Pierson v. Pyles

Marbury, J., delivered the opinion of the Court. The appellants, Milton T. Pierson and Jean Hess Pierson, his wife, entered into a contract for the purchase of lot 30 in block 2 as shown on a plat of an unrecorded subdivision known as Gordon’s Corner, Spaldings District, in Prince George’s County. The record title to the property was in W. Eugene ¹²¹ Pyles at the time the contract was made. He has since died, leaving a will which vested title in Harvey E. Pyles, Sr.., appellee, as trustee.

The contract, dated June 13, 1946, provides, inter alia, as follows: “The total purchase price of the aforesaid property is Fifteen Thousand ($15,000.00) Dollars, of which sum the above deposit of Sixty-five ($65.00) Dollars is to be a part; the purchasers covenant and agree to pay the balance of the purchase price, amounting to Fourteen Thousand Nine Hundred Thirty-five ($14,-935.00) Dollars at the rate of Sixty-five ($65.00) Dollars per month, including interest on the unpaid balance amounting to four per centum (4%) per annum, without the privilege of anticipating said monthly payments, which monthly payments are also to include all taxes and fire insurance which the sellers are hereby authorized and directed to pay from the aforesaid monthly payments of $65.00.” At the inception of the contract in June 1946 adjusted taxes in the amount of $38.78 were added to the principal amount due, and the first payment of $65.00, made July 18, 1946, had deducted from it $49.79 for interest, thus permitting $15.21 to be applied to the reduction of the principal. Assuming that this approximate amount of reduction continued, it would require 333 months, or 27 % years to reduce the principal indebtedness by $5,000. By another clause the parties had provided that when the purchasers shall have paid this amount on account of the principal the seller shall execute a deed for the property and take back a mortgage for the unpaid balance of $9,935, payable on the same terms and conditions. Payments of $65 per month have been regularly paid up to and including the time of the filing of this proceeding, and as of June 16, 1962, the balance due on the contract was $15,222.44, a sum greater than the original purchase price.

The reason for this curious result is that the assessable basis of the property has arisen sharply since 1946, causing an increase in the annual taxes to a point where eventually no money was available for ¹²² amortization of principal. The trustee has refused to permit the acceleration of the contract by permitting the purchasers to pay the purchase price therefor, but is willing to accept from them the annual real estate taxes, as well as the insurance premiums covering the property, over and above the monthly payments. The vendees at the time of the hearing were residing in Ohio, and the premises had been rented for some time prior to this litigation for $100 per month, which amount had been collected by the vendees. In addition, the appellants had signed a contract to sell the property for $17,000 (the catalyst in this proceeding no doubt).

Appellants filed a bill of complaint for declaratory relief, seeking interpretation and construction of the contract. Appellee demurred to the bill, but the court overruled the demurrer, whereupon an answer was filed. The case was heard by Judge Parker upon a stipulation, admission of facts and genuineness of documents entered into. The court found that the contract should reasonably be interpreted and construed to limit the payments to be made thereunder by the appellants, and that they should not have the privilege of requiring the seller or his successors in interest to accept a greater amount in monthly payments.

The decree did, however, provide that the appellants shall have the option to pay the taxes and insurance premiums over and above the monthly payments. The court also construed a provision in the contract regarding payment of $5,000 on the principal amount as a sum to be paid in the ordinary course of amortizing the balance due on the purchase price before the purchasers would be entitled to a deed for the property. From the decree of the lower court the vendees have taken this appeal. They contend that in the light of the events which have occurred since the inception of the contract, the construction placed upon it by the court below impaired the rights and obligations of the parties.

They also argue that the court’s refusal to allow the appellants to pay the sum of $5,000 and get a deed to the property from the appellee amounts to an unreasonable restraint on alienation. It is the trustee’s position that the vendor’s purpose in entering into the contract was to create an income bearing investment, and that to permit the vendees ¹²³ to prepay the purchase price would deprive the estate of its legal rights under the contract. That the appellants have been saddled with a bad bargain is not sufficient cause for a court of equity to redraft the provisions of the contract in order to lighten their burden. Hill Co. v. Pallottine Fathers, 220 Md. 526, 532 , 154 A. 2d 821 , and Vincent v. Palmer, 179 Md. 365 , 19 A. 2d 183 , are just two of our many decisions applying this general principle of law.

It is significant that appellants made no claim of fraud, duress,