McNally v. Moser

• Decision Date: 01 October 1955
• Docket Number: No. 169,169
• Citation: 122 A.2d 555,210 Md. 127
• Court: Maryland Court of Appeals
• Parties: , 60 A.L.R.2d 388 Brendan McNALLY and Jean McNally, his wife, and A. W. Harrison and Minnie Harrison, his wife, v. Simon MOSER and Helene Moser. ,

Page 127

210 Md. 127

122 A.2d 555, 60 A.L.R.2d 388

Brendan McNALLY and Jean McNally, his wife, and A. W Harrison and Minnie Harrison, his wife, v. Simon MOSER and Helene Moser.

No. 169, Oct. Term, 1955.

Court of Appeals of Maryland.

May 8, 1956.

Rehearing Denied June 8, 1956.

Clayton A. Dietrich, Baltimore (Edward F. Borgerding, Baltimore, on the brief), for appellants.

Lawrence I. Weisman and David M. Blum, Baltimore (Nyburg, Goldman & Walter and M. Peter Moser, Baltimore, on the brief), for appellees.

Before BRUNE, C. J., and DELAPLAINE, COLLINS, HENDERSON and HAMMOND, JJ.

HAMMOND, Judge.

This is an appeal by lessees, and the guarantors of their obligations under the lease, from a declaratory judgment in favor of the landlords that the lease remained in effect and the rent continued payable month by month, against a defense that the zoning ordinances prohibited the use of the leased premises for the purposes contemplated by the lease.

In 1940, the appellees, Dr. Simon Moser, a chiropractor, and his wife, a physiotherapist, purchased the three story building in Baltimore known as 2923 N. Charles St. and began to use the upper floors for their home and the ground floor as their professional offices. Brendan McNally, an appellant, knew the Mosers when he was in chiropractic school, and when he was graduated, came into their office to observe the treatment of patients. When he received his license to practice, he became a full time assistant of Dr. and Mrs. Moser. In 1951, Dr. Moser became ill of Parkinson's disease and soon was almost completely disabled. He arranged to sell his practice and his equipment to Dr. McNally. There was executed a contract of sale whereby all the equipment and the good-will were sold for $10,000, with the major part of the sales price represented by a promissory note (secured by a chattel mortgage on the equipment) payable in monthly installments beginning November 1, 1951, and ending October 1, 1955. As part of the deal there was a ten year lease for the ground floor offices at a rental of $125 a month for the first four years and $150 a month for the next six years. Under the terms of the lease, the Mosers had the right to terminate the tenancy after four years upon giving due notice, and Dr. McNally had the right to extend the lease for an additional five years beyond the ten year period. A. W. Harrison and Minnie Harrison, the father and mother of Mrs. McNally, unconditionally guaranteed the full and faithful performance of the McNallys under the lease.

Matters went no uneventfully for some time. Dr. and Mrs. Moser helped Dr. McNally to keep and increase the practice. Dr. Moser made himself available for reasonable periods of consultation and kept his name on the door, and Mrs. Moser made appointments for Dr. McNally and otherwise helped him as much as she could. In early November, 1954, Dr. McNally informed the Mosers that it was his understanding that the lease terminated on October 1, 1955, and that he intended to vacate and stop paying rent on that date. On November 11, 1954, the Mosers' counsel wrote Dr. and Mrs. McNally, advising them that the lease remained in effect according to its terms until September 30, 1961, and that unless the McNallys indicated their intention of honoring the lease, a proceeding would be instituted for a declaratory judgment establishing its validity and their obligations under it. On November 18, 1954, Dr. McNally's lawyer wrote a letter to the Building Inspector of Baltimore City, asking whether the use of the premises as a non-resident professional office complied with the zoning law. Four days later, the reply from the Building Inspector's office was: '* * * this property may not be used for a doctor's office unless the doctor resides on the premises * * *.' Dr. McNally took no action and made no move until October 1, 1955, and did not, in any way, disclose to the Mosers his inquiry or the result, or make any effort, either on his own or through the Mosers, to obtain official permission to continue the use of the leased premises as professional offices.

On February 18, 1955, the Mosers brought a proceeding for a declaratory judgment against the McNallys and the Harrisons, reciting the execution and guarantee of the lease, the notice of the intention to quit, the failure of the defendants to answer the letter from the Mosers asking acknowledgment of liability under the lease, and concluding with a prayer for a declaration of the rights and interest of the Mosers under the lease. Two weeks later, by letter dated March 2, 1955, the acting zoning enforcement officer of Baltimore notified Dr. and Mrs. Moser to discontinue the use of the leased premises as a non-resident office. On March 17, 195k, after the zoning enforcement officer's attention had been called to the declaratory judgment proceeding, he agreed 'to stay any further proceedings' until the litigation was concluded. A demurrer to the petition was filed and overruled in April. An answer was filed, wherein the appellants alleged that 'the use of the premises in question as a doctor's office for the practice of chiropractic was contrary to the provisions of Article 40 of the Baltimore City Code of 1950 as revised by Sections 10, 11 and 41 of Ordinance No. 711, approved May 21, 1953, known as the Zoning Ordinance, since the occupant of the basement office does not reside on the property in question; that the said Acting Zoning Enforcement Officer for Baltimore City directed the Plaintiffs by said letter (Plaintiff's Exhibit A) to discontinue the use of the premises as a doctor's office at once; * * *.' The answer also contained the following assertion: 'that the lease in question is null and void since the purpose and terms of said lease were in violation of the provisions of the Baltimore City Code of 1950, as revised by Section 9 of Ordinance 444, approved April 23, 1941, and other pertinent sections of the then existing Zoning Ordinance, when said lease was signed by the Plaintiffs and Defendants; furthermore, that the lease is null and void since the purpose and terms of said lease violate the provisions of Article 40 of the Baltimore City Code of 1950, as revised by Sections 10, 11 and 41 of Ordinance No. 711, approved May 21, 1953, which was the prevailing Zoning Ordinance in the City of Baltimore at the time of the filing of the Plaintiff's Petition for Declaratory Judgment.'

The case was tried on October 4, 1955, and judgment was entered in favor of the Mosers, declaring that the lease continued in force until September 30, 1961; that the defendants' liability for the stipulated monthly rental continued; that the Mosers had the privilege of entering and re-letting the premises, but had no duty to do so; that the defendants remain liable for the payment of the rental provided for, less any rentals received by plaintiffs if they elected to re-let; and finally, that the Mosers should recover the rent for the month of October, 1955. Dr. McNally moved out of the leased premises on October 1, 1955--the day that he said almost a year before that he would move. October 1, 1955, was also the date for the last payment under the note and mortgage which secured the bill of sale for the equipment to Dr. McNally.

The defense of the appellants, based on illegality, has two prongs. The first is that the lease was an illegal bargain when it was made because the zoning ordinances then in effect made illegal the use of the leased premises for non-resident professional offices, and second, that Zoning Ordinance No. 711, adopted in May, 1953, made the previous use illegal. There was not at the trial, and is not here, any contention that the lease does not continue until 1961 unless the appellants are right in their contention as to illegality. It was they who pleaded illegality, it is they who had the duty of producing evidence to show it, and finally, it is they who had the burden of persuading the court that they had established the illegality. One who relies on illegality, failure of consideration or other affirmative defenses, has imposed on him the burden of persuasion. Borchard, Declaratory Judgments, 2nd Ed., p. 405-9. Shedlinsky v. Budweiser Brewing Co., 163 N.Y. 437, 57 N.E. 620; Dickson v. Uhlmann Grain Co., 288 U.S. 188, 53 S.Ct. 362, 77 L.Ed. 691; Palmer v. Chamberlin, 5 Cir., 191 F.2d 532, 27 A.L.R.2d 416; Romanus v. Biggs, 214 S.C. 145, 51 S.E.2d 503; Bryan v. Pasadena Holding Co., 140 Cal.App. 261, 35 P.2d 334.

Courts do not ordinarily take judicial notice of the ordinances of Baltimore. Givner v. Cohen, 208 Md. ----, 116 A.2d 357. The appellants did not prove the ordinances on which they rely, nor do they quote or describe with particularity the legal significance of the sections of the ordinances on which they depend to show illegality. In determining whether the lower court erred in holding that the appellants had not met the burden of persuasion, we limit our consideration to so much of the ordinances and their effect as was revealed by the testimony in the case. Field v. Malster, 88 Md. 691, 41 A. 1087; Givner v. Cohen, supra; Central Savings Bank v. Baltimore, 71 Md. 515, 18 A. 809, 20 A. 283. Within this limit the record shows no proof that in 1951, when the lease was entered into, the zoning ordinances prohibited the use of parts of residences for professional offices by non-residents. Far from showing that the parties knew or contemplated that such use was forbidden, the evidence tends to show that both the landlords and the tenants assumed that the use was and would continue to be legal. Dr. McNally testified that the first he knew of the possibility of illegality was in 1954. It was shown that the Mosers, seven years after they had begun to use their North Charles Street home as an office, had secured a permit to do so, on which there was a notation 'Doctor resides on premises' but their testimony was that they did not know that a doctor who did not...