Scheffres v. Columbia Realty Co.

Barnes, J., delivered the opinion of the Court. ²⁷⁴ The appeal in this case is from a final decree entered on August 25, 1965 by the Circuit Court for Prince George’s County (Powers, J.) dismissing, with prejudice, the bill of complaint filed on June 9, 1965, by Jerome Scheffres, the appellant and contract purchaser of approximately 24 acres of land known as Columbia Park fronting on Hill Road and adjoining Highland Gardens and also the Highland Park School in Prince George’s County. The written contract was dated April 18, 1962, and was with the owner of the property, Columbia Realty Co., Inc. (Columbia or the seller), the seller and appellee in this Court. The written contract of sale is upon one of the printed forms in current use in Prince George’s County. The front of the written contract contains the printed material with appropriate spaces to be inserted; the description of the property, the conditions applicable to the sale and other provisions are typed in on the back of the printed form.

The purchaser and the seller signed the contract both on the front and on the back of the printed form. The contract of sale recited the receipt of a down-payment of $5000 by the check of the purchaser for that amount, to be applied as a part payment on “approximately twenty-four (24) acres [of land] known as Columbia Park fronting on Hill Road and adjoining Highland Gardens and also Highland Park School.” There is a reference to a deed recorded among the Land Records of Prince George’s County in Liber 766 folio 391 excepting five acres conveyed in Liber 1435 folio 128. The contract also provided that the computation of the area in order to determine the total price is to be made at the purchaser’s expense by a registered engineer in the State of Maryland. The purchase price was stated to be $3500 per acre and the purchaser agreed to pay 29 per cent of the total price and no more during the first twelve months.

The 29 per cent was to be paid in cash at the date of conveyance, and the $5000 deposit was to be a part of this payment. 1 The purchaser was to “give a first ²⁷⁵ deed of trust secured upon the premises of the balance then due,” the balance to be due in five years and to bear interest at 6 per cent per annum, payable in equal annual installments with interest payable semi-annually. There were also the usual form provisions in regard to freedom from encumbrances, adjustments and examination of title. Settlement was to be made at the office of the District Title Company. The contract of sale provided for a real estate broker’s commission of 10 per cent of the sales price to be divided among three brokers in proportions of 40, 30 and 30 per cent.

The entire deposit was to be held by the District Title Company until the time of settlement. On the back of the printed form, in addition to the description of the property sold, appeared the following: “Con tingencies This contract is contingeunt upon 1st., having the property rezoned to R-35 permitting the construction of semi-detached houses and 2nd., obtaining the approval of the Board of Education to trade certain acreage now owned by it for a like amount as shown on the plat prepared by Greenhorn and O’Mara dated March 1962 and which plat is made a part of this contract. “Settlement Settlement is to be made within sixty days after the above two contingencies have been met. “Releases Release of ground and/or lots is to be based on payments of $4,500.00 per acre at time of settlement or subsequent payments on the note secured by the Deed of Trust. “Dedication The sellers and/or Trustees agree to dedicate any and all streets rights of way etc., which may be necessary for the recording of a subdivision plat. ²⁷⁶ Purchaser agrees to make application for the change in zoning and the approval of the land trade with the Board of Education within thirty days of the acceptance of this contract by the Seller.” It is important to observe that the contract of sale does not provide that time is of the essence of the contract and does not provide any specific date for settlement (which was to be 60 days after the two contingencies were met) or for the conclusion of the two contingencies already set forth in full. The plat referred to under “Contingencies” and attached as a part of the contract of sale shows the proposed trade of 3.8813 acres between the owners of the property sold and the Board of Education of Prince George’s County (the Board). This plat shows that the Board owns a long rectangular parcel of land 1089 feet long with a width of 209.31 feet which lies almost directly northeast from the existing school building on the southwest side of the rectangular parcel.

This long rectangular parcel obviously makes it quite difficult for the owner of the surrounding property (the 24 acre tract) to have a desirable lay-out for development. The trade was to give the Board for the identical acreage contained in the long rectangular parcel, a slightly rectangular tract which projected into the 24 acre tract roughly approximately 550 feet with a median depth of approximately 350 feet. The trade would give both the seller and purchaser a more useful tract and at the same time would give the Board a much more reasonably shaped parcel for the Board’s uses. Both the purchaser and the seller submitted a zoning application for the rezoning to R-35 (residential, semi-detached dwellings) within the 30 day period after the contract of sale was executed.

Application for approval of the trade with the Board was submitted on behalf of the purchaser on May 18, 1962, and thereafter a number of discussions with the Board were had in regard to the proposed trade of land. The first proposal for the even exchange of 3.8813 acres was not acceptable to the Board at its June 1962 meeting. In addition to the 3.8813 acres to be conveyed to the Board under the original proposal, the Board wanted (1) a lot (Lot No. 1) 70 ²⁷⁷ feet wide and fronting on 69th Avenue with a depth of 120 feet, adjoining the property owned by the Board to the southwest and immediately northeast of the existing school building; (2) an entrance way, 50 feet wide and approximately 115 feet deep running from the northeast boundary of the 3.8813 acre parcel to be conveyed to the Board under the original proposal to a proposed street projected on the plat of March 1962, entitled “Study Plan, Blocks A, B, C, D & E Columbia Park.” The lot immediately adjoining the existing school building was desired by the Board to protect that building, and the right-of-way was desired in order to give access to the children using the school to the streets lying to the northeast of the 3.8813 acre parcel to be conveyed to the Board; and (3) that the seller would bear the cost of all street improvements relating to the lot and the right-of-way. At the direction of Otway B. Zantzinger, president of the seller, and of John Devereaux, its real estate agent who had discussed the matter with the Board, counsel for the purchaser prepared a written agreement containing this second proposal for the signatures of the Board and of the seller in August, 1962.

This agreement included a provision by which the purchaser also agreed to the arrangement and assumed the payment of the street assessments after the residue of the tract was conveyed to him. Mr. Zantzinger signed this proposed agreement on behalf of Columbia, the seller, as its president. The proposed agreement, however, was never completed because the Board wished other changes in the proposal of August, 1962. The new proposal, embodied in another proposed written agreement, also prepared by counsel for the purchaser, at the direction of the real estate agent for the seller, Mr. Devereaux, and dated March 18, 1963, expanded the frontage of Lot No. 1 from 70 feet to 74 feet and in lieu of the 50 foot right-of-way, provided for the conveyance to the Board of a second lot with a 60 foot frontage on 69th Avenue (with the same depth of 120 feet) immediately adjoining Lot No. 1 on the northeast.

The cost of street improvements for Lots Nos. 1 and 2 was to be borne by the seller. There was an identical provision for the agreement of the purchaser and for the payment of the street assessments by him, as was contained in the proposed agree ²⁷⁸ ment of August, 1962. This second proposed agreement was also signed by Mr. Zantzinger on behalf of the seller, but again the Board wished an additional change. The additional change was that in addition to Lots Nos. 1 and 2, the Board should be conveyed an entrance eight feet wide and approximately 115 feet deep to give access by foot, to the children using the school, from the northeast boundary of the 3.8813 acre tract to be conveyed to the Board to the proposed streets appearing on the “Study Plan” plat already mentioned.

The cost of the street improvements for Lots Nos. 1 and 2 and the eight foot right-of-way were to be borne by the seller. This proposal was embodied in a proposed written agreement dated 1963, with the day and month blank in the body of the proposed agreement, but it bears the date of April 20, 1963, after the signature of the purchaser. This third proposed written agreement was also prepared by counsel for the purchaser at the direction of the seller’s real estate agent, contained the same form for the agreement of the purchaser and for the payment of the street assessments as the forms in the proposed agreements of August, 1962 and of March 18, 1963. Mr. Devereaux, the seller’s real estate agent, testified that the Board had indicated that this was the final agreement.

Mr. Zantzinger, declined to sign this last proposed agreement on behalf of Columbia, the seller. As indicated, the agreement had been signed by Mr. Scheffres, the purchaser, at the end of the form for agreement and payment of the street assessments. Mr. Zantzinger stated in his testimony that he did not sign it because he “wanted Mr. Devereaux to get Mr. Scheffres to sign it first.” Subsequent to the signing of the proposed agreement of March 18, 1963, by Columbia, the seller, counsel for the seller, by a letter dated April 8, 1963 to counsel for the purchaser, after reciting the execution of the contract of sale, some of its basic terms and the deposit of $5000, notified the purchaser as follows: “Since the original contract several amendments have been suggested. On March 18, 1963, Mr. Zantzinger signed for his Company an agreement which ²⁷⁹ has to become effective when approved by the Board of Education and Mr. Scheffres.

Mr. John Devereaux, who had given Mr. Zantzinger the agreement, later stated that the agreement had not been so approved, therefore it is not in effect. More recently, another form of agreement was presented to Mr. Zantzinger calling for transfer of additional property to the Board of Education. “Mr. Zantzinger, for the Columbia Realty Company, is willing to treat with the Board of Education in regard to transfer of acreage, but does feel that the many suggested changes, with varying amounts of property involved, have obscured the situation so that it is difficult to understand just what is the present intention of the other parties involved. “I am writing this letter to state that Mr. Zantzinger is willing to go ahead with the original contract of April 18, 1962, but feels that unless settlement of that contract can be made within 15 days, that the contract should be declared no longer effective, and I was directed to write this letter to that effect.” Mr. Zantzinger testified that he had been advised that the purchaser had threatened to kick Mr. Devereaux out of his office and had declined to sign the last proposed agreement as a result of which Mr. Zantzinger thought the purchaser was not going to go through with the deal. He talked with his counsel about it and suggested the writing of a letter. Mr. Devereaux not only did not testify to any such episode in Mr. Scheffres’ office but testified to the following: “Q. Now, didn’t there come a time when you were in Mr. Zantzinger’s office and told him Mr. Scheffres wanted to cancel the contract ?

A. Absolutely not. “Q. Do you recall the time you went to Mr. Zantzinger’s office and made a statement which could be so interpreted? A. I never. That never entered my mind, because they were after me to get the settlement over with, get the agreement with the School Board, get the rezoning. There was never any question of can ²⁸⁰ celling the contract.

I am sorry if Mr. Zantzinger misinterpreted anything I said, but that is the truth.” The joint application of the seller and the purchaser for the R-3S rezoning was granted on January 9, 1964, by the County Commissioners of Prince George’s County and counsel for the seller was notified of the fact by counsel for the purchaser by a letter dated January 10, 1964. The letter of January 10 also provided: “As you are also aware, the Board of Education has also been agreeable to making a transfer of the portion of the property owned by them for a portion owned by your client in conformity with the sales contract, but your client’s unwillingness to execute the deed has held up the actual transfer. Nevertheless, the President of the Board of Education has assured us that the transfer will be made with the new property owner at any time. “Therefore, our client, Jerome Scheffres, is prepared to settle for the property under the terms and conditions of the sales contract between the parties dated April 24, 1962. I would like to arrange a mutually agreeable time for settlement with you at the District Title Company which is the place specified under the terms of the sales contract.

Our client would like to make this settlement prior to the end of this month and I would appreciate your calling me to let me know