McShane v. Hazlehurst

50 Md. 107, 1878 Md. LEXIS 146
CourtCourt of Appeals of Maryland
DecidedDecember 13, 1878
StatusPublished
Cited by12 cases

This text of 50 Md. 107 (McShane v. Hazlehurst) 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
McShane v. Hazlehurst, 50 Md. 107, 1878 Md. LEXIS 146 (Md. 1878).

Opinions

Bartol, C. J.,

delivered the opinion of the Court.

It appears from the record in this case, that the appellee being desirous of disposing of a tract of land with the improvements, farmin g utensils and personal property thereon, situated in Howard County, employed John R. D. Thomas, a broker in the City of Baltimore, who entered into negotiations with John K. White, .another broker employed by the appellants, for an exchange of the farm and personal property thereon, for certain leasehold estate in the city.

These negotiations led to a written contract dated March 17th 1876, and signed by the brokers, as agents for their [115]*115respective principals, marked “exhibit A” (antep. 108.) The appellee not being satisfied with the contract, and denying the authority of Thomas to make it, further negotiations were had, resulting in agreement “B” (antep. 109,) whereby the appellee agreed to take in exchange for his farm and the personal property thereon, estimated as of the value of $10,000, certain leasehold estate in Baltimore City, belonging to the appellants, consisting of two dwelling houses on Oliver Street, two on Fremont Street and two on G-ilmor Street, estimated at $15,000, and a large hotel situated on Pratt Street and Market Space, known as “ The Centennial Hotel,” estimated at $25,000.

This agreement is dated March 21st 1876, and was signed by the appellee and appellants, and was carried into effect on the 6th day of April following, by the execution of deeds of conveyance between the parties, which were delivered on the 7th day of April.

On the 4th day of May ensuing, a bill of complaint was filed by the appellee praying that the contract and the deeds be annulled and set aside, upon the ground of fraud. The fraud is alleged with reference to the hotel; as regards the other property the appellee makes no complaint.

The hotel is described in the contract as “now occupied by Mr. Stuart as proprietor, under a lease of five years from its daté at $5000 per annum; the same being subject to a ground-rent of $2826.40 per annum.”

Under the hotel were four stores not occupied hy Stuart under his lease, but included in the contract of exchange. With respect to these, the bill alleges that “it was averred that they would rent though then unoccupied, for the sum of $1200 per annum.” It is not statéd in the bill by •whom this alleged representation as to the rental value of the stores was made; and there is no proof in the case that any such representation was made by the appellants or their agent. It may therefore be dismissed from our consideration.

[116]*116With respect to the hotel proper, the frauds charged in. the bill are of the most serious and flagrant character.. They are substantially as follows:

It is alleged that it was represented that the hotel was-under a lease to a good tenant for five years, producing a. rental of $5000 per annum, payable monthly, with liberty to the tenant to renew his lease for other five years, and also-to buy out absolutely the interest- of the lessors, for thesnm of $35,000, at any time during his lease. That, induced by these statements and confiding therein, theappellee visited and inspected the premises, and found Stuart in the occupancy thereof, ostensibly carrying on the business of a hotel well equipped with suitable furniture and apparel, of which he seemed to be the owner,, and that no statements were made inconsistent with the-visible appearance of things, but on the contrary were-concealed.

That deluded by said appearances, and fully confiding in the statements that the hotel did produce such rental,. and that the occupancy was realty deemed by the parties, sufficiently valuable to be worth redemption, or buying-out for the large sum above specified, by reason of the profitable business done upon the premises, and that the-said lease was in no respect a sham, but represented a real valid and subsisting lease, producing in reality the rental therein called for; that the appellee confided in these-statements, and had a right so to confide in the representation so made, and having no ability or opportunity to discover any thing to the contrary, he accepted the offer of the several pieces of property in exchange for his farm,, and consummated the said exchange by interchanging-deeds.

The bill then charges that shortly thereafter and within a few days past, (prior to the filing of the bill,) the appellee had discovered that in the transaction he had been grossly deceived, and defrauded by the appellants, John. [117]*117McShane and Henry McShane, in the following manner to wit:

1. That so far from the hotel producing the rental of $5000 per annum, in monthly payments of $4Í6.66, that ■Stuart’s term as appeared hy the lease, had commenced •on the first day of August 1875, that up to April 1st 1876 •eight months rental had accrued viz: the sum of $3333.33-|- and which to accord with the representations, ought to have heen paid by Stuart in monthly payments, hut that he had paid only $817.17 in small sums, and at irregular intervals, and had settled the balance $2515.45 hy giving his note at 90 days; and that to frustrate any discovery that such rent was in arrear, should any intending purchaser inquire, the appellants had receipted the hill with the words “Rec’d Payment,” when in fact Stuart’s note at 90 days was taken, the appellants stating to Stuart that the payment of the note would not he exacted of him. The hill charges that such pretended settlement was designedly made as a part of a fraudulent condition of things, intended to dupe and deceive the appellee, and to give color of truth to the other representations so made as aforesaid.

2. The hill further charges, on information and belief "that in January 1876, Stuart had informed the appellants or one of them, of his inability to pay the rent, that the business of the hotel barely sufficed to pay its •ordinary expenses; that Stuart’s accounts of the business of the house, which were faithfully kept, were at that time examined hy the appellants or one of them, and ■Stuart was informed hy them that the terms of the lease might he considered as practically to be disregarded; and therefore when the appellee was assured that the hotel was leased at a rental of $5000, the appellants knew that this assurance was false, and that the tenant was barely meeting his expenses and unable to pay rent.

3. The hill further alleges that when the appellee visited the hotel he found it well equipped with furniture [118]*118suitable for the business, and Stuart in the occupancy, ostensibly the owner thereof; that within a few days past, he had discovered that the appellants had been heretofore sole owners of the furniture, and had merely entered into some contract for the sale thereof to the tenant, he to pay for the same by instalments.

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Bluebook (online)
50 Md. 107, 1878 Md. LEXIS 146, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcshane-v-hazlehurst-md-1878.