Suburban Garden Farm Homes Corp. v. Adams

²¹⁵ Sloan, J., delivered the opinion of the Court. On the 16th day of July, 1934, the plaintiffs, George Adams and Mary E. Adams, his wife, agreed in writing to sell to the Suburban Garden Farm Homes Corporation, one of the defendants, which agreed to buy, a tract of land known as the “Moore” tract, containing about 1,175 acres, situate at Waldorf, in Charles County, and a tract adjoining, known as the “Martin and Knapp” tract, containing about 235.5 acres, the two containing about 1,410.5 acres. They also agreed to sell the lots “now owned by parties of the first part, fronting on the Northeasterly line of State Boulevard, and extending back to the Popes Creek Branch of the Pennsylvania Railroad, located Northeasterly from White Plains Station, containing one thousand four hundred and seventy-five (1,475) acres, more or less, for the price of Nine Thousand Five Hundred Dollars ($9,500).” The total acreage conveyed is not 1,410.5 plus 1,475 acres, but is not more than 1,475 acres. The lots are platted on the two tracts mentioned, and to some extent, not clearly shown, cover other land, but whether owned by the plaintiffs and covered by the agreement does not clearly appear.

The terms of payment were $50 on the signing of the agreement, three payments of $50 each in one, two, and three months, $3,000 within four months of the signing of the agreement, and a mortgage for $6,300, payable with interest in three equal installments in one, two, and three years. The agreement contained three provisions, all of which are important in the decision of this case, as follows: “It is agreed that the parties of the first part shall furnish an abstract within thirty days, showing good and marketable title. “It is further agreed that title shall be such as will be insured by any reputable title insurance company. “The property shall be conveyed clear of all liens, encumbrances and easements except taxes for the year nineteen hundred and thirty-four, which shall be apportioned to date of settlement.” ²¹⁶ The agreement, which was filed as an exhibit to the bill, was signed by all parties to it, and acknowledged by the plaintiffs. The plaintiffs, on September 18th, 1935, filed their bill of complaint against the appellants, wherein they alleged that they had, on July 16th, 1934, contracted with the corporate defendant to sell to it 1,475 acres of land, more or less, and that 'the contract evidencing the sale had been recorded among the Land Records of Charles County; that the plaintiffs had acquired title to the land so agreed to be sold from Joseph A. Wilmer, treasurer of Charles County, at a tax sale; that the corporate defendant had made five payments of $50 each on account of the purchase money (an error, as all agreed that four, as provided by the contract, had been made); that shortly after the execution of the contract the corporate defendant had referred the matter of the examination of the title to the Maryland Title Guarantee Company of Baltimore, which all parties agree is a “reputable Title Insurance Company,” and on September 13th, 1934, and on October 17th, 1934, the title company reported to the plaintiffs, indicating “that the outstanding record title was in the Washington Gardens, Inc., subject to the rights which the plaintiffs acquired by the above referred to deed, and subject furthermore, to a certain deed of trust from .the Washington Gardens, Inc., to Millard T. Grinder and Taylor E. Eicher, Trustees,” as to a part of the land containing 235 acres, and to a deed of trust to George J. Moss and F. P. Williams, as to another part of the land; that the plaintiffs 'have secured a deed from Washington Gardens, Inc., and the release of the deeds of trust mentioned in the title company’s report; that on April 18th, 1935, the title company advised the corporate defendant, through its attorney, Edward J. Dougherty, that it had been “furnished with all papers necessary to clear the title to the” properties, and “are now in a position to issue” its “policy free of any exceptions as to mortgages or liens, * * * and the only exceptions to be contained in our policy of insurance are mentioned ²¹⁷ in the second page of each report, which exceptions are matters of record, and it is impossible to do anything about them, * * * that the said exceptions mentioned in the report of the Title Company are wholly irrevelant to the title to said property, and do not affect the same in anywise, and the said corporate defendant was so advised, and said corporate defendant was further advised that the plaintiffs were in a position and ready and willing to deliver a deed to it conveying the said title free and clear of all liens and encumbrances of record,” but that it refuses and persists in its refusal to take title to the property and to comply with the terms of sale; that by agreement, dated April 26th, 1935, recorded among the Land Records of Charles County, the Suburban Garden Farm Homes Corporation contracted with its president, Edward J. Dougherty, also a defendant, to convey to him 235.5 acres of the land agreed to be conveyed to it by the plaintiffs; that both of the contracts mentioned and so recorded are clouds on the title of the plaintiffs, but the defendants, though requested by the plaintiffs to take title or comply with the terms of sale, have refused to do either. The bill then prays that the contracts be rescinded and canceled, and the title be quieted as against any claim of the defendants.

The defendants answered that they have been at all times, since the execution of the agreement, ready, willing, and able to comply with its terms but deny that the plaintiffs can deliver a good and marketable title, in its present condition, free of all liens, encumbrances, and easements, and charge that since April 29th, 1935, the plaintiffs have made no further efforts or attempts to remove or clear the various objections or easements against which the title company, in its reports, declined to insure. Some evidence was taken, after which the chancellor decreed that the agreement of July 16th, 1934, and the agreement of the corporate defendant with Edward J. Dougherty, be forfeited and rescinded, and the title of ²¹⁸ the plaintiffs be quieted as to both agreements, and the defendants appeal. It is not questioned that, if the plaintiffs are prepared to convey a good, marketable title, free and clear of liens and encumbrances, and not subject to easements which may affect its marketability or insurability as prescribed by the contract, and the defendants refuse to accept the deed, then the plaintiffs are entitled to a rescission of the contract, which would remove the cloud on the title. Whiteford v. Yellott, 104 Md. 191 , 64 A. 936 ; Homewood Realty Corporation v. Safe Deposit & Trust Co., 160 Md. 457, 471 , 154 A. 58 ; Southern Real Estate Co. v. Strub, 128 Md. 513 , 97 A. 705 .

A like result might, though not necessarily, follow from a bill for specific performance. Newman v. Johnson, 108 Md. 367 , 70 A. 116 . “The granting of relief (however) by either remedy is not a matter of absolute right, but is largely within the sound discretion of the court, and no relief will be afforded in any case unless under all the attendant circumstances the exercise of jurisdiction would be just'and equitable.” 9 C. J. 1196. As stated in one of the cases there cited (Kirby v. Harrison, 2 Ohio St. 326 , 333): “It is undoubtedly within the sound discretion of the chancellor to refuse to rescind a contract, the specific execution of which he would not decree; and thus leave the parties to their legal remedies. * * * But, in general, where a specific execution would be refused, a rescission will be decreed. And where the party in default ‘has trifled, or shown a backwardness on hi's part,’ and his default is gross, and the circumstances and value of the property have materially changed, a recission ought to be decreed.” Compare Diamond v. Shriver, 114 Md. 643 , 80 A. 217 .

It is noticeable, however, that in this case both parties have cited as authorities cases in which decrees for specific performance have been prayed. There is one rule stated in O’Brien v. Pentz, 48 Md. 562 , often cited and quoted in this court, equally applicable to bills for recission or specific performance, and that is: “The party seeking ²¹⁹ its execution must, at the same time, be able to show that he has fully, not partially, performed every thing to be done on his part.” Raith v. Cohen, 142 Md. 38, 50 , 119 A. 700 ; De Crette v. Bonaparte, 139 Md. 252, 262 , 114 A. 880 ; Bamberger v. Johnson, 86 Md. 38, 41 , 37 A. 900 . The defendants in their answer say they are willing and desirous of taking the title agreed to be conveyed to them but that they should not be required so to do unless and until the plaintiffs either have the easements reported by the title company removed and released, or it be shown that they are not so material as to cast on it a reasonable doubt, and so affect the marketability of the property. It is incumbent on the plaintiffs to produce evidence, as they agreed, that there are no such easements, and that, if there are, they are beneficial to the estate or not injurious.

If the objections of the defendants are unfounded, captious and not made in good faith, then the contract should be rescinded and the cloud! removed from the plaintiffs’ title. There are objections to insurability raised by the title company which might be material, but there is so little evidence with respect to several of the alleged easements that this court is of the opinion that it cannot pass judgment on them. With the apparent willingness of the defendants to accept' the plaintiffs’ title, if found to be free and clear of liens and encumbrances, and not subject to easements or other defects which might cast a reasonable doubt on the title, the contract should not be summarily rescinded. They are buying to sell, and they cannot sell unless the title is merchantable.

If and when it may be found that the easements and conveyances by prior owners do not materially affect the title, then, because of the attitude of the defendants, the decree should be for rescission or specific performance, unless the defendants by a day certain comply with the terms of sale. To attain this end, however, it will be necessary for the plaintiffs to so amend their bill as to be bound by a decree to convey; in effect to amend it into a bill for specific performance. This sug ²²⁰ gestión is made as the proof already taken would be available under an