Berry v. Foley

Page, J. delivered the opinion of the Court: In May, 1875, the appellee, as trustee under the last will and testament of Emily McTavish, being seized and possessed of certain property, with power to make such changes of investment and reinvestmentment, as should seem to him advantageous and proper, filed a petition in the Circuit Court of Baltimore City, in which it was represented, that in the exercise of his power and his discretion to make changes of investment, he had sold to a certain Henry Blake the lessee of the property, the lot of ground which is the subject of this proceeding, with the annuity or ground rent issuing thereon of $325, per annum for the principal of the rent capitalized at six per cent, that is for the sum of $5,416.67, and that it was a fair price and the best that could be obtained, the lot being then vacant and unimproved. It was further represented, that when the lot was leased to Blake, the petitioner had “ agreed, in writing,” that the lessee- “ should have the privilege of buying out said rent, at any time within three years from the date of said lease,” and that the sale reported to the Court “ was made in pursuance of and in conformity to his said agreement.” The petitioner also set forth that the approval of’the Orphans’ Court of Baltimore City had been given, as appeared by its order, a copy of which was filed with the petition; and thereupon prayed that the Court would confirm the sale thus reported, and direct an execution and delivery of a deed to Blake, “ upon the receipt by the petitioner, of the purchase-money.” *320 After an order nisi, and the usual publication thereof, on June 9, 1875, the Circuit Court passed its order finally ratifying and confirming the sale. On May 19, 1875, twelve days after the passage of the order nisi, Blake agreed to sell, and did sell the property to the appellant Berry; and executed his bond of conveyance that day, wherein the agreement between the parties was stated in substance as follows : The appellant was to give for the property $25,000, of which $10,500, was paid in cash, $5,416.67 was to be paid on the 9th of June, 1875, “ or as soon thereafter as a good deed in fee for the said property was made and delivered by said Blake to said Berry clear of all encumbrances and the residue thereof was payable at different periods thereafter. In consideration thereof Blake was to “ grant, or cause and procure to be granted to the appellant the said premises in fee-simple,” clear of all incumbrances and further that until such deed was delivered or until default was made “ in the payment of the said sum of $5,416.67, the appellant was to be permitted to hold the property, &c.” It may be observed in passing, that this agreement clearly shows, that both of the parties to it, contemplated that the appellant on complying with the obligations imposed upon him, should receive a title clear of the ground rent and of all other incumbrances ; the sum of $5,416.67 therein referred to being the amount that Blake had agreed with Foley should be the purchase price of the ground rent, upon the payment of which he was to be entitled to a deed in fee. The sale by the trustee, at the date of the bond of conveyance, had been reported to the Circuit Court, ratified nisi, and the time for the final ratification would expire on the 9th of June. If it were ratified on that day, as in fact it was, the appellant ran no risk in agreeing to make the payment on that day, or “ as soon thereafter as a deed in fee was made and delivered,” for, in that event, Blake would be in position to enable him to make the conveyance clear of the rent. The object of the parties in deferring the payment of the *321 $5,416.67 until the time of the final ratification of the sale, it is clear, was to put Blake in that position so that the appellant should receive a deed, conveying the property in fee. For some reasons, of which we have not been informed, notwithstanding the sale was finally ratified, neither Blake nor Berry paid the purchase-money to the appellee. The appellant paid, however, all the residue of the purchase-money to Blake that the bond called for. and upon the day of the last payment, that is to say, on September 23, 1876, in fulfillment of the bond of conveyance, Blake conveyed the property to the appellant, subject, however, to the ground rent, this deed particularly states, that Blake has a right “to buy out and extinguish” the rent on the payment of the sum of $5,416.67, and conveys to Berry all Blake’s interest, “ and especially the right to obtain a deed of the property released from the ground rent, &c.” While, however, the appellee has not received this sum from either Blake or Beriy, the appellant has paid and the appellee has received a sum equal to the annual interest thereon, that is to say, $325, in semi-annual installments, from the time of his purchase of the property down to the filing of the petition in this case. On the 3rd of June, 1899, or twenty-six years after the final ratification of the sale of the property by the trustee, Foley, the appellant filed a petition in the said Circuit Court, wherein, after setting out the facts substantially as stated here, he claimed the right to be substituted as purchaser of the said ground rent of $325 per annum in the place of Blake, and to be entitled, upon the payment of $5,416.67 and all arrearages of interest, to a deed in fee-simple of the lot of ground, and prayed that it may be so ordered. In his answer thereto, the appellee admits Blake’s right to redeem the ground rent, but charges that such right ought to have been exercised within three years of the date of the lease; that the sale to Blake was reported to and ratified by the Court, but that Blake subsequently “abandoned his intention of purchasing said rent and failed to comply with the terms of said agreement.” He denies that the appellant has *322 become entitled as assignee to be substituted in his place as purchaser, and charges that the appellant, having full knowledge of Blake’s right to purchase within three years, has paid the ground rent for twenty-four years, and never made any attempt to exercise the right of redemption. After testimony had been taken, the proceedings were submitted to the Court, who thereupon dismissed the petition, and from this decree the appellant has appealed. There can be no question that the Court had jurisdiction to hear and determine the matter touching the confirmation of the sale under the provisions of the Acts of 1870, ch. 370, and of 1874, ch. 428. These provided that “ no sale of real estate made by any trustee by virtue of any power or appointment contained in any deed or. will, shall be valid unless the same shall be confirmed by the Court as in the case of sales made by trustees appointed by the Court.” By virtue of these provisions, it was the duty of the trustee to report the contract of sale with Blake to the Court, which was invested with the same powers with respect to such sales, as it would have had if the sale had been made by a trustee appointed by the Court. When, therefore, the sale to Blake was finally ratified and confirmed, and the term had passed the order or decree became final and neither that Court nor any other had power to annul the same except by bill of review for error apparent on the face of the decree or by an original bill for fraud. Tomlinson v. McKaig, 5 Gill, 256. It would seem to be clear that the order of final ratification having been passed by a Court having jurisdiction, that its effect was to invest the purchaser with the equitable ownership of the property, from the period of sale; and to entitle him to a deed, on payment of the purchase-money. Wagner v. Cohen, 6 Gill, 97; Sanders v. McDonald, 63 Md. 508. Furthermore, such an order, that is, an order of a Court of Chancery ratifying a sale made by its trustee, must be considered as amounting to a decree for the payment of the purchase-money, and in cases where no bond or evidence of indebtedness for the purchase-money is given, must be enforced by the *323 summary processes of the Court, under its dear right to enforce its own decrees. By the operation of the final order of ratification of the sale, Blake must be regarded as occupying the position of purchaser of the property, with a right to claim a deed on the payment of the purchase-money. Richardson v. Jones, 3 G. & J., 186; Tomlinson v. McKaig, 5 G. 256. In his petition the appellee states that the sale made and reported was made “in pursuance of and in conformity to his written agreement;” that is, that the sale was made and reported to the Court in execution of the agreement contained in the lease. The agreement of the lease was, therefore, completed and fully executed upon the final ratification of the reported sale. The order of final ratification is to be considered as amounting to a decree; Richardson v. Jones, (supra) and if so, it extinguished all rights the parties may have had respecting a sale of ground rent under the lease. Foley, by the sale and ratification, discharged his obligation to sell, and Blake had nothing left for him to do but to pay the purchase-money. Neither had any rights or obligations thereafter, except such as flowed from the new contract. Foley’s duty was to collect the purchase-money, and to do this he held a vendor’s lien and had open to him the summary processes of the Court; and Blake was to pay it to the trustee, with interest from the day of the sale. If Blake made default in the payment, Foley might have had a resale at the risk of Blake, and if the proceeds thereof should exceed the balance of purchase-money and all proper costs and expenses of resale, Blake would have been entitled to the excess. Mealy v. Page, Executor, 41 Md. 184. It is clear that by the report of the sale by the trustee, .the purchaser Blake was brought before the Court as a party, and became bound by all the subsequent proceedings. In Stephens v. Magruder, Trustee, 31 Md. 173, that principle was distinctly affirmed. It was contended in that case, that the Court had no power to compel payment by a purchaser by summary' process when the sale had been reported by a trustee and confirmed by the Court, but that the proceedure should be by *324 original bill. The Court in considering that question, said: “Where is the necessity for an original bill ? Are not the parties already in Court ? the trustee, the purchaser and those interested in the proceeds of the sale ? ” See Rohrer on Judicial Sales, p. 69. sec. 148; Cazet v. Hubbell, 36 N. Y. 680; Requa v. Rea, 2 Paige, 339; Deaderick v. Watkins, 8 Humph., 520. The effect of the sale to Blake, and the order finally ratifying it was first, to execute the agreement to sell in three years contained in the lease ; and secondly to complete an actual sale, between the parties, whereby an equitable title to the estate was vested in the purchaser Blake, who thereby became entitled to the legal title on the payment of the purchase-money, and thirdly, the obligation of Blake was changed from the duty of paying-ground rent to that of the payment of purchase-money with such interest thereon as might accrue if such payment were deferred. We do not think the doctrine of limitations or laches can be made to apply. Foley it seems had never demanded the payment of the purchase-money; nor has either Blake or Berry refused to pay it. On the other hand, full interest has been regulary paid semi-annually. It is true, the parties referred to the payment so made as “ rent,” and not interest, but the amount so paid annually, was a sum equal to the six per cent of the purchase price, and the exact sum that the yearly rent .amounted to, and the fact that it was called by one name or another, can make no difference. It was paid on account of the obligation as it actually existed, whatever that was, and there is no evidence that the parties by such payments, intended to enter into a new contact to alter their respective positions, or to change any of their existing legal rights. During the whole period which has elapsed since the order was passed, there seems to have been no change in the relation of the parties to each other. By the sale the relation of debtor and creditor was created between them and that relation is yet unchanged, and all the consequences that flowed from suth a situation, still exist. It was strenuously insisted that Blake had no power to assign his rights of buying out the rent to *325 Berry. As we have seen, the contract and sale, approved and ratified by the Court, was not a unilateral contract, but one that was binding upon both parties; There were no facts assigned at the hearing or in the briefs of counsel, which tended to show how the substitution of Gen. Berry in the place of Blake could injuriously affect the appellee, and the Court and the trustee could only be “interested in the substitution” to the extent of having a responsible party, and one who would readily comply with the terms of sale put in the place of the original purchaser; and it is not questioned that the character of Berry fully meets those requirements. Farmers Bank v. Clark, Admr., 28 Md. 156. (Decided January 16, 1901.) It follows from what has been said that the decree must be reversed. Decree reversed and cause remanded.