40 Md. 226 | Md. | 1874
delivered the opinion of the Court.
This case has been re-argued under an order to that effect passed at our last term, and must now be disposed of. It is an action of assumpsit by a building association to recover a balance alleged to be due under a mortgage executed to it by one of its members. We shall first state our understanding of the case as disclosed by the record and evidence in the bill of exceptions. This is necessary to a clear comprehension of the questions we propose to decide.
The mortgage from the appellant to the appellee “The Columbian Building Association of East Baltimore No. 2,” a body corporate duly incorporated, bears date the 23rd of November, 1870, and recites: “Whereas the said mortgagor being a member of the said body corporate has. received therefrom an advance of $1980 on his 20 shares of its stock, and whereas, it was a condition precedent to the granting of said advance that the payment of the bi-weekly dues, interest and fines, and the performance of all the covenants as hereinafter mentioned, should be secured by the execution of these presents: Now therefore this mortgage witnesseth, that in consideration of the premises and of one dollar the said ’ ’ McCahan doth grant to the said association and its assigns, certain described leasehold property, and then proceeds: “If however, the said mortgagor shall make the payments and perform the covenants herein on his part contained, then this mortgage shall be void ; and the said Davis L. McCahan for himself, his heirs,.
1st. “To pay the mortgagee or its assigns the sum of $10 as dues on every alternate Monday evening, until the time arrives when the said body corporate shall have sufficient funds on hand to pay the holders of every unredeemed share of its stock the sum of $150, clear of all losses and liabilities.”
2nd. “ To pay all ground-rent and taxes for which the property hereby mortgaged may become liable when payable.”
3rd. “ To pay the interest on said sum of $1980 in and " by bi-weekly instalments on the Monday evening aforesaid.”
4th. “ To pay all fines that may he imposed on him by the said mortgagee in accordance with its Act of incorporation and by-laws, and”
5th. “To keep the improvements on the said ground insured from loss by fire for the use of the mortgagee.”
“ All of which payments and covenants shall continue in force until the said body corporate shall have sufficient funds on hand to pay the holders of every unredeemed share, above all losses and liabilities, the sum of $150, and the said corporation shall, by the terms of its Act of incorporation, hare become extinct. And the mortgagor consents that a decree may be passed for the sale of said property, the sale to take place after a default in any of the conditions of this mortgage shall have continued for three months, under the provisions of sections 782 to 792 inclusive, of Article 4 of the Public Local Laws of the Maryland Code, or of any supplement thereto, or this mortgage may he foreclosed under any law or laws of said State of Maryland, intended to facilitate the regular or extra-judicial proceedings on mortgages, as fully and in the same manner as if special assent and powers were hereby given and granted.”
The defendant pleaded that he was never indebted as alleged, and that he did not promise as alleged. The case was tried on issues joined on these pleas.
At the trial the plaintiff on its part gave in evidence its Articles of incorporation, and read in evidence its constitution and by-laws, which it is agreed may be read in this Court from a printed copy thereof. The Articles of incorporation are not in the record, but it was conceded in argument that the plaintiff was incorporated in April, 1868, under the provisions of the general corporation laws, then
The defendant then offered four prayers, all of which were rejected, except the third, which was granted. By the granting of that prayer the $60 for bonus on shares in the plaintiff’s account was very properly disallowed, and there was no recovery for that item. The conflicting theories upon which, in other respects, the case appears to have been tried in the Superior Court, are these.
1st. The theory of the defendant’s counsel presented by his other .prayers, and in argument is, that the mortgage was a continuing subsisting contract between the parties, notwithstanding the sale of the property, and the provisions of the constitution on that subject, and inasmuch as the proceeds of sale received by the plaintiff were more than sufficient to pay arrearages of bi-weekly dues, interest and fines up to the time of suit brought, the plaintiff had then no right of action in any form, and that whenever it had the right to sue, the form of action must be debt or covenant on the mortgage.
A careful consideration of the case and of the decisions of this- Court bearing on the subject, has satisfied us that neither of these views is correct.
It is urged on the part of the defendant that the constitution of the association has no effect upon the mortgage or the rights and liabilities of the parties under it: that the mortgage is a subsequent independent contract between the corporation and the defendant, to be construed without reference.to the Articles of the constitution, which form no part of it, have not been incorporated into it, and can in no wise control or affect it. Some expressions in the opinion in Robertson’s Case, 10 Md., 391, where a similar mortgage was before the Court, apparently give countenance to this view, but we think it quite clear from the whole tenor of that judgment, the Court never intended to decide that in no case, could the provisions of the constitution of such 'an association be looked to, for the purpose of ascertaining the relations of the parties under, or determining the continuance of, the mortgage or its covenants. In that case, the mortgage had been presented to the Court below, by petition for a decree under the assent clause, and a decree was passed that unless a certain sum was ]oaid by a given day, the mortgaged premises be sold. The appeal was from that decree and the record contained only the petition, the mortgage .with a statement of the amount due, verified
The mortgage on its face states that the mortgagor is a member of the association and has received an advance on his shares of its stock. By reference to the constitution before us we find the object of the association to be, the accumulation of a fund by the'¡savings of the members thereof, sufficient to enable them to purchase for themselves real or leasehold property, that all shareholders become members, that members alone are entitled to receive loans or advances, to be secured by mortgages on real or leasehold property, and that sales or transfers of mortgaged property can be made only on condition that the purchasers shall become members and assume all the obligations of the original mortgagors. We then find a provision (Article 5, entitled “ Bedeinp>tion of mortgaged property”) which enables any member to obtain a release of his mortgage on making certain payments, and on so redeeming, he shall cease to be a member in such shares. It would hardly be contended that by the execution of this mortgage the defendant had precluded himself from taking advantage of this provision, and must go on paying so long as the association should last, or require it of him ; that notwithstanding this provision for his benefit, he could never disencumber his property and get out of the concern so long as they might choose to keep him in; and yet that would be the logical
Entertaining these views, we cannot sustain the defendant’s position, and to this extent we agree with that of the plaintiff. But we do not concur with the latter as to the amount to be recovered in this action, upon the assumption of an insufficiency of the proceeds of sale to satisfy the mortgage. That amount is not to be ascertained upon the basis of the account stated by the plaintiff, that is, by treating the $1980-advanced on the shares as a mortgage debt, to be repaid with interest. On this point, Robertson’s case is explicit and decisive. -The mortgages in the two cases caniiot, in this respect, be distinguished. Here, as in that case, there is no obligation or covenant in the mortgage for the payment of the $1980, or any part of it, as a mortgage debt. Here, as there, the mortgage debt consists of the several items which the covenants of the mortgage stipulate shall be paid. The language of the Court applied to that mortgage, applies to this, viz: “It is obvious that the sum actually due, according to the covenants of the mortgage, cannot be ascertained by estimating the sum of $460, named in the mortgage, as if it were a debt secured, or money to be repaid, there being no covenant in the mortgage, or any obligation on the mortgagor,
The rule for ascertaining the sum due in satisfaction of the mortgage in case of a sale, is there prescribed, and fixes the amount the mortgagee is entitled to recover, whether the suit be an action at law, like the present, or a proceeding in equity. There is no more difficulty in applying it in the one case than in the other, and no good reason exists why it should be enforced in the one and not in the other. It is plain, the mortgagee is entitled to recover in this form of action, the same sum, with interest until paid, which, ascertained by this rule, it would have received if the property had sold for enough, or more than enough, to satisfy the mortgage.
If this rule had been applied in. the Court below the plaintiff would probably have been entitled to less, and possibly to more than upon the basis of its present account, on which the recovery was had. But this question is not presented by any of the rulings before us for review. Ho instructions were asked or given at the instance of the plaintiff, and the three prayers of the defendant, which the Court rejected, proceed upon the theory of the case, which we have already disposed of. Each of them denies the right of the plaintiff to recover any sum whatever, because the mortgage was a continuing, subsisting contract between the parties after the sale of the mortgaged property, and no right of action had accrued under it at the time this suit was brought, and that the action, whenever brought, must be in debt or covenant upon the mortgage. According to the views we have expressed, there was no error in rejecting these prayers, for the reasons stated, and we need not determine whether either of them could have been rejected on other grounds. There being, therefore, no error in the rulings excepted to, the judgment must be affirmed.
Judgment affirmed.