Bohle v. Thompson

• Decision Date: 01 September 1988
• Docket Number: No. 915,915
• Citation: 78 Md.App. 614,554 A.2d 818
• Parties: , 8 UCC Rep.Serv.2d 897 James K. BOHLE et ux. v. Harold Rodney THOMPSON et al. ,
• Court: Court of Special Appeals of Maryland

Page 614

78 Md.App. 614

554 A.2d 818, 8 UCC Rep.Serv.2d 897

James K. BOHLE et ux. v. Harold Rodney THOMPSON et al.

No. 915, Sept. Term, 1988.

Court of Special Appeals of Maryland.

March 13, 1989.

Steven T. Cain, Upper Marlboro, for appellants.

Debra B. Koehler (Naji P. Maloof, on the brief), Upper Marlboro, for appellees.

Argued before MOYLAN, ALPERT and ROBERT M. BELL, JJ.

ALPERT, Judge.

Oft times members of both the bench and bar are criticized for failing to distinguish the forest from the trees. In this case, however, the controversy arises from an attempt to separate the trees from the forest. On appeal, a veritable smorgasbord of issues are presented, including questions on parol evidence, conversion, effect of notice of prior interest in property, and attorney's fees. The appeal stems from a controversy concerning the ownership of standing timber on land located in St. Mary's County. On September 23, 1986, James K. and Helen Bohle, appellants, filed suit in the Circuit Court for St. Mary's County against Charlotte Hall Lumber Company ("Charlotte Hall") and Rodney and Jeanette Thompson, appellees, alleging counts in trespass and conversion against Charlotte Hall and two counts of fraud against the Thompsons. On the same day, Charlotte Hall filed a separate complaint against the Bohles, seeking injunctive relief and/or damages. Eventually, the case proceeded to trial on Charlotte Hall's claims against the Bohles. ¹

After a two-day court trial, the circuit court entered judgment in favor of Charlotte Hall in the amount of $60,000. Further, the court imposed sanctions pursuant to Rule 1-341 in favor of the Thompsons against the Bohles in the amount of $7,500 after finding that the Bohles' suit was "without substantial justification." With the exception of an assessment of $553.85 in deposition costs, the court denied Charlotte Hall's request for attorney's fees. The Bohles then noted this timely appeal.

FACTS

The pertinent facts as the trial court found them are as follows. On February 25, 1985, the Thompsons entered into a contract of sale with Brandywine Auto Parts, Inc. Profit Sharing Plan to purchase a 539 acre tract of land in St. Mary's County. Soon thereafter, discussions between the Thompsons and the Bohles ensued. These discussions concerned the possible purchase of a portion of the land from the Thompsons by the Bohles. In response to what he perceived to be the Bohles' apprehension about Thompson's plan to sell the timber on the property, Mr. Thompson stated to the Bohles that, in order to finance his purchase of the property, and consequently the Bohles' purchase, he would have to enter into a contract to sell all the timber.

On April 25, 1985, the Thompsons entered into a contract with Charlotte Hall to sell "all the merchantable hardwood timber that is 16 in. and up except poplar and sweet gum, 14 in. and up" on the tract of land. The contract also gave Charlotte Hall the right to enter the property and remove the timber. Charlotte Hall was given two years from the date of settlement to cut and remove the timber, with an option to extend the contract for an additional six months upon payment to the Thompsons of a $5,000 fee. Subsequently, the Thompsons travelled to the Bohle residence and showed them the timber contract, which the Bohles read. On April 29, 1985, the Bohles and the Thompsons entered into a contract for the sale of approximately 100 acres of the 539 acre parcel of land.

At settlement on June 28, 1985, the Thompsons obtained fee simple title to the 539 acre tract. Shortly thereafter, a second settlement took place, at which the Bohles obtained fee simple title to approximately 137 acres of land. ²

In late July or early August of 1985, Charlotte Hall employees came onto the Bohle property and, during a two week period, they cut ten to twelve acres of timber. Subsequently, they commenced cutting on a part of the tract retained by the Thompsons. They returned in June, 1986 to renew cutting on the Bohle property. The Bohles told Charlotte Hall that if their employees cut any more trees on this property, the Bohles would have them arrested. Subsequently, the county sheriff, at the behest of the Bohles, forced Charlotte Hall to remove its equipment from the Bohle property or risk impoundment of the equipment. This suit followed.

On appeal, the Bohles ask us to decide whether the court erred:

1. in considering parol evidence of an assumption of an obligation against a purchaser under a written contract for the sale of real estate where the contract is silent as to the point and is otherwise clear and unambiguous.

2. in finding that Charlotte Hall's complaint fairly pled a cause of action for conversion.

3. in finding that a cause of action for conversion was proved by Charlotte Hall against the Bohles.

4. in assessing damages against the Bohles under the conversion theory.

5. in assessing attorney's fees against the Bohles in favor of the Thompsons.

6. in assessing unspecified attorney's fees against the Bohles in favor of Charlotte Hall.

7. in granting judgment in favor of the Thompsons as to Count V of the Bohles' complaint.

1. Parol Evidence Rule

The Bohles contend that the trial court erred in allowing several witnesses to testify that the Bohles had knowledge of the timber contract prior to their purchase of the 100 plus acres from the Thompsons. Such testimony, they contend, contravenes the express language of both the contract of sale and the deed, which purported to convey the land and the trees to them in fee simple. Further, they argue that the contract of sale contains an integration clause.

The parol evidence rule provides that:

when the contractual language is clear and unambiguous, and in the absence of fraud, duress, or mistake, parol evidence is not admissible to show the intention of the parties to vary, alter, or contradict the terms of that contract.

General Motors Acceptance Corp. v. Daniels, 303 Md. 254, 261-62, 492 A.2d 1306 (1985).

Unfortunately for the appellants, the parol evidence rule has no application to the present circumstances. Simply put, the parol evidence rule does not bar a stranger to a writing from introducing extrinsic evidence to impeach, contradict, or vary the terms of the writing. Grove v. Rentch, 26 Md. 367, 378-79 (1867); Alderson v. Ames, 6 Md. 52, 57 (1854). See also Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 347 n. 12, 91 S.Ct. 795, 810 n. 12, 28 L.Ed.2d 77 (1971).

In any event, the evidence was introduced by Charlotte Hall to show that appellants possessed knowledge of the earlier timber contract; it was not introduced to vary or contradict any contract between the Bohles and the Thompsons. In fact, any agreement between those parties is irrelevant to Charlotte Hall's claim of ownership to the timber. Because Charlotte Hall is not a party to the Bohle-Thompson contract of sale or deed transferring title to the real property, any purported agreements between those parties is not relevant to a determination of its rights under the earlier timber contract.

Thus, Charlotte Hall's introduction of the evidence in question was not to vary the Bohle-Thompson agreement, but rather to show that the Bohles knew of the prior timber agreement. Consequently, Charlotte Hall's position is that the Bohles took title to the property subject to the timber agreement. ³ To sustain appellants' argument would result in a prohibition against the introduction of any evidence that would tend to indicate that a subsequent purchaser was on inquiry notice or had actual notice of a third person's rights in property.

It is well settled that the owner of a fixture and the owner of the realty upon which the fixture is attached may agree that the fixture will remain personalty, and such an agreement is binding on subsequent purchasers of the realty who have notice of the agreement. Hankins v. Luebker, 224 Ark. 425, 274 S.W.2d 356, 358 (1955); Leawood Nat'l Bank v. City Nat'l Bank & Trust Co., 474 S.W.2d 641, 644 (Kan.App.1971); Sutton v. Frost, 432 A.2d 1311, 1315 (Me.1981); Lee-Moore Oil Co. v. Cleary, 295 N.C. 417, 245 S.E.2d 720, 725 (1978); Lundgren v. Mohagen, 426 N.W.2d 563, 565 (N.D.1988); Burlington Northern R. Co. v. Scheid, 398 N.W.2d 114, 119 (N.D.1986); Harris v. Rapke, 138 Misc.2d 538, 524 N.Y.S.2d 1003 (City Ct.1988); Johnson v. Hicks, 51 Or.App. 667, 626 P.2d 938, 941 (1981); C.I.T. Financial Serv. v. Premier Corp., 747 P.2d 934, 937 (Okl.1987); Royal Store Fixture Co. v. Patten, 183 Pa.Super. 249, 130 A.2d 271, 274 (1957); Boeringa v. Perry, 96 Wash. 57, 164 P. 773 (1967). The above rule has been applied to determine rights under timber contracts and subsequent sales of the realty upon which the timber stands. Plew v. Colorado Lumber Products, 28 Colo.App. 557, 481 P.2d 127 (1970), cert. denied, (Colo.1971); Spencer v. Strange, 184 So.2d 878 (Miss.1966); Pegg v. Mid-State Develop. Corp., 164 Mont. 525, 529 P.2d 1399 (1974); Borton v. Medicine Rock Land Co., 275 Or. 59, 549 P.2d 1122 (1976). See generally 18 A.L.R.2d 1150 (1951). Although some of the timber cases refer to the timber contracts as affecting an interest in realty, this distinction as to characterization is not relevant. To the contrary, the fixtures in the cases, supra, were characterized as personalty, the ownership of which would pass with the ownership of realty where the subsequent purchaser of realty was without notice of the prior interest. Further, a person who owns both realty and fixtures upon the realty may effect a constructive severance of the fixtures as personalty in a sales agreement, said agreement being binding on subsequent purchasers of the realty with notice. Leawood Nat'l Bank, supra; Lundgren, supra.

The inappropriateness of application of the parol evidence rule is so patent that only one of the cases above even discusses such an argument:

Here we are concerned with the rights arising between the original owner...