Soehnlein v. Pumphrey

Delaplaine, J., delivered the opinion of the court. In a suit for specific performance and accounting, George Carl Soehnlein and wife, complainants, allege (1) that Everett E. Pumphrey, defendant, orally agreed on April 13, 1937, to sell them certain real estate in Prince George’s County for $2,750, to be paid in instalments of $30 per month; (2) that in reliance thereon they took possession of the property and made substantial improvements, having painted the house twice, extended the excavation thereunder, weatherstripped and screened the house, fenced the property, erected a garage and chicken houses, constructed a driveway, and planted shrubs and fruit trees; (3) that they have paid a total of $2,017, out of which defendant has paid taxes and ³³⁶ insurance premiums, but shortly after the agreement was made they informed'him that they were unable to continue the payments, whereupon he replied that “they could ride the waves and he would ride with them,” which was understood as a waiver of periodic payments as long as they would pay as much as they could from time to time; (4) that in May, 1943, they informed him that they wished to pay all arrears, and then for the first time he declared that they weré not buying the property but merely renting it, and offered to sell it to them at a higher price without any allowance for the payments they had made; and (5) that while they do not know how much he has paid for taxes and insurance, they offer to pay into court whatever balance is due on the purchase price. The Chancellor sustained defendant’s demurrer and dismissed the bill of complaint. Complainants are appealing from that decree.

It is an established rule that an oral promise to convey real estate will be specifically enforced, notwithstanding the Statute of Frauds, where there has been a part performance by the donee in reliance on the contract, whereby he will be defrauded unless the promise is performed. Moale v. Buchanan, 11 Gill. & J. 314, 324; Hohman v. Hohman, 164 Md. 594, 616 , 165 A. 812 . Thus, possession. of land by a donee in pursuance of an oral gift and the making of permanent improvements in reliance on the gift constitute sufficient part performance to entitle the donee to specific performance of the gift. Hardesty v. Richardson, 44 Md. 617 , 22 Am.

Rep. 57 ; Loney v. Loney, 86 Md. 652 , 38 A. 1071 . Likewise, continued possession of property in pursuance of a contract of sale together with payment by the purchaser of all or a part of the purchase price constitute part performance sufficient to take the case out of the operation of the Statute of Frauds. Gorsuch v. Kollock, 139 Md. 462 , 115 A. 779 ; Buckner v. Jones, 159 Md. 679 , 152 A. 515 ; Boehm v. Boehm, 182 Md. 254 , 34 A. 2d 447, 452 . The reason that a court of equity exercises the power to compel specific performance of an oral agreement under such circum ³³⁷ stances is that otherwise the vendor would be enabled to perpetrate a fraud upon the vendee and thus a statute designed to prevent fraud would operate as an engine of fraud.

Cole v. Cole, 41 Md. 301, 304 ; Miller, Equity Procedure, Sec. 704; Neale v. Neale, 9 Wall. 1 , 19 L. Ed. 590 ; Walter v. Hoffman, 267 N. Y. 365 , 196 N. E. 291 , 101 A. L. R. 919. To merit a decree of specific performance, a contract for the sale of land must be fair, reasonable, and certain in, all its terms. Coplan v. Buckner, 123 Md. 590 , 91 A. 481 ; King v. Kaiser, 126 Md. 213 , 94 A. 780 ; Bond v. Weller, 141 Md. 8 , 118 A. 142 ; Anshe Sephard Congregation v. Weisblatt, 170 Md. 390 , 185 A. 107 ; Applestein v. Royal Realty Corporation, 180 Md. 274 , 24 A. 2d 684 . Moreover, an oral contract will not be enforced unless the acts of part performance are proved by clear and satisfactory evidence, and refer unequivocally to the particular agreement alleged in the bill.

Semmes v. Worthington, 38 Md. 298, 327 ; Reese v. Reese, 41 Md. 554 ; Hopkins v. Roberts, 54 Md. 312 . It is our opinion (1) that the alleged agreement possesses the elements necessary to entitle complainants to the aid of equity, and (2) that the possession of the property by the purchaser, the payment of 82,017 on the purchase price, and the making of substantial improvements are acts of part performance sufficient to remove the contract from the operation of the Statute of Frauds. Defendant argued that complainants are not entitled to relief in equity because they stopped paying monthly instalments, and his alleged waiver of periodic payments was indefinite and lacked consideration. The rule has been adopted in this State that when time is expressly declared to be of the essence of a contract of sale, a court of equity will ordinarily not grant specific performance where the purchaser has failed to make payment within the time specified by the contract.

Budacz v. Fradkin, 146 Md. 400 , 126 A. 220 ; Parses v. Miller Fruit & Produce Co., 155 Md. 448 , 142 A. 522 . But if a vendor reserves the right to forfeit the contract in the event of default in payments, but subsequently waives forfeiture ³³⁸ for nonpayment at the stipulated time, he cannot suddenly change his mind and insist upon a forfeiture without giving to the vendee a reasonable notice of his intention to that effect. Harris v. Troup, 8 Paige, N. Y., 423. In this case,