Edison Realty Co. v. Bauernschub

62 A.2d 354, 191 Md. 451, 1948 Md. LEXIS 384
CourtCourt of Appeals of Maryland
DecidedNovember 11, 1948
Docket[No. 16, October Term, 1948.]
StatusPublished
Cited by33 cases

This text of 62 A.2d 354 (Edison Realty Co. v. Bauernschub) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Edison Realty Co. v. Bauernschub, 62 A.2d 354, 191 Md. 451, 1948 Md. LEXIS 384 (Md. 1948).

Opinion

Delaplaine, J.,

delivered the opinion of the Court.

This suit for specific performance and other equitable relief was instituted by Joseph M. Bauernschub, a war veteran, and his wife, Evelyn Bauernschub, who entered into a contract August 19, 1946, to purchase from Edison Realty Co. a house, when completed, at 2815 East Federal Street in the City of Baltimore. Defendants are the realty corporation and its officers, Harry Bart, president, Fred Bart, treasurer, and Sara Bart, secretary.

Complainants allege that they agreed to pay $9,000 for the property, and that the corporation, which had begun the erection of about 116 houses under the Federal housing program for veterans, promised, by oral agreement collateral to the written contract of sale, that the house would be completed and would contain all of the features of a sample house in the development. On January 15, 1947, complainants were informed by an agent of the corporation that the house was substantially completed, and, if any items were not completed, they would be completed promptly after settlement. Relying upon those assurances, complainants paid the corporation a total of $4,000 in cash and gave a mortgage on the property for $5,000 financed under the “GI Bill of Rights.”

*456 Complainants allege, however, that they were not permitted to inspect the interior of the house until after they had settled and received a deed for the property; and afterwards they discovered that the house was not completed in accordance with the contract. They assert that for more than six months they constantly importuned defendants to complete the contract, but they ignored the demands and refused to remedy the defects. Complainants charge that when defendants promised to complete the house, they had no intention of performing the obligations, but on the contrary made the promises in order to induce them to pay for and accept an uncompleted house. They claim that such acts amounted to fraud. They further say that they and about thirty others who bought houses from defendant corporation formed a committee for their joint protection, but the members of the committee were treated by defendants with scorn.

It is alleged in the second amended bill that complainants discovered after the filing of the original bill that details of construction were stipulated in specifications filed with the Federal Housing Administration and in plans filed with the City of Baltimore; and that defendant thereby obtained priorities for materials used in construction ; and the price which the F. H. A. authorized defendant to charge for the house was based thereon. Complainants claim that even though they were not aware of the plans and specifications at the time of the oral agreement, yet they are entitled to have their house comply with them.

Complainants further allege that they have suffered great damage and inconvenience as a result of defendant's failure to complete the house in accordance with the agreement; that, as one example of their damage, water runs into the house after every heavy rain, and they have been compelled to spend much time in bailing out- and mopping up water in the basement.- They believe the corporation has only “meager assets/’- and therefore they have no adequate remedy at law, because the corporation has no sufficient assets out of. which a judgment *457 for damages could be satisfied; and they believe defendants are conspiring to deprive them of their rights.

The bill prays (1) that defendants be compelled to perform the contract for the completion of the house and to furnish all the items to which complainants are entitled; (2) that if it is impossible to perform fully in accordance with the agreement, complainants be awarded damages for any items not furnished; (3) that complainants be awarded damages for losses and inconvenience caused by breach of contract; (4) that defendants be enjoined from continuing the erection of other houses in the project; and (5) that receivers be appointed for the corporation and such other defendants as the circumstances of the case may require.

Defendants demurred to the second amended bill and the chancellor overruled the demurrers. From that order defendants appealed to this Court.

In England there was confusion for many years as to how far courts of equity ought to entertain suits for specific performance of a covenant to build or rebuild a house of a specified form and size on particular land. In City of London v. Nash, 3 Atk. 512, 515, Lord Hardwicke recognized the power of the court in this respect, but said that the court should not specifically enforce a covenant to make repairs to a house. The ground of his opinion in that case, which was between a landlord and tenant, was that on the covenant to repair the tenant might have a remedy at law. In some of the later decisions, however, it was held that no covenant to build or rebuild ought to be enforced specifically in equity. It was considered that there could be adequate compensation in damages in a court of law, and a court of equity ought not to undertake to construct a building any more than to make repairs. Lucas v. Comerford, 3 Bro. Ch. 167; Errington v. Aynesly, 2 Bro. Ch. 343. But the English courts finally adopted the rule that they would decree specific performance where the defendant has entered into a contract to construct on his own land work which is clearly defined, and the complainant has a material interest in its per *458 formance, and failure to perform is not susceptible of adequate compensation in damages. 2 Story, Equity Jurisprudence, 14th Ed., secs. 1006-1008.

In this country it has generally been held that specific performance of a contract to build or do work upon land is usually refused where the land is in the possession of the complainant, upon the theory that complainant himself could have the work done and then sue for damages in a court of law. McCormick v. Proprietors of Cemetery of Mt. Auburn, 285 Mass. 545, 189 N. E. 585. In Maryland it is provided by statute that no court shall refuse to specifically enforce a contract on the ground that the party seeking its enforcement has an adequate remedy in damages, unless the party resisting the enforcement shall show that he has property from which such damages may be made, or shall give bond as therein provided. Laws of 1888, ch. 263, Code 1939, art. 16, sec. 255. The purpose of the Act of 1888 is to abolish the technical defense in suits for specific performance that the complainant has an adequate remedy at law, and thus prevent a defendant who has entered into a binding contract from repudiating it by electing to pay such damages for its breach as a jury might award in an action at law. Neal v. Parker, 98 Md. 254, 57 A. 213. So, we hold in this State that where complainants have purchased land improved by an unfinished house and the vendor has installed an insufficient heating apparatus, or has failed to do certain work which he agreed to do, the court of equity has power to decree specific performance, where the work which has not been performed is clearly defined, and the vendor has not complied with the specific performance statute. Brummel v. Clifton Realty Co., 146 Md. 56, 125 A. 95.

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Bluebook (online)
62 A.2d 354, 191 Md. 451, 1948 Md. LEXIS 384, Counsel Stack Legal Research, https://law.counselstack.com/opinion/edison-realty-co-v-bauernschub-md-1948.