Brice v. Griffin

• Decision Date: 27 July 1973
• Docket Number: No. 340,340
• Citation: 307 A.2d 660,269 Md. 558
• Parties: Charles J. BRICE et al. v. Charles C. GRIFFIN et ux.
• Court: Maryland Court of Appeals

Page 558

269 Md. 558

307 A.2d 660

Charles J. BRICE et al. v. Charles C. GRIFFIN et ux.

No. 340.

Court of Appeals of Maryland.

July 27, 1973.

John C. LaPrade, Washington, D. C. (Hugh A. Feeley, Washington, D. C., on the brief), for appellants.

Irving H. Fisher, Oxon Hill (Fisher & Walcek, Oxon Hill, on the brief), for appellees.

Argued before MURPHY, C. J., and BARNES, McWILLIAMS, SINGLEY, SMITH, DIGGES and LEVINE, JJ.

DIGGES, Judge.

This is an appeal from the $3,380.70 portion of a judgment entered in the Circuit Court for Prince George's County in favor of the appellees, Charles and Marilyn Griffin, against appellants, Charles Brice and Charles Gaddis. ¹ The facts of this case have never been in dispute; however, the application of the law to those facts is vigorously contested. The evidence shows that the Griffins, as owners of an apartment building located on 28th Place, S. E., Washington, D. C., contracted with the appellants, on December 28, 1969, to sell them that building for a total purchase price of $64,221.23. Appellants were to take title to the property 'subject to a first and second deed of trust.' ² The sale was consummated on January 15, 1970 with the pertinent parts of the settlement sheet showing the following:

As may be seen from this settlement statement, in order to account for the full purchase price, the sums then due under the first and second trusts were deducted from that amount.

About eighteen months after this purchase, the second trust note holder, Erwin Groner, advised the Griffins, as the signators to that instrument, that there was a delinquency in the payments due under both the first and second trusts. This was followed three weeks later by the owner of the first trust note, People's Life Insurance Co. of Washington, D. C., advising the Griffins that, because payments for the last four months due it on the note in the amount of $3,075.54 were in arrears, it was then preparing to institute foreclosure proceedings. There is no dispute here that this amount as well as the $2,300 owed the Griffins by the appellants under the third trust were in fact then due. In order to prevent this threatened foreclosure, the Griffins paid Groner (apparently to be forwarded by him to People's Life) the amount required to satisfy the delinquency on the first trust in exchange for his promise to hold them harmless for any deficiency that may result from a default in payments under the second trust. Additionally, in connection with that payment, the Griffins reserved any rights to reimbursement they might have against the appellants for the sums advanced. Later, when they did not receive reimbursement or payment on their third trust, the Griffins filed this suit.

Here, as in the trial court, appellants' resistance to reimbursement is based principally on the theory that they did not assume the first and second deed of trust obligations and therefore are not liable to the Griffins on them. As did Judge Loveless in the trial court, we reject this hypothesis, since we conclude that as between the parties to this case the appellants had assumed the obligation of paying the outstanding indebtedness on the property which they purchased, and of protecting their vendors against any liability on account thereof.

The law is clear in this State that the mere purchase of a property subject to an existing mortgage or deed of trust does not create a personal obligation on the part of the purchaser to pay it. McKenna v. Sachse, Executor, 225 Md. 595, 171 A.2d 732 (1961); Wright v. Wagner, 182 Md. 483, 34 A.2d 441 (1943); Rosenthal v. Heft, 155 Md. 410, 142 A. 598 (1928). But, the law here is equally clear, if the purchaser assumes the payment of an existing mortgage or deed of trust as a part of the purchase price of the property, then, in that event, it becomes his duty to satisfy the obligation, and to protect his vendor against any demands that may be made for payment of the debt it secures. Wright v. Wagner; Rosenthal v. Heft, both supra. Whether the purchaser as between a vendor and vendee assumes the payment of such an existing obligation is a matter for agreement, which may be either express or implied, written or parol, and even separate from the deed conveying the property; but, in the absence of an express contrary agreement, an assumption will be implied when, as here, the amount then due under the trust obligation has been deducted from the purchase price. Wright v. Wagner; Rosenthal v. Heft, both supra.

In this case, the appellants contracted to take title to the apartment property 'subject to the first and second deed of trust.' Standing alone, and without relating it to the agreed upon purchase price, that language would mean that Brice and Gaddis acquired only the equity of redemption and thereby assumed no personal...