Burroughs v. Garner

405 A.2d 301, 43 Md. App. 302, 1979 Md. App. LEXIS 389
CourtCourt of Special Appeals of Maryland
DecidedSeptember 7, 1979
Docket1154, September Term, 1978
StatusPublished
Cited by11 cases

This text of 405 A.2d 301 (Burroughs v. Garner) is published on Counsel Stack Legal Research, covering Court of Special Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burroughs v. Garner, 405 A.2d 301, 43 Md. App. 302, 1979 Md. App. LEXIS 389 (Md. Ct. App. 1979).

Opinion

Moore, J.,

delivered the opinion of the Court.

*304 This appeal involves the interpretation of several release of lien provisions contained in a “deferred purchase money” second deed of trust. We are asked to determine whether the trial court (David Gray Ross, J.) correctly ruled, in an equity proceeding in which a real estate foreclosure and an action to enjoin it were consolidated, that the appellees-mortgagors 1 were entitled to the release of 29.8 acres out of a 147.8 acre tract pursuant to the terms of the second deed of trust.

I

In September 1971, the Brandywine Farms Joint Venture consisting of 11 members was formed pursuant to a written agreement for the purpose of acquiring and developing, for residential purposes, 147.8 acres of unimproved land in Prince George’s County. 2 The purchase price of $406,654.60 was paid by the assumption of an existing first deed of trust in the sum of $97,089.60, a second deed of trust securing three separate notes 3 aggregating $216,034.44, and cash in the sum of $93,530.56, plus assorted closing costs.

*305 The second deed of trust dated September 24, 1971 was on a standard form generally in use in Prince George’s and Montgomery Counties and in the District of Columbia. In addition, several typewritten provisions were included to allow the orderly and periodic recording of subdivision plats and the release of parcels from the deed of trust lien. These provisions now stand at the heart of the controversy between the parties in light of the Joint Venture’s default in 1977 and its subsequent desire to have a portion of the property released from the deed of trust lien.

Before recounting the events leading up to this litigation, it is necessary that we set out the pertinent typewritten sections of the deed of trust. With respect to plats of subdivision and similar type instruments, the deed of trust imposed mandatory duties upon the trustees at the request of the Joint Venture:

1) That the Trustees hereunder, without further authority from the parties secured hereby, and without any fees or payments on account of said notes secured hereby, shall be authorized and required at the party of the first part’s request, at any time and from time to time, to join in the recording of and to execute consents and approvals with respect to plats of subdivision, street dedication plats or deeds, sanitary sewer, water, storm drainage, gas, electricity, telephone and other utility rights-of-way and easements, declarations of covenants, agreements and other similar-type instruments which may be required at any time and from time to time with respect to the orderly development of the property. (Emphasis added.)

Three separate typewritten paragraphs dictated the circumstances under which releases from the deed of trust lien could be obtained. Twenty-five acres were to be released from the deed of trust lien based upon the consideration *306 provided by the cash payment at settlement. This twenty-five acre release was governed by the following provision:

4) The Trustees are authorized without further approval by the noteholders to execute one or more releases of the property conveyed herein at the request of the maker hereof or its successors and assigns, of 25 acres in one or more parcels upon the following conditions:
(a) Payment from the maker hereof or its successors or assigns to the party secured hereby of the sum of $10.00;
(b) Recordation among the Land Records of Prince George’s County, Maryland of a plat subdividing at least the amount of acreage which is to be released hereunder;
(c) That the property not released hereunder shall have an easement as wide as required by the subdivision requirements of Prince George’s County so that said property will not be landlocked. Said right of way may be either dedicated by record plat or granted in the release to be executed hereunder.

As part of the development plan, the deed of trust provided for additional acreage to be released “subsequent to the release of the twenty-five acres” described in the foregoing paragraph. It provided that upon the payment of “any and every” required installment of principal, “there shall be released from the lien of this Deed of Trust an amount of acreage computed at the rate of $2,750.00.” (Emphasis added.) If both interest and principal were paid in advance of the mandated schedule, then “anv of the land secured herein may be released . . . from time to time upon payment on account of the debt secured hereby of . . . $2,750.00 per acre.” (Emphasis added.)

*307 No provision was made in the deed of trust instrument for the location of property to be released within the 147.8 acre tract except for a requirement that “all releases subsequent to the 25 acres to be released at no cost to the maker hereof shall be contiguous and adjacent to said 25 acre tract.” 4

Sometime in April 1972, the Joint Venture engaged the services of W. Stanley Machen, a professional surveyor of many years’ experience, to assist them in the work of subdivision and development. He subsequently drafted three successive preliminary plats of subdivision for portions of the property which were all given preliminary approval by the Maryland-National Capital Park & Planning Commission’s Prince George’s County Planning Board. Mr. Machen also prepared a final plat dated June 1,1978 encompassing 50.069 acres, to which reference is hereinafter made.

From the beginning the Joint Venture was unable to make the scheduled payments of interest and principal due under the second deed of trust. For the first two payments, due September 24, 1972 and 1973, respectively, the noteholders orally agreed to accept interest payments only. In October 1974, payments of principal were made on two of the three notes in the sum of $6,585 each, and interest was also paid on each of the two notes in the sum of $4,609.50. 5 This, too, was done with the noteholders’ approval. In 1975, by further agreement with the noteholders, interest only was again accepted but the interest rate was increased to 9% and a payment in the sum of $5,233.85 was made on each of the two notes. The same payments were made in 1976. In 1977, *308 however, no payments were made of either principal or interest; 6 the Joint Venture also did not pay the property taxes for 1976-77 and 1977-78, which led to a tax sale on May 8, 1978. 7

On June 18, 1978, foreclosure proceedings were instituted in the Circuit Court for Prince George’s County by George T. Burroughs and Bessie Mae Cox, substitute trustees.

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Bluebook (online)
405 A.2d 301, 43 Md. App. 302, 1979 Md. App. LEXIS 389, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burroughs-v-garner-mdctspecapp-1979.