137 A. 509 | Md. | 1927
On June 23rd, 1922, Eleanor B. Biggs caused to be issued out of the Circuit Court for Anne Arundel County an attachment against Mary W.F. Speers, a non-resident, on an alleged debt of $3,650, and the sheriff laid the attachment on the day of its issuance on certain land of the debtor, and made on that day the return of "property attached as per schedule and copy posted at Ct. House door," as appears from the docket entry in the attachment case. On the same day the short note case was docketed. Nothing was done in either case until October 9th, 1922, when separate motions were made in the attachment case by the Speers Land Clay Works, Inc., and by the debtor, to quash the attachment. The ground upon which this corporation and the debtor intervened was that the latter had conveyed to the corporation, on May 31st, 1922, one hundred acres of land of the tract of one hundred and fifty-two then owned by the debtor and on which the attachment had been attempted to be levied. While these motions were filed separately, they were identical in the grounds assigned, which attacked the sufficiency of the affidavit of the cause of action of the *54 short note case and of the description of the property scheduled, which denied the issuance of a summons for the defendant or an actual levy having been made upon the land; and which asserted that, although the tract of land was occupied, the sheriff had falsely returned that no person was in possession. The next and final act of the parties in the attachment case was on November 9th, 1922, when it was agreed in writing by the attaching creditor and debtor that the attachment should be released as to the one hundred acres of land conveyed by the debtor to the corporate intervenor before the attachment was issued, and that the attachment "is retained as a valid attachment against the remainder of the tract of which the said one hundred acres was a part, to avail to the extent of the recovery, if any, of the plaintiff against the said Mary W.F. Speers in the case. Short note case No. 12, Appearances October Term, 1922, for trial at April Term, 1923." This agreement contained a reference to the date and place of record of the deed for one hundred acres, and was filed, with an order for a release of the one hundred acres, on November 9th, 1922.
No further action was had in the short note case until July 11th, 1923, when the suit was tried and a verdict of $2,525.60 was rendered in favor of Eleanor B. Biggs against Mary W.F. Speers. The verdict was followed by a motion for a new trial, which was overruled, and judgment was extended on the verdict, on March 19th, 1924.
At the time the attachment was begun there was a mortgage lien upon the residue of the tract of land owned by Mary W.F. Speers, and, because of her default, foreclosure proceedings, under the power contained in the mortgage, were begun on February 28th, 1923, by the assignee of the mortgagee, who made sale of the property, and filed his report of such sale on March 22d 1923, whereupon an order nisi was passed, and afterwards exceptions were filed to its ratification; but the sale was finally ratified on March 5th, 1924, and later the funds became available for distribution. *55
After the beginning of the foreclosure proceedings and after the assignee of mortgagee had filed his report of sale, the Union Trust Company of Maryland obtained, on May 11th, 1923, a judgment by confession against Mary W.F. Speers in the Circuit Court for Anne Arundel County for the sum of $812, with interest and costs of suit and counsel fees of $81.20.
The Union Trust Company and then Eleanor B. Biggs filed in the mortgage foreclosure proceedings their respective petitions to be allowed their claims out of the surplus funds remaining in the hands of the assignee of the mortgagee after the payment of the mortgage indebtedness, and the auditor gave preference to the judgment claim of the Union Trust Company, which left an insufficient residue to pay in full the Biggs claim. The appellee excepted to the auditor's account and the chancellor decided that Eleanor B. Biggs was entitled to be allowed priority, and from this decree the Union Trust Company has appealed.
1. With the filing of his bond, the assignee of mortgagee assumed the discharge of the trust created by the power of sale contained in the mortgage, and, although the jurisdiction of equity did not become complete until the subsequent filing of his report of sale, yet the sale of the mortgaged premises under the power of sale in the mortgage deed virtually foreclosed the mortgage and divested all rights of redemption which had remained in the mortgagor until the sale. Warehime v. Carroll CountyBldg. Assn.,
What has been said in the course of this opinion is not in conflict with the recognized right of a judgment creditor, who secures his judgment at any time after a sale of the mortgaged property and before a distribution of the funds, to acquire by attachment a lien on whatever residue of trust funds may remain belonging to the mortgagor after the payment of the mortgage debt and all prior claims. The appellant, in this case, did not resort to an attachment, and, as his judgment was obtained after the mortgaged property was sold at a sale later duly ratified by the court, and, therefore, at a time when the mortgagor's equitable estate had been determined, the appellant acquired no lien by his judgment on the mortgagor's interest in the obligation of the purchaser to pay the purchased price, which was not a right or estate in land but a chose in action. Western Bank v. UnionBank,
It is a necessary consequence of the rules discussed that the appellant had neither any legal or equitable lien entitling it to priority in the surplus funds.
2. Through the issue and laying of her attachment, Eleanor B. Biggs, the appellee, acquired an inchoate lien upon the equity of redemption of Mary W.F. Speers, a non-resident, in a tract of land which she had mortgaged. The object of the attachment was to induce the appearance in the short note case of the debtor, by the seizure of her property, and to secure payment of the debt by acquiring a specific lien on the particular equitable estate attached. Philbin v. Thurn,
The body of the agreement, which was signed by the respective attorneys of the litigants, was of this form:
"It is agreed this 9th of November, 1922, that the attachment in this case (No. 130 Trials, October Term, 1922) is released as to the one hundred (100) acres of land conveyed by Mary W.F. Speers to Speers Sand and Clay Works, Inc., by and of May 31, 1922, recorded in Liber W.N.W. No. 52, folio 62, etc., among the Land Records of Anne Arundel County, but is retained as a valid attachment against the remainder of the tract of which the said one hundred acres is a part, to avail to the extent of the recovery, if any, of the plaintiff against the said Mary W.F. *59 Speers in the case — (Short Note Case No. 12, Appearances, October Term, 1922 — for trial at April Term, 1923)."
On the day this agreement was filed, the attaching creditor entered on the trial docket in the attachment case an order releasing the specified one hundred acres from the lien and operation of the attachment, and thus performed her part of the contract.
The agreement was upon a valuable consideration, and by its terms described the remaining parcel of about fifty acres of land so as to be susceptible of identification; established that the property had been attached by the sheriff and that it was the mortgaged land of the debtor; and, while leaving its possession in the debtor, promised, in effect, that the mortgagor's specific interest in this particular parcel of land should be held or charged with a subsisting attachment lien as security for the payment of the creditor's claim in the amount thereafter to be adjudged to be due in the trial of the short note case between the creditor and debtor as the litigants. Since this agreement made the effectiveness of the lien intended to be retained dependent upon the establishment of the creditor's claim at law, it would have been premature to have taken any action in the attachment case until a trial and judgment in the short note suit. So the attaching creditor did not proceed further in the attachment case, but prosecuted her action, and eventually obtained a judgment, in an amount less than her original demand. Compare Hodge McLane on Attachments, sec. 50.
With the rendition of the judgment in the short note case for the attaching creditor against the debtor, the sole condition was fulfilled for the creditor to receive the benefit of her charge under this agreement upon the debtor's equity of redemption in the mortgaged land, but the equity of redemption had been ended by the foreclosure sale before the appellee's judgment had been obtained. Further, the appellee had relied upon the agreement, and neither had sought nor obtained a judgment of condemnation, which *60
would have had merely the effect of adjudicating the property originally attached as that of the debtor and applicable to the satisfaction of the claim of the attaching creditor, and this legal result of a judgment of condemnation is precisely the effect intended to be accomplished by the agreement in the present case. West v. Wood Co.,
The equitable lien of the appellee in the equity of redemption was subject to the outstanding mortgage, but followed and attached to the fund into which the equitable interest had passed by foreclosure. The mortgagor could not prevent this fund from being applied to the payment of the claim of the appellee, and the appellant is in no better position, since when, on November 9th, 1922, the appellee and the mortgagor entered into the agreement in question, the appellant was a subsisting creditor of the mortgagor, because its later judgment claim was obtained on an unpaid note which was issued by the mortgagor as maker on October 2d 1922. The appellant, therefore, had neither lien nor equity superior to the specific equitable lien of the appellee and, as this is the simple question brought up on appeal, the decree of the chancellor will be affirmed.
Decree affirmed, with costs, and cause remanded. *62