Sommers v. Wilson Building & Loan Ass'n

Digges, J., delivered the opinion of the Court. After the Superior Court of Baltimore City (Dorf, J.) sustained without leave to amend a demurrer to the declaration which was filed by the plaintiffs-appellants, Milton and Ethel Sommers, they appealed. The only question before us is whether this ruling was correct. In substance, the declaration alleges that the defendant-appellee, Wilson Building and Loan Association, and its secretary, Harry Altschull, also a defendantappellee, “undertook and had the duty of seeing to it that insurance was carried on each property mortgaged to Wilson, [renew] the policies of fire insurance upon their expiration, and if unable to renew the same, [notify] the mortgagors so that they could obtain their own insurance.” The declaration further avers that in December of 1965 the appellants, as members of the building association, applied for and received from that financial institution a $6,800 loan which was secured by a mortgage on two pieces of Baltimore City property owned by Mr. and Mrs. Sommers, one located at 4750 Park Heights Avenue and the other at 1825 W. Pratt Street; that, according to the terms of the mortgage, appellants, each week, were obligated to pay the sum of $5.00 to the building association, part of which was to be applied by it, when due, to the payment of the fire insurance policy premium; that, though the appellees initially obtained a policy which insured the Park Heights Avenue property against damage by fire to the extent of $8,000, and though appellants paid to the building association all moneys they were obligated to remit under the terms of the mortgage agreement (including the necessary funds to cover, when due, the insurance renewal premium) appellees failed to pay over the renewal premium to the insurance company and thereby allowed that fire insurance policy to lapse on December 17, 1968; that the appellees “negligently failed to renew the policy of insurance, or to notify the [appellants] ³⁹⁹ said policy had terminated”; and that “unaware of the non-existence of fire insurance, and in the belief . . . that the [appellees] had arranged for insurance”, appellants continued to make the payments required by the terms of the mortgage until they learned that there was no longer insurance coverage for their Park Heights Avenue house after that property had suffered fire damage in excess of $8,000 on November 24, 1972.

By the ad damnum clause the appellants claimed $8,000 and interest from December 24, 1972. The building association and its secretary initially responded to this declaration with a request that the appellants file in the case a copy of the mortgage instrument (Maryland Rule 326). In addition, by that pleading the appellees demanded that Mr. and Mrs. Sommers furnish particulars pursuant to Rule 346 as to the date, terms and provisions of all written instruments whereby the appellees “undertook or had the duty to keep the [appellants’] property . . . insured against loss by fire,” as well as “the date, terms and provisions of all written agreements or contracts, memorandum or otherwise, . . . whereby the [appellees], or either of them, undertook or had the duty (1) to see that fire insurance was carried ... or (2) to renew the policy . . . upon its expiration, or (3) if unable to renew, to [so] notify the [appellants] . . . .” (emphasis added). Mr. and Mrs. Sommers replied to these requests by filing only a copy of the written mortgage instrument.

Appellees, without taking exception to this response, filed a joint and several demurrer “to the entire declaration, and to each and every paragraph thereof, as particularized . . . .” The assigned reasons for the demurrer stated that the declaration was bad in substance and insufficient in law; that it failed to show a written agreement between the parties to this case requiring the appellees to keep the property insured against loss by fire; that the pleadings failed to show any “written agreement or contract, memorandum or otherwise, between the [parties], whereby the [appellees], or either of them, undertook ... to see that fire insurance was carried” on the property, or to renew the ⁴⁰⁰ policy upon its expiration; and further because under the provisions of the mortgage the appellants “agreed and covenanted ... ‘to keep the improvements on the said ground fully insured from loss by fire, for the use of the mortgagee in some company acceptable to the said mortgagee, to the extent of its lien thereon ....’” Following a hearing, Judge Dorf held his ruling under advisement until August 12, 1973, when he signed an order sustaining without leave to amend the demurrer filed by each appellee. In a memorandum which accompanied his order, the trial judge stated that he made this ruling because “by the expressed terms and provisions of the said mortgage, which constitutes the contract between the parties, the plaintiffs had the obligation and responsibility to keep the mortgaged property insured against fire. The court further finds that in this case parol evidence is inadmissible to vary or contradict the terms of said written mortgage.” We conclude that the