Schapiro v. Jefferson, 42
| Decision Date | 09 December 1953 |
| Docket Number | No. 42,42 |
| Citation | 100 A.2d 794,203 Md. 372 |
| Parties | SCHAPIRO v. JEFFERSON et al. |
| Court | Maryland Court of Appeals |
Eugene Hettleman, Baltimore, for appellant. Walter C. Mylander, Jr., Baltimore (Reuben L. Uman, William Lovitt and Marshall A. Binder, Baltimore, on the brief), for appellee.
Before SOBELOFF, C. J., and DELAPLAINE, COLLINS, HENDERSON and HAMMOND, JJ.
The question presented on this appeal is whether the vendor in a land instalment contract has any right to a deficiency decree after default by the vendees and a resale of the property under the Land Instalment Contracts Act. Code 1951, art. 21, §§ 118-124.
On May 11, 1951, Louis Schapiro contracted to sell to Renus Jefferson, Lillian Jefferson, his wife, and Annie Jefferson, his mother, a three-story house situated at 1018 South Sharp Street in Baltimore, subject to an annual ground rent of $96 to be created, for the sum of $6,500. The contract provides that $250 was paid at the signing thereof, an additional $100 is to be paid on June 11, 1951, and the balance is to be paid in instalments of $28 a week, beginning May 12, 1951, the payments to be applied by the vendor to payment of taxes, ground rent, insurance, interest, and principal.
We are concerned chiefly with the provision that upon default in any of the payments, the vendor shall have the option either (1) to declare the contract terminated, in which event the property shall revert to the vendor, and all payments made shall be considered as earnest money and liquidated damages and remain the property of the vendor, and the vendees shall immediately vacate the property, or (2) to consider the vendees as tenants from week to week for the rental of $28 a week, payable in advance.
Annie Jefferson, who resided at 1111 Sharp Street, entered into the contract to assist her son and his wife, who needed a home. They moved into the second floor and rented the first and third floors. After they had occupied the property more than a year, they were unable to continue the weekly payments, and they moved out of the house on August 4, 1952.
On September 5, 1952, the vendor served a notice on the vendees that they were $200 in arrears, and that the contract would terminate on October 6 unless they brought the payments to date prior thereto. On October 17 he instituted foreclosure proceedings under the Land Instalment Contracts Act. The property, subject to annual ground rent of $96, was advertised for sale at auction on November 12, and it was sold for $3,000. The sale was ratified on December 23. On February 11, 1953, the auditor filed a report showing the amount still due by the vendees to be $3,092.96. As there were no exceptions, the report was ratified February 25.
On February 26 the vendor petitioned the Court for a decree in personam for the amount of the deficiency. The vendees objected. At the hearing on the petition Annie testified that on the day Renus and Lillian vacated the house, she phoned the vendor that they were moving out, and that they were turning the property back to him. She testified that he came to see her and did not object in any way, but he asked her whether she would do him the favor of collecting the rents from the tenants on the first and third floors, and she agreed to do so. The tenants brought the money to her home, and the vendor came there to get the money. She further testified that, while she did not receive any written notice of the foreclosure proceedings, she knew of the sale of the property, as she saw the auction sign on the day it was posted on the house. Her daughter-in-law also testified that she saw the sign on the property in October, 1952.
The chancellor found that the vendees surrendered possession of the property, and that the vendor terminated the contract in accordance with its terms and was not entitled to a decree in personam under the contract. From the chancellor's order denying the petition, the vendor appealed here.
The Land Instalment Contracts Act, enacted by the Maryland Legislature and approved by Governor McKeldin on April 30, 1951, did not take effect until June 1, 1951, several weeks after the contract was entered into. Laws 1951, ch. 596, Code 1951, art. 21, §§ 118-124.
Section 121 of the Act provides that when the vendee is in default in the payment of any sum due under a land instalment contract, the vendor shall, as a condition to the exercise of his remedy, first serve written notice on the vendee of intention to terminate, at least 30 days before such action may become effective. This section prescribes what the notice shall state and how it must be delivered.
Section 123 provides that upon default and after notice to the vendee, the vendor, after filing an affidavit that Section 121 has been complied with, may make a sale of the property described in the contract, upon giving bond and complying with the requirements of Section 5 of Article 66 of the Maryland Code, entitled 'Mortgages,' and such sale shall be made in further compliance with Sections 7 to 14, inclusive, of Article 66.
Section 123 contains a proviso that this remedy in the nature of a foreclosure of a mortgage shall be the sole remedy of the vendor for repossession of property sold under a land instalment contract executed after June 1, 1951; and that as to such contracts executed prior to June 1, 1951, this remedy shall also be available in lieu of any summary remedies provided by law for landlord and tenant cases, which summary remedies are made inapplicable to actions arising out of such contracts.
It is clear that the Act authorizes the court to enter a decree in personam for a deficiency under a land instalment contract, as Section 123, which authorizes a sale in the event of default by the vendee, states that the sale shall be made in compliance with Sections 7 to 14, inclusive, of Article 66, entitled 'Mortgages'; and Section 14 of Article 66 provides that where, upon a sale of mortgaged property the net...
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...241, 249, 230 A.2d 672 (1966); Wheaton Triangle Lanes, Inc. v. Rinaldi, 236 Md. 525, 530-31, 204 A.2d 537 (1964); Schapiro v. Jefferson, 203 Md. 372, 378, 100 A.2d 794 (1953). Thus the various clauses pertaining to arbitration scattered throughout the AIA Contract must be read in pari mater......
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