United States Court of Appeals Fourth Circuit
United States Court of Appeals Fourth Circuit
2d 676
The plaintiff, a Negro, made an abortive attempt to purchase a house and lot in
a residential subdivision under development in Maryland. The promoters,
moved by threats of litigation and publicity, finally entered into a settlement
agreement which obligated them to sell to the plaintiff an identical house
constructed on an equivalent lot in the subdivision1 and to pay liquidated
damages for delay. Thereafter the plaintiff rejected a specific proffer of
performance on the ground that the tendered lot was not the equivalent of the
one he had first chosen. As the controversy continued it developed that in the
view of the plaintiff and his attorney there was no equivalent lot. Interest,
however, focused on a lot and house immediately across the street from the
residence the plaintiff first sought to buy. The plaintiff offered to accept that
with a cash allowance because of claimed lack of equivalence in the lots. He
was also claiming liquidated and other damages.
3
During the trial, the plaintiff, through his counsel, finally agreed to recognize
No. 11810 Smoke Tree Road as equivalent to the one he had sought to buy. In
doing so, he recognized the rule that the Court could not require a conveyance
to him of the Smoke Tree Road house while the plaintiff contemporaneously
was pressing a claim for compensation for want of equivalence.
A grant of specific preformance was further complicated by the fact that the
legal title to the Smoke Tree Road lot and the other unsold lots was in the name
of one of the individual defendants. His wife was not a party to the action. The
Court and counsel considered the possible inadequacy of specific relief, and
reference was made to the difficulties the plaintiff would encounter in financing
his purchase and otherwise should the wife decline to relinquish her dower
interest. Nonetheless, the plaintiff insisted he wished the requested specific
relief and would accept it notwithstanding its possible infirmities without
diminution of the purchase price either because of the earlier claim that the lot
was not the equivalent of the first one or on account of the outstanding inchoate
dower interest.
Under those circumstances, the District Court granted the specific relief,
expressing some wonder that the plaintiff should prefer it to damages. It,
therefore, entered an order requiring the defendants to convey to the plaintiff all
of their right, title and interest in the Smoke Tree Road lot with its
improvements.
8
The plaintiff has now appealed insisting that he is entitled to a warranty deed.
He wants it for, as he says in his reply brief, 'it would merely make the sellers
liable for damages on their warranty if an outstanding dower or other
impairment of title should later emerge.'
The contract does, indeed, call for 'a good and sufficient special warranty deed.'
While it is to be doubted whether under Maryland law a special warranty would
give the plaintiff protection against an outstanding dower claim or put him in a
position to obtain favorable financing of his purchase, it is perfectly plain from
his own assertions that he wants the warranty for the very purpose of
supporting a subsequent claim for damages against the defendants.
10
11
These rules the District Court recognized. It specifically referred to them in its
opinion. Clearly, it ordered the defendants to give to the plaintiff a quitclaim
deed for the very purpose of assuring that the plaintiff's representation that he
was prepared to pay the full purchase price for such title as was vested in the
defendants would be complied with, and that there would be no subsequent
controversy about it.
12
The plaintiff's appeal and his frank statement that he wants the warranty for the
purpose of a subsequent claim for damages against the defendants makes it
apparent beyond controversy that he never intended to comply with his
representation that he was prepared to pay the full purchase price for the
defendants' title, subject to the dower interest. He wants the dower interest, and,
failing to secure its release, he insists that he is entitled to damages against the
defendants. That is the precise equivalent of a reduction of the purchase price
because of the outstanding inchoate dower right.
13
14
Under these circumstances, we might affirm the order of the District Court
granting specific performance to the extent of ordering the defendants to deliver
a quitclaim deed to the plaintiff. That would be obviously unacceptable to the
plaintiff-appellant, however, and the frank statement of his intention in his brief
on appeal discloses plainly now what was obscured in the District Court-- that
he never was prepared to take the step of an unequivocal payment of the full
purchase price by which alone he would be entitled to specific performance. If
the plaintiff had informed the District Court of his intention, which he has laid
bare before us, the District Court would not have entered the order it did. The
appropriate course is a vacation of the order of the District Court and a remand
of the case for further proceedings. The plaintiff is entitled to damages for the
breach of the contract. Subsequent proceedings will be necessary in order to
give him an opportunity to prove what damages, if any, he has suffered from
the breach.
15
The District Court has already computed and allowed to the plaintiff damages
he suffered by reason of delay in performance. It refused to allow liquidated
damages called for by the contract upon the ground that they were clearly penal
in nature and not compensatory. The plaintiff has also complained upon appeal
of the disallowance of the liquidated damage claim, but we think there was an
adequate basis for the District Court's conclusion that they were penal and
unallowable.
16
No one has complained of the District Court's computation and award of actual
damages suffered by the plaintiff from delay of performance. Since there is to
be no specific performance of the contract, however, the parties and the District
Court may wish to reconsider those elements of general damages for the breach
to which the plaintiff will be entitled.
17
The judgment below will thus be vacated in its entirety, so that the District
Court may award such damages as may be appropriate, free of any restrictive
effect of the earlier order.
18
The defendants have filed a cross appeal, in which they have contested the
appropriateness of specific performance on a number of grounds. In addition to
the one we have considered, they are founded principally upon the nature of the
original purchase offer and the circumstances surrounding the execution of the
The agreement purported to give them other alternatives, but they are irrelevant
here. The alternative that they deliver the house and lot originally selected by
the plaintiff was nominal only, for it long since had been sold. They could also
have delivered a substantially equivalent house in the Rockville area, but this
alternative was not selected within the time limited for its availability
Trotter v. Lewis, 185 Md. 528, 45 A.2d 329, 334; see also Whittle v. Brown,
217 Md. 161, 141 A.2d 917; Schneider v. Davis, 194 Md. 316, 71 A.2d 32