McNiece v. Eliason

78 Md. 168 | Md. | 1893

Fowler, J.,

delivered the opinion of the Court.

The appellant, William McNiece, filed a creditors' bill in the Circuit Court for Kent County on the 30th November, 1892, suing for himself and all other creditors of Norris Bernard, deceased, in the usual form, making the administrators and heirs-at-law of the deceased debtor, and also Thomas W. Eliason, Jr., the appellee, parties defendant. The bill alleges that said Bernard was in his life-time indebted to the appellant, and other persons in large sums of money which were unsecured, and that there was an outstanding overdue ■mortgage which the said Bernard had executed to secure the payment of two single bills amounting to nine thousand dollars, and that by the terms of said mortgage the mortgagee, who is the appellee here, might at any time proceed to sell the real estate therein mentioned.

In order to prevent a sale, which the appellant alleges would result in injury to him and the other unsecured creditors of the mortgagor, he “ tenders himself ready and willing to satisfy and pay unto the said mortgagee " the mortgage debt and interest, and asks that the mortgagee may be required to show cause why he should not accept the same, and he prays also that he may be subrogated to the rights of the mortgagee under the mortgage.

To this bill the appellee demurred on the ground that the appellant, being only a general creditor, he had no legal right to redeem or pay off the mortgage debt, and be subrogated to the rights of the mortgagee; and this demurrer was sustained by the Court below.

The first question, however, is presented by the motion to dismiss the appeal. This motion is based upon the ground that the order appealed from is not in its nature a final order. But we think it is clearly of that character.

The object of the bill was to secure a sale of the mortgaged real estate under the creditors’ bill for the benefit of all the creditors, after paying the mortgage debt, and as a means to that end the prayer was that the mortgagee should be required to accept and that the appellant might be allowed to pay the same. In no other way could the object of the bill be attained. 6

For if the estate mentioned in the mortgage should be sold under the power therein contained, the bill might as well have been dismissed, because its main — indeed its whole object — was to secure a decree for a sale of said property. In a word, the appellant claimed the right to redeem and sell the land; but by the order appealed from it was declared that such right did not exist. It is true, this order does not in terms dismiss the bill, but that was its necessary result. It denied the relief sought, and there was no other course open to the appellant. Hazlehurst vs. Morris, et al., 28 Md., 71; Waverly Mutual Building Asso. vs. Buck, 64 Md., 343. To proceed further with the creditors’ bill, as was suggested by the appellee, would have altogether been fruitless, for in effect it had been finally decreed by the . Court below that the appellee and not the appellant had the right to sell.

The motion to dismiss will, therefore be overruled.

Was the demurrer properly sustained? We think it was.

The questions presented by the demurrer to the creditors’ bill, and by the pleadings in the injunction case (being two appeals argued before us by agreement of counsel) are first, whether the appellant, who is a general, unsecured creditor of the deceased mortgagor, has a legal right to redeem and be subrogated; and secondly, if so, has ho properly exercised that right? The conclusion we have reached in regard to the first question renders it unnecessary to consider the second in regard to the appellant, but. we will presently consider it as applied to the administrators of the mortgagor.

There can be no doubt upon the general question here involved. The doctrine is thus expressed by Mr. Pomeroy, {Equity Jurisprudence, sec. 1212:) “The payment must be made by or on behalf of a person who has some interest in the premises, or some claim against other parties which he is entitled in equity to have protected." And in 2 Story’s Equity, section 1023, we find a full statement of this jminciple. It is there said that the equity of redemption is not only an interest in the land in the hands of the heirs, devisees, assignees, and representatives of the mortgagor, but it is also in the hands of any other persons who have acquired any interest in the lands mortgaged, by operation of law, or otherwise in privity of title. All such persons, says Judge Story, have a clear right to redeem in order to make their own claims beneficial.

He then proceeds to enumerate the various persons who may redeem, and concludes by awarding this right of redemption to “every person, being an encumbrancer or having a legal or equitable title or lien " in the mortgaged property.

It may be conceded that the appellant by virtue of the statute (Code, Art. 16, sec. 188,) has some kind of a lien or quasi lien, or as said in Van Bibber vs. Reese, 71 Md., 608, 613, that the land of a decedent is under the express language of the Code contingently or conditionally liable to be sold for the payment of his debts.

The question here, however, is not whether some such statutory lien or conditional liability may or may not exist, but conceding its existence, as provided by the statute, is it such a right to, interest in or lien on the decedent's real estate as to give to a general creditor like the appellant a right to redemption and subrogation as here claimed by him?

Clearly not, we think, under tbe rule laid down by Mr. Pomeroy and Judge Story, just quoted. All the illustrations given by the latter, as well as the general terms used by him, would seem to exclude the appellant, who is certainly not an encumbrancer within the ordinary meaning of that term, nor can he be said to have either a legal or equitable title or such an absolute lien as the law gives to a judgment creditor. Nor do we see why we should give to this provision of our Code such a strained and novel construction. For it is or may be conceded that the administrators, as personal representatives of the deceased debtor, have the right to redeem.

Indeed, it may be said that, having the personal property — the primary fund for the payment of debts — in their hands, they would, in cases where it would be proper to redeem, be the persons to exercise that right under the direction of the Orphans’ Court. Being of opinion that the appellant, under the facts in this case, had no legal right to redeem, the demurrer was properly sustained, and the order appealed from will be affirmed.

In regard to the other appeal little need be said. A bill was filed in the Circuit Court lor Kent County on the 31st December, 1892, by the appellant and the administrators of said Bernard, setting forth the proceedings on the creditors’ bill, the demurrer to which we have just been considering, alleging that, notwithstanding the appellant as well as the said administrators had tendered to the appellee the mortgage debt and interest, and had paid the same into Court, yet the appellee, as mortgagee, had advertised, and was about to sell under his said mortgage. An injunction was prayed, and was subsequently issued by said Court, restraining the appellee from selling. This bill was answered by the appellee, and his defence is that neither the appellant nor the administrators, nor the appellant and administrators jointly had the right to payoff the mortgage debt, and thus destroy his right to exercise the power of sale under his mortgage.

We have already said in the other appeal that the appellant had-no such right, and that the administrators have.

The question here, however, is whether this right has been properly exercised by the administrators who are conceded to possess it.

Only the exact amount of the mortgage debt and interest was tendered. Before the appellee was made a party to the creditors’ hill, he had filed his bond and advertised the property under his mortgage, and although a bill of the costs thus incurred was presented to the administrators, they did not include them in the amount tendered. If the tender had been made before any costs had been rightfully incurred by the mortgagee, the tender of the debt and interest would no doubt have been good; but, after filing the bond and advertisement of the property, the legal costs thereby incurred should have been included in the amount tendered. Columbian Build. Asso. vs. Crump, et al., 42 Md., 195; 4 Amer. Eng. Enoylo. of Law, 821, and notes. The proper amount not having been tendered, the appellee was under no obligation to accept it. Our conclusion is that the injunction was properly dissolved, and the order appealed from in this case will also be affirmed.

It was suggested that the appellee could not properly proceed to exercise his power of sale, after the institution of the creditors’ suit.

But when the bill in that case was filed he had already filed his bond and advertised, and as soon as the injunction was issued all his proceedings under his power of sale appear to have ceased, and he did not again proceed to sell under his mortgage until after the injunction had been dissolved, and the creditors’ bill dismissed.

(Decided 16th November, 1893.)

Being thus freed from the injunction, and being no longer a party to the creditors’ bill, he re-advertised and sold.

If the appellant had desired to restrain the effect of the order dissolving the injunction and that dismissing the creditors’ bill, he should have given bond as required by the Code, (Art. 5, sections 27 and 28.) But, no such bond having been given, and the Court having jurisdiction of the appellee having dismissed him, we can see no reason why he should not proceed to exercise the valuable power given him by the mortgage. We do not deem it necessary to determine in this case how far, and under what circumstances generally a Court of equity can control a mortgagee in the exercise of such a power after default of the mortgagor.

All we mean now to decide is, that there is nothing in the cases now before us to justify a Court of equity either in prohibiting or controlling this appellee in the exercise of such a power.

Orders affirmed, with costs.