Brown v. Fraley, 205

• Decision Date: 31 May 1960
• Docket Number: No. 205,205
• Citation: 161 A.2d 128,222 Md. 480
• Parties: Richard P. BROWN v. Brake R. FRALEY.
• Court: Maryland Court of Appeals

Page 480

222 Md. 480

161 A.2d 128

Richard P. BROWN v. Brake R. FRALEY.

No. 205.

Court of Appeals of Maryland.

May 31, 1960.

R. Edwin Brown, Rockville (Charles W. Bell, Rockville, on the brief), for appellant.

James R. Miller, Rockville (John E. Oxley, Lee C. Miller and G. Richard Park, Rockville, on the brief), for appellee.

Before BRUNE, C. J., and HENDERSON, HAMMOND, PRESCOTT and HORNEY, JJ.

BRUNE, Chief Judge.

This is an appeal from a decree ¹ of the Circuit Court for Montgomery County, in Equity, which declared that a Bill of Sale made by the appellant, Richard P. Brown, to the appellee, Brake R. Fraley, was in substance a chattel mortgage, found that there was due on the mortgage the sum of $5,462.44 and appointed trustees to sell the mortgaged property to satisfy the mortgage indebtedness.

The appellee filed a motion to dismiss the appeal, based upon Rule 835 b(5) of the Maryland Rules, under which an appeal may be dismissed because '[t]he contents of the printed record extract do not comply with section b of Rule 828 (Part of Record to Be Printed--Printed Record Extract).' There are some undoubted and admitted deficiencies in the printed record, which are stated to be the product of misunderstanding, mistake or inadvertence. The Rules are established to promote the orderly and efficient administration of justice and are to be read and followed. Those here involved, we think, are not difficult to comprehend or to follow, and we do not wish to encourage such errors as have occurred here (one of which is the failure to print the decree appealed from, contra to the explicit provision of Rule 828 b 1(a). In this particular case, however, the missing material has been supplied, and the omissions were not deliberate. Whether to dismiss the appeal or not is discretionary with this Court, and under the circumstances just stated we do not think that such a drastic corrective is necessary in this instance. We accordingly deny the motion to dismiss.

The appellee Fraley sought to foreclose a Bill of Sale as a chattel mortgage and to have certain trucks and equipment sold to satisfy the unpaid balance secured thereby. The appellant Brown filed a cross-claim alleging that Fraley had violated a covenant in the contract for the sale of a trucking business and equipment by Fraley to Brown, pursuant to which the Bill of Sale was executed to secure the deferred payments, and that by reason of this breach the contract was rescinded and Brown was released from liability thereunder. He also asked for a judgment for the amount already paid under the contract and for an injunction enjoining Fraley from aiding in any way any competitor of Brown in the trucking business in Montgomery County. He also claimed that the Bill of Sale was not a chattel mortgage and that Fraley had not released one piece of equipment for each $1,500 reduction in the principal debt as provided by their agreement. The decree appealed from dismissed the appellant's cross-bill, but the appellant's brief makes no contention that the decree should be reversed on that account, either for the Chancellor's refusal to grant an injunction or for the denial of damages sought by the cross-bill.

On May 28, 1957, Fraley contracted to sell to Brown a trucking business which Fraley had previously carried on in Montgomery County. The contract provided for the sale of twelve pieces of equipment used in the business and the good will of the business, and granted Brown certain incidental privileges. Fraley covenanted 'not to in anywise engage in the trucking business in Montgomery County, Md., for a period of five (5) years other than the business which the Seller can do with one 16 ft. stake truck, and one pick-up truck, and does further covenant and agree not to back, assist, finance, be a silent partner, or in any way aid or engage in any business in Montgomery County, Md., for said period of five (5) years which will compete with the Purchaser's trucking business.' The total price for the business was $23,000, of which $5,000 was paid at the time of the signing of the contract, $5,000 was payable, and was paid, on or before June 20, 1957, and the balance of $13,000 was payable at the rate of $450 per month beginning August 20, 1957, with interest on the $13,000 beginning on June 1, 1957. Brown agreed to 'execute and deliver unto the Seller a Bill of Sale in the usual form securing the deferred purchase money on the aforegoing equipment.' The parties also agreed 'that any of the aforegoing equipment will be released from the lien of said Bill of Sale at the rate of a reduction in principal amount of indebtedness at the rate of Fifteen Hundred Dollars ($1,500.00) per piece of equipment to be released, whether the same be tractors, trailers, or stake trucks.' On the same day that the contract was executed the Bill of Sale from Brown to Fraley in the amount of $13,000 was executed on the equipment sold to Brown.

Brown made the required payments through February 20, 1959. Early in March, 1959, Brown discovered that Fraley's nineteen-year old son was conducting a trucking operation, including the hauling of cattle and waste from distilleries, which was the principal business of Fraley at the time he sold his business to Brown. Fraley's son was living with Fraley and the operation was being conducted from Fraley's home. Brown protested to Fraley and said that if the situation was not corrected he would stop making the payments. After demand for payment was made Fraley filed a replevin action to repossess the equipment. He then changed his mind, dismissed the action and on April 29, 1959, filed a bill to foreclose the Bill of Sale as a chattel mortgage. Brown then filed an answer and a cross-claim. After taking testimony from several witnesses the Chancellor required Fraley to have his son move out of Fraley's house or be subject to an injunction and denial of relief until the situation was corrected (although the Court said later that Fraley did not actually aid or assist his son in the business). Fraley complied with this requirement before final decision of the case. The Chancellor then found that the contract was divisible and therefore the violation of the covenant not to compete did not prevent the foreclosure of the Bill of Sale, which was found to be a chattel mortgage. The Chancellor also found that, contrary to the contention of Brown, the second $5,000 payment was not to be applied to the lien secured by the Bill of Sale, but that only the monthly payments were to be so credited. He also held that Brown was not entitled to have any pieces of equipment released for each $1,500 by which the principal indebtedness had been reduced, whether through monthly payments or through the $5,000 payment made on June 20, 1957.

In this Court the appellant Brown contends that (1) the second $5,000 payment should have been applied to reduce the amount due under the Bill of Sale; (2) the conduct of Fraley aided and assisted, his son in the trucking business; (3) the breach of the covenant not to aid or assist prevents recovery under the Bill of Sale; (4) one item of equipment should have been released for each $1,500 reduction in the principal debt, and the refusal to so release the equipment also should have prevented foreclosure under the Bill of Sale.

We shall first deal with point (3). The Chancellor found that the contract of sale was divisible and therefore held that the breach of the clause prohibiting competition by Fraley would not excuse Brown from making the payments required by the contract. As Williston points out (3 Williston, Contracts § 872 (Rev. Ed.)), a contract for the sale of chattels at a fixed price may also contain other promises for which no price is fixed. He gives as an example (at p. 2452) 'a contract for the purchase of goods [in which] there may be a promise for an agency or an exclusive market or for freedom from competition' and says of such a contract: 'Breach of such a promise will not excuse the buyer from paying the contract price for property which he has received, nor will breach of a promise to assist in the resale of the goods sold. * * * It may be urged that frequently the defendant would not have agreed to pay this price except on the assumption that the other promises in the contract were to be kept. This is true and because it is true the injured party should be allowed to refuse to go on with the bargain if it is still wholly executory and should be allowed to rescind it even though executed, if he can restore to the other party the performance which has been received. * * * But so long as the defendant has received and retains the performance for which he promised to pay a fixed sum, it is going in the teeth of the express terms of the contract to excuse him from liability. Under such circumstances he must seek redress for non-performance of other promises in a cross-action or counterclaim, and this is true even though without fault on his part, he is unable to put the other party in statu quo by returning the performance which he has received.' Williston, supra, pp. 2452-55. The following cases support this statement of the law: Tichnor Bros. v. Evans, 92 Vt. 278, 102 A. 1031, L.R.A.1918C, 1025; Mark v. Stuart-Howland Co., 226 Mass. 35, 115 N.E. 42, 2 A.L.R. 678; Springfield Seed Co. v. Walt, 94 Mo.App. 76, 67 S.W. 938. See also Detroit Vapor Stove Co. v. J. C. Weeter Lumber Co., 61 Utah 503, 215 P. 995 and Annotation, Rights and remedies of purchaser under seller's agreement to assist him in reselling the goods, 29 A.L.R. 666. It is pointed out in the annotation that in only one case has the breach of such a covenant been allowed to be used as a defense to an action for the purchase price. The contract in the instant case shows that the covenant not to compete is subsidiary to the sale of the trucking equipment and business, and that for any breach by the seller the buyer could be compensated by damages. This...