61 Md. 122 | Md. | 1883
Lead Opinion
delivered the opinion of the Court.
In the voluminous record transmitted to this Court are four appeals from an order of the Circuit Court for Kent County, sitting in equity; and some difficulty has been encountered in segregating from a mass of irrelevant matter the prominent and material facts upon which a proper solution of the questions in controversy is dependent. Some years antecedent to the pending litigation, by a decree of the Circuit Court for Kent County, in a cause in which II. Maria Blackiston and others were complainants, and Clara L. Blackiston and others defendants, D. James Blackiston was appointed trustee, and was directed to sell certain real estate situate in said county, consisting of about one hundred and fifty acres of laud known and designated by the name of “Davis’ Industry,” in order that the proceeds from the sale, when made, might be distributed among the parties to the cause who were the devisees of a certain Jemima Kaudain. On the 10th day of June, 1869, the trustee, so appointed, sold the said real estate to his father, D. C. Blackiston ; but this transaction has never received the sanction of the Court by an order of ratification, nor has the purchase money ever been paid. The trustee, however, on the 2'lst day of January, 1810, executed and delivered a deed to the purchaser, in manifest contravention of the explicit terms of the decree, which inhibited the execution and delivery of a deed anterior to the payment of the purchase money.
The proof in the cause tends to establish the fact of the insolvency of the purchaser as well as that of the trustee, and the irresponsibility of their sureties. That a deed had been executed was, apparently, unknown to the devisees directly interested in said real estate until a number of years subsequent to its delivery to the purchaser; several of them testifying that they had no knowledge of the
The auditor stated a number of accounts, in each, making a distribution of the proceeds from the sale in correspondence with the separate and distinct theories of the parties respectively. Exceptions were taken to each one of these accounts, which was sustained, the accounts re
To enter upon a detailed examination of the items in each one of these accounts would probably lead to an almost endless, and certainly to an exceedingly amplified and prolix investigation, and, as this cause must be remanded, it would seem that a concise exposition of the legal principles, forming the basis of the instructions given by the learned Judge in the Circuit Court, is all that is necessary for the. guidance of the auditor in his future action.
The auditor was instructed to disallow the judgment of Harriet Tilghman, use of G. B. Westcott, use of Thomas Pumphrey, which was obtained November 21st, 1866; the judgment of the Mutual Eire Insurance Company, use of Thomas, use of N. Pumphrey, which was obtained October 19th, 1868; and the judgment of the Visitors and Governors of Washington College, which was obtained on the 11th day of May, 1868. These judgments were obtained in suits against D. C. Blackiston, more than twelve years anterior to the execution of the deed of trust under which liis property was sold and the fund for distribution created. It was assumed that they were consequently barred by the Statute, and were not admissible as evidence of any indebtedness, Rev. Code, Art. 69, sec. 3.
It has been contended in argument that, on some of these judgments, executions had been issued antecedently to the expiration of the period of twelve years, and that a bar had thus been interposed to the operation of the Statute. This question was determined in the case of Mullikin vs. Duvall, 7 G. & J., 355; the Court there deciding that a judgment could not be revived by scire facias subsequently to the lapse of the statutory period of twelve
The judgment of the Mutual Eire Insurance Company, of Kent County, was not barred by limitation, ás was supposed by the Circuit Court, there having been a stay of execution for one year. It should, therefore, have been admitted in the order of its priority to 'be determined by its date.
The mortgage from D. C. Blackiston and wife to A. P. G-orman and others, is shown, by the evidence in the cause, to have been taken as an additional and, as was supposed, a better security for claims on which judgments had already been obtained. Eeferring to the mortgage, Mr. Bannon, in his testimony, says: “ It pledged, besides Mr.
The Circuit Court treated this mortgage as collateral security for the judgments named in said mortgage, and which are barred by limitation. The principle on which this ruling is founded cannot be controverted. A creditor may be so fortunate as to obtain more than one security for the payment of money due him, and if one fails him, because of the operation of the Statute of Limitation, by no process of ratiocination, based upon judicial authority, can it be made to appear that the other is necessarily extinguished. It is true that there can be but one satisfaction of the debt, but the evidence of its existence may be multiform. There was, therefore, no error in the Court’s ruling on this point, nor in the determination which seemed to follow in logical sequence, that the wife of D. C. Blackiston, who had joined with her husband in the execution of the mortgage, should not receive any allowance for her potential right of dower in any of the lands embraced in said mortgage, until the amounts due on said judgments and secured by said mortgage had been paid in full.
The judgment of Hurlock, use of Spry, designated among the claims as No. 8, and being part of a judgment against W. T. Spry, as a co-defendant and surety for D. C. Blackiston, has not been allowed, as no copy of this judgment was among the papers submitted to the Court. The Circuit Court decides that “ if the judgment was obtained against Spry as a surety of Blackiston, and Spry has paid the same, or any part thereof, then the claim should be allowed to the extent of said payment, accord
The auditor, in one of the accounts stated, has distributed the proceeds from the sale of the tract of land called “Davis’ Industry” among the devisees of Jemima Naudain, in satisfaction of what has been termed in these proceedings their vendors’ lien. . The Circuit Court rejected this account because of other inaccuracies, but sustained the claim of these devisees to the special fund arising from this source, and directed the auditor to allow it in restating his account.
The trustee having acted in contravention of the terms of the decree, an effectual remedy need not have been sought for, by a bill in equity, for the enforcement of a vendor’s lien. Upon a proper presentation of the facts by petition, the Court could have treated the unauthorized conveyance to D. C. Blackiston as a nullity; could have removed the trustee; appointed another fiduciary agent in his stead, and directed him to make sale in conformity with the terms'of the decree.
It has been urged in argument that, although the sale was not ratified, the ratification of the auditor’s account was tantamount to a waiver of the objection. This position is not tenable; for it is a recognized principle that there can be no waiver of a nullity. There is a marked and important distinction between nullities and irregularities. An irregularity may be waived; a nullity never can be waived. In Holmes vs. Russell, 9 Dowl., 437, Coleridge, J., says :
“It is difficult sometimes to distinguish between an irregularity and a nullity, but I think the safest rule to determine what is an irregularity and what is a nullity is to see whether a party can waive the objection. If he can waive it, it amounts to an irregularity; if he cannot, it is a nullity.”
As by an agreement filed in this cause, the devisees of Jemima Naudain have consented to look to the fund created by the sale of the tract of land called “ Davis’ Industry” for the satisfaction of their claim, it becomes necessary to analyze the title of D. C. Blackiston to this particular portion of the-real estate conveyed by deed of mortgage to A. P. Gorman and others. He derived his title, if any he had, from the unauthorized conveyance of the trustee. Even in the case of a conventional trust, if the trustee goes beyond the scope of the power conferred by the deed or other instrument creating the trust, a Court of equity will declare his acts to be ultra vires and legally inoperative. But in the case now under consideration the Court was the vendor, making a contract of sale through its agent, the trustee, and no sale could be consummated unless it had been judicially sanctioned and ratified. The unauthorized deed of the trustee could convey no title to the purchaser, who, therefore, acquired no seizin in the land by its delivery. That nothing can emanate from nonentity or, as more tersely enunciated, de nihilo nil, is an axiom in the physical sciences which might be appropriately transferred to a judicial investigation of this nature. If D. C. Blackiston had no title he could convey none by way of mortgage or otherwise. It may be safely
The question in relation to the validity of the bill of sale, by which the growing crop was transferred, is now to be considered. After a determination of the title in favor of the lessor of-the plaintiff, in the old action of ejectment, he could institute an action for the recovery of the mesne profits. The Act of 18*72 has simplified the proceedings, and the plaintiff can now, in the same action, recover the premises and the mesne profits. D. C. Blackiston had leased the tract of land called “Davis’ Industry,” to one John Scotten; and by the terms of the leasing it was stipulated that the rent was to be paid by the delivery to the lessor of a portion of the crop when severed from the soil. The lessor mortgaged his moiety of the crop to Hurlock and Griffith in anticipation of the severance. Under the deed of trust the land was sold while the crop still adhered to the soil, and the mortgagees now claim that they have a lien on the fund created by the sale, to be measured by the value of Blackiston’s moiety of thé wheat crop thus sold with the land.
This case presents a very different aspect from one originated by a bill in equity for the enforcement of a. vendor’s lien against a purchaser who has entered in good faith and by legal right, but who has subsequently become delinquent in relation to the performance of his pecuniary
Exit on other and distinct grounds it must be held that the growing crop is to be included in the corpus of the estate, and could not become the subject of a transfer anterior to its severance from the soil, and its apportionment, as rent due, in conformity with the terms of the lease.
In Comyn on Landlord and Tenant, page 226, it is said that, “When the lessor, being tenant in fee, or in tail, dies, after the rent has become due, it will be payable to his executor; if he die before it becomes due, to the heir or remainder-man.”
In the case of Martin vs. Martin, 7 Md., 375, the Court said, “ There can be no doubt that the assignee of a reversion is entitled to the rent falling due after the assignment, where'there is no reservation of the rent; the reason whereof is that the rent is incident to the reversion, and passes away by the grant of the reversion.”
In the case just cited the lessor, before any rent was due, drew two orders on his tenant, the defendant in the cause,
“We do not perceive that the plaintiff, as assignee of so-much of the rent, occupies any better position, as against the purchaser, than the landlord himself would, if these orders had not been given. He must be presumed to have had knowledge of the judgment, and of its legal consequences if enforced. The defendant, in a judgment binding his lands, cannot create liens to the prejudice of the plaintiff. All persons, dealing with him in reference to the land, acquire rights, if any, in subordination to the judgment lien. It cannot be maintained, that a debtor so-situated, may, by making a lease, and anticipating the payments of the rent, affect the value of the plaintiff’s security for his debt.”
It is clear that the question, invoking a solution in this cause, has already been determined by the authority just cited, and that the mortgagees, Hurlock and Griffith, acquired rights, if any, in subordination to the lien of the devisees of Jemima Naudain. The Court below therefore erred in its instructions to the auditor to allow their claim, to the exclusion of the rights of said devisees.
It now becomes necessary to determine in what order the liens shall he paid from the funds in the hands of the trustees. From what has been already said it follows that the devisees of Jemima Naudain have a prior and paramount claim to the proceeds arising from the sale of the tract of land called “Davis’ Industry;” including the sum received from the wheat crop, adhering to the soil, and transferred to the purchaser of the realty. The judgment obtained, against D. C. Blackiston, by the Visitors and
It has been strenuously and ably contended in argument that the other judgments were merged in the mortgage subsequently executed; the mortgage being a specific lien on the land therein described, and absorbing and extinguishing the general liens, for the same indebtedness, acquired by the judgments antecedently obtained. The doctrine of merger, as it is technically understood, seems to have been derived from the principles applicable to feudal tenures, and to have relation only to estates in land. When a termor acquired the estate in reversion or remainder, the estate for life, or for years, was merged in the fee, the greater absorbing the less. This extinguishment of the term is founded on the maxim, Nemo potest esse dominus et tennens.
Preston, in his treatise on “ The Quantity and Quality of Estates,” says that “ merger is described to Be whenever a greater estate and a less coincide and meet in one and the same person, without any intermediate estate, whereby the less is immediately annihilated, or is said to be merged, that is, sunk or drowned in the greater. Nothing is more clear than that merger is an act of law; and it appears to be entitled to the denomination of the extinguishment, by act of law, of one estate in another by the union of these two estates. To consolidate two estates, and confound
But in equity, merger is always a question of intent to be gathered from the nature and circumstances of the case. Dirks vs. Logsdon, 59 Md., 173.
If it is sought to apply the doctrine of merger in this case it is difficult to perceive how a judgment, which is not only a lien on all the lands of the debtor, but under which an execution could be levied on his goods and chattels and credits, can, by mere operation of law, be merged in and extinguished by a mortgage which merely creates a specific lien, on the particular tract of land included within the scope of its description. The production of such an effect would seem to present the phenomenal indication of the greater interest being absorbed and annihilated by the less.
The doctrine of merger cannot be applied to mere evidence ; for it is important to distinguish between the debt itself and the proof of its existence. A debt is an obligation to pay a certain sum of money due from a debtor to his creditor. The obligation is imposed by the law of the land. That such an obligation exists is dependent upon the adduction of proof. The evidence may be multiform; but when a judicial investigation has resulted in the rendition of .a judgment, the original claim is said tobe merged in the judgment. In other words, the specific cause of action has ceased to exist, and cannot subsequently become the foundation for another suit. The judgment has then
The testimony in the cause apparently demonstrates that this was the impelling motive which urged the parties to the execution of the mortgage.
It has been contended that money was obtained by the mortgage, and that the sums thus loaned were applied to the payment of the claims created by the judgments which had been obtained in suits against the mortgagor. The evidence in the cause proves that this theory rests on no solid foundation. The mortgagor admits, in his testimony, that he never received any money; and, by the uncontradicted and corroborated testimony of Mr. Bannon, it is shown that the mortgagees applied the money to the purchase' of the judgments, and having thus obtained assignments, held the mortgage as collateral security. This fact is established by the proof in the cause; and even in the absence of proof, on no other hypothesis could the assignments he accounted for in view of the debtor’s recognized and - ascertained situation of onerous pecuniary embarrassment.
The judgment of the Mutual Eire Insurance Co. of Kent County has not been barred by limitation, as there was a stay of execution for one year from the time it was rendered. It will therefore stand on a footing with the other judgments not affected by the Statute ; and come in gov
That a mortgage is not only a specific lien, but may be received as evidence of an indebtedness generally, was long ago determined in England. In the case of King vs. King, 3 P. W., 360, the Lord Chancellor said “that every mortgage implies a loan, and every loan implies a debt; and that though there were no covenant or bond, yet the personal estate of the borrower of course remains liable to pay off the mortgage.” The same principle had antecedently been recognized in other cases. 2 Salk., 449; 1 P. W., 294; 2 P. W., 455.
As has already been said with respect to the lien of the judgment lost by lapse óf time, the mortgage, held as collateral security, being now the only evidence of the indebtedness, the order of priority in which that indebtedness is to be paid must be determined by the date of the mortgage. The mortgage is not, however, the only evidence of the other liens, including the judgment of the Mutual Fire Insurance Co., which have not been barred by the operation of the Statute of Limitation; and as parties cannot, on any recognized principle, be precluded from offering the best evidence of the existence of their claims, those liens must be allowed in conformity with the rule by which the older stand first in the order of preference, which is to be determined by reference to their respective dates.
The cause will be remanded, so that, under the direction of the Circuit Court, the auditor may state an account in correspondence with the principles indicated in this
Order affirmed in part, and reversed in part; and cause remanded.
Concurrence Opinion
filed the following concurring opinion:
I concur in the conclusions arrived at in the foregoing opinion, but not in all the reasoning employed by the learned Judge who delivers it; and Judges Miller and Irving concur with me in this view.