Phelps v. Herro

• Decision Date: 19 December 1957
• Docket Number: No. 65,65
• Citation: 215 Md. 223,137 A.2d 159
• Parties: George W. PHELPS et ux. Charles W. Sandsbury et ux. v. James J. HERRO et ux.
• Court: Maryland Court of Appeals

Page 223

215 Md. 223

137 A.2d 159

George W. PHELPS et ux. Charles W. Sandsbury et ux. v. James J. HERRO et ux.

No. 65.

Court of Appeals of Maryland.

Dec. 19, 1957.

Dissenting Opinion Dec. 31, 1957.

William D. Macmillan and J. Calvin Carney, Baltimore (W. Garrett Larrimore, Annapolis, on the brief), for appellants.

John O. Herrmann, Baltimore (Charles F. Rechner, Jr., Baltimore, on the brief), for appellees.

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

PRESCOTT, Judge.

This appeal questions the validity of an order passed on April 3, 1957, that directed 'the Plaintiffs' (appellees') motion for a Summary Judgment be granted,' and a judgment entered on April 8, 1957, in favor of the appellees against the appellants for the sum of $34,135.82; both in the Circuit Court for Anne Arundel County.

On October 21, 1955, the appellees and appellants entered into a written agreement whereby the appellees agreed to sell, and the appellants agreed to buy, fractional interests of the appellees in and to certain real property and corporate stock for the sum of $37,500. The agreement further provided that appellants should pay the purchase price as follows:

'1. Five Thousand Dollars ($5,000.00) in cash on or before January 1, 1956.

'2. A promissory note in the amount of Thirty-two Thousand Five Hundred Dollars ($32,500.00) calling for principal payments in the amount of Five Thousand Dollars ($5,000.00) plus interest at the rate of four per cent (4%) per annum on the first of each succeeding January and the entire balance to become due and payable January 1, 1961. However, Phelps and Sandsbury (appellants), may extend the maturity date until January 1, 1963, by giving notice of intention to so extend in writing to Herro (appellee) on or before July 1, 1960.'

The appellants paid the first $5,000 as provided in the agreement. They and the appellees remained rather closely associated in several intricate and complicated business transactions until some time in September of 1956. At that time, the appellees transferred unto the appellants their fractional interests in the real estate and corporate stock named in the contract. Soon thereafter, negotiations were conducted by the parties, which had as their objective the sale to the appellants of all of the interests of the appellees in all business enterprises where there were mutual interests, or a purchase by the appellees of the appellants' interests therein. A meeting was held and attended by all of the parties on October 11, 1956, at the office of the appellees' counsel. At this meeting, the appellants contend the appellees made an oral proposal that was subsequently accepted unconditionally by the appellants in writing, thereby making a binding contract. While the appellants fully acknowledge the existence of the contract involved in the case at bar, this alleged contract, as set forth by them, materially changed their obligations thereunder. The appellees contend the appellants did not accept the proposal as made by them, and claim the purported acceptance contained a number of terms either in addition to or at variance with the oral offer made by them; consequently the purported acceptance was no more than a counter-proposal, which was not acceptable to them.

The appellees instituted an action at law against the appellants on December 7, 1956. The declaration consisted of five common counts in assumpsit and one special count on the written contract. At the same time, the appellees filed a motion for a summary judgment to which was attached a photostatic copy of the written contract. This motion was supported by an affidavit in proper form. This affidavit, after stating some of the facts related above, alleges the appellees: 'transferred and conveyed to the defendants their said interest in and to said real and personal property and performed all other matters and things required of them under said agreement; that the defendants paid the plaintiffs five thousand dollars ($5,000.00) but have failed and refused to execute and deliver to the plaintiffs a promissory note in accordance with the said agreement although plaintiffs have so requested and demanded; that defendants have, through their attorney and agent, notified the plaintiffs, through their attorney and agent, that they will not pay the balance of the purchase price to the plaintiffs in the amount of thirty-two thousand five hundred dollars ($32,500); that there is now therefore justly due and owing the plaintiffs by the defendants over and above all credits the sum of thirty-two thousand five hundred dollars ($32,500) together with interest from January 1, 1956.' The appellants filed what they termed an 'Answer in Opposition to Plaintiffs' Motion for Summary Judgment.' As the affidavit attached to his 'answer' was clearly defective in not being made on personal knowledge (Maryland Rule 610, subd. b), it cannot be considered here. The appellees filed a supplemental affidavit before the hearing on the motion for summary judgment stating that they had received no payment from the appellants since the filing of the suit. A hearing was held on the motion on March 29, 1957. On April 3, 1957, a docket entry was made that reads: 'Ordered that the Plaintiffs' motion for Summary Judgment be granted,' and on April 8, 1957, judgment was entered against the appellants in favor of the appellees for $34,135.82. From these, the appellants have appealed.

The judgments herein were entered under the authority of Maryland Rule 610. Section a, par. 1 of this rule provides: 'In an action, a party asserting a claim, * * * may at any time make a motion for a summary judgment in his favor as to all or any part of the claim on the ground that there is no genuine dispute as to any material fact and that he is entitled to judgment as a matter of law.' As the appellants' affidavit was defective, there was no genuine dispute concerning the facts, so we must determine whether the appellees were 'entitled to judgment as a matter of law.'

It will be noted suit was filed December 7, 1956, and the next instalment of $5,000 was not due under the contract until January 1, 1957. It is well settled and familiar law that a cause of action must be ripe at the commencement of the suit and the non-existence of a cause of action at that time is fatal to the right to recover; therefore it would be superfluous to cite authorities in support of the proposition.

The appellees' theory of the case is that at the time of the hearing on the motion for a summary judgment, their allegations that the appellants had failed and refused, although requested and demanded, to execute and deliver a promissory note, and that the appellants had notified the appellees they would not pay the balance of the purchase price showed such a definite and specific repudiation of the contract that it entitled them to sue immediately for the entire sum due by the appellants under the contract. The appellants, on the other hand, claim the suit was prematurely brought; that originally the contract was a bilateral one that became unilateral as soon as the appellees performed all of the matters and things required of them under the agreement (the fact that appellees had so performed being admitted in appellees' affidavit); that under the agreement of the parties, the appellants had not agreed to give a negotiable promissory note, or a note that was to be secured in any manner, but simply a promissory note payable to the appellees and signed by the appellants; that the consideration named was higher than the appellants would have agreed upon, unless the appellees had agreed to take an unsecured note payable over a long period of time; that when the contract became unilateral, the only obligation thereunder was that the appellants were required to pay several sums of money in instalments, which obligation, assuming a failure to give a note and a statement by their attorney that appellants would not pay the note, would not be accelerated so as to make the entire sum named in the contract, or any part thereof, due on December 7, 1956, when suit was instituted.

One of the leading cases on the question of the anticipatory breach of a contract is Hochster v. De la Tour, 2 El. and Bl. 678. There, the plaintiff in April, 1852, had agreed to serve the defendant, and the defendant had undertaken to employ the plaintiff, as courier, for three months from June 1, 1852, on certain terms. On May 11, 1852, the defendant wrote the plaintiff that he had changed his mind, and declined to avail himself of plaintiff's services. On May 22, 1852, the plaintiff brought an action at law for breach of the contract. It was held that there could be a breach before the time fixed for performance; that a positive and absolute refusal to carry out the contract prior to the date of actual default amounted to such a breach. Since the decision in this case, there have been numerous and varied rulings on the many and complex angles that have arisen in applying, or not applying, the doctrine of anticipatory breach of a contract, and it is entirely possible the law relating thereto is not, at the present, well settled in all of its aspects. Annotation, 105 A.L.R. 460, 462.

However, with reference to unilateral contracts, or bilateral contracts that have become unilateral by full performance on one side, for the payment of money in the future, without surety or other conditions involved (the situation in this case when suit was instituted), the text writers and decisions are in general accord that the doctrine of anticipatory breach has no application. 5 Williston, Contracts, sec. 1328; 4 Corbin, Contracts, sec. 963; Annotation, 105 A.L.R. 460, 465; Restatement, Contracts, sec. 318, comment e. In Roehm v. Horst, 178 U.S. 1, 20 S.Ct. 780, 44 L.Ed. 953, a leading case, the Supreme Court, on elaborate consideration by Chief Justice Fuller, recognized the principle. In Greenway v. Gaither, ...