Stirn v. Segall

Marbury, J., delivered the opinion of the Court. On September 6, 1966, Ephraim S. Segall and Rose F. Segall, his wife, appellees-purchasers, filed suit in the Circuit Court for Howard County against the appellant-seller, William F. Stirn. The bill of complaint sought specific performance of a contract for the sale of real estate, an injunction, monetary damages and further relief. A hearing was held in the lower court on June 19, 1967, before Chief Judge James Macgill.

On July 31, 1967, the chancellor filed a written opinion in which he stated that he would deny specific performance of the contract but would award the appellees a decree for $3,000.00 by way of the deposit paid by them under the contract, with interest. On August 29, 1967, by an amended decree Judge Mac-gill ordered that the interest on the $3,000.00 was to be paid from April 22, 1966, the date of the contract, to the date of payment. On appeal, the appellant urges that the lower court erred in finding that the appellees were entitled to a return of the deposit and in providing that interest should be paid from April 22, 1966. ²⁴² The seller entered into a written contract with the purchasers on April 22, 1966, for the sale of a portion of his property located in Howard County for the purchase price of $26,600.00, of which amount the appellees paid the sum of $3,000.00 as a deposit to be applied toward the purchase price. The contract provided that the balance of $23,600.00 was to be paid as follows: $1,200.00 on or before May 1, 1967, $1,200.00 on or before May 1, 1968, $1,200.00 on or before May 1, 1969, and $20,000.00 to be paid on or before May 1, 1970.

It further stated that upon payment of the unpaid purchase money, the seller would execute a deed to the purchasers, and that time was of the essence. Settlement was to take place within ninety days. There was no provision in the agreement for a mortgage, or other security to be given to secure these deferred payments. The contract had been drawn up by Wist Realty, Inc., which was the real estate agent of the seller.

A little over a month after the date of the contract, Mr. Stirn consulted an attorney, Mr. Alexander W. Spedden, Jr., who, on May 24, 1966, wrote a letter to Mr. and Mrs. Segall, the pertinent parts of which are as follows: “Dear Sir and Madam : “Mr. William F. Stirn has consulted me concerning a paper dated April 22, 1966, relating to the sale to you of a tract of land owned by him. “It appears that you want to secure from Mr. Stirn a deed of his property, mentioned in the paper on a payment of $3000.00 cash; then Mr. Stirn is to trust you for the balance of the purchase price, $20,000 of which is not to be paid for four years. No provision is set forth in the document for any security to be given to Mr. Stirn for the unpaid purchase price and nothing therein is provided for the payment by you of interest on the unpaid purchase money. Never in my experience as a lawyer going back many years, have I ever seen anything like this so-called contract; it is outrageous. “This matter has been taken up by me with Wist Realty, Inc. and the company has secured counsel to represent it; I would suggest that you also consult ²⁴³ counsel about this matter, as Mr. Stirn is not going to give up the title to his property set forth in the so-called contract unless he is paid therefor in cash, or unless he is given a first mortgage on the property containing satisfactory provisions for proper and reasonable dates for any deferred payments agreed upon, with interest thereon. “I trust you understand the seriousness of this matter.” The Segalls did not reply to this letter, but turned it over to their counsel, Mr. Bernard F. Goldberg. The record does not establish that there was a reply in any manner and Mr. Segall testified that after the contract had been signed he had no further conversations with Mr. Stirn at all.

On July 22, 1966, Mr. Goldberg wrote a letter to Mr. Stirn advising him that the purchasers were ready, willing and able to settle and that settlement on the property had been set for 3:00 p.m. that day. He further stated that efforts to reach Mr. Spedden had been unsuccessful and that if the time set was inconvenient it would be changed. Mr. Raymond W. Griffith testified that he had attempted to deliver the letter to Mr. Stirn, who refused to accept it. On appeal the seller contends that (1) the purchasers failed to perform the duty imposed upon them to cooperate with him in the manner of providing some security for the deferred installments and because of this failure, he is entitled to retain the deposit as liquidated damages; (2) since the contract provided that time was of the essence the appellees’ default prevents a refund of the deposit; (3) the pleadings of the appellee mention nothing about the recovery of the deposit; and (4) the imposition of interest retroactive to the