs. Rogers and Helen Clarke to Chance and Joseph Urciolo dated March 24, 1965; affirmed the validity of the deed of May 26, I960, from Chance and Joseph Urciolo to Arban et al; sustained the validity of the purchase money mortgage dated May 26, 1965, from Arban et al, to Chance and Joseph Urciolo and further decreed: “II. [Covered above.] “D. That the full principal and interest indebtedness set forth in the aforesaid mortgage are due and payable as prescribed in the mortgage without offset for any reason, except payment to Thomas Chance for J. Urciolo. “E. That pursuant to the agreement of August 7, 1969, between John Rogers and Thomas Chance filed in these proceedings, Thomas Chance forthwith execute an assignment of the mortgage described in paragraph C above to John J. Rogers. “F. That Joseph Urciolo forthwith execute an assignment of the mortgage described in paragraph C above to John J. Rogers and deliver the mortgage and assignment to counsel for Rogers. “G. That Joseph Urciolo forthwith pay over to John Rogers’ counsel, for John Rogers’ benefit, any and all sums received on account of principal or interest paid on the mortgage indebtedness, together with a com ⁷²² píete account on oath of said Urciolo as to the dates upon which the various sums, if any, were paid against the principal and/or interest called for under the terms of said mortgage. “H. That Raphael Urciolo and Joseph Urciolo account and forthwith pay over to John Rogers’ counsel, for John Rogers’ benefit, the sum of $16,151.62 together with interest from June 12,1965. “I. That the option contract of April 4, 1963 and the contract of sale of September 23, 1963, both between John J. Rogers, et ux and Arthur J. McGinnis, the later contract recorded among the Land Records of Anne Arundel County in Liber LNP 1847, folio 228, be and the same are hereby declared null and void. “III. That the counterclaim of Thomas E. Chance against John J. Rogers be and the same is hereby dismissed with prejudice. “IV. That the cross-claim of Thomas E. Chance against Raphael G. Urciolo, et al, be and the same is hereby dismissed with prejudice. “V. That the cross-claim of Raphael Urciolo against Thomas E. Chance be and the same is hereby dismissed with prejudice. “VI. That the counterclaim of Raphael Urciolo against Dudley and McGinnis be and the same is hereby dismissed with prejudice. “VII.

That the cross-claim of Arban, della Badia, and Florence E. Urciolo be and the same is hereby dismissed with prejudice. [These parties did not appeal.] “VIII. That the counterclaim of Rogers against McGinnis and Dudley be and the same is hereby dismissed with prejudice. [Rogers did not take a cross-appeal.] ⁷²³ “IX. That costs of the proceedings be divided among plaintiffs, Arban, della Badia, F. Urciolo, J. Urciolo and R. Urciolo.” McGinnis and Dudley appealed from those portions of the decree which dismissed their bill of complaint for specific performance and upheld the validity of the Clarke and Rogerses’ deed to Chance and Joseph Urciolo (March 24, 1965), the deed of Chance and Joseph Urciolo to Arban et al (May 26, 1965) and the purchase money mortgage. Raphael Urciolo filed an appeal from paragraphs V and VI of the decree only, being respectively a dismissal of his cross-claim against Chance and the dismissal of his counterclaim against Dudley and McGinnis.

No appeal was filed by him with respect to the decree in personam against him, apparently on the premise that the court did not have jurisdiction over him to render such a decree. Joseph Urciolo also contested jurisdiction of the court on the premise that he had never been served with a copy of the original bill of complaint. The court eventually decided that it had jurisdiction over Raphael Urciolo and leave was granted to Rogers to effect proper re-service of his cross bill on Joseph, which was accomplished. Although Joseph Urciolo appealed, he did not file a brief.

The final chapter in this case begat a new cause of action, Equity No. 19, 637 in the Circuit Court for Anne Arundel County, which was a mortgage foreclosure proceeding brought by John J. Rogers, assignee, against Arban, della Badia and Florence E. Urciolo, appearing as mortgagors in the mortgage covering the subject property and which proceeding sired a companion appeal to the case at bar. Arban v. Rogers, 262 Md. 738 , 279 A. 2d 457 (1971). We mention that litigation at this juncture because its affirmance or reversal could have an effect on the type of relief decreed in the instant case. Certainly its affirmance would render specific performance of the McGinnis contract impossible and would ⁷²⁴ only allow them an alternate relief by way of damages, were we in this case to find that the lower court erred and that they were entitled to relief.

Since we have previously stated that we affirm the decree of the lower court in all respects, we see no need for further reference at this time to the mortgage foreclosure sale. 3 Fortunately, the law applicable to this case is not as complicated as the facts. When this matter was first heard by Judge Sachse in the court below it was on a motion by Chance for summary judgment and the court made its determination on the basis of the pleadings, depositions and affidavits. On appeal, we expressed the opinion that material facts were in dispute which placed the matter beyond the pale of summary judgment. We pronounced concern over the question of whether the Clarke v. Rogers equity suit (No. 16,484 Equity in the Circuit Court for Anne Arundel County) was a true adversary proceeding, particularly regarding the complicity, if any, of Mr. John Rogers, who had not been served as a party in the original action.

We viewed the facts as permitting the inference that Chance and Urciolo might have acted in concert to frustrate the purpose of the contract between McGinnis and the Rogerses. Further, the evidence was subject to the interpretation, without explanation, that Raphael Urciolo might have misled Dixon into thinking he was going to receive an extension of the March 23, 1965, settlement date. The victimization of the Rogerses was not at all apparent. As Judge Childs stated, after hearing the testimony of the brothers Urciolo, he could “fully understand the malaise that the Court of Appeals had upon reviewing the record.” After remand, the record now presents us with a plethora of facts which ⁷²⁵ stills any misgivings we may have harbored regarding the chancellor’s refusal in the first proceeding to grant specific performance of the McGinnis-Rogers contract.

We shall discuss the rights of the parties in the order in which they were affected by the chancellor’s decree. I DISMISSAL OF THE BILL OF MCGINNIS AND DUDLEY FOR SPECIFIC PERFORMANCE The record on remand has strengthened the original finding of Judge Sachse, as has been pointed out with clarity by Judge Childs, that McGinnis and Dudley slept on their rights. The contract of September 23, 1963, expressly states, “Buyer will immediately proceed with due diligence to clear title to said property but in no event will the time of this contract exceed eighteen months.” We find an appropriate analogy in the case of Development Sales Company v. McWilliams, 254 Md. 673 , 255 A. 2d 1 (1969), in which there was a contract for the purchase of land calling for zoning to be obtained by the purchaser within eighteen (18) months, with extension at the consent of the owners, should it prove necessary. Otherwise, the contract was to terminate.

In that case, although the purchasers diligently