King v. Bankerd

• Decision Date: 01 September 1983
• Docket Number: No. 150,150
• Citation: 303 Md. 98,492 A.2d 608
• Parties: Arthur V. KING v. Howard R. BANKERD. ,
• Court: Maryland Court of Appeals

Page 98

303 Md. 98

492 A.2d 608

Arthur V. KING v. Howard R. BANKERD.

No. 150, Sept. Term, 1983.

Court of Appeals of Maryland.

May 27, 1985.

John E. Clapp, Rockville, for appellant.

Cleopatra Campbell, Frederick, for appellee.

Argued before MURPHY, C.J., ELDRIDGE, COLE, DAVIDSON, ^* RODOWSKY and COUCH, JJ., and JAMES C. MORTON, Jr., Associate Judge of the Court of Special Appeals (retired), specially assigned.

COLE, Judge.

The single issue presented in this case is whether a power of attorney authorizing the agent to "convey, grant, bargain and/or sell" the principal's property authorizes the agent to make a gratuitous transfer of that property.

The facts are uncomplicated. Howard R. Bankerd (Bankerd) and his wife, Virginia, owned, as tenants by the entirety, a home in Montgomery County, Maryland. They resided there until 1966 when Mrs. Bankerd moved out as a result of marital problems. Bankerd continued to live at the property until July 1968, when he "left for the west." Mrs. Bankerd thereupon resumed residency of the property. For the ensuing twelve years, Bankerd lived at various locations in Nevada, Colorado, and Washington, and he made no payments on the mortgage, for taxes, or for the maintenance and upkeep of the home.

Before Bankerd's departure, he executed a power of attorney to Arthur V. King, an attorney with whom he was acquainted. From 1971 to 1974, Bankerd did not communicate or correspond with King in any manner. In 1975, however, King sent Bankerd a letter enclosing an updated power of attorney because the Washington Suburban Sanitary Commission was about to put a sewer adjacent to the subject property, and King believed the new power would be beneficial. This power of attorney, which is the center of the instant litigation, was executed by Bankerd and returned to King. Dated October 30, 1975, this power of attorney provides:

KNOW ALL MEN BY THESE PRESENTS, that I, Howard R. Bankerd, hereby make, constitute and appoint ARTHUR V. KING, my attorney for me, and in my name to convey, grant, bargain and/or sell the property designated in the Montgomery County land record as Lot 9 of an unrecorded subdivision as recorded in Liber 3027 at folio 293, situated at 14026 Travilah Road, Rockville, Maryland on such terms as to him may seem best, and in my name, to make, execute, acknowledge and deliver, good and sufficient deeds and conveyances for the same with or without covenants and warranties and generally to do and perform all things necessary pertaining to the future transfer of said property, and generally to do everything whatsoever necessary pertaining to the said property.

After granting this power of attorney, Bankerd had no further communication with King until 1978.

Mrs. Bankerd, who as noted above had been residing at and maintaining the subject property since 1968, requested King in September 1977 to exercise the power of attorney and to transfer Bankerd's interest in the property to her. King was aware that Mrs. Bankerd was nearing retirement and that she was "saddled" with a property she could neither sell nor mortgage. Consequently, King attempted to locate Bankerd. King wrote to Bankerd on at least two occasions at a Carson City, Nevada hotel where Bankerd had been living. Only one letter was returned. King sent a third letter to Bankerd to another Carson City address, but that letter was also returned. King also made several other efforts, albeit unsuccessful, to obtain Bankerd's address.

Mrs. Bankerd informed King that her husband had once attempted to give the property away to a neighbor on the condition that the neighbor assume the mortgage payments. Consequently, King asserted that he believed Bankerd "didn't give a damn" about the property, that Bankerd had abandoned his interest in the property, and that given Bankerd's age (approximately sixty-nine years), King believed that Bankerd might even be deceased. King therefore conveyed Bankerd's interest in the property to Mrs. Bankerd by deed dated June 21, 1978. Mrs. Bankerd paid no consideration for the transfer and King received no compensation for the conveyance on behalf of Bankerd. Mrs. Bankerd thereafter sold the property to a third party for $62,500.

In 1981 Bankerd filed suit against King in the Circuit Court for Montgomery County alleging breach of trust and breach of fiduciary duty in King's conveyance of Bankerd's interest in the subject property in violation of the power of attorney. After the completion of the discovery proceedings each party moved for summary judgment. On August 12, 1982, the trial court granted summary judgment to Bankerd against King and awarded $13,555.05 in damages on the basis that King had negligently violated the fiduciary relationship that existed between those two parties. The Court of Special Appeals affirmed, holding that the broad language of the power of attorney did not authorize the conveyance without consideration in favor of Bankerd. King v. Bankerd, 55 Md.App. 619, 465 A.2d 1181 (1983). ¹ We granted King's petition for certiorari, 298 Md. 394, 470 A.2d 353, to consider the issue of first impression presented in this case.

I

King basically contends that the language contained in a document granting a broad power of attorney be viewed in light of the surrounding circumstances to determine whether the attorney in fact had authority to transfer the property without consideration. Based on this contention, King concludes that the second power of attorney did not as a matter of law preclude him from gratuitously transferring Bankerd's property. We disagree.

Similar to other jurisdictions, Maryland appellate courts have had relatively few occasions to analyze powers of attorney. Because we last addressed the substantive law relating to powers of attorney over a half century ago, see Kaminski v. Wladerek, 149 Md. 548, 131 A. 810 (1926), we shall review the relevant rules relating to powers of attorney again. ²

Broadly defined, a power of attorney is a written document by which one party, as principal, appoints another as agent (attorney in fact) and confers upon the latter the authority to perform certain specified acts or kinds of acts on behalf of the principal. See 3 Am.Jr.2d Agency § 23, at 433 (1962); see also Long v. Schull, 184 Conn. 252, 256, 439 A.2d 975, 977 (1981) (per curiam); Realty Growth Investors v. Council of Unit Owners, 453 A.2d 450, 454 (Del.1982); Bank of America, National Trust & Savings Association v. Horowytz, 104 N.J.Super. 35, 38, 248 A.2d 446, 448 (1968); Cabarrus Bank & Trust Co. v. Chandler, 63 N.C.App. 724, 726, 306 S.E.2d 184, 185 (1983), review denied, 311 N.C. 303, 317 S.E.2d 679 (1984). This instrument, which delineates the extent of the agent's authority, is a contract of agency that creates a principal-agent relationship. See Long v. Schull, supra, 184 Conn. at 256, 439 A.2d at 977; Restatement (Second) of Agency §§ 1, 34 (1958) [hereinafter cited as Restatement].

Various rules govern the interpretation of powers of attorney. As Chief Judge Murphy observed for this Court in Klein v. Weiss, 284 Md. 36, 61, 395 A.2d 126, 140 (1978), one "well settled" rule is that powers of attorney are "strictly construed as a general rule and [are] held to grant only those powers which are clearly delineated[.]" Although our predecessors recognized this rule over a century ago in Posner v. Bayless, 59 Md. 56 (1882), they were careful to note that the rule of strict construction "cannot override the general and cardinal rule" that the court determine the intention of the parties. Id. at 60. To ascertain this intent, the Posner Court emphasized that the language used in the instrument and the object to be accomplished be viewed in light of the surrounding circumstances. See also Kaminski v. Wladerek, supra, 149 Md at 557-58, 131 A. at 813-14 (reiterating principles); American Bonding Co. v. Ensey, 105 Md. 211, 220-22, 65 A. 921, 925 (1907) (same). Other courts of last resort have likewise embraced the rule of strict construction of powers of attorney. See, e.g., Aiello v. Clark, 680 P.2d 1162, 1166 (Alaska 1984); Fierst v. Commonwealth Land Title Insurance Co., 499 Pa. 68, 74, 451 A.2d 674, 677 (1982). See generally Comment, Construction of Written Powers of Attorney, 18 Ohio St. L.J. 129, 130 (1957) (indicating that American courts follow the strict construction principle).

Another accepted rule of construction is to discount or disregard, as meaningless verbiage, all-embracing expressions found in powers of attorney. Restatement, supra, § 34 comment h; see Von Wedel v. Clark, 84 F.Supp. 299, 300 (D.N.J.1949); Mercantile Trust Co. v. Harper, 622 S.W.2d 345, 349 (Mo.Ct.App.1981). Because powers of attorney are ordinarily very carefully drafted and scrutinized, courts give the terms used a technical rather than a popular meaning. Restatement, supra, § 34 comment h. In addition, ambiguities in an instrument are resolved against the party who made it or caused it to be made, because that party had the better opportunity to understand and explain his meaning. Id.; see Truck Insurance Exchange v. Marks Rentals, Inc., 288 Md. 428, 435, 418 A.2d 1187, 1191 (1980) (ambiguity in an instrument resolved against party responsible for drafting it, absent evidence indicating the intention of the parties). Finally, general words used in an instrument are restricted by the context in which they are used, and are construed accordingly. See Aiello v. Clark, supra, 680 P.2d at 1166 (quoting Gouldy v. Metcalf, 75 Tex. 455, 458, 12 S.W. 830, 831 (1889)).

In accordance with these principles, nearly every jurisdiction that has considered the issue in the case sub judice has concluded that a general power of attorney authorizing an agent to sell and convey property, although it authorizes him to sell for such price and on such terms as to him shall seem proper, implies a sale for the principal's benefit. Such a power of attorney, however, does not authorize the agent...