Moreland v. Meade

Pattison, J., delivered the opinion of the Court. On the 16th day of December, 1929, Joseph E. Moreland and Mamie M. Moreland, his wife, as tenants by the entireties', owned a suburban development, known as Biltmore Earms, in Baltimore County, which was laid off in lots, and through which ran roads and avenues. The development of the property was under the management and direction of the husband, Joseph E. Moreland. At this time, one E. S.Eeal ⁹⁷ was the agent for the owners, in the sale of the lots.

On the date mentioned, he effected a sale of lots Nos. 62, 63, and 64 to one William E. Meade, at and for the sum of $900. Upon the payment of a deposit thereon, the following receipt was given therefor: “Baltimore, Md., Dec. 16, 1929. “Received, from W. E. Meade one 00/100 dollars, the same being deposited on Lots 62-63-64 at Biltmore Farms, the total price being $900. Terms, $1.00 down, §-monthly. The above deposit not to hold the lots after three days, unless so stated in this receipt and countersigned by Joseph F. Moreland, and after that date, all moneys are forfeited.

This receipt, if given on the land, holds lots above, unless previously sold at the office, in which case the deposit will he refunded. No representations or agreements outside of those set forth in this receipt shall be binding. “Per F. S. Neal, Agent.” This contract was not countersigned by Joseph E. More-land in accordance with the terms, and provisions! of the retceipt. On the 3rd day of March, 1930, another contract or agreement relative to1 the sale of said property unto William F. Meade was madey in which one Edward J. Kuehn represented the owner of said land. This contract was as, follows: “Joseph F. Moreland. “5402 Harford Ave., Baltimore, Md. “March 3, 1930. “No. of lots three. “Total amount, $900.00. “No verbal agreements or written alterations recognized. “I hereby agree to subscribe to Building Lots Nos. 62-63-64, Biltmore Farms, Baltimore County, Maryland, for which I agree to pay $300.00 per lot.

Herewith $10.00 and the balance in sums of $10.00 every month hereafter until full amount of $900.00 is paid. It is understood that deed for these lots, sub ⁹⁸ ject to restrictions on the back thereof, shall be issued to me when I have made all payments as agreed above. If there is any default in payments for subscriptions on lots it is agreed that all moneys paid are at the option of Joseph E. Moreland to be retained as liquidated damages and not as penalty. All water and sewerage charges to be assumed by purchaser from date hereof.

All money to bear interest at the rate of 6 per cent, per annum after one year from the above date. “Signature Wm. E. Meade, “Address R. E. D. Towson, “Joseph E. Moreland, “Per Edward J. Kuehn. “Witness and Agent, Edward J. Kuehn,.1” To or upon said contract was attached a memorandum showing the imposition of certain restrictions, hut, for the purpose of this opinion, we need only insert the fourth restriction, which is as follows: “4. The right is reserved to cut the grass until the lots are improved. Written permission must be obtained to construct fences or buildings, or to cut or remove any trees before complete payment has been made.” At the conclusion of the restriction mentioned is found the following provision: “It is further understood and agreed between the principals to this contract that no representations or agreements made by any agent or any other persons except those named in this contract shall be binding upon the parties to this contract.” At the time of the purchase, the property was unimproved.

On the 10th day of February, 1930, the purchaser, William F. Meade, started to improve the same by the erection of a garage and bungalow thereon. Before doing so1, he called at the office of Joseph F. Moreland to obtain from him permission to- make such improvements', as he was required to do under the contract. Meade was told by the agent, Kuehn, ⁹⁹ that Moreland was in Florida.; and he found Kuehn in charge of Moreland’s office and apparently in charge of hisi affairs. Meade explained the purpose or object of his visit to the office, and he was told by Kuehn that “it was all right,” to go ahead with the improvements.

William F. Meade, it seems, was practically without funds or credit, and had only paid $10 upon the purchase money. Although he had no money, he was able to procure the labor of his father, William H. Meade; a. carpenter and the appellee in this ease, in the erection of the buildings thereon. But William F. Meade, without money or credit, was unable to obtain lumber and other1 material with which to- erect the buildings. This; it would seem, was largely due to the fact that the legal title to the land upon which the buildings were to he erected was not in him, but in Moreland and his wife.

Meade; finding himself unable to get lumber under these conditions, went to see Kuehn, Moreland’s agent, and stated to him the difficulties, with which he was confronted in obtaining lumber and material, whereupon Kuehn gave him the following letter: “March 8, 1930. “T'o Whom It May Ooncern: “I have given Mr. W. F. Meade permission to construct. a dwelling on Lots 62, 63 and 64 at Biltmore Farms, provided he has lived up to the restrictions in contract. “Jos. F. Moreland, “Per Edward J. Kuehn.” This letter enabled Meade to get the required lumber with which to erect the buildings, and, with the labor of his father, the appellee; he was able to complete the buildings. When Moreland returned and learned of the improvements being made by W. F. Meade, lie, if not expressly, by implication approved of what had been done through his agent, Kuehn, in his absence; and in addition thereto gave W. F. Meade information and advice as to the financing of the erection of the buildings on the lot purchased from him. ¹⁰⁰ The appellee, who was employed by his son to do' the work upon the buildings, was. not paid for his services. As a result thereof, he filed a mechanic’s lien therefor.

On the 29 th day of December, 1930, the money owing him for his services rendered in the erection of the buildings not having been paid, he filpd a bill against Joseph F. Moreland and Mamie M. Moreland, his wife, for enforcement of the mechanic's lien. After answer filed thereto-, the court heal’d evidence on the issues joined, and on July 20th, 1931, the learned chancellor decreed that, unless the amount of the mechanic’s lien was paid within the time therein mentioned, the property was. to- he sold by a trustee therein named, and the proceeds thereof brought into- court for distribution under its direction. From that decree this appeal was taken. The learned chancellor, Judge OfFutt, filed in this case a written opinion giving clear and forceful reasons for the conclusion reached by him.

These reasons are adopted by this court, and are as follows: “The controlling question in this case is. whether a mechanic’s lien for work and labor on a building on land sold under an unrecorded installment contract of sale shall be preferred to- the lien of the vendor for the unpaid purchase money due him for the property, where there was no contract between such vendor and the vendee, the mechanic’s lienor, or any other person, for the improvement, and where it was not made at his instance or request, and where such vendor did not contract for such work and labor, hut knew of and consented to- the improvement, and where the vendee was in default under the sales contract when the improvement was made. “The two sales contracts, were in my opinion integral parts of a single transaction, the sale of the lots, and I am satisfied from the testimony that the agents Neal and Kuehn were authorized to- execute them. For whatever question there might be as to- that is answered by their subsequent ratification by Moreland, acting for himself and his wife. And, while the contracts are incomplete and inartificial, they are nevertheless quite sufficient to- indicate that the clear inten ¹⁰¹ tion of the parties was that the lots be sold to William E. Me-ade. So that it may he assumed that, as between the parties, after December 3rd, 1929, the vendee, Meade, was the equitable owner of the property, and the vendors held the legal title as security fox the payment of the unpaid purchase price.

Brwvtly’s Digest, Vendor and Purchaser, subtitle ‘Vendor’s Lien.’ “Reverting to the question first stated, Code, art. 63, see. 1, provides: ‘Every building erected and every building repaired, re-built or improved to the extent of one-fourth its value in Baltimore City and in any o-f the counties shall be subject to a lien for the payment of all debts contracted for work done for or about the same, and in the counties every such building shall also he subject to a lien for the payment of all debts contracted for materials furnished for or about the same.’ And section 15 provides: ‘The lien hereby given shall be preferred to all mortgages, judgments, liens and encumbrances which attach upon the said buildings or the grounds covered thereby subsequently to the commencement thereof; and all the mortgages and liens other than liens which have attached thereto' prior to the commencement of the said building and which by the laws of this State are required to be recorded shall be postponed to said lien, unless recorded prior to- the commencement o-f said building.’ “Tbe plaintiff’s contention is that, under those sections, he is entitled to hisi lien because the work described in detail in Ms lien claim was done on the buildings, erected on tbe land described in the claim, under a contract with his son, the vendee, and that it is. immaterial whether the More-lands contracted with the plaintiff therefor, or even whether they contracted with any o-ne else to haves the buildings erected. In other words., ho contends that his son was the owner of the property, that the work was done under a contract with him while he owned it, and that therefore a lien for the work must under section 15 be preferred to any claim wbieb the vendor may have either to- the land or for the purchase money. “It may he assumed that at the time the work on the ¹⁰² buildings was commenced the vendee was nominally the owner of the land on which they were to- be erected (Brewer v. Herbert, 30 Md. 307 ; Hall v. Jones, 21 Md. 439 ; Carr v. Hobbs, 11 Md. 285 ), and that as such owner he could contract for the construction of the: buildings, and that work done under that contract could properly be the subject of a mechanic’s lien claim which would bind at least his interest, whatever it was, in the property. But it does not necessarily follow that it would also bind the interest of the vendors therein, if the: lien claimant knew that the legal title to- the property was in the vendors, and that the vendee had a merely nominal interest therein, and if the vendors had neither contracted for the construction of the buildings nor were privy thereto'. “Section 15, while somewhat obscurely phrased, apparently deals only with the priority to' be given in the event of a conflict between a mechanic^, lien claim and a judgment or incumbrance attaching to' a building subsequent to' the ‘commencement thereof,’ and a mortgage or lien required by law to be recorded but not in fact recorded prior to the commencement of the building. Over any such liens the machanie’s lien is preferred, but the section does not apparently affect the status of liens which have attached prior to the commencement of the building and which are not required by law to be recorded, but the priorities between such lienors and subsequent mechanic’s lienors are left to