Ortel v. Upper Ashburton Realty Co., Inc.

• Citation: 190 A. 239,171 Md. 678
• Decision Date: 17 February 1937
• Docket Number: 8.
• Parties: ORTEL v. UPPER ASHBURTON REALTY CO., INC., ET AL.
• Court: Maryland Court of Appeals

190 A. 239

171 Md. 678

ORTEL v. UPPER ASHBURTON REALTY CO., INC., ET AL.

No. 8.

Court of Appeals of Maryland

February 17, 1937

Appeal from Circuit Court No. 2 of Baltimore City; Robert F Stanton, Judge.

Suit by Anna M. Ortel against the Upper Ashburton Realty Company Incorporated, and others. Decree dismissing the bill, and plaintiff appeals.

Affirmed.

H Mortimer Kremer, of Baltimore, for appellant.

Joseph H. A. Rogan, of Baltimore (J. Francis Ford, of Baltimore, on the brief), for appellees.

Argued before BOND, C. J., and URNER, OFFUTT, PARKE, SLOAN MITCHELL, SHEHAN, and JOHNSON, JJ.

URNER Judge.

The plaintiff, Anna M. Ortel, on December 15, 1932, signed an agreement for the purchase, from the Upper Ashburton Realty Company, Inc., of thirty-eight or more lots included in the company's real estate development in the northwestern suburbs of Baltimore City. The purchase price was $8,000. Of that amount $3,200, was paid when the agreement was executed and $150 the following day. It was stipulated that the balance should be paid at the rate of $50 per month beginning on April 15, 1933. The sale was effected by a sales organization known as the Harrison-Broussard Company, a copartnership which had contracted with the Upper Ashburton Realty Company on August 16, 1932, to serve as its exclusive sales agent for the disposition of its lots. The negotiations for the sale to the plaintiff were conducted principally by H. W. Philpot, the manager of the sales agency. Because of his alleged misrepresentations in procuring her agreement of purchase, the plaintiff refuses to make any further payments under its terms, and by this suit in equity she endeavors to have the contract rescinded and the vendor corporation and its three directors required to make restitution of the purchase money which she has already paid. The proceeding to that end, however, was not instituted until the lapse of nearly two years after the discovery of the fraud charged in the bill of complaint. According to its allegations the fraud consisted of the false promise, on behalf of the defendants, that the lots in which the plaintiff was thereby induced to invest would be resold for her within three months at a profit of at least $2,000, and that in the event of a failure to make such a sale, the money paid by her on account of the purchase would be returned. It was further averred in the bill that the amount of her payment on the purchase was derived from the sale of securities which she delivered to the defendants, or their agents, to be sold for the purposes of the investment; that subsequently they sent to her by messenger a contract for the purchase which she was persuaded to sign but was not allowed to read; that the promise of resale at a profit or repayment of the money received from the plaintiff has not been fulfilled, but the defendants have demanded of her additional payments to an amount largely in excess of her intended investment.

The defendants filed answers denying the allegations of fraud. A trial upon that issue resulted in a decree dismissing the bill, and the plaintiff has appealed.

The only witnesses who testified to material facts in the case were the plaintiff and J. Brooks Mellor, the vice president and sales manager of the Upper Ashburton Realty Company. The members and agents of the Harrison-Broussard firm, through which the lots had been sold to the plaintiff, were not available as witnesses. From the testimony of the plaintiff we quote as follows: "In November, or in the fall of 1932, I was repeatedly called on the telephone by the Harrison Company who invited me to come to their development out to Ashburton Heights, and I told them I was not interested in real estate, but they persisted in calling, and finally sent a man to my home to take me out there to see their property, and thinking to be rid of him I went. * * * Before that, they had what they call a lecture luncheon system of selling real estate, and there was a speaker there who said during the course of his lecture that Messrs. Albrecht, Mellor and Hoch were the millionaire owners of that property, who were reputable persons of very high standing in the community, and were prepared to give clear title to any lots that were sold there. * * * A salesman of the company--Mr. Philpot--tried to interest me in the property there and I told him I was not interested as a building site. * * * Then when he saw he could not interest me in it as a home site, he wanted to know why I would not be interested as an investment and he went on to recite numerous cases of people who had bought property there, and in each case had sold at a profit. * * * Then to make it more attractive, he said the city had purchased adjoining property to be used as a public park and when the general public realized that fact, there would be a great rush to buy those lots and if I would buy certain lots he pointed out on a map to me as an investment he would guarantee to sell them in ninety days at a profit that would make up all the losses that I would have assumed if I had sold the securities which I hold."

Yielding to that allurement, the plaintiff signed the contract of purchase which she now desires the court to annul. But, as she testified, "that was not the first one. There were three contracts involved all together. The first two were for property that was located at Patterson Heights, which I had never seen or heard of before, and I was under the impression it was all at Ashburton Heights. That fact was called to my attention by Mr. Mellor. When I showed him my papers at the end of the ninety days, he pointed out to me the fact that they were not contracts with his company." The two prior contracts were executed on the 14th and 17th of November, 1932, and the vendor was the Arlington Realty Company, with which the defendants in this suit appear to have had no connection, but which was likewise represented by the Harrison-Broussard sales agency. On the occasion of each transaction the plaintiff delivered to Philpot some of her securities to be sold with a view to the application of the proceeds to the purchase price. The payments thus provided for aggregated $8,450, and absorbed all but $540 of the amounts realized from the sale of the plaintiff's securities. It was her belief, according to her testimony, that the payments under the three contracts were exclusively for Upper Ashburton lots and fully satisfied her liability as purchaser. In regard to the number of lots she was buying, or as to the valuation per lot, she disclaims any definite understanding. After signing the contracts, partly in blank, at the office of the sales agency, she received them by mail or messenger in their completed form as executed by the vendor corporation, but without reading the agreements she placed them in her safe deposit box, from which they were not removed for several months. The lots not having then been resold, she visited Philpot with a view to having that purpose accomplished. Any effort which he may have made to sell the lots for the plaintiff was unsuccessful. The sales organization which employed him ceased to function and he removed from Baltimore.

The testimony of Mr. Mellor was to the effect that when the plaintiff called to see him in the spring of 1933, she complained that two of...