Opinion ID: 2349960
Heading Depth: 1
Heading Rank: 6

Heading: Estoppel to Use Charter Forfeiture

Text: In respect of the effect of the forfeiture (31 October 1962) of Tenant's charter on its right to exercise the option, Judge Carter had this to say: Such a devolution of the ownership of the lease as a corporate asset clearly constitutes a devolvement upon persons other than the Lessee, by operation of law, and is therefore squarely within the provisions of the subject paragraph thereby constituting a default which existed on December 18, 1962. The Lessee contends that notwithstanding this fact when the charter was revived on January 27, 1964 the revival validated all contracts, acts, matters, and things made, done and performed by the officers and agents of the corporation during the time when the charter was void with the same force and effect as if the charter had at all times remained in full force and effect by reason of Art. 23, sec. 85 (d) and therefore that any default caused by the forfeiture is made whole and obliterated. It is difficult to perceive how the later validation of acts of officers of the corporation during the period of forfeiture affects the fact that by the forfeiture ownership of the lease devolved upon persons other than the Lessee by operation of law from October 31, 1962 to January 27, 1964, which fact constitutes a default by the Lessee under the provisions of the lease and which default was in existence at the time the option to purchase was attempted to be exercised on December 18, 1962. The ultimate validation of the acts of the directors by making such acts the acts of the corporation does not alter the fact that by reason of the forfeiture the lease devolved on persons other than the Lessee which was the situation when the option to purchase was attempted to be exercised.    To interpret the intent of the parties to this lease, which restricted the option period to October, November and December, 1962 so that the Lessors would be required to hold the matter open for the Lessees to validate its offer to exercise the option at any time up until January 27, 1964 when the charter was revived or for a period of over a year after the specified period had terminated would be a strained and queer construction, indeed. The correctness of Judge Carter's holding is disputed by Judge Pugh. He cites as support for his position Code, Art. 23, § 85 (d) which validates, upon revival, all contracts, acts, matters and things made, done and performed during the period of forfeiture. Absent that part of paragraph 4 (e) of the lease which reads or if this lease shall, by operation of law, devolve upon any person    other than Lessee Judge Pugh's contention might be persuasive. In the circumstances, however, especially in light of the language of the lease, we think Judge Carter has correctly stated the law. Judge Pugh argues further that, because Landlords, in their motion for summary judgment filed 17 February 1964 in the equity case and in a similar motion filed the following day in the ejectment case (while it was in Baltimore County) undertook, for the first time, to make use of the forfeiture of the charter (which had been revived several weeks earlier (27 January 1964)), they are estopped from doing so. It is undisputed that Landlords were unaware of the forfeiture until 31 January 1964  four days after revival. We think the filing, within a few weeks, of their motions for summary judgment demonstrates, in the circumstances, something more than ordinary diligence and we see no reason why they should be estopped from making use of what is undeniably a fact. Tenant, in its brief, presented a number of questions which Judge Pugh, in his opinion, did not touch upon. We think several of them require some comment. The Caroline County court lacked jurisdiction, argues Tenant, because an ejectment case can be tried only in the county where the land is located. Tenant insists this is the tenor of Maryland Rule T 41. No other authorities are offered. Rule T 41 says nothing about ejectment cases being tried only in the county where the land lies. The action shall be brought in the county in which the land lies is the precise language of Rule T 41 a. (Emphasis supplied.) In any event, the procedural and jurisdictional problems involved in the institution, removal and trial of actions at law (including ejectment) were settled long ago in Baltimore v. Libowitz, 159 Md. 28, 149 Atl. 449 (1930) and recently further discussed in Bullock v. State, 230 Md. 280, 186 A.2d 888 (1962). See also Maryland Rule 542 h which gives the court to which an action has been removed the power to issue a warrant of resurvey, a procedure frequently used in ejectment cases and provided for by Rule T 44. Still another oddity in the case is the fact that it was Judge Pugh himself who signed the order removing the case to Baltimore County. Tenant did not then attack nor, until the filing of its brief, has it since attacked, the propriety or legality of transferring this ejectment case to another county for trial. We might also point out that it seems to be well established that where the issue of jurisdiction is raised and determined in favor of the jurisdiction, the ensuing judgment on the merits is not open to later collateral attack on the jurisdictional issue, whether or not the determination thereon was erroneous. Jackson v. Irving Trust Co., 311 U.S. 494, 61 S.Ct. 326, 85 L.Ed. 297 (1941); 1 B Moore's Federal Practice, Par. 0.405 (5). See also 50 C.J.S., Judgments, § 714 and A.L.I., Restatement, Judgments, §§ 5j, 9 and 10. Tenant insists that because the equity case was filed four days before the ejectment case the doctrine qui prior est tempore, potior est jure applies and operates to defeat the jurisdiction of the Caroline County court. We do not agree. The principle of priority is applicable only when the cases involved are identical as to subject matter, parties and relief sought. Baltimore City v. Gittings, 113 Md. 119, 77 Atl. 319 (1910); Mish v. Lechlider, 89 Md. 275, 43 Atl. 57 (1899); Buck v. Colbath, 70 U.S. 334 (1865); 20 Am.Jur.2d, Courts, § 131. In the case at bar the relief sought was the specific enforcement of the option. The object of the ejectment suit was to obtain possession of the property. Nevertheless, argues Tenant, Judge Carter, by deciding that Tenant's default precluded the exercise of its option, invaded Judge Pugh's prerogative and decided the specific performance case against Tenant. To that argument we must turn a deaf ear for the conspicuously obvious reason that Tenant's plea on equitable grounds compelled Judge Carter to decide that issue. His decision is final, unreversed and beyond collateral attack. Only the final judgment itself may be considered in applying the principle of res judicata. The opinion, being irrelevant and obiter dicta, has no force or effect. So argues Tenant. In our judgment a more correct statement of the law will be found in 50 C.J.S., Judgments, § 726:    [R]ecourse may be had to the opinion of the court in a former action to ascertain what was in the mind of the court when judgment was rendered, especially where there is only a general finding; and where the judgment makes the opinion `a part of the record' a direct statement in the opinion as to the matters litigated is conclusive. So it has been held that the matters decided in the opinion of an appellate court are concluded although the decision is not in the decree, at least where such matters are within the issues presented by the pleadings. It will be recalled that the concluding words of Judge Carter's order of 24 July 1964 were: A written opinion in support of this Order will be filed. The basic theory of Tenant's defense in the ejectment case was that it was a vendee rather than a lessee holding over and that eviction, in the circumstances, would be inequitable. To reach this conclusion Judge Carter would have been obliged, under the pleadings, to find that Tenant had complied with the obligations under the lease which were a condition precedent to its right to exercise the option. But he found to the contrary, a finding, necessary under the pleadings, to support his final judgment that Tenant was wrongfully in possession. Our holding in Cuffley v. Hammond, 228 Md. 162, 178 A.2d 901 (1962) is peculiarly relevant to the case at bar and it seems appropriate to conclude this opinion with a brief reference to it. Chief Judge Brune, for the Court, said: The Circuit Court for Anne Arundel County had jurisdiction over the subject matter and over the parties to the first ejectment suit. In that case, unlike Dundalk Holding Co. v. Easter, 195 Md. 488 (see p. 494), 73 A.2d 877, a plea upon equitable grounds was filed, and equitable considerations were therefore not irrelevant  at least in the absence of a showing that such a plea was wholly unfounded or frivolous. Whether the Circuit Court did or did not decide the ejectment suit correctly and whether or not it exercised its equitable jurisdiction therein properly (see Easter v. Dundalk Holding Co., 199 Md. 303, 86 A.2d 404; Dundalk Holding Co. v. Easter, 215 Md. 549, 137 A.2d 667), are questions which cannot now be relitigated. No appeal was taken in the first ejectment case, and it cannot be reviewed on this appeal. If it were a nullity, it might now be open to collateral attack; but in view of the court's jurisdiction over the parties and the subject matter, we think that its order was not a nullity. The appellants are accordingly bound by the order in the original ejectment suit, whether it was erroneous or not. Christopher v. Sisk, 133 Md. 48, 104 A. 355; Ugast v. La Fontaine, 189 Md. 227, 55 A.2d 705; Riggs v. Loweree, 189 Md. 437, 56 A.2d 152. Id. at 167-68. Decree reversed. Appellee to pay the costs.