Court Opinion

ID: 3483281
Source: CourtListenerOpinion
Date Created: 2016-07-05 21:07:12.980622+00
Date Added: 2024-06-11T14:13:27.992810
License: Public Domain

The opinion prepared by Judge Urner seems to me to express perfectly the conclusion of all the judges, including myself, on the facts and on the principles of law which the majority of the judges accept as the basis of decision. But I think the case should be decided upon a different ground, one which has not been adopted by the majority of the Court. I am rather strongly of opinion that the question of the applicability of the redemption statutes to such a relation as that established under this lease needs to be reconsidered. And it seems to me that it would be well to state that view. *Page 259 
It is well known to all lawyers and to others in this State that the Act of 1884, chapter 485, together with the acts which amended it, was designed to put a stop to the creation of the irredeemable ground rents which for about a century had been a favored form of security in Baltimore City, but which had survived to become a detriment. And that was its only purpose. "The statute involved in these cases," this Court has said, "was passed because it was known that the system of irredeemable ground rents which had prevailed in Baltimore City became very injurious to the prosperity of the city and a sound public policy demanded that the right to redeem be given to holders of leasehold interests under such leases as the statute included."Spear v. Baker, 117 Md. 570, 573. And again, in Safe DepositCo. v. Marburg, 110 Md. 411, 413, the Court said, "It is well known from cases in this Court and otherwise that the complex system of ground rents in this State often rendered titles unmerchantable, although in some instances the rents had not been collected for many years, and some of them were for such a nominal sum and were owned by so many persons, that it was difficult to obtain the reversions for anything like a reasonable amount as compared with the rent reserved." And see Swan v.Kemp, 97 Md. 686, 690.
The "ground rent" thus banned for the future was a perpetual charge put upon land by the device of a lease for ninety-nine years with a covenant for renewal forever. It was, as Judge Miller stated in Banks v. Haskie, 45 Md. 217, "to secure the prompt payment in perpetuity of the interest on a sum of money equivalent to the value of the property in fee, at the time the lease was made, and on the part of the lessee to acquire a perpetual interest in the leased premises, which would justify his making permanent improvements thereon, and enable him to avail himself of the value of the property thus enhanced, as well as of its increase in value arising from other causes." The originators of this device had contrived a permanent ownership of the land in the one in the position of lessee, coupled with a permanent charge or annuity in the one standing as fee simple owner or *Page 260 
reversioner. On both sides were to be permanent owners, one of the land and the other of the charge. All enjoyment of the land belonged to the one entitled lessee, all increases in value were his increases, all losses were his losses; the one entitled reversioner or lessor had an interest only in a fixed, unchanging money charge. And it seems to have been no other than the land charge, or charges upon land in the ownership of another, which developed in many jurisdictions, and under several legal systems, and which, while it was carried along under the old forms and categories of lease or sale, belonged in reality to a relation distinct from that regularly established by either of these. Here it was embodied in a form which with all its details seems to have been made use of only in this State, and in England and Ireland. (Banks v. Haskie, 45 Md. 218); but in respect to its real character it had parallels in the ground rent which in Pennsylvania was charged upon fee simple estates, and which was made redeemable by an Act of 1850 (Cadwalader, Ground Rents,
page 297), in the "ground annual" of the Scotch law, and in the land charges of Continental Europe. Huebner, History of GermanicPrivate Law, 356 to 368; Brissaud, History of French PrivateLaw, sec. 389. And it was similar to the rent charged under the perpetual lease, or emphyteusis, of the Roman law, which after long debate was officially declared to be neither a hiring of land on the one hand nor a sale on the other, but an arrangement of its own kind. Inst. Just. 3, 24, 3; Sohm, Institutes ofRoman Law (3rd ed., Ledlie), 348 to 350; 2 Moyle, Institutes
(3rd ed.), Excursus II, 328; 2 Sherman, Roman Law in the ModernWorld (2nd ed.), 602 to 608; Cadwalader, Ground Rents, page 102, note.
The statute enacted here to stop the creation of these rents was broad in terms. As now printed in article 53, section 24 of the Code, the provision is that "all leases or sub-leases of land made in this State * * * shall be redeemable at the option of the tenant * * * for a sum of money equal to the capitalization of the rent reserved" at a rate specified in the statute. But the object sought was clearly defined and *Page 261 
restricted in the general understanding. For a long time it never entered anybody's mind that anything but the familiar ground rent lease would be affected, or that the statute would allow the redemption of any charge but a ground rent. No one seems ever to have found a lease for the occupancy of premises under the ordinary relation of landlord and tenant made to conform to the operation of the redemption statute, and no one would expect to. Business premises were let for long terms before 1884, although not so frequently as in later years. Other property rights within the legal classification of "land" were leased on long terms, piers for example. After that time, with the growth of business the need increased for the settled conditions which long leases would secure, and the number of long terms became greater. Short leases for many large business establishments became undesirable. Then a question of the full effect of the letter of the ground rent redemption statute arose. There was some reason for apprehension from a provision so broadly worded; and by the Act of 1914, chapter 371, the Legislature with some limitations excepted future leases of buildings from the operation of the older statute. In 1915, the decision in the case of Brager v.Bigham, 127 Md. 148, applied the ground rent statute to leases for the occupancy of business premises under the ordinary landlord and tenant arrangement, made prior to 1914. The Court took the view that the letter of the statute permitted no distinction between the leases which created ground rents and leases for the occupancy of premises as described, and expressed a fear that such a distinction, if allowed, would inevitably lead to abuses and evasions of the ground rent statute. The case ofSwan v. Kemp, supra, while it had to do with an improved lot of ground as distinguished from the vacant land on which ground rents were more commonly established, still had to do only with the ordinary ground rent, and Brager v. Bigham, supra, seems to have been the first case — and up to this time the only case — to extend the application of the redemption statutes beyond ground rents.
Since that decision was rendered we have had time and *Page 262 
occasion to test it by its effects. It has been made abundantly clear that when it was decided in 1915 that the redemption statute included the ordinary business leases in its operation, many lessors of property were caught unawares and placed in a much embarrassed situation. Entirely unexpected by them, their properties were found tied up under agreements unadapted to any plan of redemption on the basis of rent solely. And by the same stroke tenants found themselves suddenly possessed of power to throw overboard any one or all of a great variety of other covenants which have been, and always will be, necessary in adjusting the demands which arise in the letting of one property and another in the ordinary course of business. In one instance, a tenant sought by redeeming on the basis of the rent fixed in his lease at the outset to put aside a covenant which required him to pay in addition to that rent all increases in taxes and insurance premiums, which amounted in the end to $9,555.69 yearly. In the case of Brager v. Bigham, supra, the tenant had covenanted, as part of the consideration proceeding from him (and doubtless it had its effect on the amount of rental agreed upon), to erect a new building on the lot or to pay the lessors $10,000; and that obligation was thrown off by redemption on the basis of the amount specified as rent. And other tenants have suddenly found themselves possessed of power to acquire the fee in each of their properties at prices which while about equal to the value many years back were now far below it. Tenants of one property which had grown in value to over $100,000 claimed a right to take it over at $35,000 by redeeming on the basis of the rent in an old lease. Other unjust results can easily be imagined, and some will doubtless be shown in other suits before all the leases which originated prior to 1914 have come to an end. It may well be found that in some leases far the greater part of the consideration moving to the lessors has consisted in something other than rent. The leases we are considering are of a nature to make that arrangement appropriate and likely. The lease involved in the case of Feldmeyer v. Werntz, 119 Md. 285, which was for a term of twenty years with a covenant *Page 263 
for renewal for another period of twenty years or sale at a price to be fixed, provided for no rent at all; the considerations moving to the lessors were all of another kind. It has been made clear enough that the ground rent redemption statute does not fit these leases, and that no just resolution of the relation of the landlords and tenants is possible under it. With only the redemption of the ground rent in mind, the framers of the act of 1884 and its amendments were confronted with a simple problem. The whole interest of the owner of the rent, the landlord of that relation, was summed up in that rent, and redemption of it upon a fair capitalization closed accounts between the two sides completely and fairly. But in the other relation the landlord is the real owner of the land; and he is the man upon whose ownership the ground rent, if there is any, is charged. In the exploitation of his property he must from time to time covenant for a variety of considerations entirely beyond the concern of a mere ground rent owner. That is necessary for both the landlord and the tenant, the law protects them in their covenants, and it would clog the renting of premises with hardship to both tenants and landlords if they should be denied freedom to adopt any covenants they might find desirable in their business arrangements. With the redemption statute construed to empower the tenant in this relation to redeem on the basis of whatever might be fixed as the rent, however, the parties, if they wish to make a lease for a long term, are denied freedom to embody beneficial, balancing covenants in any other form, or the tenant is given the right to expunge them. That is the practical result, with relation to leases made prior to 1914, at least.
It seems clear, then, that in adhering to the conclusion ofBrager v. Bingham, we are making an application of the redemption statute which is contrary to the purpose of the Legislature in enacting it, and which makes it accomplish hardship and inconvenience not dreamt of. Is this unavoidable? In the first place, is the court compelled so to interpret the words of the statute as to attach this consequence to it? *Page 264 
Of course, ever since courts have been engaged in the work of applying statutes to concrete cases, it has been recognized that their function must be a much greater one than that of checking words with facts. Statutes are drafted by men, and therefore with a limited power of anticipation, and a limited power of expression. And one of the obvious guiding rules for the courts in interpreting a law is that the judges must fall in with the known purpose of the Legislature. This principle had, perhaps, more frequent application in older cases, when broad, general statutes were more common, but it is, of course, just as valid and effective in appropriate cases today. "All words," said Lord Bacon, "whether they be in deeds or statutes, or otherwise, if they be general, and not express or precise, shall be restrained unto the fitness of the matter or person." and in Canal Co. v.Railroad Co., 4 G.  J. 152, Buchanan, C.J., said: "Statutes should be construed with a view to the original intent and meaning of the makers, and such construction should be put upon them, as best to answer that intention, which may be collected from the cause or necessity of making the act, or from foreign circumstances; and when discovered, ought to be followed, although such construction may seem to be contrary to the letter of the statute. * * * That, therefore, which is within the letter of a statute, is sometimes not within the statute, not being within the intention of the makers." Baltimore v. Root,8 Md. 95, 105; Commercial Assoc. v. Mackenzie, 85 Md. 132, 137;Mitchell v. State, 115 Md. 360, 365. The principle is illustrated in practice by the working out of several of the most familiar statutes. The law built up on the Statute of Frauds is an instance. Lord Mansfield said of it (Bates v. Babcock, 3 Burr. 1921): "The object of the legislature was a wise one; and what the legislature meant is the rule both at law and equity. * * * The key to the construction of the act is intent of the legislature; and therefore many cases, though seemingly within the letter, have been let out of it." Perhaps the development of the Sherman Anti-Trust Act may serve as another illustration. In the opinion in Commercial Association v. Mackenzie, supra,
Judge Bryan *Page 265 
of this Court used several apt illustrations; a decision that a statute for the punishment of anyone who "drew blood upon the streets" did not apply to the letting of blood by a surgeon to relieve one suffering from a fit; and another that a law which awarded the ship and lading to those who stayed aboard during a storm did not apply to a case in which one man stayed, but did so only because he was too sick to escape. So, in the interpretation and concrete application of a statute the function of the court varies according to the amount of the combined task already performed by the Legislature itself. Assuming there is a workable statute to begin with, then the courts have to do more or less in accomplishing the aim of the Legislature according as the Legislature has left them more or less to do. And with a succinct statutory provision for the redemption of "leases of land" upon the basis of "rents reserved," the courts have a statute in which the Legislature has not undertaken to provide some qualifications and distinctions necessary to keep it within its purpose on the one hand, and to prevent evasions on the other hand by avoidance of the strict letter. Inevitably there arose soon after its enactment a case outside the strict letter, but which seemed to accomplish the mischief aimed at, and this Court was called upon to uphold the purpose against evasion by avoidance of the letter.Stewart v. Gorter, 70 Md. 242. And cases arose which were within its letter but outside the purpose, and the task of the Court was then to protect from the letter. Walker v.Washington Grove Assoc., 127 Md. 564; Buckler v. SafeDeposit Co., 115 Md. 228. In these cases concerning leases of premises in the ordinary relation of landlord and tenant the courts are again dealing, not with ground rents, not with the system of ground rents which had become an economic detriment and which the Legislature was undertaking to stop, but with a relation which the Legislature did not have in mind and for interference in which it made no provision. And in applying the statute to this latter relation, we are not carrying out the purpose of the Legislature but adding to their statute something they had no thought of including, in order to safeguard their purpose. *Page 266 
We see the injustices which are resulting. Cases in which the results are even more regrettable may come before the courts in future, until the leases made before 1914 have all run their full courses. We cannot forsee the particular difficulties which they will oppose to the carrying out of the interpretation adopted inBrager v. Bigham.
It has seemed to me that this situation requires that Brager
v. Bingham be overruled, and that the decree in the present case be affirmed on the ground that the redemption statute does not apply to the lease involved; and I have ventured to urge this course upon the Court. That is a method of correction which is ready at the Court's command, and however rarely it is used (and of course its use should be rare) situations must occur in which the best service is to be rendered by it. Stimmell v.Underwood, 3 G.  J. 289; and Green v. Johnson, 3 G.  J. 389; Owens v. Sprigg, 2 Md. 479; Patterson v. Gelston,23 Md. 445; Maus v. McKellip, 38 Md. 236; Terrall v. BurkeConstruction Co., 257 U.S. 529; Klein v. Maravelas, 219 N.Y. 283, 385, 386. It is a single decision (see the authorities collected in Ram on Legal Judgment, chap. XIV, sec. III, ofDeparture from One Decision); and it happens that from the outset the Act of 1914, chap, 371, deprived it for all practical purposes of that prospective effect upon which the rule of staredecisis chiefly depends. So correction by overruling it, if that decision is mistaken, seems to be to an unusual degree free from obstacles.
I venture to think it is the only way to the root of the difficulties which are being presented in these cases. Possibly the two statutes, the Act of 1914, chapter 371, and the Act of 1922, chapter 384, now in section 97 of article 21 of the Code, may by implication bring into the operation of the ground rent redemption statute some leases of the other nature, and, if this is true, the overruling of Brager v. Bigham may not confine these redemption statutes strictly to ground rents; but that is a question not involved in the present case. *Page 267