Washington Brewery Co. v. Carry

• Citation: 24 A. 151
• Parties: WASHINGTON BREWERY CO. ET AL. v. CARRY.
• Decision Date: 17 March 1892
• Court: Court of Appeals of Maryland

24 A. 151

WASHINGTON BREWERY CO. ET AL. v. CARRY.

Court of Appeals of Maryland

March 17, 1892

Appeal from circuit court, Prince George's county, in equity.

Bill by Albert Carry against the Washington Brewery Company and George W. Stegmaier to compel specific performance of an oral promise to mortgage certain land to secure the purchase money, which was advanced by complainant. From a judgment for plaintiff, defendants appeal. Reversed, and bill dismissed.

Argued before ALVEY, C.J., and MILLER, ROBINSON, MCSHERRY, BRYAN and FOWLER, JJ.

A A. Lipscomb, R. E. Brandt, and Fillmore Beall for appellants.

C C. Magruder and Joseph S. Wilson, for appellee.

PER CURIAM.

The bill in this case alleges that Stegmaier, one of the defendants, purchased the real estate in question, and that the complainant loaned to him $3,000 to make the cash payment; Stegmaier promising at the time the loan was made to secure the payment of the same by a mortgage of his interest in the property. Whether the complainant would be entitled to a specific performance of this verbal promise or agreement, as against Stegmaier himself, is a question not necessary, in the view we take of this case, to decide. Be that as it may, the record shows that Stegmaier subsequently sold and conveyed the property to the Washington Brewery Company, and we are all of opinion that the company is a bona fide purchaser without notice of any such promise, and being a bona fide purchaser, without notice, the complainant, it is clear, is not entitled to a specific performance of the promise or agreement against the company. Decree reversed, and bill dismissed.

BRYAN J.

Albert Carry filed a bill in equity against Stegmaier and the Washington Brewery Company, a body corporate. It was alleged in the bill that Stegmaier purchased at trustee's sale a certain tract of land in Prince George's county, and that after the sale was ratified he borrowed from the complainant $3,000 to make the cash payment, and at the same time promised to secure the repayment of the money by a mortgage on the land, and that he has failed and refused to do so; that afterwards Stegmaier conveyed his interest in the land to the brewery company, and that said conveyance was made for simulated and pretended considerations, and was intended to delay, hinder, and defraud the complainant and other creditors of Stegmaier. The prayer of the bill was that the deed might be declared void; that the agreement to execute the mortgage might be specifically enforced, or, if it could not be enforced, that compensation might be decreed; and that Stegmaier's interest in the land might be sold for the purpose of paying the debt and interest. The answers of the defendant denied the fraud, and pleaded the statute of frauds to the alleged agreement to make a mortgage; not admitting, however, the existence of said agreement. The circuit court passed a decree ordering a sale of the land, and the defendants appealed.

At the time the money was loaned to Stegmaier he executed and delivered to Carry his promissory note for the amount, but the promise to make the mortgage was entirely by parol. The fourth section of the statute forbids any action on a contract or sale of lands, or any interest in or concerning them, unless the contract is in writing. It ought never to have been doubted that a contract to make a mortgage of land was within the terms and meaning of the statute. But, as almost every description of question has been made the subject of controversy, it is not surprising that we find this one adjudicated. Clabaugh v. Byerly, 7 Gill, 362; Albert v. Winn, 5 Md. 77; Browne, St. Frauds, § 267. The appellee contends that by reason of the payment of the money the contract has been performed in part, and that he is therefore entitled to a decree for specific performance; and he places great reliance on certain expressions in the opinion of the court in Cole v. Cole, 41 Md. 302. In that case the complainant had loaned one of the defendants a sum of money, with which he purchased a tract of land, and the borrower verbally agreed that he would secure the repayment of the money to the lender by a mortgage on the land, but afterwards refused to do so. The lender filed a bill in equity, praying for a sale of the land to satisfy the debt, or that the borrower might be decreed to execute a mortgage on it to secure the payment of the money loaned, and for general relief. The defendants did not deny the agreement to execute a mortgage, nor did they set up the statute of frauds as a defense. In deciding the case this court used this language: "Cole, having obtained the said advance upon the agreement to execute a mortgage upon the land to secure the repayment, is bound, in equity and good conscience, to performance on his part; and his interest in the property must be held answerable for the same, to the same extent as if the mortgage had been given according to the agreement. A court of equity will hold him liable, and consider that as done which ought to have been done. There is nothing in the statute of frauds, if it had been pleaded, in conflict with this equitable principle. That statute was enacted to provide as far as possible against the perpetration of frauds, and courts of equity never allow its provisions to be perverted and made instrumental in the accomplishment of fraud. They decree the specific execution of agreements where there has been a performance on one side, because the refusal to perform on the other side is a fraud, and they will not permit the statute designed to prevent fraud to be made an engine of fraud." General expressions like these are frequently found in the reports of decided cases, and in the textbooks. Their extreme generality ought to suggest that there must be a great many cases to which they could not be applied. If adopted as rules of decision, they would operate as a judicial repeal of the statute of frauds. The language of courts is usually intended to be interpreted by its application to the case which they are considering, and not as establishing a rule for different cases, which are not at the time under discussion. A very eminent judge has put on record his estimate of these generalities. I allude to the opinion of Lord Chancellor SELBORNE in Maddison v. Alderson, L. R. 8 App. Cas. 474. Speaking of the equity of part performance of parol contracts, his lordship said: "That equity has been stated by high authority to rest upon the principle of fraud. 'Courts of equity will not permit the statute to be made an instrument of fraud.' By this it cannot be meant that equity will relieve against a public statute of general policy in cases admitted to fall within it, and I agree with an observation made by Lord Justice COTTON in Britain v. Rossiter, [11 Q. B. Div. 131,] that this summary way of stating the principle (however true it may be when properly understood) is not an adequate explanation either of the precise grounds or of the established limits of the equitable doctrine of part performance." In like manner this court has had occasion to express its opinion on the other general rule quoted in Cole v. Cole, that "equity will consider that as done which ought to have been done." In Clabaugh v. Byerly, 7 Gill, 354, the court were considering an alleged parol promise to make a mortgage of land. They say: "By the appellee it is insisted that he is to be preferred because of an agreement which the mortgagor made with him before the date of the deed to the appellants, and upon the principle that equity will consider that as done which ought to be done. No doubt this, when correctly understood, is an established maxim in equity But there are many things which a man ought to feel himself bound to do, many promises which the party promising ought to feel himself bound to fulfill, and yet which the chancery court cannot compel him to perform. The court, then, in order to be justified in regarding an act as done, must have jurisdiction of the case, and to be able to insist that it shall be done." On a little reflection, many exceptions will be perceived to nearly all general rules, however great may be the latitude of the terms in which they are laid down.

It becomes necessary to consider some of the leading cases in which the general expressions used in Cole v. Cole were applied to existing facts, so that we may...