(111 A.)

of the company then proposed to be formed [necessary to redeem the ground rent on lot with a capital stock of $20,000 for the pur- G, we have $78,000 left as the value of the pose of taking the property and making the plaintiffs' interest in lots E, F, and G, withextensive improvements that would be re- out making any allowance for the depreciatquired by the Garland Steamship Company. ing effect of the obligations under the lease The plaintiffs, ignoring Mr. Maloy's telegram, to the Coastwise Company, and if we add to came to Baltimore on December 27th with a this value of their interest in the lots the fixed purpose and determination to close im- value of the notes and stock disposed of unmediately an arrangement by which they der the agreement of December, 1916, amountwere to dispose of all their property, except ing to about $62,626, we have $140,626 as the the Boston Sand & Gravel Company stock total value of the property for which they. referred to, in order to secure the much de- received an annual ground rent of $10,000 sired permanent incomes, and the only ques- redeemable at $200,000. So that the plaintion still open in their minds was the amount tiffs not only deliberately entered into the of income they could get. When they signed contract with full knowledge that they were the agreement of December, 1916, they fully disposing of all the property therein menunderstood that they were parting with their said property in consideration of an annual ground rent of $10,000 redeemable at $200,000 to be reserved in a lease of lots E. F, and G to the wharf company, and to be further secured by said notes, stock in the contracting company, and contingent interest in lot D [1-3] Although what we have said is clearas collateral, and they executed the agree-ly established by the evidence, nevertheless ment knowingly, advisedly, and deliberately. the plaintiffs intrusted Mr. Maloy and Mr. The great and convincing weight of the evi- Brady with, and they with that knowledge dence further shows that the plaintiffs, un- undertook, the preparation of the agreement der the agreement of December, 1916, got for so as to carry out the understanding of the their property its full value at that time, and parties and to protect their interest, and the more than they could probably have gotten rule applicable to such cases is nowhere more from any other person or company. rigidly enforced than in this state. In the case of Cumb. C. & I. Co. v. Sherman, 20 Md 117, the court, after stating the rule applicable to trustees, said:

Mr. Caughy, Mr. Steffey, Mr. Merriken, Mr. Ferguson, and Mr. Lindsey, real estate experts of long experience, who were familiar with lots E. F. and G, and whose conclusions were reached not for the purpose of this case, but in connection with valuations arrived at by them just prior to December, 1916, placed the value of these lots, in fee simple, in December, 1916, at from about $133,000 to $143,000, and Judge Trippe testified that the appeal tax court made a careful revaluation of these lots in the fall of 1917, and the evidence shows that as the result of that revaluation the total value of the lots, for land and improvements, was fixed at $104,009. In addition to these estimates, we have the testimony of these gentlemen to the effect that there was no demand for these lots in December, 1916, and the evidence of Mr. Maloy and others of repeated efforts to self them without getting an offer for them, notwithstanding they were in the hands of a number of real estate agents for sale. The one real estate expert produced by the plaintiffs placed a higher value on the lots, and stated the value of lot G, in fee simple, to be $118,000, although in June, 1916, before a part of that lot was sold to the Baltimore & Ohio Railroad Company for about $38,000, at the request of a proposed purchaser, he valued the entire lot, in fee simple, at $107,250. If we deduct from the $143,000, the highest value reached by either Mr. Caughy, Mr. Steffey, Mr. Merriken, Mr. Ferguson, Mr. Lindsey, or the appeal tax court, the $65,000

tioned for the ground rent therein provided for, but they received for that property much more than its market value, and more than they could probably have gotten otherwise, provided the agreement was fully performed by the warehouse company.

"This doctrine which is applicable to trustees, applies also to purchases, by persons acting in any fiduciary capacity, which imposes upon them the obligation of obtaining the best terms for the vendor, or which has enabled them to acquire a knowledge of the property."

In Payne v. Avery, 21 Mich. 524, Judge Cooley said:

"We think, relying upon Avery being such a man, Payne, with Avery's full knowledge and concurrence, intrusted him to draw up all the papers between them, and that in doing so, and in all the conversations relating thereto, Avery occupied the twofold and very difficult position of purchaser and confidential legal adviser, and was bound to observe the utmost good faith towards Payne, and not only to abstain from any deception and overreaching, but to draft all papers with sufficient care and professional skill to make them express the real understanding and agreement of the parties, so far as was essential to the protection of Payne's interest."

In the case of Roman v. Mali, 42 Md. 513, Judge Alvey said:

"In order, however, to avoid all possible misapprehension upon the subject, we deem it proper to state, that the general rule governing transactions between client and attorney is in no manner designed to be questioned, or in the slightest manner qualified or impaired by the decision of this case. Over such trans

actions courts of equity exercise the most exact scrutiny, and are always disposed to view them with more than ordinary jealousy. But in this case, the simple fact that Roman was an attorney can make no difference in considering the transactions between himself and Mali; and even if it be conceded that the relation of client and attorney existed between them, the rule does not go the length of absolutely avoiding transactions between parties standing in that relation. The attorney is under no actual incapacity to deal with or purchase from his client. All that can be required is, that there has been no abuse of the confidence reposed; no imposition or undue influence practiced, nor any unconscionable advantage taken by the attorney of the client. When a transaction between parties occupying such relation to each other is brought in question, the onus of the case is cast upon the attorney of showing that nothing has happened in the course of the dealing which might not have happened had no such connection subsisted, and that the transaction has been fair in all respects. If the court be satisfied that the party holding the relation of client performed the act or entered into the transaction voluntarily, deliberately and advisedly, knowing its nature and effect, and that no concealment or undue means were used to obtain his consent to what was done, the transaction will be maintained. Such is the rule as deduced from the best considered cases upon the subject, and which is said to be dictated from motives of public policy."

(equal to the amount the company might spend for improvements over and above the $12,000, without any provision for the protection of the appellants so far as the nature of the improvements were concerned. In these particulars at least, as well as the failure to provide for a lease redeemable under the act of 1914 at not less than $200,000, the agreement was, in the opinion of the court, defective in that it did not properly protect the rights the appellants expected and were intended to acquire under the contract. While, therefore, the evidence in the case completely exonerates the appellees from any willful fraudulent act or omission, or any intentional wrongdoing, and the defects referred to are doubtless attributable to the apparent haste in which the agreement was prepared, if the contract was still open and unperformed and a suit was brought by the appellants to set it aside, or by the appellees to enforce it, it would be difficult to sustain the agreement under the strict rule referred to, and the case would furnish an example of the danger of participating in transactions which the law discourages, and an illustration of the wisdom of a rule based upon sound public policy. But the situation here is different. Fortunately the appellants were dealing with honest and capable men, who, instead of taking advantage of any of the defects in the agreement, faithfully performed, or offered to perform, every obligation assumed by the company or by them, as they and the appellants understood them and intended them to be, and who at every step in the subsequent transactions were careful to make more secure the rights the appellants acquired under the agreement, and as the reNow the evidence shows that the ware- sult the appellants have received more than house company, one of the parties to the they contracted for, namely, an annual agreement of December, 1916, was not incor- ground rent of $10,000, which the appellants porated until the 29th or 30th of December, offered to redeem or to make redeemable and there is no evidence to show that the at $200,000, secured by a "first lien" on propcapital stock of the company was subscribed erty upon which more than $60,000 has been or paid for until some time after the agree spent in permanent improvements, and for ment and lease were executed, and there was which ground rent they gave property worth no obligation, under the written agreement, at the date of the agreement not more than on the part of any of the appellees to incor- $140,626. In addition to this feature of the porate the company or to take and pay for its case, the appellants not only executed the capital stock. If therefore the agreement lease of January 3, 1917, but after they adwas signed by the appellants on the 28th, the mittedly knew that Mr. Maloy and Mr. Brady other party to the contract was not in exist- were stockholders of the warehouse company, ence at the time they executed it, and at they executed the agreements of June 26th, the time the lease was executed the company continued to accept the rent, and after they had no subscriptions to its capital stock. employed counsel and were fully advised of It is no answer to say that the appellants, all their rights, they forced the appellees to upon the failure or refusal of the company redeem the underlying ground rent of $65,000 to secure the required subscriptions, could in order to make more secure the ground have recovered back their property, because rent they acquired under and in pursuance of that would have been attended with both ex- the agreement of December, 1916, without pense and delay. Again the nineteenth para- intimating or disclosing to the appellees any graph stipulated that the company should intention on their part to dispute the validihold free from the pledge any of the security of that agreement. Under such circumties in the safe deposit box to an amount stances they must be held to have ratified

See, also, Merryman v. Euler, 59 Md. 588, 43 Am. Rep. 564, Williams v. Williams, 63 Md. 371, and Ezzel v. Ducan, 112 Md. 346, 76 Atl. 493, which show that the rule so clearly stated in the opinions quoted has never been departed from or qualified in this state.

(111 A.)

the agreement and to be estopped from questioning its validity. In the case of Browne v. M. E. Church, 37 Md. 108, the court said: "The principle is this, where one stands by and sees another laying out money upon property, to which he has some claim or title, and does not give notice of it, he cannot afterwards, in good conscience, set up such claim or title."

How much stronger is the case where one not only stands by and sees another laying out money upon the faith of an agreement, but who also exacts strict performance of it while secretly intending to deny its validity. And in the case of Carmine v. Bowen, 104 Md. 198, 64 Atl. 932, 9 Ann. Cas. 1135, Chief Judge McSherry said:

"Where a person with actual or constructive knowledge of the facts induces another by his words or conduct to believe that he acquiesces in or ratifies a transaction, or that he will offer no opposition thereto, and that other, in reliance on such belief, alters his position, such person is estopped from repudiating the transaction to the other's prejudice."

Learned counsel for the appellants rely upon the case of Hoffman Coal Co. v. Cumb. C. & I. Co., 16 Md. 456, 77 Am. Dec. 311, where the court said:

"The law governing questions of ratification, in cases like the present, is well settled. To render the act of ratification effective, and conclusive, certain considerations are necessary. At the time of the supposed ratification, the principal must have been fully aware of every material circumstance of the transaction, the real value of the subject of the contract, and

his act of ratification must have been an independent and substantive act, founded on complete information, and of perfect freedom of volition. And, in addition to all this, the cestui que trust must not only have been acquainted with the facts, but apprised of the law, how those facts would be dealt with if brought before a court of equity."

Assuming that the limitations of the rule as stated are applicable to the facts of this case, and that the defense mentioned rests entirely upon the doctrine of ratification, the evidence in the record brings the case clearly within the requirements. There is no question but that the appellants knew, at the time they compelled the payment of the $65,000 ground rent, all the facts necessary to give full effect to their act. They had counsel who had carefully investigated the circumstances under which the contract was executed, and who had advised them of their rights, and "how the facts (as they stated and alleged them to be) would be dealt with if brought before a court of equity," and they had also been advised by counsel that what they had done, and what they were then doing, did not amount to a ratification of the agreement.

Without intending to qualify in any respect the rule applicable to dealings between attorney and client, which this court has ever jealously enforced, we must hold for the reasons state that the appellants are not in a position entitling them to the relief asked for, and affirm the decree of the court below which dismissed their bill of complaint. Decree affirmed, with costs.

(136 Md. 593)

TURNER v. SPENCER. (No. 28.) (Court of Appeals of Maryland. June 17, 1920.)

I. Attachment

249-Evidence held insufficient to show debt fraudulently contracted. On motion to quash attachment, evidence produced by plaintiff, held insufficient to meet the burden on him to sustain his jurisdictional allegation that his debt was fraudulently contracted.

2. Attachment 32-Statement as to intended use of money borrowed held not fraudulent.

The failure of one to carry out a promise to use money for a certain purpose when borrowing it would not amount to fraudulently contracting a debt, justifying attachment, unless the borrower intended at the time he made the promise not to keep it.

Appeal from Baltimore City Court; Henry Duffy, Judge.

"To be officially reported."

Action by Leonidas G. Turner against William Spencer. From an order quashing an attachment, plaintiff appeals. Affirmed.

Argued before BOYD, C. J., and BRISCOE, THOMAS, PATTISON, URNER, STOCKBRIDGE, ADKINS, and OFFUTT, JJ.

George Washington Williams, of Baltimore (William R. Price, of Baltimore, on the brief), for appellant.

Myer Rosenbush, of Baltimore, for appellee.

THOMAS, J. The appellant in this case, Leonidas G. Turner, was engaged in the real estate business in Baltimore city, and interested in the development of suburban property. He had two sons, Percy P. Turner and Robert B. Turner, who were architects, doing business under the name of Turner Architectual Service, and who occupied his office. They prepared the building plans and speci fications for those who purchased building lots from their father, and supervised the construction of the houses, and in some instances took the contract for the erection of the building and sublet it to other contractors or builders. It seems that the appellant, who, as we have said, was interested in the development of the property, in order to en

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

courage the erection of houses, would sometimes assist the builders or contractors by lending them money to meet their pay rolls and other expenses, and that the contractors or builders were paid by the owners of the houses as the work progressed upon certificates of the architects as to the amounts due under the terms of the contracts.

did not fraudulently contract the debt due the appellant. The case was heard on evidence produced before the court, and embraced in the bills of exception in the record, and this appeal is from the order of the court below, quashing the attachment.

No evidence was produced in support of the first averment of the affidavit, but the appellant relies upon the evidence offered to sustain the second allegation. The testimony of the plaintiff as to what occurred is as follows:

"That he is in the real estate business and

came in one Friday afternoon, very much downcast, said that he would have to have $1,000. the contract which my sons were handling for There was nothing due him under the terms of him, or handling in connection with him, and he set there with his head on his hands for a while very much depressed, and one of my boys asked him what he needed the $1,000 for, why should he need $1,000; certainly his pay roll was not that much. Well, he said he needed $1,000 to pay the bricklayer on Mr. Frazier's house and the plasterer on Mr. Frazier's house, and yet there was no money due him under the terms of the contract until he had completed the house up to a certain point, until the plastering was finished; he had had the previous payments in various other stages. So I think one of my boys said to me, 'Father, would you like to help Mr. Spencer?' I said, 'Why?' 'Well, it is perfectly safe; you will get this money next week when the house is at a certain state of the contract;' and Spencer spoke up and said, 'Yes; I will be $15,000 to the good when these houses are cleaned up.' When these houses are finished. And, moreover, he said that he would get certain payments next week, one on the Frazier house and another from another house to reimburse me if I would let him have the money, and as a further inducement he said he would give me 10 per cent. I said, 'Spencer, I would not take any 10 per cent. from you or any compensation whatever if 1 want to help you and it is perfectly safe; if you say, "I am going to get this money next week," why, I do not mind letting you have $1,000.' So I gave him the $1,000 on that reparchitect the payments that would be due, one resentation, and he had assigned to me by the payment on each of two houses, $400 on one and $600 on the other."

In September, 1919, William Spencer, the appellee, was the contractor for several houses in the course of erection on lots sold by the appellant, and among them was one for O. C. Frazier and one for a Mr. Byrd, and on Friday, September 26th, the appellee the plaintiff in this case. That his claim arose went to see the appellant, who had, for in the following manner: Mr. Spencer was several weeks, been lending him the mon- building some houses. My boys were the arey to carry on the contracts, to borrow chitects. We occupy the same offices. Spencer $1,000 with which to meet his pay roll the next day and other pressing obligations. The appellant told him that he was very busy that day, and that he should come to see him the next day, and he would let him have the money. The following day the appellant gave him the money, and took from him two papers, one in the form of a certificate signed by his son, "P. P. Turner, Architect," addressed to O. C. Frazier, certifying that the appellee as contractor was entitled to the sixth payment under the contract, amounting to $600, and a receipt for that amount signed by the appellee, and the other a similar certificate addressed to Mr. Byrd for $400, and a receipt for that amount signed by the appellee. About 10 days later the appellee was so far behind with his obligations under the several contracts referred to that he had to call a meeting of his creditors. At that meeting a committee was formed to take over and complete such of his contracts as, in the judgment of the committee, would be profitable to his creditors. The work under the Byrd contract was completed and the appellant received the $400 mentioned in the certificate and receipt given nim for that amount, but the contract for the Frazier house was abandoned by the committee, and the appellant, not having received the $600 mentioned in the certificate and receipt given for that amount sued out of the Baltimore city court an attachment on original process against the appellee, the affidavit stating that the appellant had good reason to believe: First, that the appellee had assigned, disposed of, or concealed, or was about to assign, dis- On cross-examination he further testified: pose of, or conceal, his property, or some por"At the final division (by the committee of tion thereof, with intent to defraud his credi- the creditors) of whatever money was coming tors; second, that the appellee fraudulently to Mr. Spencer I received a check for apparentcontracted the debt of $600 due the appellant. ly my pro rata share, which check I returned. The attachment was laid in the hands of This was after the whole thing was averaged Robert B. and Percy P. Turner, the appellant's and after they had stopped work on the Frasons, who admitted assets in their hands to the amount of $600.40. The appellee filed a motion to quash the attachment on the ground that he had not assigned, etc., and was "not about to assign," his property with intent to defraud his creditors, and that he

zier house, on which I was to get my $600. Q. which is undoubtedly true. You and your sons They refused to finish the Frazier house, were connected in this building operation; in other words, the sale of the land was by you and they as architects, and they as the contractors were building these houses; that is

(111 A.)

Percy P. Turner, one of the appellant's sons, who was present at the time the money was loaned to the appellee, testified that—ing week the appellant's son "went out and