Traylor v. Grafton
| Decision Date | 10 February 1975 |
| Docket Number | No. 30,30 |
| Parties | Raymond P. TRAYLOR et ux. v. Corbin C. GRAFTON et ux. |
| Court | Maryland Court of Appeals |
Eugene A. Alexander, III, and Sidney Blum, Baltimore, for appellants.
John C. Love, Bel Air (Edwin G. Carson and Cameron & Reed, Bel Air, on the brief), for appellees.
Argued before SINGLEY, SMITH, DIGGES, LEVINE and O'DONNELL, JJ.
Early in 1968 Earl Deshner (Deshner), a Maryland and Pennsylvania developer, knowing of the interest of the appellants, Raymond P. Traylor and M. Jacqueline Traylor, his wife (Traylors), in purchasing a small farm, apprised Mrs. Traylor, a real estate salesperson, of a listing with one Philip W. Eppley (Eppley), a York County realtor, of a 115 acre farm owned, occupied and operated by the appellees, Corbin C. Grafton and Margaret K. Grafton, his wife (Graftons), in lower Chanceford Township, Pennsylvania. Deshner, interested in acquiring the farm and in developing the land for a mobile home park, was willing, upon acquisition, to sell off to the Traylors a parcel of approximately 18 acres, including the dwelling. Mrs. Traylor was accompanied by Deshner, who was introduced as her 'uncle' in order to conceal his true identity as a prospective developer, when she inspected the property; he counseled her throughout the negotiations, advising the submission of an offer of $44,000, but told her that his backer-one Christopher Peter Eilers of Harford Count-would 'go as high as $45,000.'
After rather minimal negotiations the Traylors, in March 27, 1968, entered into a standard form realty contract provided by the York Board of Realtors, Inc., by which the Graftons agreed to sell them the farm, dwelling, fixtures, heating and plumbing systems and crops in the ground for $45,000. A deposit in the amount of $500 was made from funds advanced by Deshner. 1 The balance due under the contract 'to be paid at settlement,' scheduled on or before June 30, 1968, was
The contract contained, printed therein, a forfeiture provision which read as follows:
'It is mutually agreed that should either party hereto fail or neglect to perform his part of this contract, the injured party may, at his option, elect to pursue his remedy for specific performance of this contract of accept a sum equal to ten (10%) percent of the agreed price of sale as liquidated damages, which said sum the other party hereby agrees to pay.'
All acts in connection with the execution of the contract, including the initialed amendment whereby the offer was increased from $44,000 to $45,000 occurred in York County, Pennsylvania. Under it Eppley, the realtor, was to be paid commissions of $2,700.
Immediately following execution of the contract the Traylors and Eppley visited a Delta bank seeking information on the availability of financing, but no mortgage application was ever there made. Shortly after signing the contract the Traylors were introduced to the Eilers who advised that they would 'finance the whole deal'; the Eilers had agreed to take a mortgage from the Traylors on the parcel of land to be conveyed to them.
When, several days before the scheduled settlement, Eppley made inquiry of Mrs. Traylor she stated that there was 'no problem about financing,' and upon receiving additional assurances from her that the Traylors could obtain the financing, the Graftons, at public auction on June 20, 1968, sold their cattle, all farm implements and moved to another home (which they had constructed). The date for settlement was mutually extended to July 17, 1968, to be held at the office of an attorney in York, Pennsylvania.
Upon a reinspection of the property, on the day before the rescheduled settlement, complaint was made by the Traylors that certain fixtures-a first floor bathtub, first floor heating unit, and kitchen cabinets-had been removed from the premises. Grafton denied that a downstairs bathtub had ever been in the premises, that the heating unit, loaned by a neighbor, had been returned, and that the kitchen cabinets had been re-erected. Mrs. Traylor testified that when her husband indicated he would not settle 'without the stove or range being replaced,' Grafton, with some irritation, forcefully declared that you can 'forget the whole thing'; this was denied by Grafton.
When the Traylors reported the missing fixtures to Deshner he advised them that he would 'take care of everything' at the settlement, it being understood that under an assignment made by the Traylors to him he would appear at the settlement and the entire matter would be negotiated by him. An unsigned, undated assignment of contract to Deshner was offered in evidence with testimony that Deshner had the executed original. There was similarly offered in evidence an unsigned, undated assignment from the Traylors to the Eilers which had been prepared in the office of the attorney scheduled to conduct the settlement.
When the new settlement date arrived neither Deshner nor the Traylors appeared, although the Graftons and Eppley were on hand.
Although there was testimony that Deshner had been negotiating with the Eilers and the funds used to complete the settlement were to be received from the sale by Eilers of another property, such collateral transaction was not apparently consummated.
The Graftons instituted suit against the Traylors in the Circuit Court for Harford County and asserted liquidated damages in the amount of $4,000 ($4,500 less the $500 down payment). When, pursuant to Maryland Rule 315, the Traylors impleaded Deshner, their theretofore undisclosed principal, as a third-party defendant, the Graftons, in an amended declaration, set forth three 'alternative' causes of action: in Count I they sued the Traylors; in Count II they sued both the Traylors, as agents, and Deshner, as principal, alleging a joint and several liability; under Count III Deshner alone was sued as the principal of the Traylors.
The Graftons in their declaration gave notice of their intention to rely upon the law of Pennsylvania in accordance with the provisions of Maryland Code (1957, 1965 Repl.Vol.) Art. 35, § 50 (now Maryland Code (1974), Courts and Judicial Proceedings Article § 10-504), and at a pretrial conference the Circuit Court (Dyer, J.) ruled that law of Pennsylvania controlled on the issue of liquidated damages and granted the motion of the Graftons to restrict the testimony to preclude any evidence that the property had been subsequently sold with no resultant actual damages to the Graftons. During the trial of the case the trial court (Proctor, J.) upon a proffer made by the Traylors to show that no actual damages had been sustained by the Graftons ruled as a matter of law that the claimed liquidated damages were not a penalty.
The case was submitted to the jury under each of the three counts on behalf of the Graftons, as well as upon the third-party claim by the Traylors against Deshner, but the court instructed the jury only under Counts I and III and the third-party claim. After counsel had noted their respective exceptions to the court's instructions, and immediately prior to argument, counsel for the Graftons, 'in order to attempt to make an election, pursuant to Maryland Rule 320,' moved 'to amend their declaration to strike Count III against Earl Deshner.' Although Judge Proctor recognized that under the rule an 'amendment' could be made at any time, in his discretion he denied the motion.
During the course of its deliberations the jury addressed a written question to the trial court as follows 'If we find that the verdict is for the Plaintiff, and further find that the Traylors are responsible to Plaintiff, and then find for the Traylors against Deshner in the third-party claim, does it make Deshner fully responsible for the penalty?'
Following discussion with counsel in chambers the court in response to the inquiry replied as follows:
The Traylors excepted to the entire reply by the trial court, contending that the response should have been a simple 'No'; the Graftons filed exception to the last sentence of the court's supplemental instruction.
After approximately an additional hour of deliberation the jury addressed another question to the court. This question read:
'If we rule Plaintiff (Grafton) against Traylor and Deshner, with Traylors as agents to principal (Deshner) is the third party suit dissolved, or can we rule Traylor against Deshner in the third party suit?'
The Court, in consultation with counsel, advised of the answer he proposed to submit. Counsel for the Graftons excepted on the ground that the proposed answer was contrary to Pennsylvania law. Counsel for the Traylors excepted to the proposed reply on the ground that 'the simple answer' should be: that if the verdict is that the Traylors were acting as agents for Deshner as principal and so find a verdict against Deshner, then, in such event, the third-party suit would be 'dissolved.' Overruling the exceptions, the court's written response to the jury, as proposed, read as follows:
Judge Proctor then, sua sponte, directed the court reporter to prepare three questions for submission to the jury which he believed 'will...
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