Baltimore High Grade Brick Co. v. Amos

• Decision Date: 31 October 1902
• Citation: 53 A. 148,95 Md. 571
• Parties: BALTIMORE HIGH GRADE BRICK CO. v. AMOS et al.
• Court: Maryland Court of Appeals

53 A. 148

95 Md. 571

BALTIMORE HIGH GRADE BRICK CO. v. AMOS et al.

Court of Appeals of Maryland

October 31, 1902

Motion for reargument denied.

For former opinion, see 52 A. 582.

SCHMUCKER J.

Since the filing on June 19th of our opinion in this case, the appellees have made a motion for a reargument. In the brief filed in support of their motion they contend that we reached the wrong conclusion both as to the character and effect of the three Devilbiss mortgages, and as to the right of the appellant to maintain the suit. They urgently insist that the mortgages constituted valid liens upon the mortgaged property for the sums of money, amounting in all to $27,500, paid by Spalding and Singer to Amos during the erection of the buildings, whether the payments are to be regarded as having been made on account of purchases of material from Amos by Devilbiss, or to be treated as future advances to Amos. To this contention we cannot yield our assent. We are satisfied from the evidence appearing in the record that there were no real and bona fide purchases of materials from Amos by Devilbiss, but that the $27,500 were in reality future advances to Amos, and that the purchases and guaranty set forth in the mortgages consisted of merely formal acts performed in execution of a scheme devised for, and employed in, an attempt to evade the provisions of the Code relating to advance mortgages. No actual loss under a guaranty was suffered by Spalding or Singer from those transactions, and they therefore cannot claim a lien under their mortgages for any loss of that description.

On the other hand, the mortgages, which were deliberately drawn by the mortgagees' counsel in a form of their own selection do not, on their face, profess to secure the repayment of future advances of money, apart from any purchase of materials; nor could they, without doing violence to their own statements, be so construed as to bring such advances within their operation. Furthermore, as we have already said in our opinion now on file, the mortgages, treated as advance mortgages, are condemned as void under the statute for failure to specifically state the amounts of the several advances, and the times when they were to be made. Our conclusion as to the necessity, since the act of 1872 amending section 2 of article 6 of the Code, of this specific statement in an advance mortgage, is in no sense inconsistent with the cases on which the appellees rely in that connection to support their motion. The cases, which they cite, of Cole v. Albers, 1 Gill, 412, and Brooks v Lester, 36 Md. 65 Rosenstock v. Ortwine,

46 Md. 388, which was decided since the act of 1872, the mortgage, on its face specifically stated the amount ($250) of each advance, and the time when it was to be made; i.e., one payment when each successive floor of joists was laid on the house, etc., with exact precision throughout. Nor are we able, in holding the mortgages now under consideration legally ineffectual to secure to the mortgagees a lien for the $27,500 advanced by them, to treat those instruments as good, equitable mortgages for the advances, on the ground that the money had been actually paid, and thus uphold the appellees' claim to a lien, for to do so would be to exercise our equitable powers to defeat not only the policy, but the positive provisions, of the statute law. The appellees are, of course, creditors of Amos for the advances made by them to him, but the repayment thereof was not secured by these mortgages.

The second contention of the appellees is that the appellant, as a subsequent creditor of Amos, cannot impeach the mortgages because (a) the record contains no proof of actual fraud in their creation; (b) the appellant had both actual and constructive notice of their existence when it sold the bricks to Amos. Subsequent creditors, in order to impeach a conveyance of their debtor on the ground that it was made to hinder, delay, or defraud them, must show the existence of an intention to accomplish that purpose, but such intention need not be proven as an independent fact. It is to be gathered from the deed itself, and from the acts of the parties and the surrounding circumstances. The law conclusively presumes every man to intend the necessary, and even the probable, consequences of an act deliberately done. Gardner v. Lewis, 7 Gill, 404; Whedbee v. Stewart, 40 Md. 424; Ecker v. McAllister, 45 Md. 309; Lineweaver v. Slagle, 64 Md. 489, 2 A. 693, 54 Am.Rep. 775; Gebhart v. Merfeld, 51 Md. 325. We have already said that, in our judgment, the natural and probable result of Amos' conduct in retaining the title to the lots, upon which he was about to erect buildings, in the name of Devilbiss, and procuring the latter to incumber the lots with mortgages made for what was in effect a feigned consideration, was to hinder and delay, and thus to defraud, subsequent creditors, like the appellant, from whom Amos...