
    JOSEPH F. GERLACH vs. CARROLL E. WARREN.
    
      Contract — Fraudulent A Iteration — Evidence.
    A contract for the sale of property on instalment payments, having been executed in duplicate, but the buyer having lost his duplicate copy, held that the evidence of several persons as to the contents of the lost duplicate, as well as the appearance of the duplicate retained by the seller, justified a decr.ee that a clause, appearing at the close of the latter duplicate, was not in the contract as executed.
    
      Decided January 14th, 1925.
    
    
      Appeal from the Circuit Court of Baltimore City (StbiN, ■L).
    Bill by Carroll E. Warren against Joseph F. Gerlach to-'restrain the prosecution of an ejectment suit. From a decree for plaintiff, defendant appeals.
    Affirmed.
    The cause was .argued before PIttisow, AmaNs, OuKutt, JDioghes, BoNd, and Pakkb, JJ.
    
      Henry H. Dinneen, with whom was Harry M. Benzinger on the brief, for the appellant.
    
      Robert G. McKee and Morton Y. Bullock, for the appellee.
   PattisoN, J.,

delivered the opinion of the Court.

The appellee, Carroll E. Warren, was on the first day of -June, 1918, a tenant of the leasehold premises known as 5002 Palmer Avenue, in the City of Baltimore, and was then, and had been for several years prior thereto-, paying as ■rent therefor to its owner, the appellant, Joseph F. Gerlach, the sum of fifteen dollars a month. !On the date above mentioned Warren purchased the property so occupied by him from Gerlach at and for one thousand dollars, of which sum one hundred dollars was paid in cash and the balance ($900) was to be paid in monthly installments of twenty dollars, commencing with the first day of June, 1918. From the payments, so to be made, were to be deducted the interest on the purchase money, and a sufficient amount to cover taxes, ground rent, water rent and insurance on the property from Ihe date of the agreement-; and when the amounts so paid, after the deductions aforesaid, amounted to nine hundred ■dollars, the balance of the purchase money, the property was to be assigned or conveyed to- the appellee- by the appellant. There was to be an adjustment every twelve months-, at which time Gerlach w'as to deduct from the aggregate amount- paid •during the preceding twelve months- the interest on the amount of purchase money owing at the beginning of saicl term, as well as all taxes, ground rent, etc., paid by him. during said time, ,and the balance was to be credited on the purchase mloney. And if Warren, for two consecutive-months-, failed to pay the monthly installments as the same-became due and payable, then the agreement with all its-provisions, and covenants^ was to- be null and void at the option o-f Gerlach, and all money paid by Warren thereafter,, if he were permitted to remain in possession -of the property, was to- be considered as rent, such rent however not to- exceed twenty dollars per month.

The abo-ve provisions- were- contained in a written contract,, executed in duplicate-, and in the hand writiug. of Gerlaoh. The duplicates, when written by Gerlaoh, were- carried by him to- the home of Warren, where they were compared, Ger-laeh reading one- of them, while Warren and his- wife-, with the other, followed him in his reading. After the comparison-was so made the contract, as we have said, was- executed in-duplicate, and either on that day, or at a later time, one of the duplicates was given by Gerlaoh to Warren and the other was- retained by him, and thereafter Warren made his> monthly payments upon the purchase money in accordance-with the terms of the agreement.

In November, 1919, when Warren was to meet Gerlaoh for an adjustment, as provided by the agreement, the June meeting of 1919 having been deferred to such time at the request' of Gerlach, Warren, to get hisi duplicate, went to the- drawer-of -the bureau where, only a few months before, be had placed it, but was unable to find it. Whereupon he at once told Ger-laeh o-f its loss, and called upon him for a copy of the duplicate in bis possession, but- it was not until March, 1920, after repeated demands had been made upon him, that he furnished, at the request of Warren’s attorneys-, what purported to- be a copy of such duplicate.

Until told by Warren that he had lost his duplicate, Ger-lach had regularly called at Warren’s home for t-he payment •bf the monthly installments, but thereafter Gerlaoh ceased to come for them, and Warren carried the money to Gerlach.

In February, 1920, Gerlaoh told him he would not receive from him any more of the monthly payments, but that he would sell the property to him for one thousand, two hun-•drecl and fifty dollars. Warren having lost his duplicate of the contract and not knowing what might be the effect or result of its loss in an effort to enforce it, considered the proposition to- buy the property at the new price named by Gerlach, and, by appointment, met Gerlach at the court house in Baltimore City, where they discussed the purchase of the property, and it was suggested that the execution of the duplicate held by Gerlach should be acknowledged by them, and that such duplicate, with the acknowledgment appended thereto, should be placed upon record.

A notary w!as procured, who wrote an acknowledgment upon the duplicate, hut before acknowledging it, Warren asked to be permitted to read the duplicate, and upon reading it, he observed, at the end of it, .a, clause which he said was not in either of the duplicates at the time of their execution, and of which he, until then, had no knowledge whatever. 'The following is the clause mentioned:

“It is agreed and understood between tbe parties hereto that the party of the first part shall have the right to cancel this contract any time providing he refunds one hundred (100) dollars and all money paid over expenses and interest.”

After discovering that the duplicate contained the above clause Warren refused to acknowledge its execution, and, as shown by the original duplicate produced at the argument, lines were drawn through the acknowledgment so written by the notary.

It was after the meeting above referred to at the court house that Gerlach furnished the copy of the duplicate held by him; and although he had said on February, 1920, that he would not thereafter receive from Warren any more of the monthly payments, he continued to receive them until July, 1920, the last one received by him being on the 21sfr day of July of that year, and in the receipt given by him for that payment it is stated that it was “on account, purchase,’5' which was the language used in many of the preceding receipts for such monthly payments.

After the last named date Warren continued to send the monthly installments to Gerlach until June 6th, 1923, when, he received a letter from Gerlaoh’s attorney, saying:

“Under your agreement with Joseph F. Gerlach dated June 1, 1918, Mr. Gerlach is privileged to cancel that contract and repossess the property No. 6002 Palmer Avenue at any time upon repayment to you of the sum of one hundred dollars, plus the net difference between the sums paid by you in installments, and the expenses and interest on the principal of one thousand dollars.
“Mr. Gerlach now desires to repossess this property, and I wish you would arrange an appointment, so that we can strike a balance, and thus determine exactly how much is due.
“Under the circumstances, no more payments of .twenty dollars per month will be accepted by Mr. Gerlach.”

As there was no adjustment of the matter as suggested by the above letter, and as Warren remained in possession of’ the property, Gerlach, on the 25th day of June, 1920, brought an action of ejectment in the Baltimore City Court against Warren to eject him from the property.

■It was then that Warren applied to the Circuit Court off Baltimore City for an injunction restraining Gerlach from, the further prosecution of his suit in ejectment.

The court, after hearing testimony upon the bill and answer filed, granted the injunction as prayed. From that decree Gerlach has appealed to this Court.

The only question in this case is, Bid the contract when-executed contain the provision above set out giving to1 Ger-lach the right to cancel the contract upon the terms therein, stated, notwithstanding Warren should fully comply with. the other provisions of the contract therein previously contained ?

Warren testified that in June, 1918, Gerlach came to his home — 5002 Palmer Avenue* — and said to him that he, Warren, “would either have* to buy or move from the property” he then occupied as a tenant of Gerlach, as “he was going to sell.” “We talked it over and he, Gerlach, said ho would draw up> an agreement and bring it down and. we could study over it, and he brought the agreement down some time after that”; that when he brought it to hisi home* “he, Ger-lach, read over one copy and we (he and his wife), followed on with the other one,” .and he* and his wife a. number of times, thereafter, read the duplicate that was left with him; That the last clause in it was that the party of the second part (Warren) had the right to alter and repair the property, and, as he remembered, about three inches below that Was the name of Gerlach, and beneath Gerlach’s name was his own name; and that the clause at the end of the contract, giving Gerlach the right to cancel it was not in the contract ,at such time. He also testified that shortly after his duplicate or copy was left in the house, he carried it to his. uncle, John W. Warren, who was president of a building and loan association and who was familiar with the essentials of such a contract, and had him read it over in his presence; after which his uncle discussed some of its features with him. He further stated that Mrs. Thomas, his wife’s sister, was at his house, though not in the same room with them, on the occasion when Gerlach left the duplicate at Warren’s home and that she too read it over.

Mrs. Warren, wife of Carroll E. Warren, the appellant, testified that she was present when Gerlach brought the com tract prepared by him to their home, it was in duplicate, and when asked, Did you read it at the time before it was signed ? she replied, “Yes, all together. Q. How do you mean all together ? A. Mr. Gerlach held one contract and my husband and I read the other one as he read it over.” At that time, she said, the papers were alike, what he read from his was on them. Mrs. Warren too testified tbait her sister, Mrs. Thomas, was at their borne on tbe occasion referred to by ber husband, and that she, Mrs. Thomas, after Gerlach bad left, read tbe contract or duplicate left with them. ¡She also testified that sire saw and read said duplicate at least a dozen times before it was lost. 'She, as well as ber husband, speaks of ber signing tbe duplicates', but as shown by tbe one produced by Gerlach, they meant thereby that she witnessed the signatures of tbe parties, Gerlach and Warren.

When .asked about tbe clause permitting Gerlach to cancel tbe contract, she said it “was not in it at all”; that when she signed it bis name was two, or two and one-half, inches below tbe written matter in the contract; that tbe last provision in tbe contract, when she read it, was tbe right of ber husband to alter or make repairs. As shown by tbe duplicate produced by Gerlach, the last line of tbe clause which permitted him to cancel tbe contract, which concludes tbe written matter of the contract, is on a line with Gerlaoh’s signature thereto; tbe last word of which is not more than one-half inch from tbe beginning of bis signature, and not more than onedralf inch .above the name of Mrs. Warren, which is on tbe left side of the paper, little below the signature of Gerlach’s.

Mrs. Thomas, tbe sister of Mrs. Warren, testified that she was at. Warren’s bouse on the occasion when Gerlach left there one of tbe duplicates, of the contract, and that she, after Gerlach left, read tbe paper; that she recalled that tbe last thing in it at that time was tbe clause allowing Warren to make alterations or repairs. She also spoke of tbe extent of space between tbe writing in tbe contract and tbe signatures of the parties, but this applied only to tbe copy or duplicate left with Warren, as she did not see tbe other, but this was not so with Mr. and Mrs. Warren, for they saw, and either signed or witnessed, both duplicates.

John W. Warren, únete of tbe appellee; testified that for twelve years be bad been president of tbe Pimlico Building Association, and bad bought a number -of pieces of property on°bis own account. He also testified that Carroll E. Warren brought to him his duplicate- of the- contract made with Ge-rlach, and asked him to examine it, which he did very carefully, and he recalled that it concluded with the.clause that Warren should have the right to alter and repair the property mentioned therein. This clause he discussed rvith the appellee and told him of the advantage of it to- him.

He was then asked: if he recalled seeing therein the clause now in the duplicate- produced by Gerlacb permitting bim to cancel the contract at any time. His reply was “I don’t know anything about that. That was not in the contract that I read.”

Ge-rlach testified he had been in the real estate business for thirty years. He bought and sold property and was the owner of a great deal of property in the City of Baltimore. He stated that Warren was expecting to be drafted in tbe army and worried about the increase o-f rent to- which his family might be subjected in bis absence, and wanted some assurance from him, that the rent w'o-uld not he increased. Ge-rlach told him it would not be increased, but Warren wanted assurance; in Writing, and to do- this- he- wrote in duplicate- the contract already mentioned. The duplicates, as, he said, were signed by him, and Warren, and, one left with the latter. He- admitted that he- was told by Warren that he had lost his duplicate of the contract and was asked by him several times- for a copy of it before one w-as furnished him. When .asked why he did not give the- eo-p<y to Warren, he said, “I was undecided then, I did not know why they should be so- anxious to get a copy.” The court then asked him what was his- reason for cancelling the- contract and be replied, “Well, I had the privilege, that is the reason. Q. Is that the only reason ? A. Tes. Q. Isn’t the property worth more now than in 1918 ? A. Yes, sure it is. Q. That is your reason, isn’t it ? A. Yes. Q. Isn’t it true that in 1918 property was very cheap- when the- contract was signed ? A. That property was worth then about $1,400 or $1,500 then. Q. Why did you sell it for $1,000 then?’ A. I really did not expect to dispose of this property. The intentions at that time was to insure him against raising the rent. He thought he might be drafted in the army and he was worried about my raising the rent. Q. At no time did you ever expect to give him the property, is that right ? A. Well, I might have given it to him if property had not advanced so much. I am satisfied now to give it to- him at a reasonable figure. Q. What is a reasonable figure? A. I figure that property is worth three thousand five hundred dollars now. Q. Why didn’t you give him a lease instead of a purchase agreement? A. I guess I could have done that but I would not have had five months rent in advance.” It will be observed that, although he says that the paper prepared by him, which is in the nature and form of an outright sale, was given to assure Warren that the rent would not be increased, yet by said paper the rent was increased five dollars per month. The appellant concluded his testimony by saying that the duplicate retained by him was exactly like the one he gave Warren.

Upon a careful consideration of the evidence in this case, we cannot escape the conclusion that the clause found in the paper produced by Gerlach, by which he was permitted to cancel -at any time said contract made between the parties) even though Warren complied in every way with all the terms and conditions preceding it, was not in the contract at the time of its execution.

It is time, as contended by counsel of Gerlach, that such determination should be reached only upon clear and convincing evidence, but such evidence we think is found in the record.

No less than four persons, who read the duplicate left with Warren, testified in language most positive that the clause in question was not in it; and not only does Warren and his wife, who saw, and either signed or witnessed, both duplicates, testify that the duplicate left with them was like the one retained by Gerlach, but Gerlach himself says that the two were alike when he gave one of them to Warren. War-rcn and his wife were afforded the opportunity of seeing the paper that was retained by Gerlaeh, and had a mind picture of its appearance at such time, which they disclosed to the court in their evidence. Their names., as well as. the name of Gerlaeh, when placed thereon, were much further from, the written matter of the contract than they now appear upon the paper produced by Gerlaeh. In it Gerlaeh’s signature is practically on a line with the last line of writing in the contract, with hardly enough room between it and the edge of the paper for his. name to be written, .although when placed thereon there was a blank space below it. of more than three and one-half inches. These facts strongly support the positive assertions, of the appellee’s witnesses, that the clause in question was not in the contract when it was executed.

Against this evidence is the evidence of Gerlaeh .alone. This we will not discuss hut, after giving it all the credence and weight to which it is entitled, we think it is sufficiently shown that the clause in question was not in the contract at the time of its execution. We will, therefore, affirm the decree of the lower court.

Decree affirmed, with, costs.  