Kahn v. Janowski

• Decision Date: 20 July 1948
• Docket Number: 205.
• Parties: KAHN et ux. v. JANOWSKI et ux.
• Court: Maryland Court of Appeals

60 A.2d 519

191 Md. 279

KAHN et ux. v. JANOWSKI et ux.

No. 205.

Court of Appeals of Maryland

July 20, 1948

Appeal from Circuit Court No. 2 of Baltimore City; E. Paul Mason Judge.

Suit by Ray Janowski and wife against Richard A. Kahn and wife for specific performance, an accounting, declaration of trust and other relief. From an order overruling a demurrer, the defendants appeal.

Affirmed and cause remanded.

Justinus Gould, of Baltimore, for appellants.

K Michael Jeffrey and Arthur R. Padgett, both of Baltimore (Samuel J. Aaron, of Baltimore, on the brief), for appellees.

Before MARBURY, C.J., and DELAPLAINE, COLLINS, GRASON, HENDERSON and MARKELL, JJ.

DELAPLAINE Judge.

Ray Janowski and Pauline Janowski, his wife, who have been occupying the property at 3307 Spaulding Avenue in Baltimore since 1942 under a conditional contract of sale, entered this suit to obtain equitable relief from Richard A. Kahn and Alice Kahn, his wife, of Hyattsville, the owners of the property.

The contract of sale, a copy of which was filed as an exhibit with the bill of complaint, was signed November 21, 1942, by Kahn and Mrs. Janowski. Kahn agreed therein to sell the property, subject to ground rent, and several pieces of furniture for $3,900, the purchasers to assume the ground rent and also a mortgage on the property for the sum of $2,500, and to pay the balance of $1,400 by monthly installments of $60 each. The seller agreed to pay all taxes, ground rent, interest on mortgage, and insurance premiums until date of settlement. The purchasers agreed to pay for repairs and water rent. The contract, however, reserved to either the seller or the purchasers the option to rescind the contract at any time up to December 1, 1948, with the proviso that in case of rescission the monthly payments made by the purchasers shall be forfeited and considered as rent for the property.

Complainants allege in their bill that they paid $3,300 on the purchase price up to May, 1947, and that they painted the house at an expense of $350, built a porch at the rear of the house, installed a hot water tank and gas heater, and made other substantial improvements. They further allege that defendants informed them for the first time in May, 1947, that they intend to cancel the contract, and treat them as lessees. In order to avoid a forfeiture, complainants offer to pay whatever balance is due to defendants. They aver that the fair rental value of the property is between $35 and $40 per month. They pray for the following relief: (1) specific performance of the contract, (2) an injunction against dispossession, (3) an accounting to determine the amount due under the contract, and (4) a declaration that the property is impressed with a trust for the benefit of complainants. Defendants demurred to the bill, and from an order overruling their demurrer they entered this appeal.

Defendants objected to the exhibit for the reason that the typewritten copy of the contract is not certified. General Equity Rule 4 provides: 'No order or process shall be made or issued upon any bill, petition, or other paper, until such bill, petition, or other paper, together with all the exhibits referred to as parts thereof, be actually filed with the Clerk of the Court.' Code 1939, art. 16, sec. 164. The purpose of this rule is to prevent the passage of any order or decree upon a bill or petition until all of its parts are filed, so that any order or decree will relate to a complete paper, all parts of which are of record for the inspection of any persons concerned. Sears v. Barker, 155 Md. 323, 141 A. 908; Becker v. Minber Corporation, 177 Md. 583, 586, 10 A.2d 707; Spangler v. Dan A. Sprosty Bag Co., 183 Md. 166, 175, 36 A.2d 685. If copies of written instruments upon which the right to equitable relief depends are not filed with the bill, defendants may demur. Beachey v. Heiple, 130 Md. 683, 693, 101 A. 553. General Equity Rule 4 also provides that no injunction or order appointing a receiver shall be issued until the originals or certified copies of instruments of record and verified copies of all documents not of record necessary to show the character and extent of the complainant's interest in the suit shall have been filed, if in possession of the complainant or accessible to him; if not, that fact shall be stated in the bill or petition. Code 1939, art. 16, sec. 164; Plitt v. Kaufman, Md., 53 A.2d 673. There is no express requirement that exhibits shall be verified, except for injunctions or orders appointing receivers. While it is desirable that instruments filed as exhibits be verified, nevertheless there is no reason why the bill in this case should be dismissed merely because an exhibit was not verified. If there is any question about the correctness of the copy of the contract filed with the bill, the chancellor can require complainants to produce a verified copy.

The principal ground of demurrer in this case is that the contract can be rescinded by either the seller or the buyers. It is well settled that a court of equity will not decree specific performance of any contract which one of the parties may rescind at will. The Court will not interfere in a case where, if it were to do so, one of the parties might nullify its action by exercising a discretion given him by the terms of the contract. Reichert v. Pure Oil Co., 164 Minn. 252, 204 N.W. 882; Southern Express Co. v. Western North Carolina R. Co., 99 U.S. 191, 25 L.Ed. 319. It would manifestly be improper to impose upon the Court the task of investigating a controversy when the facts are such as to preclude any decree it may render from being conclusive. As the contract in this case provides that either the seller or the purchasers may rescind it at any time prior to December 1, 1948, and defendants have given notice that they will rescind the contract, it would be an idle ceremony for the Court to enter a decree, which defendants would render ineffective.

Complainants however, have stated that they instituted this suit in order to prevent defendants from taking unfair advantage of them, and they will be satisfied with a decree which will award them reimbursement for any amount to which defendants are not justly entitled. Complainants were given possession of the property and have been paying for it in monthly instalments, while the seller has retained the title. The parties agreed that if the contract is rescinded prior to December 1, 1948, all payments made by the purchasers shall be forfeited and considered as rent. Complainants claim that, while they have paid $60 per month, the fair rental value of the property is very much less. It is an accepted rule that where parties are competent to contract, neither party can be relieved from his promises merely because he did not use good business judgment or because the contract was not as profitable as expected, in the absence of fraud, undue influence, or mistake in making the agreement. Poe v. Ulrey, 233 Ill. 56, 84 N.E. 46; Lea v. Blokland, 122 Or. 230, 257 P. 801. Generally the parties to a contract may provide that it may be rescinded at the option of either party, and may fix the rights and liabilities of each in the event of such rescission. For instance, in Geiger v. Western Maryland R. Co., 41 Md. 4, 15, this Court held that where the parties to a contract have stipulated that a certain sum shall be paid by way of compensation upon a breach of the contract, or where the covenants to do certain acts, the damages from which are uncertain and incapable of being ascertained by any fixed pecuniary standard, the sum agreed upon will be considered as compensation for the breach and not as a penalty. Where the right to terminate a contract is reserved in the instrument itself, in the absence of fraud, undue influence, or mistake, such reservation is valid and will be...