Miller, Lee M.

NELLCO Consortium Legal Scholarship Repository

Qualifying Terms And Relief For Deficiency In Quantity In Land Sales - Carozza v. Peacock Land Corp.

Digital Commons @ UM Law

Maryland Law ReviewVolume 24 | Issue 2 Article 9Qualifying Terms And Relief For Deficiency InQuantity In Land Sales - Carozza v. Peacock LandCorp.Lee M. MillerFollow this and additional works at: http://digitalcommons.law.umaryland.edu/mlrPart of the Property Law and Real Estate CommonsThis Casenotes and Comments is brought to you for free and open access by the Academic Journals at DigitalCommons@UM Carey Law. It has beenaccepted for inclusion in Maryland Law Review by an authorized administrator of DigitalCommons@UM Carey Law. For more information, pleasecontact smccarty@law.umaryland.edu.Recommended CitationLee M. Miller, Qualifying Terms And Relief For Deficiency In Quantity In Land Sales - Carozza v. Peacock Land Corp., 24 Md. L. Rev. 210(1964)Available at: http://digitalcommons.law.umaryland.edu/mlr/vol24/iss2/9MARYLAND LAW REVIEW [VOL. XXIVporate assets, the cause of action is exclusively the corpora-tion's, without regard to an existing contractual relation-ship between stockholder and corporation.18 In the Cartercase the more appropriate action would seem to have beena derivative suit in behalf of the corporation. 9 This isparticularly important because of the limited situations inwhich minority stockholders could prove that the injurythey allegedly suffered was not likewise experienced bythe other stockholders. The derivative suit appears to pro-vide substantial advantage to the stockholder by eliminat-ing the necessity for establishing privity of contract, and,at the same time, by permitting the individual stockholderto enjoin or redress the wrongful act.While the holding of the Carter decision is faulty inpart, it does have the important effect of giving clear recog-nition to the basic concept underlying Federal securityregulation: that the corporation and its representatives areheld to the highest standards of care and good faith in theirdealings with the public. The corporation is not only liablefor its misrepresentations, but is contractually bound bythe language of its prospectus where it is reasonably con-strued as a statement of intent.Guy B. MASERITZQualifying Terms And Relief For DeficiencyIn Quantity In Land SalesCarozza v. Peacock Land Corp.'The court appointed trustee for Peacock Land Corpora-tion advertised a mortgage foreclosure sale, describing theproperty as fronting approximately three hundred thirtyfeet on York Road in Baltimore County. Prior to the execu-tion of the mortgage, a portion of the property had beendeeded to Baltimore County, with the result that thetrustee could only convey property fronting two hundredtwenty-six feet on York Road at the time of the sale.,to the property of a corporation or for impairment or destruction of itsbusiness is in the corporation, and such an injury, although it may diminishthe ,alue of the capital stock, is not primarily or necessarily a damage tothe stockholder, and hence the stockholder's derivative right can be assertedonly through the corporation." Waller v. Waller, supra.1B13 FLETCHim, aupra note 17.' Id. § 5829.'231 Md. 112, 188 A. 2d 917 (1963).CAROZZA v. PEACOCKAppellants, who bought the property at the foreclosure,excepted to ratification of the sale on the ground that amistake resulted from the misrepresentation. Appelleesclaimed that the frontage distances had been qualified by'approximately" and that the purchaser had thereforeassumed the risk of a deficiency in quantity. In the alter-native appellees claimed that caveat emptor applied. TheCourt of Appeals sustained appellants' exceptions by dis-tinguishing the term "approximately" from "more or less"and determining that the purchasers had not assumed therisk of a deficiency in quantity. The court also ruled thatcaveat emptor does not apply in judicial sales prior toratification.The problem often arises of construing contracts for thesale of land in gross' containing statements of quantity,acreage or frontage, qualified by such words as "approxi-mately", "about", or "more or less". The cases vary as tothe effect of these terms where relief is sought for adeficiency in quantity, but generally hold the terms them-selves to be equivalent.3 However, the Maryland Court ofAppeals, in construing the term "approximately" for thefirst time, did distinguish it from "more or less".In the majority of jurisdictions, such qualifying termspresent no great problem of construction. They are con-strued as "intended to cover a reasonable excess or deficit."'4They are not considered to preclude claims of mistake,requests for abatement or suits for damages when there isan unreasonable discrepancy between the estimate and theactual acreage or frontage.5 In determining what is rea-sonable, general principles of contract construction areapplied in an attempt to determine the intent of the parties.The qualifying terms are considered in connection with all' A sale in gross is one in which the purchase price is based upon a tractof land as a whole and not upon a particular number of acres. Therefore.quantity is not the essence of the contract. 'Such a sale has been describedas a "contract of hazard." Kriel v. Cullison, 165 Md. 402, 408, 169 Atl. 203(1933). The sale has also been described as one in which "there is noexpress or implied warranty as to quantity." Terry v. Rich, 197 Ala. 486,73 So. 76 (1916).' E.g., Alexander v. Hicks, 242 Ala. 243, 5 So. 24 781, 782 (1942) ; Quindtv. Kilpatrick, 96 Cal. App. 2d 824, 216 P. 2d 481, 482 (1950); Harris v.Harang, 23 So. 2d 786, 790 (La. App. 1945); 8 Thompson Real Property§ 4580, at 525 (perm. ed. 1940).'Sims v. Haggard, 162 Tex. 307, 346 S.W. 2d 110, 115 (1961); accorde.g., Brewer v. Schammerhorn, 183 Kan. 739, 332 P. 2d 526, 531 (1958);see Annot. 1 A.L.R. 2d 9 at 90 (1948). This annotation on mistake andsales in gross contains an extensive discussion of the effect of qualifyingterms. Comment, Mutual Mistake as Ground for Relief in a Contract forthe Sale of Land in Gross, 25 Texas L. Rev. 165 (1946).See Enequist v. Bemis, 115 Vt. 209, 55 A. 2d 617, 620, 1 A.L.R. 2d 1 (1947).1964]MARYLAND LAW REVIEW [VOL. XXIVother factors in a particular case.6 Among other factors fre-quently considered are the nature and quality of the land,7the main object of the sale,8 the method of stating the price,sand the amount of the purchase price.10 Some cases actuallygive a very narrow effect to the qualifying words, constru-ing them to be "words of safety and precaution, intended tocover some slight or unimportant inaccuracy.""On the other hand, there are some jurisdictions in whicha very broad effect is given to the qualifying terms. Inthese jurisdictions no relief is granted, in the absence offraud, for a shortage of quantity when the statements ofquantity are modified by such terms as "about", "approxi-mately", and "more or less". 2 Rather than consideringsuch words as one factor in determining the intent of theparties, these courts apparently construe the terms to meanthat the vendee has assumed the risk of any deficiencyin quantity.Although in the earliest Maryland cases no dispropor-tionate weight was given to the presence of qualifyingterms," there are a series of later decisions in which theterm "more or less" was construed to mean that the vendeehad assumed the risk of any deficiency in quantity. 4 Thislatter construction stemmed from the case of Jones v.Plater where the court said that "unless the words 'more6Russo v. Corideo, 102 Oonn. 663, 129 At. 849 (1925) ; Coble v. Agnew,128 So. 2d 158 (Fla. 1961) ; Burke v. Smith, 57 Okla. 196, 157 P. 51, 53 (1916).See Raben v. Risnikoff, 95 App. Div. 68, 88 N.Y.S. 470, 471 (1904)where the court quoted Siebel v. Cohen, 54 N.Y. Super. Ct. 436 (1887) :a "'difference of a few inches more or less in the lines within which a citylot is b ounded might cause a difference in pecuniary value exceeding thatof acres of farm land'."8 See Pollack v. Wilson, 33 Ky. 25 (1835). Here the court determinedthat a mill seat was the principal inducement to the purchase and thatthe rest of the land was of little value or importance.I Hill v. Johnson, 214 Ala. 194, 106 So. 814, 816 (1925). "That the landis valuable in proportion to acreage, and not by reason of special improve-ments, and that the price is in round figures, such as $2,500 for 500 acres,more or less, are circumstances indicating that area was a material basisof the contract."10 See Gardner v. Kiburz, 184 Ia. 1268, 168 N.W. 814 (1918) where thecourt granted relief for a deficiency of three percent in acreage, emphasiz-ing that three percent of the purchase price was $1500.u Pittsburgh Outdoor Advertising Co. v. Surowski, 164 Pa. Super. 383,64 A. 2d 854, 856 (1949) ; accord, Pierce v. Lefort, 197 La. 1, 200 So. 801,803 (1941) ; Parrow v. Proulx, 111 Vt. 274, 15 A. 2d 835, 838 (1940).Spires v. Nix, 256 Ala. 642, 57 So. 2d 89 (1952) ; Young v. Bradshaw,224 Ark. 467, 274 S.W. 2d 466 (1955) ; Salyer v. Poulos, 276 Ky. 143, 122S.W. 2d 996 (1938).13 Brown v. Wallace, 4 G & J 479 (Md. 1832); Andrews v. Scotton, 2Bland 629 (Md. 1830) ; Hoffman v. Johnson, 1 Bland 103 (Md. 1826).1 Tyson v. Hardesty, 29 Md. 305 (1868) ; Hall v. Mayhew, 15 Md. 551(1860) ; Smallwood v. Hatton, 4 Md. Ch. 95 (1853); Hurt v. Stull, 3 Md.Ch. 24 (1849), aff 'd, 9 Gill 446 (Md. 1851) ; Jones v. Plater, 2 Gill 125, 41Am. Dec. 408 (Md. 1844).CAROZZA v. PEACOCKor less' lead to such a conclusion, they are useless and in-sensible."' 5 Dictum in the Jones case recognized the possi-bility of a sufficiently large deficiency in quantity warrant-ing relief on the basis of mistake. 6 The later case of Hurtv. Stull17 followed this decision, but added dictum to theeffect that relief could only be granted in instances of fraud,thereby failing to accept the dictum of the Jones case. TheCourt of Appeals in the instant case avoided these decisionsby distinguishing the term "approximately" from "moreor less".An examination of the more recent Maryland cases re-veals that it was unnecessary to distinguish between "moreor less" and "approximately", as the Hurt and Jones casesare no longer good law in Maryland. In Baltimore Perma-nent Bldg. & Land Soc'y v. Smith,"5 the court was requiredto construe the phrase "about sixty-five acres": No attemptwas made to distinguish the term "about" from "more orless". All circumstances surrounding the sale were con-sidered and damages were granted for the deficiency inquantity. After the Land Soc'y case, there were a series ofdecisions involving the phrase "more or less" in whichlanguage similar to that of the court in the Hurt case wasused.' 9 In none of these cases, however, was the term arbi-trarily construed without regard to other circumstances.A definite break was made from the Jones line of decisionsin Kriel v. Cullison, where it was held that the words"more or less", "when used to qualify a representation ofquantity... will be construed... as indicating an inten-tion on the part of the parties . . . to assume the risk ofquantity, which, until rebutted by evidence of a differentintent inherent in the instrument or extrinsic to it, will berecognized and enforced."20 This statement represents aSupra note 14, at 127. The court relied on a similar statement byJustice Story in Stebbins v. Eddy, 22 Fed. Cas. 1192, 1195 (No. 13,342)(C.C.D.R.I. 1827).11 Id. at 128."7 3 Md. Ch. 24 (1849), aff'd, 9 Gill 446 (Md. 1851).1854 Md. 187, 39 Am. Rep. 374 (1880). The court construed "about" asimporting "that the actual quantity is a near approximation to that men-tioned, that is 'to say, within a fraction of an acre, or perhaps it mightcover a discrepancy of one or two acres." Supra at 204. This case Wascited with approval in Md. Constr. Co. v. Kuper, 90 Md' 529, 45 Atl. 197(1900), although relief was denied due to the small quantity of thedeficiency."Neavitt v. Lightner, 155 Md. 365, 142 At. 109 (1928) ; Musselman v.Moxley, 152 Md. 13, 136 A. 48 (1927) ; Wagner v. Goodrich, 148 Md. 318,129 A. 364 (1925).2 165 Md. 402, 411-12, 169 Atl. 203 (1933). (Emphasis added.) Vendeecontracted to buy tracts of land containing forty-five acres, more or less.They actually contained only thirty-one acres with the major tract havinga deficiency of eight out of twenty acres. ,Kriel's testliony showed thathe was Interested only in frontage not in acreage, and that he knew the2131964]MARYLAND LAW REVIEW [VOL. XXIVposition similar to that of the majority of the states.Qualifying phrases are merely one factor, albeit a strongone, in determining whether relief will be granted.Unfortunately, the latest case, Brodsky v. Hull,2 con-struing the phrase "more or less", returned to the phrase-ology of the Hurt case. Although using such phraseology(that the vendee assumed the risk of quantity), the courtactually applied the "intent test" of the Kriel case in de-termining that plaintiff was not entitled to damages forbreach of contract.2" In dissenting, Judge Marbury criti-cized the majority for their reliance on phraseology incentury old cases and asked for reiteration of the law asstated in the Kriel case.23With the decision in Carozza v. Peacock Land Corp., theMaryland Court of Appeals has now construed the qualify-ing terms most often used to modify statements of quantityin land sale contracts. "About", as construed in BaltimorePermanent Bldg. & Land Soc'y v. Smith, and "approxi-mately", as construed in the instant case, are merely fac-tors in determining the intent of the parties by normalprinciples of contract construction. A similar constructionwas placed on "more or less" in the Kriel case, althoughthis interpretation was weakened by the language in theBrodsky case. Since "about", "more or less" and "approxi-mately" are generally considered equivalent, the Court ofAppeals, by distinguishing "more or less" and "approxi-mately", perhaps has missed an opportunity to reiteratethe Kriel case and clear away the complicating vestiges ofJones v. Plater24 and Hurt v. Stull.25LE M. MILLERboundaries of the property he was buying. The court decided that Kriel'stestimony, the manner of describing the premises, and the use of "moreor less" combined to show the statement of quantity was merely descrip-tive. Plaintiff was granted specific performance. Kriel, however, receivedan abatement for the deficiency in quantity.21 196 Md. 509, 514, 77 A. 2d 156 (1949). A house was advertised as con-taining -a one acre lot. Vendee inspected it and offered to buy, insistingthat a statement of acreage be included in the contract. The lot containedonly .46 acres and the vendee sued for breach of contract. No damageswere awarded. In his dissent, Chief Judge Marbury relied heavily on theKriel and Land Soe'y cases, arguing that plaintiff had shown sufficientevidence of an intent to make quantity material.Id., at 516. The court said that plaintiff had inspected the lot twice,had time to check for acreage, and acquiesced in describing the lot as con-taining one acre, more or less. Furthermore, they said, the sale was for agross sum. The court went on to say that the "rule [that vendee assumedthe risk of quantity] does not bar ... a suit in equity for rescission ... orabatement . . . [for] mutual mistake." Id. at 514-15.2 Id. at 517."2 Gill 125, 41 Am. Dec. 408 (Md. 1844)."3 Md. Ch. 24 (1849), aff'd, 9 Gill 446 (Md. 1851).

Qualifying Terms And Relief For Deficiency In Quantity In Land Sales - Carozza v. Peacock Land Corp.

Abstract

Similar works

Full text

Available Versions

NELLCO Consortium Legal Scholarship Repository

Digital Commons @ UM Law