Court Opinion

ID: 9703301
Source: CourtListenerOpinion
Date Created: 2023-08-25 23:51:14.938659+00
Date Added: 2024-06-11T18:21:47.541131
License: Public Domain

COLE, Judge,
dissenting.
The Court today holds that subsection (f) of § 10-102 of the Real Property Article of the Maryland Code (1974, 1988 RepLVol.), provides that the purchaser’s unconditional right to cancel a land installment contract terminates when the vendor records the contract. I think this holding is incongruous and defeats the purpose for which this statute was enacted. I, therefore, respectfully dissent.
The state of affairs for vendees (purchasers) buying real property under land installment contracts, at the time legislation for this type of transaction was contemplated, was most disheartening. As the Legislative Council pointed out in its report to the General Assembly:
In many instances such an agreement has been made between landlord and tenant, as an attempt to circumvent rent control regulations by substituting the relationship of seller and buyer. One result has been that the buyer-tenant could build up a considerable equity in the property and then be dispossessed and lose all his equity in case of any default.
Legislative Council Report to the General Assembly of 1951, Vol. 2, Item No. 71, p. A-44. The inequities surrounding use of installment contracts to purchase land did not *541end there. The reality was that oftentimes the purchasers were those who were poor and partially illiterate and, therefore, could not establish credit or did not possess the astuteness to understand real estate transactions. But nevertheless, pressed with the need to obtain a home, purchasers would enter into installment contracts in which the vendor charged an amount which far exceeded the purchaser’s weekly income and, thus, virtually guaranteed default by the purchaser — the remedy for which was forfeiture. The result was that the vendor not only took repossession of the property, but also kept all installment payments previously paid regardless of the amount. Moreover, forfeitures occurred with such frequency that a vendor would resell property to the same vendee repeatedly but at a higher price and without credit for payments made on the principal in the original contract.
The inequities between parties to a land installment contract during this period are made manifest when one reviews a summary of the provisions routinely inserted into these contracts:
1. Time is of the essence of this contract.
2. In the event of a default by the vendee, the vendor shall immediately, upon such default, have the right to declare the contract void and retain whatever may have been paid on said contract, and all improvements that may have been made on said premises and may take immediate possession of the premises and remove the vendee.
3. Any default shall cause all subsequent payments to become due immediately, and vendor shall have the right to compel the continued performance of the contract by the vendee.
4. Upon any default by the vendee, the vendor shall have the right to foreclose the contract.
5. The vendor shall have the right to use any and all of the above-mentioned remedies.
*5426. Waiver of any breach of this contract resulting from default on the part of the vendee shall not be deemed to be a waiver of any other [breach].
(Emphasis supplied). Levin, Maryland Rule on Forfeiture under Land Installment Contracts ... A Suggested Reform, 9 Md.L.Rev. 99, 104 (1948). This article triggered, to a great extent, legislative attention to the problem, resulting in the passing of the 1951 bill.
The resulting legislation, now recodified as Md.Real Prop. Code Ann. §§ 10-101 to 10-104, was designed to correct and avoid the egregious results from which vendors unfairly benefitted. More specifically, § 10-102 established the .following:
(b) Vendor to give copy of instrument and purchaser to give receipt. — At or before the time the purchaser signs the instrument, the' vendor shall deliver to him an exact copy and the purchaser shall give the vendor a receipt showing that he has received the copy of the instrument. If the copy was not executed by the vendor at the time the purchaser signed, the vendor shall deliver a copy of the instrument signed by him within 15 days after he receives notice that the purchaser has signed and the purchaser shall give the vendor a receipt showing that he has received the copy. If the vendor fails to deliver the copy within 15 days, the contract signed by the purchaser is void at his option, and the vendor, immediately, on demand, shall refund to the purchaser all payments and deposits that have been made.
(c) Receipt. — The receipt for the delivery of a copy of a contract shall be printed in 12-point bold type or larger, typewritten or written in legible handwriting. If contained in the contract, the receipt shall be printed, typewritten, or written immediately below the signature on the contract and shall be signed separately.
(d) Right of purchaser to cancel and receive refund until copy of instrument is given him. — Until the purchaser signs a land installment contract and receives a copy signed by the vendor, the purchaser has an uncondi*543tional right to cancel the contract and to receive immediate refund of all payments and deposits made on account of or in contemplation of the contract. A request for a refund operates to cancel the contract.
(e) Vendor to give purchaser receipt for payment or deposit. — When any payment or deposit is accepted by the vendor from a purchaser, before the purchaser signs a land installment contract and receives a copy, the vendor immediately shall deliver to him a receipt, which clearly states in 12-point type or larger, in typewriting or in legible handwriting, his rights under subsection (d). Section 10-103 further required that the vendor include
certain information in the contract. For example, notice to the purchaser was required, conspicuously printed, of his right to receive a copy of the contract at the time he signed it. Moreover, the vendor had to reserve a space in the contract where the purchaser could sign, acknowledging receipt of a copy of the contract. The vendor was also required to inform the purchaser of his liability in the event of default. See § 10-103(a).
In 1957, the legislature added subsection (f) to 10-102 to further discourage recurrence of former evils accomplished through this type of contract. This subsection made it mandatory for vendors to record the executed contract within 15 days of execution. Failure to do so gave the vendee the unconditional right to cancel the contract and to immediately receive a full refund. In the usual real estate transaction, the obligation to record placed upon vendors by this subsection, was the purchaser’s. This was probably the case because it was believed that the purchaser of land would record the deed expeditiously in order to protect his rights. On the other hand, because of the naivete of the purchaser under a land installment contract, the legislature obviously saw fit to saddle the vendor, who had more experience in these transactions, with this obligation.
Contrary to subsection (d), which clearly indicates that the purchaser’s unconditional right to cancel exists only until a copy of the executed contract is received, subsection *544(f) does not identify an event which terminates the purchaser’s unconditional right to cancel. Rather, both subsections are consistent in that neither makes any provision “for an allowance to the seller of an amount equivalent to the reasonable rental value of the property during the period of the purchaser’s occupancy.” Spruell v. Blythe, 215 Md. 117, 123-24, 137 A.2d 183, 187 (1957).
At the time the Land Installment Contract Law was recodified, in 1974, the commission, in the Revisor’s Note following § 10-102, suggested that the legislature clarify the ambiguity as to when, if ever, the purchaser’s right under this subsection expires.1 It has been fifteen years since that recommendation was made and the General Assembly has not acted upon it.
To me, the legislature’s inaction reinforces its intent to emphasize just how “unconditional” the purchaser’s right to cancel and receive a full refund is. I am convinced that this statute was enacted in order to rectify a situation in which the poor and disadvantaged were victimized by unscrupulous vendors. The majority, however, is unconcerned that its holding establishes a loophole for vendors who may now delay recordation of the contract in order to circumvent the intent of the statute. The majority appears only fearful that if the purchaser exercises his unconditional right to rescind, the vendor may be required to fully refund all payments made under the contract. But it seems, to me, this is what the legislature intended. Admittedly, the instant case is one of extremes in that the vendor was one day late in recording the contract, and the purchaser did not exercise his right to rescind until two years later. None*545theless, the language of the statute places no time limit on when the purchaser may exercise his right of cancellation.
The time provisions are not complied with by a late recordation; instead, subsection (f) contains a stringent penalty clause. See Russ v. Barnes, 23 Md.App. 691, 699, 329 A.2d 767, 771 (1974). The purchaser’s unconditional remedy becomes effective when there is a failure to record “as required under this section within the time stipulated.” § 10-102(f).
Close examination of the statute reveals that the legislature consciously considered the effect noncompliance would have on a vendor’s rights as well as a vendee’s. See 10-102(d) and 10-106. These sections set forth, in clear, unequivocal language, what allowances would be made for a vendor or vendee who fails to comply with the statute. Conversely, § 10-102(f) does not make provisions for a vendor who records the contract outside the 15 day time period — obviously for the reason that the legislature did not intend to give vendors an opportunity to circumvent the vendee’s right to rescind under these circumstances.
In construing the statute to reach its holding, the majority would have to add the following language: the vendee has an unconditional right to cancel until the vendor records the contract. The majority justifies its construction under the guise of providing “a reasonable interpretation ... consistent with the earlier provisions of the statute.” By this holding, however, the majority seeks to legislate, which is not its function. And we have repeatedly stated that the court may not “attempt, under the guise of construction, to supply omissions or remedy possible defects in [a] statute.” In re Appeals Nos. 1022 & 1081, 278 Md. 174, 178, 359 A.2d 556, 559 (1976) (citation omitted); see also State v. In re Patrick A., 312 Md. 482, 487, 540 A.2d 810, 812 (1988); Bridges v. Nicely, 304 Md. 1, 10-11, 497 A.2d 142, 147 (1985); Board of Education of Garrett Co. v. Lendo, 295 Md. 55, 63, 453 A.2d 1185, 1189 (1982); Smelser v. Criterion Ins. Co., 293 Md. 384, 389, 444 A.2d 1024, 1027 (1982); Hurst v. V & M of Virginia, 293 Md. 575, 578, 446 *546A.2d 55, 57 (1982); Department of State Planning v. Mayor and City Council of Hagerstown, 288 Md. 9,15, 415 A.2d 296, 299 (1980). Moreover, as a general proposition, the statute’s provisions are to be construed in favor of those for whom it was enacted. Caton Ridge, Inc. v. Bonnett, 245 Md. 268, 272, 225 A.2d 853, 855 (1967).
Had the legislature intended to máke allowances for a vendor’s good faith failure to record, it could have done so at the time subsection (f) was drafted or, at least, within the 15 years since the issue was brought to its attention. The legislature did nothing. Consequently, today’s holding not only emasculates the 15-day recordation rule, but also unjustifiably éxpands the time in which a .vendor may record the contract. The majority gives the vendor a right the legislature never intended.
For these reasons I would affirm the judgment of the Court of Special Appeals.
Judges ELDRÍDGE and ADKINS have authorized me to state that they concur, in the views herein expressed.

. The relevant portion of the Revisor's Note, accompanying § 2, ch. 12 of the 1974 Laws of Maryland, states:
Subsection (f) is unclear to the extent that it fails to indicate whether the purchaser has a perpetual right to cancel and receive a refund or whether this right expires at some time, e.g., when the vendor records the contract. The commission recommends that the General Assembly consider enacting separate legislation to remedy this ambiguity.