Harry's Thrifty Tavern, Inc. v. Pitarra

• Decision Date: 10 January 1961
• Docket Number: No. 109,109
• Citation: 166 A.2d 908,224 Md. 56
• Parties: HARRY'S THRIFTY TAVERN, INC., v. Samuel J. PITARRA.
• Court: Maryland Court of Appeals

Page 56

224 Md. 56

166 A.2d 908

HARRY'S THRIFTY TAVERN, INC., v. Samuel J. PITARRA.

No. 109.

Court of Appeals of Maryland.

Jan. 10, 1961.

Severn E. Lanier and Jack H. Williams, Baltimore, for appellant.

Howard B. Stocksdale, Baltimore (Alan H. Stocksdale, Baltimore, on the brief), for appellee.

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

HENDERSON, Judge.

In a controversy over the sale of a tavern business, the buyer Pitarra sued for the return of his deposit and damages, and the seller Harry's Thrifty Tavern, Inc., filed a counterclaim for damages. The trial court sitting without a jury, entered judgment for the buyer and dismissed the counterclaim. The amount of the judgment included these items: deposit, $750; fees and expenses for incorporation, $250; transfer of license, $15; loss of income from a vending machine business (9 weeks at $50 per week), $450; a total of $1,465. The seller appealed. There was no cross-appeal. The questions presented are whether the court erred in finding that the seller breached the agreement of sale and whether the court erred in making the award of damages.

The agreement of sale was signed by Pitarra and 'Max Caplan, President', on May 26, 1958. It covered 'the tavern business, chattels and all other assets incidental thereto located at 2802 Greenmount Avenue,' at a price of $7,500 'plus stock and cost of new liquor license.' Paragraph 3 provided: 'The merchandise and stock in trade at wholesale cost as of date of settlement shall be added to the purchase price and together with the cost of the license shall be paid in cash on date of settlement.' Presumably, the 'cost of the license' called for a pro rata reimbursement to the seller of the annual fee which it had paid on May 1. Paragraph 4 provided that '$750 has been paid as a deposit to the Oriole Realty Company, Seller's agent, and the balance shall be paid or secured as follows: $4,250 shall be paid in cash on date of settlement and the Buyer shall execute a mortgage to the Seller for the balance of $2,500 * * *.' Paragraph 5 provided: 'Buyer shall have transferred to his name the 6 BWL Liquor License for the premises. If not obtained, this proposal shall be null and void and the deposit paid by the Buyer shall be refunded to him immediately.' Paragraph 7 provided: 'Seller agrees to satisfy all bedts and obligations of the business at or before date of settlement and to comply with all requirements of the Bulk Sales Act * * *.' Paragraph 8 provided: 'Settlement shall take place within ten days after the liquor board has approved the liquor license transfer to Buyer * * *.'

Paragraph 11 stated that the 'proposal' was subject to certain 'terms and conditions'. The first, 'a', was that the 'Buyer shall be able to secure a lease from Minnie Caplan and Max Caplan, her husband, for five years * * *,' with a renewal clause. The Caplans were the owners of the premises where the tavern was located, and they apparently intended to reside in the upper part of the building after the bar was moved to the lower floor. Conditions 'b' and 'c' provided for 'Landlord to make exterior repairs' and 'Tenant to make interior repairs.' Condition 'e' provided: 'Heat to be furnished and maintained by tenant.' Condition 'h' was the 'Landlords to remove heat pipes and radiators' and condition 'i' 'Landlords to move and relocate bar and all bar equipment into lower section of building and install all plumbing, at his own costs, risk and expense.' Paragraph 12 provided that 'Seller shall keep business in operation until date of settlement.'

Upon signing the agreement, Pitarra paid the $750 to the broker and caused a corporation, 'Bunky's, Inc.', to be formed to operate the business. On June 11, 1958, Pitarra made application to the Board of Liquor License Commissioners for transfer of the license. On June 26, the Board notified the applicant of its approval of the transfer, subject to meeting the requirements of the Health Department, Building Engineer, and Bulk Sales Act and payment of sales tax. The notice stated that unless the license were transferred within ten days, the approval might be withdrawn. A Health Department notice, dated June 23, called for repairs to toilets, additional ventilation, rat proofing, and the installation of two three-compartment sinks at the bar and in the kitchen unit. These requirements were never met.

On July 14, 1958, the Board of License Commissioners notified Pitarra that unless completed within a week the Board 'may' withdraw approval. On July 22, 1958, counsel for Pitarra wrote Caplan, stating that the Seller had not moved the heat pipes, relocated the bar, or installed the plumbing. Counsel stated he had prepared a bill of sale and affidavit under the Bulk Sales Act when he received a draft of lease and chattel mortgage from counsel for the Seller on June 27, 1958. He stated he had not received a list of creditors. He called upon Caplan to complete his part of the bargain by July 31, 1958, under threat of suit for refund of the deposit and damages. The Board wrote another letter on August 13 (not in the record), apparently withdrawing its conditional approval of the transfer. Suit was filed on November 3, 1958.

The appellant contends that the agreement of sale was unambiguous, and under its plain terms the Seller, Harry's Thrifty Tavern, Inc., was not obligated to make the alterations mentioned in paragraph 11-i of the agreement, such obligation resting upon the 'Landlords', Mr. and Mrs. Caplan individually. Although this is technically correct, the agreement of sale was conditioned upon the obtention of a lease, wherein the Landlords assumed that obligation, and the lease was never executed. The appellant argues that the performance of the obligation was not a condition precedent to the settlement, but it is clear that settlement was contingent upon a number of actions by the Seller, including the payment or satisfaction of outstanding debts, the furnishing of a list of creditors, the execution of a bill of sale, an inventory of the merchandise and stock in trade at wholesale cost, as well as the procuring of the lease. The buyer was never placed in a position where he could make settlement.

Even with regard to the removal of the bar, there was testimony from Pitarra and from the witnesses Mann, Abrams, and Griffith, that Caplan said he would 'take care of' the removal on many occasions. Mann testified that the removal was to be made before the settlement and that Pitarra could not complete, or even start, the renovation until that was done. Griffith testified to the same effect. Abrams testified Caplan said he was trying to get the work done, but was having difficulty with the plumbing. All this testimony came in without objection and hence may be considered as bearing upon the...