author: Smith, J.,

text:
    HILDA MAE MOATS et al. v. THE ESTATE OF LILY W. PUMPHREY et al.
    [No. 1303,
    September Term, 1975.]

      Decided September 17, 1976.

    The cause was argued before Frederick J. Singley, Jr., and Marvin H. Smith, Associate Judges of the Court of Appeals, and David Ross, Associate Judge of the Eighth Judicial Circuit, all specially assigned.

      Steny H. Hoyer, with whom were Hoyer & Fannon on the brief, for appellants.

      Jeffrey D. Radowich, with whom were Edward S. Digges, Sr., and Edward S. Digges, Jr., on the brief, for appellees.
   Smith, J.,

delivered the opinion of the Court.

This case is a sequel to Moats v. Schoch & Berry, 24 Md. App. 453, 332 A. 2d 43 (1975), and was pending at the time that proceeding was before this court. In fact, Chief Judge Orth noted for the court in footnote 5 of the opinion in that case that the appellants there (two of the three appellants here) “moved to have further appellate proceedings stayed pending the outcome of Equity 3343 [(this case)] below,” which motion was denied. We shall here invoke Maryland Rule 1086 and hold that “the judgment of the lower court [should] not be set aside on the evidence [since it was not] clearly erroneous .. . .”

The seeds of this controversy were sown in 1942 when Hilda Mae Pumphrey married contrary to the wishes of her parents. A day or two later they executed a will styled at the top as “Joint and Several Will of William B. Pumphrey and Lily W. Pumphrey.” It provided in pertinent part:

“We, William B. Pumphrey and Lily W. Pumphrey, husband and wife,... do hereby make, publish and declare this to be our Joint and Several Last Will and Testament in manner and form following, that is to say: —
“After the payment of all our just debts ... we dispose of our estate, jointly and individually, as follows: —
“Item 1\ — We give and bequeath unto our daughter, Hilda Mae Pumphrey, the sum of one ($1.00) dollar.
“Item 2: — After the death of both of us, we jointly and severally bequeath and devise our home property containing 18.32 acres, more or less, ... unto our daughters, Frances Geneva Pumphrey and Lillie Belle Pumphrey, equally, share and share alike.
“Item 3: — We jointly and severally and individually bequeath and devise, after the death of both of us, the survivor having had a life interest therein, all the rest and residue of our estate, jointly and severally and individually, real, personal and mixed, of whatsoever kind and wheresoever located, and whether nor [sic] owned or hereafter acquired, unto our daughters, Frances Geneva Pumphrey, and Lillie Belle Pumphrey, equally, share and share alike.
“We hereby nominate, constitute and appoint our daughters, Frances Geneva Pumphrey, and Lillie Belle Pumphrey, executors of this our Joint and Several Last Will and Testament.”

Mr. Pumphrey died in 1949. In 1957 Mrs. Pumphrey executed a new will. In it she left the residue of the estate, after bequests of $1.00 to each of her three daughters, to two granddaughters, the children of Lillie Belle Bastain. In the earlier appeal two of the daughters, Hilda Mae and Frances Geneva, sought to prevent the probate of the later will. In holding that the 1957 instrument was properly admitted to probate, Chief Judge Orth said for the court:

“We assume for the purpose of decision, but expressly do not decide, that it was a joint and mutual will, contractual in nature, and that Lily W. Pumphrey accepted benefits thereunder. In other words, we are assuming arguendo, for the determination of this appeal only, that the will of 1942 was a joint, mutual, reciprocal will binding William and Lily to dispose of their property in the manner therein set out, each in consideration of the other, and that there was a contract between them that the will would remain in effect. Even on these assumptions, which accept the premises in the question as presented by daughters, the answer to the question is no, the will of 1942 is not irrevocable.

In this case appellants Hilda Mae Moats (Hilda Mae), Frances Geneva Bell (Frances Geneva), and Lillie Belle Bastain (Lillie Belle) (collectively, the daughters), have sued the two granddaughters and the estate of Mrs. Pumphrey. Among other things, they have alleged:

“That prior to and concurrent with the execution of said will, [their parents] agreed and contracted, each with the other and in consideration of the promises made each to the other' and to their daughters, to dispose of all of their separate and jointly held property, whether in hand or after acquired, in such manner that the survivor would obtain only a life interest therein, including property owned solely by the survivor, with remainder to specified legatees and devisees, namely, their daughters, Frances Geneva Bell, Hilda Mae Moats and Lillie Belle Bastian [sic],
“That said agreement and contract was understood and consented to by both parties, and the terms thereof were reduced to writing and contained in the document dated May 22,1942, and titled ‘Joint and Several Will of William B. Pumphrey and Lilly [sic] W. Pumphrey’ (marked as Exhibit A and attached [to the bill of complaint]), which document was intended to and did in fact serve as a binding written memorial of said agreement and contract, as well as the means by which performance of said agreement and contract would be insured as to both parties in the event of the death of the other.”

They further alleged that by this will their mother “took only a life interest in the property of [their father], [with the] remainder to Frances Geneva Bell, and Lillie Belle Bastian [sic], and she did contract to leave her property, then held or after acquired, in accordance with the terms thereof”; that “[t]he parties contracted and agreed that upon the death of the first to die the survivor should take an ordinary life estate in all property belonging to either spouse at that time or thereafter acquired, and that [their mother] thereby became bound to create such an interest at the death of [their father] in all property belonging to her then or acquired later, and to make a gift of the remainder interest to her daughters in compliance with the agreement”; “[t]hat at the death of [their father], [their mother] acquired a life estate only in his property and simultaneously had her own fee interest in all jointly held, separate, and after acquired property, diminished, pursuant to the agreement and contract between them, to a life estate”; that at the death of their father they “acquired a vested remainder interest in fee simple in all property belonging to [their father], and in all property jointly owned by [their father and mother] and in all property owned by [their mother] at that time or thereafter acquired by her and not disposed of inter vivos that at the death of their mother “and the termination of her life interest in all her property, whether separate, jointly held, or acquired subsequent to the death of [their father], the Plaintiffs’ vested remainder interest became a vested fee simple interest in all property belonging to [their parents], whether separate, jointly held, or after acquired, and that, therefore, [their mother] was without power or authority to effect any valid testamentary disposition of any such property in violation of the agreement and contract described supra.” (Emphasis in original.) They sought: (1) a declaration that the agreement between their parents as contained in the 1942 will was “valid and binding upon the Estate of Lily W. Pumphrey, deceased, . .. upon the Defendants in this action; and upon all other persons mentioned in or benefited by the said mutual Will”; (2) specific performance of the agreement; (3) that the 1957 will “be declared inoperative, illegal, and ineffective to devise, bequeath, give or dispose of any of the real or personal property which came into the hands of [their mother], on the death of [their father], or was thereafter acquired but not disposed of by her during her life, and that in such respect said alleged Last Will and Testament of [their mother] be declared null ánd void”; (4) an accounting of all property received by the co-executors under the 1957 will and surrender by them of all such property; (5) an injunction against sale or transfer of real or personal property in the possession of the co-executors; (6) the appointment of a receiver “for the purpose of taking possession of and protecting the property mentioned in [their] complaint,” with the receiver to collect rents, etc.; and (7) a judgment for costs.

The chancellor (Bowling, J.) pointed out in his opinion that the earlier case in this court settled the fact that the 1942 will was revocable. Thus, he reasoned, “if the relief prayed is to be granted it must be based on an underlying agreement independent of the Will.” He referred to Wilks v. Burns, 60 Md. 64 (1883), quoted extensively by this court in the earlier opinion, and repeated that portion of the opinion in Wilks in which Judge Yellott said for the Court:

“If a will executed under these circumstances, is subsequently cancelled, the aid of a Court of equity can be invoked. But how does equity intervene? By an inquiry into the terms of the contract, which must be established by the adduction of proper and adequate evidence. If the proof fails, there can be no application of the remedy, and the cancelled will remains without vitality.” Id. at 70.

He said that in “reviewing] the terms of the Will and the facts in this case to determine whether an underlying agreement existed which would be enforcible [in equity]” it was necessary that “a determination should be made as to whether this is a ‘joint and mutual’ or a ‘joint and several’ Will,” that if it were found that this was “a mutual Will it would be some evidence indicating that there was an independent, underlying agreement between Mr. and Mrs. Pumphrey for the disposition of their property.” He pointed out that the words “joint and several” were used in the instrument, that “Websters’ definition of several is ‘existing apart, separate, distinct and individual,’ ” that there was “no other language in the Will which indicates that these words were to be given any meaning other than their normal and customary meaning,” and thus concluded “that this was to be a joint and several Will and not a joint and mutual Will,” that at the death of her husband in 1949 the will became the individual will of Mrs. Pumphrey “and she had the right as provided by statute to revoke the same at any time.” He added that “[t]he disposition of property as provided in the Will does not show an independent, underlying agreement which would be binding upon Mrs. Pumphrey after the death of Mr. Pumphrey.” He then went on “to determine whether or not there was extrinsic evidence sufficient to establish the existence of an underlying agreement which would preclude Mrs. Pumphrey from revoking this Will in 1957.” He concluded there was no such evidence, that there was no underlying agreement concerning the disposition of the property other than that both parents intended to punish Hilda for running off and getting married, and that “[t]he evidence disclose[d] no independent agreement for the disposition of their property in any other manner which would prevent Mrs. Pumphrey from revoking her 1942 Will in 1957.”

The evidence adduced was sparse. All three daughters testified. Hilda Mae said that she had no contacts with her parents from the time that she called her mother after the ceremony on the day of her marriage until seven years later in 1949 when her father was in the hospital. She testified that her father operated a hog farm in Prince George’s County and that when the hogs were sold her father “got two-thirds. [Her] mother received a third. They were partnerships.”

Lillie Belle said that her father told her that if she “taken and walked off and got married like Hilda [she] would be left nothing or otherwise if [she] had stayed home and got married like [she] should that [she] would heir to everything that he had,” that is that she and her sister, Frances, would be “made heirs of everything.” This conversation took place on the night that Hilda was married. She stated that on the following day her father “said he was going to Upper Marlboro and they [we] re going to make a will” and “that Frances and [she] would be the heirs to whatever they had.” On May 22, in the presence of her mother, she and her sister were handed the will and told to read it. At that time the discussion was with her father who “told [them] that there was a will and everything belonged to Frances and [Lillie Belle].” She identified the will we have quoted as the instrument which she read on that day. She testified to familiarity with the business operation of the family farm and that “when [her father] came home from selling these hogs [her mother] was given so much money, one third, and he kept the other two-thirds. In fact, he put his share in the bank/’

The next witness was Frances Geneva. She was close to 16 at the time her older sister got married and left home in 1942. She said, “There was a lot of confusion and threats and everything, what would happen if we did it and all.” She testified relative to a conversation with her father:

“He said if either one of you girls do that, you will get the same thing. We will leave her a dollar. We are going to have a will made and we are going to leave her a dollar.”

On May 22, 1942, when she came home from school her mother and father showed her the will. She identified the document we have previously quoted as the instrument which she was shown. Relative to the conversation, she declared:

“My father said well, we had a will made today. And my mother handed it to my oldest sister and we read it, because, you know, I was a child. I didn’t pay too much attention to it.”

John E. Kennedy described himself as a good friend of the family in 1942. At that time he saw Mr. Pumphrey “every day, five days a week. And family about twice. [He] guess [ed] about every other night through the week.” He said that when Hilda ran away to get married her father “said that they were going to make a will,” that “[h]e said they [we] re going to make a will, going down to Upper Marlboro, to make a will, and leave Hilda one dollar and the entire estate would go to Belle, which is the oldest daughter and Frances, the youngest daughter.” This conversation took place on May 21, 1942, a date he “never will forget.” According to Kennedy on the following day or two days later Mr. Pumphrey “and Mrs. Pumphrey told [him] that they made the will that day” and asked whether he “would like to read it.” He said there was not much further conversation “with Mr. Pumphrey. Because he was very brief. He never said much. But Mrs. Pumphrey kept saying over and over .. . that they made the will and that Belle and, the oldest daughter, and Frances. The youngest one would get the entire estate. Hilda Mae would get one dollar.”

The above testimony, the 1942 will, and a certified copy of the administration account in Mr. Pumphrey’s estate showing a gross personal estate of $3,945.04 and payment in excess of receipts of $294.78 constituted the evidence before the chancellor.

We review this case bearing in mind that in Wilks, 60 Md. at 67-68, the Court of Appeals said, “When there is an application for specific performance, the proof of the intention of the contracting parties must be clear, and the contract certain in its terms, and free from all shade or color of ambiguity.” In that same case the Court quoted from Semmes v. Worthington, 38 Md. 298 (1873), where Judge Alvey said for the Court:

“[I]n all cases for specific performance [of a contract to devise real estate] the contract must be accurately stated in the bill, and the proof must in every essential particular correspond with the terms of the contract thus set up. The proof must be clear and explicit, leaving no room for reasonable doubt. And in cases for the specific enforcement of a contract to devise, like the present, where the property has been devised to other parties, the utmost certainty is required, as, by the enforcement of the contract, the court undertakes to set aside a solemn testamentary act of the deceased party, in the absence of all possible explanation of his conduct, and when he is no longer present to vindicate himself against the imputation of bad faith. To such cases may well and most aptly be applied the rule so clearly and forcibly stated by the late Mr. Justice Grier, of the Supreme Court, in delivering the opinion of that tribunal, in a case of an application for specific performance. In speaking of the character and certainty of proof required on such applications, he said: ‘Such proof must be clear, definite and conclusive, and must show a contract leavingnojws deliberandi or locus penitentiae. It cannot be made out by mere hearsay, or evidence of the declarations of a party to mere strangers to the transaction, in chance conversations, which the witness had no reason to recollect from interest in the subject-matter, which may have been imperfectly heard or inaccurately remembered, perverted or altogether fabricated; testimony, therefore, impossible to be contradicted.’ Purcell v. [Coleman], [71 U. S. 513, 517, (] 4 Wall. [513,] 517 [), 18 L. Ed. 435 (1867)].”Id. at 318-19.

The daughters suggest:

“[I]t is clear that while the mere execution of a joint will by husband and wife does not by itself prove the existence of an underlying agreement, it does give rise to at least an inference of mutuality. Additionally, it is equally certain that reciprocal terms and a dispositive scheme under which husband and wife testators limit themselves to only a life estate interest in all property, should he or she be the survivor, with benefit over to a named third person in whom both share a common interest, all combine to provide the additional evidence necessary to establish the underlying agreement, as a matter of law.”

One of the leading cases supporting this point of view is Nye v. Bradford, 144 Tex. 618, 193 S.W.2d 165 (1946). Other cases include: Van Houten v. Whitaker, 169 Cal. App. 2d 510, 337 P. 2d 900 (2d Dist. Div. 1, 1959); Weiss v. Storm, 126 So. 2d 295 (Dist. Ct. App. Fla. 1st D. 1961); Frazier v. Patterson, 243 Ill. 80, 90 N. E. 216 (1909); In re Estate of Marcucci, 5 Ill. App. 3d 484, 285 N.E.2d 141 (1st D. 1971), rev’d on procedural grounds 54 Ill. 2d 266, 296 N.E.2d 849 (1973); Helms v. Darmstatter, 56 Ill. App. 2d 176, 205 N.E.2d 478 (5th D. 1965), aff'd 34 Ill. 2d 295, 215 N.E.2d 245 (1966); In re Weidman’s Estate, 181 Kan. 718, 314 P. 2d 827 (1957); In re Estate of Adkins, 161 Kan. 239, 167 P. 2d 618 (1946); Tutunjian v. Vetzigian, 299 N. Y. 315, 87 N.E.2d 275 (1949); Rastetter v. Hoenninger, 214 N. Y. 66, 108 N. E. 210 (1915); Seat v. Seat, 172 Tenn. 618, 113 S.W.2d 751 (1938); Wilson v. Starbuck, 116 W. Va. 554, 182 S. E. 539 (1935); and Schwartz v. Schwartz, 273 Wis. 404, 78 N.W.2d 912 (1956).

A number of writers have criticized or taken positions inconsistent with the reasoning of these cases. Their point of view is perhaps best articulated by Professor Bertel Sparks, Contracts to Make Wills 26 (1956), where he takes the general position that “[t]he rule requiring that contracts to devise or bequeath be proved by clear and convincing evidence should be strictly adhered to and all attempted encroachments upon it carefully guarded against.” With reference to joint wills in particular he said:

“The courts do not always display the desired amount of diligence in the application of the ‘clear and convincing’ rule and this tendency becomes especially pronounced when they are confronted with the wills of two or more persons which, when considered together, show on their face, by their reciprocal provisions or otherwise, that they were intended as part of one integrated scheme or plan. Such wills might consist of one document executed by two or more persons as the will of each of them, in which case they will be referred to as joint wills; or they might consist of separate documents which nevertheless reveal the common scheme or plan, in which case they will be referred to as mutual wills. Where wills of this kind are concerned the courts still give verbal adherence to the rule that clear and convincing evidence is required to prove the existence of a contract, but an examination of the results reached raises a very real question as to the exactitude with which the rule is applied. When two people execute a common document as the will of each of them or when they execute separate documents at approximately the same time and in identical or almost identical language there is a tendency to pass too easily to the conclusion that such action must have been the result of a contract.
“The clear weight of authority, and certainly the sounder view, is that the mere presence of either joint or mutual wills does not raise any presumption that they were executed in pursuance of a contract. Nor is this rule altered by evidence that the parties had ‘agreed’ to the making of such wills. Of course they had so agreed. The mere presence of such wills reveals that the parties must have talked the matter over and must have arrived at an understanding or agreement concerning their testamentary dispositions. Such discussions and such understandings between persons of close affinities, especially between husbands and wives, are not unusual and the fact that they have taken place is no indication that there has been any thought of a binding contract.” Id. at 26-28.

He argues that “[t]he use of such pronouns as ‘we,’ ‘our,’ and ‘us’ in joint wills is often said to be indicative of a contract” but “[s]uch language should be taken as nothing more than the normal and natural usage of two people attempting to execute two wills as one document,” that this language “indicates that they have talked over their testamentary plans and have agreed upon a certain scheme of disposition, but is completely silent as to whether or not a contract has been entered into. Such has been the position of the better reasoned opinions.” Relative to two wills executed simultaneously he says:

“Closely related to the problem of joint wills is the situation presented by two wills executed by different testators as separate documents but indicating on their face or through the surrounding circumstances that the two were parts of a single transaction or at least had been discussed or considered together. Sometimes the language is identical except for such differences as are necessitated by two different testators being involved. There is sometimes evidence that the two testators consulted the draftsman together and quite often both wills are attested by the same group of attesters. The provisions of such wills are usually reciprocal in that each testator gives the other a life estate, with or without a power to consume, with a gift over to a common remainderman. Do any or all of these factors prove the existence of a contract for the making of these mutual wills? The general rule is that they do not.” Id. at 29.

He points out relative to mutual wills that “[t]he fact that each testator had knowledge of the other will is sometimes emphasized as evidence of a contractual relationship. It is quite apparent that all these cases which are contrary to the general rule stated above result from a confusion of evidence of an understanding or a common plan with evidence of a contract. This confusion has resulted in the finding of some contracts on extremely slender evidence and in the occasional suggestion that the presence of reciprocal provisions is sufficient without more to prove the contractual relationship.”

A view similar to that put forward by Professor Sparks is found in T. Atkinson, Handbook of the Law of Wills § 49 (2d ed. 1953):

“Many questions arise concerning the proof of contracts to leave one’s property in accordance with the terms of joint or mutual wills. It is important to distinguish between a mere agreement to make a will and one not to revoke the same. Sometimes, though not often, there is a separate written contract to the latter effect. The wills themselves may recite the agreement which is made. It is generally held that the mere making of mutual separate wills is not sufficient evidence of a contract not to revoke. While their form and content often indicate that each testator knew about the other’s will and it may even be inferred that there was concert in making them, we should not infer a contract not to revoke without further proof. In the case of a joint will however, some courts have indicated that the will by itself permits the inference of an agreement not to revoke. Possibly the execution of a joint will has more of a tendency to indicate a contract not to revoke than in the case of mutual separate wills. But the better view is that the proof of the execution of a joint will without further evidence is not sufficient proof of a contract not to revoke.” Id. at 226.

Similar reasoning is found in 1 J. Alexander, Commentaries on the Law of Wills §§ 97, 98 (1917), and Bowe—Parker: Page on Wills § 11.1 (1960). The latter states:

“The fact that joint wills and mutual wills are usually executed as the result of a common intention does not in any way mean that they are always executed pursuant to a contract between the parties respecting the making of such wills. Though it is true that in many cases the joint will or the mutual wills are made as the result of a contract to make reciprocal wills, there are undoubtedly an equal number of cases in which the common intention does not proceed anywhere near to the point where arms length promises are exchanged, consideration exists, and a contract emerges. It is more logical to expect that in many settings, particularly that of husband and wife, the reciprocity or similarity in the dispositive provisions of the two wills results from similar tastes and affections that have resulted from years of living together, and the making of identical or similar wills was a spontaneous thing unaccompanied by even so much as a thought on the part of either husband or wife that they should enter into a contract with each other. The sole fact, standing alone, that two wills were executed at or near the same time and bear similar provisions should in no way give rise to a presumption or an inference that they were made pursuant to a contract.” Id. at 554.

See also P. Sykes, Maryland Probate Law and Practice § 12 (1956), and T. Jarman, Wills (8th ed. 1951), which latter work states:

“The fact that a husband and wife have simultaneously made mutual wills, giving each to the other a life interest with similar provisions in remainder, is not in itself evidence of an agreement not to revoke the wills; in the absence of a definite .agreement to that effect there is no implied trust precluding the wife from making a fresh will inconsistent with her former will, even though her husband has died and she has taken the benefits conferred by his will.” Id. at 42.

Some courts have refused upon the ground of lack of consideration to find an underlying agreement which makes the provisions of a joint will enforcible in equity. See, e.g., Clements v. Jones, 166 Ga. 738, 746, 144 S. E. 319 (1928); In re Estate of Johnson, 233 Iowa 782, 791, 10 N.W.2d 664 (1943); Menke v. Duwe et al., 117 Kan. 207, 220, 230 P. 1065 (1924); In re Gudewicz’ Will, 72 N.Y.S.2d 838, 839 (Surrogate’s Ct., Richmond Co. 1947); and Lee v. Powell, 285 S.W.2d 291, 296 (Tex. Civ. App., Waco 1956). Other cases have simply emphasized the lack of evidence where what was relied upon to establish a contract was merely reciprocal provisions or a general scheme in conjunction with the relationship between the parties. See, e.g., Lamberg v. Callahan, 455 F. 2d 1213 (2d Cir. 1972); Rolls v. Allen, 204 Cal. 604, 269 P. 450 (1928); Father Flanagan’s Boys’ Home v. Turpin, 252 Iowa 603, 612, 106 N.W.2d 637 (1960); In re Estate of Pennington, 158 Kan. 495, 500, 148 P. 2d 516 (1944); Neff v. Poboisk, 281 Minn. 475, 161 N.W.2d 823, 825-26 (1968); Glidewell v. Glidewell, 360 Mo. 713, 722, 230 S.W.2d 752 (1950); Edson v. Parsons, 155 N. Y. 555, 50 N. E. 265 (1898); In re Gudewicz’ Will, supra; Ginn v. Edmundson, 173 N. C. 85, 91 S. E. 696 (1917); Rhodes’s Estate, 277 Pa. 450, 453-54, 121 A. 327 (1923); Havird v. Schissell, 251 S. C. 416, 162 S.E.2d 877, 878 (1968); and Beveridge v. Bailey, 53 S. D. 98, 106-07, 220 N. W. 462(1928).

The claim of the daughters that their mother received benefits under the will of their father that should preclude her from making a will contrary to the 1942 will is rebutted insofar as the personal estate is concerned by the administration account showing a deficit in the father’s estate. There is. absolutely no evidence in the record establishing that any real estate passed to Mrs. Pumphrey under the will of her husband. Argument that because of the agreement between the parents the mother received property held as tenants by the entireties is a fallacious one since in order to receive title to land thus owned by the parties all she had to do was to survive her husband. Obviously, the will could have no effect upon the title to property thus held.

From the evidence we know only that Mr. and Mrs. Pumphrey were irked at the marriage of their daughter, that they executed a will together penalizing that daughter, that Mr. Pumphrey announced his intention of making such a will, that Mr. Pumphrey said they had made such a will, that a neighbor was told by both Mr. and Mrs. Pumphrey that they had made such a will, that the will was handed to the two remaining children to read, that Mr. Pumphrey predeceased his wife, that Mr. Pumphrey’s personal estate was not sufficient to pay the sums due, that Mrs. Pumphrey wrote a later will, and that when Mr. and Mrs. Pumphrey operated their hog farm Mrs. Pumphrey normally received one-third of the proceeds of sales of hogs.

We believe the sounder view to be that expressed by Professor Sparks, a view in line with that expressed by the Court of Appeals in Semmes v. Worthington, supra, a somewhat analogous case, “that the mere presence of either joint or mutual wills does not raise any presumption that they were executed in pursuance of a contract. Nor is this rule altered by evidence that the parties had ‘agreed’ to the making of such wills.” The evidence adduced here is a far cry from establishing a contract between Mr. and Mrs. Pumphrey as to the disposition of their estate which could be the basis for specific performance. As Judge Alvey pointed out for the Court in Semmes v. Worthington, supra, what the daughters would here have us do is “to set aside a solemn testamentary act of the deceased party [(their mother)] . .. when [she] is no lon'ger present to vindicate h[er]self against the imputation of bad faith”; accordingly, the proof should correspond with the terms of the contract which the daughters seek to establish. There is no showing in this case of “a dispositive scheme under which husband and wife testators limit themselves to only a life estate interest in all property, should he or she be the survivor, with benefit over to a named third person in whom both share a common interest” as contended by the daughters. The burden of proof was upon the daughters as the plaintiffs. They left the chancellor unpersuaded. Generations of Maryland lawyers have sought jury instructions to the effect that if testimony in a case should leave the mind of the jury in a state of equipoise or even balance, then their verdict should be for the defendant. See, e.g., Morris v. Christopher, 255 Md. 372, 380, 258 A. 2d 172 (1969); Sullivan v. Smith, 123 Md. 546, 558, 91 A. 456 (1914); Barabasz v. Kabat, 86 Md. 23, 37, 37 A. 720 (1897); Ohlendorf v. Kanne, 66 Md. 495, 498, 500, 8 A. 351 (1887); and A. Thomas, Prayers and Instructions § 311 (1908). The rule, obviously, must be the same if the trier of fact is a judge rather than a jury.

On the facts presented in this case we cannot say that the chancellor was clearly in error when the proof adduced by the plaintiffs left him unpersuaded as to the essentials of the contract.

Judgment affirmed; appellants to pay the costs.

      “6. The courts have not been discriminate in defining the terms ‘joint,’ ‘mutual,’ and ‘reciprocal’ wills. We think the best definitions are those found in Vaughn, ‘The Joint and Mutual Will,’ 16 Bay L.R. 167 (1964):
      ‘A joint will is a single testamentary instrument which contains the wills of two or more persons, is executed jointly by them, and disposes of property owned jointly, in common, or severally by them. A mutual will is one executed pursuant to an agreement between two or more persons to dispose of their property in a particular manner, each in consideration of the other. If the testators name each other as beneficiaries, the wills are reciprocal. Two or more wills may be mutual without being joint. A joint and mutual will must be the will of two or more persons contained in a single testamentary instrument, jointly executed by them pursuant to an agreement to dispose of their respective estates to each other or to third parties. Although the initial execution of the will may categorize it as joint and mutual; nevertheless, it cannot be given effect as such while one party survives, but, as to him, it will be given effect as his separate will.’ (footnotes omitted)

        See Annot., 169 A.L.R. 9, 12-14 (1947); G. Thompson, Wills, § 34 (3rd ed. 1947); 57 Am. Jur. Wills, § 681 [(now 79 Am. Jur.2d Wills § 754 (1975))].”Id. at 458-59.


source: Caselaw Access Project

author: Levine, J.,

license: Public Domain

text:
    NOMITA BRADY et al. v. JOSEPH B. BERKE et al.
    [No. 1332,
    September Term, 1975.]

      Decided September 20, 1976.

      The cause was argued before Irving A. Levine and John C. Eldridge, Associate Judges of the Court of Appeals and Ralph W. Powers, Chief Judge of the Seventh Judicial Circuit, all specially assigned.

      Lewis Straughn Nippard and Terry B. Blair, with whom were Louis A. Becker and Sybert, Sybert & Nippard on the brief, for appellants.

      Raymond J. Kane, Jr., with whom were Richard D. Neidig and Reese & Kane on the brief, for appellees. Thomas E. Lloyd for appellee Claude M. Skinner.
   Levine, J.,

delivered the opinion of the Court.

This action for reformation of a deed based on mutual mistake was commenced by the filing by appellees of a bill of complaint in the Circuit Court for Howard County. After appellants successfully moved to include the original surveyor, Claude M. Skinner, as a third party defendant, a trial on the merits was held. In his decision, the trial judge (Macgill, C. J.) determined that the deed should be reformed as requested and dismissed the third party complaint. Appellants filed a petition for rehearing based on newly discovered evidence, but after taking additional testimony, the court filed a memorandum and order affirming its original decision. An appeal was then taken to this Court.

I

On September 9, 1959, appellee Joseph B. Berke entered into an agreement with Augustus Riggs and his wife whereby Berke was given the option of purchasing a portion of a 150 acre tract owned by Riggs. The Riggs tract was bounded on all four sides by public roads, on the north by U.S. Route 40, on the west by Old Frederick Road, on the south by Maryland Route 144 and on the east by Maryland Route 97. According to the terms of the option agreement, Berke was given the exclusive right to purchase a portion of the tract “containing one hundred twenty (120) acres of land, more or less, to be exactly determined by actual field survey.” The boundaries on the north, west and south were to be the public roads; the boundary on the east was to be measured inward from Route 97. The metes and bounds description of the property in the agreement, according to testimony, while not prepared pursuant to a field survey and though an obvious approximation since it failed to close the property at one point, was of a tract containing about 120 acres. Finally, the agreement provided that “the purchase price of the land covered . . . shall be at the rate of nine hundred (900) dollars per acre.”

The option was exercised and Skinner, a registered engineer, was requested by Riggs’ attorney to make a survey and prepare a description of the property which was the subject of the option agreement. A property description prepared by Skinner was embodied in the deed, which itself purported to convey 120 acres of land, more or less. The settlement sheet prepared at closing indicated a “purchase price of 120 acres at $900.00 per acre.”

Then in 1972 appellees retained another registered professional engineer, Leon Podolak, to resurvey the tract in preparation for the sale of a portion of it. At that time Podolak found, and reported to appellees, that the tract described in the January 1960 deed contained, in fact, only 90 acres. Two months later appellees filed a bill of complaint seeking reformation of the deed, alleging mutual mistake and seeking establishment of a new eastern boundary to reflect the purported intention of the parties that a 120 acre tract be conveyed.

Appellants, respondents below, Hans von Barby and Nomita Amoroso Brady, are the grandchildren of Riggs and devisees of his interest in the remainder of the original tract, Riggs having died testate in 1966; appellees are Berke and the several other grantees under the 1960 deed. Additional parties to this action are Skinner, as a third party defendant, and the State Roads Commission of the State Highway Administration, which had filed a petition to acquire a 17 acre parcel, part of which was within the disputed 30 acres. Appellants do not dispute on appeal the correctness of the lower court’s order with respect to the division of monies paid by the State Roads Commission for that portion of the tract taken in the exercise of eminent domain, except, of course, to argue that no division is appropriate because reformation is unwarranted.

In support of their claim, appellees offered, in addition to that of Berke, the testimony of Reginald D. Malloy, an attorney who represented Berke in the purchase and was present at settlement, and of the two professional engineers.

Malloy testified as to the composition of the settlement sheet, already mentioned, and the fact that he had calculated the purchase price of $108,000 by multiplying the unit price of $900 stated in the option agreement by 120, the number of acres to be sold. He further testified that he hired Skinner to survey the property and prepare the description for the deed.

Over objection, Skinner testified that he had been employed by an attorney to prepare descriptions of a 120 acre parcel for purposes of a contract of sale and of a 20 acre parcel to be specifically exempted from the operation of a purchase money mortgage taken back by Riggs. He testified that he was later contacted by another attorney and asked to prepare a third description, this of a 90 acre parcel for the purpose of a mortgage release. The 90 acre description was prepared, according to his testimony, by taking a carbon copy of the plat of the 120 acre parcel and erasing the easterly boundary, drawing in a new boundary somewhat west thereof. Skinner neglected, however, according to his own testimony, to change his notation on the plat that the parcel shown contained 120 acres. Finally, it was his testimony that the 90 acre descripUon was the one incorporated in the deed.

Two plats were prepared by Podolak, one showing the 90 acre area described in the deed and the other showing a 120 acre tract, derived from the description in the option agreement with the addition of a small area added to bring the total acreage up to 120. The boundary line of the 120 acre tract drawn by Podolak, according to his testimony, was nearly identical to the line, erased but still clearly visible, on the 90 acre plat prepared by Skinner.

Upon the foregoing facts, the trial court concluded that mutual mistake as to the description of the property had been established “clearly and beyond a doubt.” It was therefore ordered that the deed be reformed by changing the eastern boundary to that calculated by Podolak and that appropriate sums be paid to appellees by appellants and the State Roads Commission.

The first argument of appellants is that the evidence was insufficient to establish either mutual mistake or the precise agreement if indeed a mistake was made. In considering this argument we are mindful of Maryland Rule 1086, also applicable in actions for reformation, which provides that the judgment of the trial court is not to be set aside on the evidence unless clearly erroneous. See Lazenby v. F. P. Asher, Jr. & Sons, 266 Md. 679, 683, 296 A. 2d 699 (1972).

It is well settled that a court of equity will reform a written instrument to make it conform to the real intention of the parties where, because of a mutual mistake of fact, the instrument fails to express that intent. Mattingly v. Houston, 235 Md. 54, 59, 200 A. 2d 160 (1964); Painter v. Delea, 229 Md. 558, 563-64, 184 A. 2d 913 (1962); Moyer v. Title Guarantee Co., 227 Md. 499, 505, 177 A. 2d 714 (1962). More specifically, as was said in Hoffman v. Chapman, 182 Md. 208, 214, 34 A. 2d 438 (1943):

“Where a deed is intended to carry into execution a written or oral agreement, but fails to express the manifest intention of the parties on account of a mistake ... whether from carelessness,' forgetfulness or lack of skill, equity will rectify the mistake to make the deed express the real intention of the parties.” (citations omitted).

Further, it is settled that the standard of proof is not that ordinarily applied in civil cases; reformation will be granted only if the evidence is “clear, strong and convincing.” Mattingly v. Houston, supra, 235 Md. at 59; Hoffman v. Chapman, supra, 182 Md. at 210.

While it is true, as appellants argue, that one seeking reformation of an instrument must show not only that there has been a mistake, but also what was the agreement contemplated by the parties, Housing Equity Corp. v. Joyce, 265 Md. 570, 580-81, 290 A. 2d 769 (1972); Painter v. Delea, supra, 229 Md. at 564; Moyer v. Title Guarantee Co., supra, 227 Md. at 504, in our opinion there is clear and convincing evidence of both in the record of this case. First, appellees .demonstrated clearly the existence of mutual mistake. The testimonial and documentary evidence presented indicates no intention other than to convey a 120 acre tract of land. The option agreement, the settlement sheet and the deed itself are concerned with the transfer of 120, not 90, acres. Moreover, appellees have demonstrated the origin of the mistake in the preparation and mislabeling of the third plat by the engineer.

Secondly, appellees, in our view, have amply demonstrated what was the actual agreement contemplated by the parties. Most important in this regard is the option agreement which described, in rough figures, the 120 acre tract it was the intention of the seller to convey and the purchaser to acquire. That the erased line on the 90 acre plat prepared by Skinner, which showed his calculation of the eastern boundary of the 120 acre tract, tracked, according to testimony, almost exactly the boundary .line fixed by Podolak according to the directions in the option agreement demonstrates the accuracy with which the true agreement was determined.

It is therefore our view that the evidence was sufficient to support the ordered reformation.

II

It is next argued by appellants that the testimony of Skinner should have been excluded by operation of the Dead Man’s Statute. Maryland Code (1974), § 9-116 of the Courts and Judicial Proceedings Article provides:

“A party to a proceeding .. . against a . .. devisee ... may not testify concerning any transaction with or statement made by the dead . . . person, personally or through an agent since dead ....”

Appellants contend that since Skinner was made, albeit upon their motion, a third party defendant, he was a party to the proceeding and his testimony was therefore barred by § 9-116. We find it unnecessary, however, to decide whether a third party defendant included in an action by motion of the party seeking protection of the Dead Man’s Statute is a party for purposes of § 9-116, since we find that in the circumstances of this case the testimony given was not siich as is prohibited by § 9-116 in any event. See Ridgley v. Beatty, 222 Md. 76, 82, 159 A. 2d 651 (1960).

The Dead Man’s Statute only prohibits testimony of a party “concerning any transaction with . . . the dead . . . person, personally or through an agent since dead.” Skinner’s testimony was that he never met any of the parties to the transaction, but was instead hired by an attorney to prepare the 120 acre description and plat. Berke testified that, in fact, it was he who paid Skinner to make the survey, this according to the provision in the option agreement that the “Optionee will cause to be made at his own expense a complete survey by a competent surveyor of the land involved.” Likewise, the plat and description for the 90 acre tract was prepared upon the request of an attorney, apparently Riggs’ attorney Murray, as agent for Riggs. There being no indication that Murray was deceased at the time of the proceeding below, transactions between him, as agent for the deceased, and the witness were admissible. In any event, the objection made by appellants’ counsel was only “to the competency of [Skinner] to testify as to any transactions, conversations or dealings between he and the decedent, Mr. Riggs.” (emphasis added). No further objection was made when testimony about transactions had with Murray was introduced.

The objection was, therefore, properly overruled.

Ill

Lastly, appellants contend that the trial court erred in finding that appellees’ action was not barred by laches because of the passage of time, some 12 years, between the date of execution of the deed and the institution of this action. We find this contention to be equally without merit.

In general, there is no inflexible rule as to what constitutes laches, and hence the existence of laches must be determined on the facts and circumstances peculiar to each case. Parker v. Board of Elec. Sup., 230 Md. 126, 130, 186 A. 2d 195 (1962); Boggs v. Dundalk Realty Co., 132 Md. 476, 481, 104 A. 45 (1918); Warburton v. Davis, 123 Md. 225, 231, 91 A. 163 (1914). The passage of time is merely one factor to be considered in determining whether the delay is unreasonable and unjustified. Parker v. Board of Elec. Sup., supra.

Appellants rely primarily on the principle, occasionally applied, that in an appropriate case, such as where there is a long unexplained delay in bringing an action, a court of equity will apply by analogy the statute of limitations applicable in the most nearly apposite action at law. See, e.g., Hall v. Barlow Corporation, 255 Md. 28, 42, 255 A. 2d 873 (1969); Stevens v. Bennett, 234 Md. 348, 351, 199 A. 2d 221 (1964); Brashears v. Collison, 207 Md. 339, 352, 115 A. 2d 289 (1955). The appropriate statute of limitations here is, perhaps, as argued by appellants, the 12 year limitation on actions on a specialty.

The flaw in appellants’ theory, however, is that they would measure the delay from the date of execution of the deed, apparently based on the presumption that the subsequent delay is unexplained. In fact, it is well settled that time begins to run, for purposes of laches, from the time the party charged with it should have had knowledge or the means of knowledge of facts giving rise to his right or cause of action. Berman v. Leckner, 193 Md. 177, 185, 66 A. 2d 392 (1949); Labanowski v. Baltimore, 168 Md. 127, 132, 176 A. 615 (1935); Sears v. Barker, 155 Md. 323, 330, 141 A. 908 (1928); Cit. Mut. F. I. Co. v. Conowingo B. Co., 116 Md. 422, 434-35, 82 A. 372 (1911). The trial court found that appellees were in possession of no facts prior to the time of the commission of the new survey by Podolak, only two months prior to the institution of this action, putting them on notice of the error in the description in the deed. The shortage would not, according to the court below, have been apparent even to one skilled in estimating land areas from observation, nor would the average layman possess the skill necessary to calculate the land area from the description in the deed. In short, there was no reason for appellees to suspect any error in the original survey and therefore no reason to have a new survey made. The relevant delay was, therefore, only some two months, a delay not of unusual duration.

Nor does it appear that appellants were appreciably prejudiced by the delay. The land in question remains undeveloped. Indeed, the only prejudice claimed by appellants is that which results from the death of Riggs during the intervening years and the consequent unavailability of his testimony. Riggs, however, died in the period during which appellees lacked knowledge of the facts giving rise to their cause of action, and that event is not, therefore, a significant consideration. In fact, in light of the particularly convincing quality of the evidence in this case, we doubt whether there would be sufficient prejudice to justify a finding of laches in any event. Cf. McDonnell v. Milholland, 48 Md. 540, 548 (1878).

There being, therefore, neither an unreasonable delay in commencing this action nor prejudice to the parties charging laches, we find no error in the refusal of the trial court to impute laches to the complainants.

Judgment affirmed; costs to be paid by appellants.

      . Though a brief was filed on behalf of Skinner, it does not appear that any error was assigned with respect to that part of the trial court’s order dismissing the third party claim against him.


author: Liss, J.,

text:
    UNIVERSAL UNDERWRITERS INSURANCE COMPANY et al. v. SAMUEL A. WILSON, JR.
    [No. 1333,
    September Term, 1975.]

      Decided September 20, 1976.

      The cause was argued before J. Dudley Digges, Associate Judge of the Court of Appeals,  Solomon Liss, Associate Judge of the Eighth Judicial Circuit, and Charles E. Edmondson, Associate Judge of the First Judicial Circuit, all specially assigned.

      George D. Solter and B. Ford Davis for appellants.

      Robert E. Powell, with whom were Smith, Somerville & Case on the brief, for appellee.
   Liss, J.,

delivered the opinion of the Court.

On December 21,1972, Samuel A. Wilson, Jr. (hereinafter referred to as “Wilson”) was involved in an automobile accident with Linwood V. Uhler and Janet C. Uhler, his wife (hereinafter referred to as “Uhlers”), in which the Uhlers sustained personal injuries and property damage to their automobile.

Wilson, on November 29,1971, was the manager of Bittorf Ford Sales, Inc. (hereinafter, “Bittorf”), an automobile dealership. On that date, he purchased from Bittorf for $750 a 1967 Buick LeSabre, which Bittorf had received in trade from a customer who had assigned the title in blank to Bittorf. Wilson made a down payment of $50 and executed a conditional contract of sale to Executive Cars, Inc., another Bittorf controlled company, for the balance; Bittorf retained the paper title as additional security. Bittorf permitted Wilson to use its dealer’s tags during the period in which payments were to be made. Wilson used the car for his personal affairs and occasionally for Bittorf’s business until mid-September of 1972, when his employment with Bittorf terminated. Final payment on the car was made on October 10, 1972; however, Wilson continued to use Bittorf s dealer’s tags, and they were still being used and displayed on the vehicle when the accident occurred.

The Uhlers filed suit for damages in the Circuit Court for Howard County against Wilson and Bittorf; and thereafter, the case was removed to the Circuit Court for Carroll County. A motion for summary judgment v,;>s filed and granted in favor of Bittorf on the ground that tnere was no evidence of any agency relationship between Wilson and Bittorf at the time of the accident.

Universal Insurance Company (hereinafter, “Universal”) had issued to Bittorf a garage, bodily injury and property damage liability policy, the omnibus clause of which provided coverage for “any other person while actually using an automobile covered with this policy with the permission of the named insured.”

Wilson filed in the Circuit Court for Carroll County this suit for declaratory judgment in which he petitioned the court to find that he was entitled to be furnished a defense by Universal in the Uhler suit against him and that he was further entitled to coverage under the liability policy.

Testimony disclosed the facts hereinbefore recited and, in addition, disclosed a dispute between Bittorf and Wilson as to the events after the final payment of the purchase price on October 10, 1972: Wilson contended that on that date, he requested the title from Mr. Bittorf but did not receive it. Mr. Bittorf said he told Wilson that as soon as his check cleared, the title would be mailed to him; he further stated that in accordance with his promise, he mailed the title to Wilson, who denied ever receiving it. The evidence further disclosed that Wilson was required to apply for a duplicate title some six months after the final payment. Mr. Bittorf also testified that both he and his son demanded the return of the dealer’s tags on numerous occasions between the date of final payment (October 10, 1972) and the date of the accident (December 21, 1972), but the tags were not returned. Wilson claimed he believed the automobile was covered by Bittorfs insurance company; Mr. Bittorf said he believed the automobile was insured under Wilson’s personal automobile insurance. It is unfortunate for all the parties that Wilson had no such insurance.

In order to secure his dealer’s tags, Bittorf had certified to the Motor Vehicle Administration that any vehicle displaying its dealer’s tags would be covered by insurance in the amount required by the Maryland Financial Responsibility laws and that he was insured by Universal.

The law governing transactions of this nature is found in the Motor Vehicle Code. The pertinent portions are set out in Art. 66V2, § 3-113 (a) and (c) of the Annotated Code of Maryland:

“Transfer to or from dealer; records.
(a) Certificate of title to be retained by dealer. — If the transferee of a vehicle is a registered dealer who holds the vehicle for sale, he shall retain the certificate of title in his possession. The certificate of title shall have thereon an assignment and warranty of title executed by the former owner and must be in the possession of the dealer within 10 days of the date of transfer to the registered dealer and remain therein until the further sale or transfer of ownership of the vehicle. All certificates covering vehicle held for sale shall be available for inspection by representatives of the Department and by police officers during regular business hours.”
“(c) Transfer to one other than another dealer. — If ownership of a vehicle held by a registered dealer for sale is transferred to someone other than another registered dealer who holds the vehicle for sale, the transferring dealer shall execute and acknowledge an assignment and warranty of title in the manner and upon the form prescribed by the Department, and in addition shall comply with the following:
1. .If the vehicle is a Class A vehicle which is to be registered and titled in this State, the transferring dealer shall obtain from the transferee the written application for a certificate of title and the prescribed fee therefor, and forward the same, together with all other documents required by § 3-104, to the Department within 10 days from the date of delivery of the vehicle;...”

It was conceded that Bittorf did not comply with the requirements of this statute and that at the time of the accident, the paper title to the vehicle was still registered at the Motor Vehicle Administration in the name of the prior owner with Bittorf having in its possession an assignment in blank of that title.

The trial court in its Order found that because of Bittorf s failure to comply with the requirements of the Code, it was left with an interest in the vehicle, which entitled Wilson to hold Universal responsible under the terms of the omnibus clause of Bittorf s policy for a defense and liability coverage. Thereafter, a Motion for Reconsideration was filed and granted, and memoranda were submitted. The trial court reaffirmed its original finding; and, in addition, it ruled that Universal was bound by the certification filed by Bittorf which required Bittorf to have financial responsibility insurance on any vehicle displaying its dealer’s tags. It is from these orders that the appellants have filed their appeal.

The issues to be determined in this appeal are:

1) Did Bittorf at the time of the accident retain sufficient interest in or control over the vehicle on which its tags were displayed to hold Universal liable under the omnibus clause of its policy? and
2) Is Universal bound by Bittorf's certification — required by the Motor Vehicle Administration — that any vehicle upon which the dealer’s registration plate is displayed will be covered by liability insurance?

The trial court, in its Order, cited a number of cases to support its conclusions. One of the cases cited was Clouse v. American Mutual Liability Insurance Co., 344 F. 2d 18 (1965), a South Carolina case, in which the 4th Circuit of the United States Court of Appeals reversed a District Court judgment and held that when an automobile dealer failed to comply with the statutory requirements for transferring the title of an automobile to the purchaser, the dealer was left with an interest in the vehicle which entitled the plaintiff to hold the insurer responsible under the omnibus clause of the dealer’s insurance policy. The Clouse decision was followed in the District Court of South Carolina, Aiken Division, in Security General Ins. Co. v. Bill Vernon Chevrolet and Universal Underwriters, 263 F. Supp. 74 (1967), where a dealer failed to comply with the statutory requirements for transfer of title to a purchaser, and the dealer’s insurer was held primarily liable for any judgment against the purchaser and was required to furnish a defense.

In Clouse, supra, however, the Court had left itself a fallback position. It said at page 21 of its opinion:

“Regrettably, the Supreme Court of South Carolina has had no opportunity to pass upon the broad question of state policy which is now before us. Decisions from other jurisdictions involving different factual situations and slight differences in statutory wording and arrangement offer guidance, but of necessity cannot control the outcome here.”
See cases cited therein.

Mirabile dictu, when the matter reached the South Carolina Supreme Court, an entirely different interpretation of state policy was enunciated: In the case of St. Paul Fire and Marine v. Boykin, et al, 251 S. C. 236, 161 S.E.2d 818 (1968), the Court held that the failure of an automobile dealer to comply with the requirements of the South Carolina title certificate law did not prevent title from passing to the buyer under the dealer’s garage policy, thus rejecting the theory that title remained in the dealer and that the buyer was covered under the omnibus clause of the dealer’s policy.

St. Paul v. Boykin, supra, was followed by the Federal District Court of South Carolina in United States Fidelity and Guaranty Co. v. Fomby, 297 F. Supp. 1153 (1969), wherein the Court said at page 1154:

“This court finds assurance and guidance in St. Paul Fire and Marine v. Boykin, supra, where the facts are remarkedly similar, the interpretation of the law clear, and the sad injustice of Clouse laid to rest. Therefore the failure to register the vehicle in Pollard’s name does not negate the clear and unmistakeable effort of Summers and Pollard to buy Pollard a car. The car was always owned by Pollard.’.’

The facts and law in the series of South Carolina cases are strikingly similar to the case here presented, and the conclusions of the South Carolina Supreme Court are persuasive.

Appellees also cite in support of their position Eggerding v. Bicknell, 20 N. J. 106, 118 A. 2d 820 (1955), and Glens Falls Ins. Co. v. Irion, 323 F. Supp. 1164 (D.C. Mont., 1970); but an examination of these cases discloses substantial differences between the statutory provisions of N.J. and Montana and those of Maryland governing the use of dealer’s tags and the failure to transfer title to a purchaser. In both cases the courts held that ownership remained in the dealer until the transfer had been completed; but Maryland, however, has not allocated the same importance to the registration of the paper title to a vehicle. It has adhered to the rule that the expressed intention of the parties as to when title is to be transferred governs. In Inland Mutual Ins. Co. v. Stallings, 263 F. 2d 852, 854 (4th Cir. 1959), it was held:

“[D]elivery [of possession of an automobile] and assignment of title were sufficient to pass ownership at that time if the parties so intended, Md. Code (1957), Uniform Sales Act, Art. 83, Sec. 36 (1), even though there has not been compliance with the registration law of the state. Hofslund v. Metropolitan Casualty Ins. Co. of New York, 7 Cir., 1951, 188 F.2d 188.”

The Uniform Commercial Code was adopted in Maryland as of February 1, 1964; and Section 2-401 provides in part that “title to goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed on by the parties.” It further provides that “any retention or reservation by the seller of title (property) in the goods shipped or delivered to the buyer is limited in effect to a reservation of a security interest.”

The Court of Appeals of Maryland in Liberty Mutual Insurance Company v. American Automobile Insurance Company, 220 Md. 497, 500, 154 A. 2d 826, 827 (1959), in discussing the effect of title registration of a motor vehicle, held “that title registration merely raises a presumption of ownership, which, not being conclusive, is rebuttable by evidence to the contrary if such is produced.” See East Balto. Transfer Co. v. Goeb, 140 Md. 534, 118 Atl. 74 (1922); Epstein v. Ruppert, 129 Md. 432, 99 Atl. 685 (1916); Metropolitan Auto Sales v. Koneski, 252 Md. 145, 249 A. 2d 141 (1969); 1 Blashfield, Cyclopedia of Automobile Law and Practice (Perm. ed. 1955), Sec. 304; 27 A.L.R. 2d 176.

In Government Employees Ins. Co. v. Coppage, 240 Md. 17, 212 A. 2d 523 (1964), the Court pointed out that both under the Uniform .Sales Act and at common law, the expressed intention of the parties as to when title is to be transferred governs.

An examination of the transaction between Bittorf and Wilson convinces us that the parties intended ownership as well as possession of the vehicle to be in Wilson at the time the initial installment payment was made, subject to the security interest retained by Bittorf to guarantee the payment of the balance. Certainly, there can be no doubt that Wilson was the owner of the vehicle when the final payment was made on October 10, 1972, whether the title had been registered with the Motor Vehicle Administration or not.

In our review of this case, Wilson falls within the exclusion set out in Item V. of Universal’s policy, which states:

“None of the following is an insured:
(iii) any person or other organization other than the named insured with respect to any automobile
(b) possession which has been transferred to another by the named insured pursuant to an agreement of sale.”

Since he was excluded by the terms of this portion of the policy at the time of the accident, Wilson was not entitled to either coverage or defense by Universal.

Appellees point out that under the Maryland State Motor Vehicle Administration Rules and Regulations, Chapter 11.02.03, Dealers and Salesmen, the dealer is required to file a surety bond for the use and benefit of the agency and the public who may suffer or sustain any loss by reason of any violation of the various sections of the Motor Vehicle regulations mentioned; and it is conceded that this bond was filed by Bittorf. They also call attention to the fact that when Bittorf applied for its Vehicle Dealer’s License (Form VR-55), it was required to make the following certification under the rules and regulations of the Motor Vehicle Administration:

“In submitting this application for MVA consideration, I/we CERTIFY that all motor vehicles or trailers owned by this dealership, or under its control, on which Dealer Registration Plates are at any time to be attached, will be continuously covered by liability insurance in the minimum amounts required under the Financial Responsibility Laws of Maryland, for personal injury and property damage caused by any person, who shall use said motor vehicles or trailers with the dealership’s authority.”

Bittorf acknowledged making this certification and that by so doing, it had designated Universal as its insurance carrier. Wilson urges, however, that the trial court’s declaratory findings were correct because the conduct of Bittorf in wrongfully retaining the title, failing to collect applicable taxes and fees, failing to follow inspection procedures, and wrongfully issuing dealer registration plates, when considered in conjunction with the filing of the VR-55 form, amounted to a retention of dominion and control over the vehicle.

We do not agree. As we have already indicated, we hold that the intention of the parties was that Wilson was to become the owner of the vehicle when the original down payment was made. Whatever Bittorf may have done to ensure the payment of the balance of the purchase price is of no significance as to the intention of the parties as to ownership. We note also that the VR-55 certification does not appear to be incorrect. It applied to “motor vehicles or trailers owned by this dealership, or under its control, on which Dealer Registration Plates are at any time to be attached ....” The certification as to insurance coverage is applicable only when two conditions exist. The vehicle must be owned by or under the control of the dealer and the vehicle must have his dealer plates attached. We have already ruled that the vehicle was owned by and under the control of Wilson.

Orders vacated, and case remanded to the Circuit Court for Carroll County for the entry of a declaratory judgment in accordance with this opinion.

Costs to be paid by the appellees.

      . wonderful to relate


text:
    DEVEROE R. LYLE et ux. v. TRI-COUNTY FEDERAL SAVINGS AND LOAN ASSOCIATION OF WALDORF
    [No. 1334,
    September Term, 1975.]

      Decided September 20, 1976.

    The cause was argued before Marvin H. Smith and John C. Eldredge, Associate Judges of the Court of Appeals, and Joseph M. Mathias, Associate Judge of the Sixth Judicial Circuit, all specially assigned.

      George E. Meng, with whom were Pitrof &, Starkey on the brief, for appellants.

      Joseph Ernest Bell, II, for appellee.
   Smith, J.,

delivered the opinion of the Court.

Appellants, Deveroe R. Lyle et ux. (the Lyles), sought, unsuccessfully, in the Circuit Court for Charles County to recover from appellee, Tri-County Federal Savings and Loan Association of Waldorf (Tri-County), allegedly usurious interest and other charges. For reasons to be stated, we are of the opinion that the interest charges were usurious and, therefore, we hold that part of the determination by the trial court to be in error.

The facts are relatively simple. The Lyles desired to construct a home in Prince George’s County. They obtained a loan commitment from Tri-County. They executed a note to Tri-County in the amount of $60,000 bearing interest at 8%. Payment of the note was secured by a deed of trust of the same date which referred to the note. On the same day a loan agreement was executed. It recited that the Lyles owned a lot “upon which said land [Tri-County] ha[d] [t] heretofore agreed to loan the sum of . .. $45,000.00 ... to be secured by the Deed of Trust [t] hereinabove mentioned, and the said money to be so loaned to be used in improving the said land by the erection thereon of a dwelling .. ..” The dwelling was to be completed within 12 months. Provision was made for payment by Tri-County of the $45,000 in 9 installments as work progressed. At settlement Tri-County’s check in the amount of $60,000 was presented to and endorsed by the Lyles. The settlement sheet reflects disbursal of $15,000 from the loan proceeds to the seller of the lot. The remaining balance of $45,000 of the loan proceeds was paid over to Tri-County. The president and “managing officer of Tri-County” testified that this sum “was deposited to an account maintained by Tri-County at the Bank of Southern Maryland.” He said it went into that bank “along with all the other moneys that was taken in by Tri-County on April 15th, 1974, which totaled $82,158.96.” No escrow account was maintained. Tri-County did maintain a record of “loans in process” and the balance kept on hand in its account was said to always be equal to or greater than the total amount committed to loans. The account was used for such things as payment of employees’ salaries and other monthly expenses of Tri-County. Also collected at settlement and paid over to Tri-County was $60 for an appraisal fee, $10 for a credit report, and $90 for nine inspection fees in accordance with the schedule in the loan agreement. The credit report and appraisal fees were disbursed by Tri-County to other parties. The house was not constructed as planned and the $90 sum for inspection fees ultimately was returned to the Lyles. The Lyles abandoned their construction plans and settled with Tri-County on September 24, 1974, repaying the $15,000 at that time plus $573.29 accrued interest on the full $60,000. At the same time they were given credit for the $45,000 retained. Interest had been paid in the interim in accordance with the schedule originally agreed upon. This interest was at all times on the full $60,000.

The Lyles brought suit claiming that Tri-County “charged and collected from [them] usurious interest and fees of $1,633.83” and that under Maryland Code (1957, 1972 Repl. Vol.) Art. 49, § 8 they were “entitled to three times the amount of interest and charges collected on any loan in excess of the interest and other charges authorized by that Article, or the sum of $500.00, whichever is greater....” The trial judge found the fees “not [to be] a payment of interest over and above the eight per cent allowed by law.” He noted that the $45,000 “was deposited in the bank, admittedly deposited with other funds,” and that the testimony of the president of Tri-County “was that there is a general ledger which controls, which they use to control the funds that are put in the bank and that they retain sufficient funds in several banks to cover all outstanding construction loans which are in progress ... at any given time.” He concluded:

“So the Court, gentlemen, feels that the commitment was made, the testimony shows that the funds were available for the benefit of Mr. and Mrs. Lyle, in accordance with their agreement. They agreed that the funds were to be retained by the lending institution in accordance with their agreement and there is nothing that I can find in any statute in the State of Maryland, which prevents the individual from entering into this agreement authorizing the lending institution to make such disbursal of funds as, for which they had signed the deed of trust.
“The Court, for that reason, will grant the motion and will enter a verdict, enter a judgment nisi in favor of the defendant.”

Two questions are presented on this appeal: (1) whether the credit, appraisal, and inspection fees were interest and thus usurious; and (2) whether the charging of interest by Tri-County on the full amount of the loan from the date of settlement while holding $45,000 in its own account was usury under Maryland law.

i

The Law

Maryland Constitution Art. Ill, § 57 provides, “The Legal Rate of Interest shall be Six per cent, per annum; unless otherwise provided by the General Assembly.” (Emphasis in the Constitution.) The background and history of usury statutes was traced for the Court of Appeals by Judge Delaplaine in Plitt v. Kaufman, 188 Md. 606, 610-12, 53 A. 2d 673 (1947). It is important to remember that the statute in effect in Maryland at that time and for most of the years since adoption of the constitutional provision was far different from the statute in effect today. Maryland Code (1957) Art. 49, § 3, originally enacted by chapter 69 of the Acts of 1704, defined usury as “exact [ing], directly or indirectly, for loan of any money, goods or chattels to be paid in money above the value of six dollars for the forbearance of one hundred dollars for one year, and so after that rate for a greater or lesser sum, or for a longer or shorter time . . ..” This law was changed by the enactment of Chapter 453 of the Acts of 1968, codified as Code (1957, 1972 Repl. Vol.) Art. 49, §§ 1-11. Interest is defined by § 1, with certain charges not considered interest, while § 3 provides that “[i]nterest may be charged not in excess of the rate of six percent (6%) per annum simple interest on the unpaid balance, except that interest may be charged at the rate not in excess of eight percent (8%) per annum simple interest on the unpaid balance under an agreement in writing between the lender and the borrower.” (Emphasis added.) By § 6 usury is defined as “the collection by a lender of either interest or other charges in amounts greater than allowed by ... [Ajrticle [49].”

In B. F. Saul Co. v. West End Park, 250 Md. 707, 246 A. 2d 591 (1968), the Court of Appeals considered § 1 (b) (6) (C) exempting from consideration as interest “[a]ctual expenses collected by the lender ... [f]or . .. costs not retained by the lender ... in connection with the loan.” Judge Finan observed for the Court:

“We adopt the lower court’s classification of specific items as set forth in its order.... The main thrust of the lower court’s rationale is that the determining factor, in the event of any ambiguity as to whether or not a fee or charge should be included as interest, is whether such charge is retained by the lender and, if so, it should be treated as interest. That such a construction is a projection of the intent of the Legislature becomes manifest upon reading the Act .’’Id. at 723.

To like effect see Equitable v. Insurance Comm’r, 251 Md. 143, 148, 246 A. 2d 604 (1968).

In Plitt Judge Delaplaine said for the Court:

“This Court has held that no device or subterfuge of the lender will be permitted to shield him in taking more than the legal interest on a loan. In whatever part of the transaction usury may lurk, or in whatever form it may take, or under whatever guise the lender may attempt to evade the law, the court will seek to ascertain what the contract actually was between the parties and give the debtor relief. Andrews v. Poe, 30 Md. 485 [(1869)]; Brenner v. Plitt, 182 Md. 348, 84 A. 2d 853 [(1943)].” Id. at 611.

n

Credit Report, Appraisal Fee and Inspection Fees

Neither the charge for the credit report nor that for the appraisal fee was retained by Tri-County. It is clear from the evidence that the inspection fee would have been disbursed to the person making the inspection had the Lyles proceeded with their building. The fee was in fact refunded to the Lyles. Thus, under the holding in West End we are of the opinion that these charges are not usurious.

iii

Collecting Interest on the Sum Retained by Tri-County

Tri-County relies upon Bettum v. Mont. Fed. S. & L. Ass ’n, 262 Md. 360, 277 A. 2d 600 (1971). That case is factually inapposite. As Judge Singley pointed out for the Court of Appeals in that case, the statute under which we here consider the question of usury “did not become effective until 1 July 1968, more than two years after Montgomery Federal made its loan.” Moreover, there “both parties seemingly concede[d] that the controversy [was] controlled by the law of the District of Columbia, where the mortgaged property [was] located and the loan was made . . . .”

We see this case as one of statutory interpretation. Because of the peculiarities of the Maryland statute, cases from other jurisdictions are of little help.

Cases abound in Maryland in which the Court of Appeals has stated that the cardinal rule of statutory construction is to ascertain and carry out the real legislative intent and that in ascertaining that intent the Court considers the language of an enactment in its natural and ordinary signification. See, e.g., Gillespie v. R & J Constr. Co., 275 Md. 454, 457, 341 A. 2d 417 (1975), and cases there cited.

We regard the significant language in the statute here to be that which we emphasized in our earlier quotation, that interest is to be calculated “on the unpaid balance.” Webster’s New International Dictionary (2d ed. 1959) says of ‘balance”:

“7. a An equality between the sums total of the two sides of an account.
“b The excess on either side, or the difference between the two sides, of an account.”

The Compact Edition of the Oxford English Dictionary (1971) states by way of a definition:

“17. The process of finding the difference, if any, between the Dr. and Cr. sides of an account, or set of accounts; the exhibition of this process in a tabular form; the result so ascertained or exhibited.
“b. esp. To strike a balance: to determine the exact difference, if any, between the two sides of an account or set of accounts, lit. and fig.
“c. gen. A comparative reckoning, rare.
“18. An equality between the total of the two sides of an account, when added up, after making all entries on both sides....
“19. The difference between the Dr. and Cr. sides of an account, or set of accounts.
“b. Balance (of indebtedness): the difference between the total amounts which two persons, societies, or nations mutually owe each other.” (Emphasis in original.)

The term is defined in The Random House Dictionary of the English Language (1967):

“10. Accounting, a. equality between the totals of the two sides of an account, b. the difference between the debit total and the credit total of an account, c. unpaid difference represented by the excess of debits over credits. 11. an adjustment of accounts.”

The American College Dictionary (1964) states:

“8. U.S. the remainder or rest. 9. Com. a. equality between the totals of the two sides of an account, b. difference between the debit total and the credit total of an account, c. unpaid difference represented by the excess of debits over credits. 10. an adjustment of accounts.”

Black’s Law Dictionary (4th ed. 1957) states relative to “balance”:

“BALANCE. An equality between the sums total of the two sides of an account, or the excess on either side. Jones v. Marrs, 114 Tex. 62, 263 S.W. 570, 574.
“The conclusion or result of the debit and credit sides of an account. It implies mutual dealings, and the existence of debt and credit, without which there could be no balance. Thillman v. Shadrick, 69 Md. 528, 16 Atl. 138. The amount remaining due from one person to another on a settlement of the accounts involving their mutual dealings; the difference between the two sides (debit and credit) of an account.
“Often used in the sense of residue or remainder, and, in a general sense, may be defined as what remains or is left over. Commercial Discount Co. v. Holland, 107 Cal. App. 83, 289 P. 906, 908.”

5 Words and Phrases, “balance” 132, 133 (1968) is consistent with the above definitions.

In Thillman v. Shadrick, 69 Md. 528, 16 A. 138 (1888), cited by Black, the question presented was whether a statement filed with a declaration in assumpsit “complied with the provisions of sec. 171 of the Act of 1886-in respect to filing an account, or a sufficient statement of the particulars of the [defendant’s] alleged indebtedness as to entitle him, the [plaintiff], to a judgment by default under that statute.” The account filed referred simply “[t]o a balance due on the purchase money of [certain] houses ....” The statute required the plaintiff to “file with his declaration an affidavit ... stating the true amount the defendant [was] indebted to him ....” Judge McSherry said for the Court:

“Inasmuch as a balance is claimed, it is perfectly evident that there must be a debit and a credit side to an account from which that balance was taken. The balance so produced is not an account, but the result of an account. It bears to an account precisely the same relation that a conclusion does to the premises of a syllogism. McWilliams v. Allan, 45 Mo. 573. An account is the statement of two merchants or others who have dealt together, showing the debits and credits between them. 1 Bouv. Law Dic. 48. The correctness of the balance depends upon the accuracy of the debits and credits.” Id. at 531.

So long as the $45,000 in question was solely under the control of Tri-County it could not be a part of “the unpaid balance.” Had this sum been placed in an escrow account not subject to the sole control of Tri-County, then it properly would be a part of “the unpaid balance.” To us the plain meaning of the term “the unpaid balance” is the net amount under the deed of trust note due from the Lyles to Tri-County. Accordingly, when Tri-County attempted to collect interest on the entire $60,000 at the rate of 8%, $45,000 of which it retained, it was guilty of usury.

Judgment affirmed in part and reversed in part, and case remanded for entry of a judgment consistent with this opinion; appellee to pay the costs.

      . Virtually the same provision is found today in Code (1975) §§ 12-102 and 12-103 Commercial Law Article which became effective July 1, 1975, and thus is not applicable to this proceeding. The term there used is interest “on the unpaid principal balance of a loan.”
      There are certain exceptions in both the 1968 and 1975 acts which are not relevant to this proceeding.