Judik v. Crane

Bryan, J., delivered the opinion of the Court. The appellant and his wife filed a bill in equity against the appellee for the specific performance of a contract for the sale of certain real estate in the city of Baltimore. On demurrer the Court dismissed the bill with costs. The property was sold by auction to the appellee for the appellant, and was described as “an old and original irredeemable and well-secured ground rent of one hundred and forty dollars per annum on No. 418 Forrest street, near [617] Gay street.” We will state the particulars of the title. Edmund Law Rogers and wife, in August, eighteen hundred and seventy-one, leased to John M. Brock for ninety-nine years, renewable forever, a lot of ground on Forrest street, at the yearly rent of two hundred and forty dollars. The lot was quadrangular and the second and fourth lines were perpendicular to Forrest street. But Brock made a mistake in running his lines and made the second and fourth oblique in a direction parallel to Low street, which crossed Forrest at a short distance southwesterly; and he entered upon, enclosed and improved the lot thus bounded. The diagram attached to this opinion shows the two lots; the one described in the lease is marked at the corners by the letters D, A, E, F, and the one actually occupied is marked D, A, B, C. It will be seen that while the front of each lot is the same, the one which was occupied by Brock takes in on one side a small triangle not included in the lease, and leaves out on the other.side another small triangle which was included in the lease. Brock mortgaged his leasehold, describing it according to the boundaries in the lease. After the execution of the mortgage, Brock, in July, eighteen hundred and seventy-two, executed a surrender of his lease to the reversioners, and received from them, on the same day, a new lease in the same terms as the former one, except that it described by correct metes and bounds the lot actually occupied by him. The leasehold was sold under and by virtue of the mortgage, and was conveyed to the purchaser by the description in the first lease. In May, eighteen hundred and ninety-four, the reversioners conveyed to David S. Collet the rent and reversion as reserved by the second lease, and he conveyed them to J. Henry Judik. Since the auction sale of the ground rent, Judik and wife have released for value a portion of the rent, amounting to one hundred dollars per annum, so that the amount now payable is one hundred and forty dollars per annum. When Brock executed the surrender of his lease, he was not possessed of the legal title to the leasehold. That was [618] vested ip the mortgagee, who was liable as assignee on the covenants of the lease. Hintze v. Thomas, 7 Maryland, 346, as explained in Mayhew v. Hardesty, 8 Maryland, 494. Brock held only the equity of redemption, which was after-wards barred by a sale under the mortgage. Upon the facts which we have stated (and they are those alleged in the bill of complaint), Brock’s surrender of his lease and acceptance of another one in its place could have no effect against the mortgagee, or any tenant holding under title derived from him. Consequently the second lease and the reservation of rent contained in it would be inoperative to bind the successive assignees of the original leasehold. The Court therefore properly sustained the demurrer. But there are other facts very strongly implied, although not stated in the bill. From the known and ordinary course of business, we think it highly probable, in fact almost certain, that the assignees of the original leasehold who can claim title only under the mortgage sale, have entered upon and taken possession of the lot enclosed and improved by Brock, and have paid to the reversioner the rent reserved. If so, He has recognized them as tenants, and they have acknowledged him as their landlord. From this mutual recognition and acknowledgement very important consequences follow. In the first place, a party consenting to hold as tenant cannot afterwards deny the title of him who is acknowledged as landlord. This was said by this Court in a case where the tenant had originally entered upon land under another title, and subsequently to taking possession had consented to hold as lessee, and agreed to pay rent; Isaac and Wife's Lessee v. Clarke, 2 Gill, 1; an action of ejectment where it was necessary to prove a clear legal title. Another result takes place. Brock’s surrender of the old lease, and acceptance of the new one were beneficial to him, because it secured him in the possession of the lot which he had improved ; these transactions were also beneficial to the reversioner, because it gave him the security afforded by the whole of the improved lot. The benefit to Brock’s sue [619] cessors in the possession would be as great as the benefit to him. Now, although his dealings with the leasehold could not bind the mortgagee against his will, yet he could have authorized it beforehand, and he could have ratified it after it was done. And when his assignee (the purchaser at the mortgage sale) took possession, he also had the right to ratify and approve the advantageous arrangement made between Brock and the reversioner. And he could not ratify it in a more positive and unequivocal manner than by taking and enjoying the benefits conferred by it. If he took possession of the improved lot and paid the rent on it, he sanctioned the substitution of it for the other and adopted the adjustment made by Brock and the reversioner. On the other hand, the consent of the reversioner would be fully manifested by the acceptance of the rent. We would then have as decisive and irrevocable a ratification as could be made of a proceeding which originally was affected with infirmity. No element would be wanting to give it efficacy. There was notice of the surrender of the new lease, which was given by the public land records; and the deliberate acceptance of the benefits conferred by these instruments, followed by the payment apd receiving of a money consideration in the form of rent. It is not necessary to refer to the effect of continuous acquiescence for more than twenty years, because the ratification had absolute validity as soon as it was consummated, and it needed no support from lapse of time. A case was decided by this Court some years ago which illustrates in some respects the views which we have expressed. In Cook v. Creswell, 44 Maryland, 581, a woman was tenant of certain land, and her husband, acting as her agent, surrendered the term and accepted a new one. The wife recognized the agency of her husband and adopted and acted upon the change made in the tenancy. It was held that she was estopped from insisting that she had never surrendered the original term. The question was presented in its simplest form, and the justice of the decision is unquestionable. An attentive examina [620] tion of the case will, however, show that an important principle was involved. The third section of the Statute of Frauds enacts that no lease shall be surrendered unless by-deed or note in writing, signed by the party so surrendering 'or by his agent thereunto lawfully authorized by writing. As the husband had no written authority, his surrender must have been invalid, and great injustice would have been done, except for the operative of the principle which we have been considering. From such examples, we may see the wisdom and necessity of this maxim of the law, and its salutary influence in the conservation of justice. (Decided June 19th, 1895.) The title is perfectly good if the facts are as we suppose them to be, and the complainants ought to be allowed to allege them by amending their bill. To enable them to do so we shall remand the cause by the authority of section 36 of Article 5 of the Code, without either affirming or reversing the decree below. Cause remanded zvithotit affirming or 1 eversing the decree.