47 Md. 262 | Md. | 1877
delivered the opinion of the Court.
The petition of the appellant, filed in the Circuit Court of Baltimore City, on the 21st of September, 1876, represented that a certain Benjamin F. Kershner of said city, to secure the payment of the sum of $2000, due the petitioner, conveyed to the petitioner by indenture of mortgage certain leasehold premises, lying in said city, with an agreement therein that a decree for the sale, of the property at any time after default made might be passed pursuant to Md. Code Pub. Local Laws, Art. 4, sec. 782, &c., as would more fully appear from the said mortgage, therewith exhibited, dated the 28th of June, 1872.
The petition further alleged that the principal debt was long since due, with interest thereon, and prayed a decree for sale.
On this petition and exhibit, the Court passed a decree in the usual form, directing that the property be sold, and
The trustee having filed his bond, which was duly approved, the mortgagee filed “ a statement of the amount of the mortgage claim remaining due,” under oath, accompanied by the note of the mortgagor intended to be secured by the mortgage.
The trustee advertised, giving due notice of the time, place and terms of sale, and sold the premises for $3600, and reported the sale on the 6th of December, 1876.
Whereupon an order nisi was passed.
Afterwards on the 4th of January, 1877, exceptions were filed to the sale by Margaret Kershner, wife of the mortgagor, and Samuel T. Rouskulp, a subsequent mortgagee.
Mrs. Kershner’s exceptions are as follows :
1st. That at the time of the execution of the contract, by which the fee-simple of the estate mentioned in the proceedings was converted into a leasehold estate — an estate for years — she was under coverture, the wife of B. P. Kershner, the defendant, and says that said contract was illegal, usurious and void.”
2nd. “ She claims a potential right to dower in the property and premises, named aud described in these proceedings, and has not been made a party thereto.”
3rd. That the legal estate and title to the property and premises, &c., was not in Benjamin P. Kershner, the defendant, at the time of the execution of the mortgage to the complainant.”
4th. “ That the contract for the payment of the rent in the lease mentioned in these proceedings, recited in the mortgage aforesaid, was usurious and void, and she is not bound by it.”
5th. She was made a party defendant with others, in an action of ejectment, instituted at September Term, 1876, of the Superior Court of Baltimore City, by Amelia C.
6th. “ That while said action of ejectment was pending, the complainant, her co-defendant, without notice to her, obtained a decree for the sale of the property.”
7th. “ That after said decree had been obtained by the complainant, for the sale of the property, &c., the action of ejectment was entered ‘ off/ by order of the plaintiff ’s attorney.”
8th. “ That these proceedings were a surprise to her.”
Rouskulp’s exceptions are in several instances repetitions or duplicates of Mrs. Kershner’s.
His first exception is, that he was not a party, (which is included in Kershner’s, No. 2.)
His second, that he was a prior encumbrancer, and only consented to release his security of mortgage, upon conditions not complied with by the complainant and defendant.
His third exception is a mere particular specification of the second, viz : “ being a creditor of the defendant to the amount of $5000, and holding a mortgage in fee on the property in the proceedings mentioned, from the defendants, B. E. Kershner and wife, as security therefor, which was known to the complainant, he only consented to postpone his claim to that of complainant, upon condition that his debt was to be secured by a mortgage of the fee, instead of which he was given a mortgage of the leasehold of the estate — or term of years, &c., and his release was without consideration and void.”
4th. Because the contract between the defendant and Mrs. Hinks, made with the knowledge, co-operation and consent of the complainant, by which the fee was converted into a term of years, was in disregard of the understanding upon, which the exceptant agreed to release his prior mortgage, and is otherwise usurious, illegal and void.
6th. Includes Kershner’s fifth and sixth. That he was made a co-defendant with Carroll in the ejectment suit, brought by Hinks, in the Superior Court, and pending these proceedings the decree for sale was obtained without notice to the exceptant.
7th. Surprise.
These exceptions were answered severally by the appellant, denying all knowledge of the previous relations between Hinks and Kershner, and Rouskulp and Kershner, except what he derived from the records and deeds filed in the case, from which it appeared Mrs. Hinks had united with her husband in relinquishing her dower and divested herself of all interest therein. The respondent denied the exceptant Kershner had any potential right of dower in the premises, and that she should have been made a party defendant. He denied that B. F. Kershner bad not, at the time of the execution of the mortgage, title to the property mortgaged.
The respondent denied all knowledge of the contract for the rent reserved in the lease from Hinks to Kershner than that derived from an examination thereof, and denied that said contract was in any way usurious.
The respondent admitted the institution of the ejectment suit, but denied all combination or connection with the same, averred he had never been served with notice, and that an appearance had been entered for him without his privity and consent. He admits that pending the ejectment he procured his decree for sale, but did not advertise the property until after the ejectment was entered “off.”
In the answer of Carroll to the exceptions of Rouskulp, he denies all acquaintance with him personally, and all previous negotiation, discussion or agreement with him
On examining the title, a number of other liens were found to exist, but releases for these were prepared by and were in the hands of the attorney of Mrs. Hinks.
The liens were to be duly released, a deed conveying the fee to be made by Kershner and wife to Hinks, and a lease by her to B. F. Kershner, reserving the above rent, and Kershner was then to execute the mortgage to the respondent. The respondent, through his attorney, was informed a second mortgage, subject to complainant’s, was to be executed by Kershner to some person living in the country, whom respondent did not know, but who it appeared afterwards was the exceptant. He was not informed of the amount or the consideration of the second mortgage and made no inquiries, being only interested in having it made subject to his own.
The respondent further answering denied the right of Rouskulp to be made a party : he averred that the exceptant, having voluntarily released his prior encumbrance, and not at the instance or request of the respondent, could not avoid his release as to strangers who had no knowledge of its conditions, or that any had been broken.
He further denied all knowledge of the conditions on which the exceptant Rouskulp consented to waive his lien — also denied that the contract between Kershner and Hinks was usurious, and that he was a party to the understanding between them, or that he in any way ever sought to induce the exceptant to waive, postpone or release his prior mortgage. He denied the allegation of exceptant that the legal title to the premises was not in Kershner, at the date of the mortgage to respondent, and referring
Every important fact alleged by the exceptants was put in issue by the answers, and the burden of proof thrown on them.
Depositions were taken by the exceptants and appellants, in support of their respective allegations and answers, and a mass of documentary evidence, filed as exhibits, encumbering the record unnecessarily, contrary to the new rules regulating appeals. The exceptions having been argued by the counsel for the exceptants and appellant, the sale made and reported by the trustee was set aside by the order of the Court below, and the exceptions sustained. No reasons are assigned by the learned Judge for his order: we must therefore search the record for the grounds of his action: no particular exception is referred to, as the basis of the Court’s decree; we are at a loss to know which of the exceptant’s objections were most influential, or whether all were equally tenable in the opinion of the Court.
It is proper to premise that no objection is made to the model character of the sale. There is no charge of irregularity, or misconduct in conducting the sale. No complaint of departure from the terms of the decree, in time, place or circumstance: no imputation upon the motives of complainant or the trustee; no suggestion of inadequacy of price.
The exceptants in effect complain, that though the decree, sale, etc., were legally regular in every other respect, they ought to be set aside,—
1st. Because they were not made parties.
The first exceptant, Mrs. Kershner, had no legal or equitable interest in the property sold. She had united in a deed with her husband, conveying all her interest in fee to Mrs. Sinks for a valuable consideration, which estops her from questioning its effect, unless she can impeach it for fraud.
There is no legal of equitable principle which required the appellant to make subsequent mortgagees or encumbrancers parties to proceedings to obtain a decree to sell, under an agreement to consent to such decree incorporated in the mortgage. Hays vs. Dorsey, 5 Md., 99.
The proceedings in this case, although not instituted under the 64th Art. of Public G-eneral Laws, is in pursuance of a similar special authority vested in the Courts of the City of Baltimore. In an analogous case this Court held, speaking of such special powers and jurisdiction: “Although objections may be filed against the sale by any person interested in the property, yet it is apparent, as a sale only passes the title which the mortgagor had in the premises at the time of recording the mortgage, no person whose interest would not be affected by the sale would be allowed to intervene.” Warfield vs. Ross, 38 Md., 85, 90.
The exceptants or petitioners, to open the decree in that case, also urged as a reason, that the contract was usurious.
To which this Court replied: ‘ ‘ Whether the contract was usurious or not, is immaterial in an inquiry as to the validity of the sale. This Court has recently determined that usury affects only the distribution of the proceeds, not the sale itself. If more than legal interest has been extorted by the mortgagee, the Court in distributing the proceeds, may direct it to be withheld or refunded.” Vide Powell & Harrison vs. Hopkins, 38 Md., 1, and Md. Perm’t Building Society of B. vs. Smith & Carroll, 41 Md., 516.
The objection of the exceptants, that the decree was obtained pending the action of ejectment instituted by-Mrs. Hinks, does not constitute any legal ground for setting aside a sale, in the absence of all evidence of combination, collusion and fraud. No such charge is directly, made, and it is wholly rebutted, if intended to be implied, by the testimony of the trustee.
Without extending this opinion unnecessarily, it is sufficient to say, we have not been able to find in the facts or the law of this case, any reason for setting aside the sale. The order appealed from will therefore be reversed, and the cause remanded.
Reversed and remanded.
