Caroline St. Permanent Bldg. Ass'n No. I of Baltimore City v. Sohn, 45.

• Decision Date: 12 June 1940
• Docket Number: No. 45.,45.
• Citation: 13 A.2d 616
• Parties: CAROLINE STREET PERMANENT BLDG. ASS'N NO. I OF BALTIMORE CITY v. SOHN et al.
• Court: Maryland Court of Appeals

13 A.2d 616

CAROLINE STREET PERMANENT BLDG. ASS'N NO. I OF BALTIMORE CITY

v. SOHN et al.

No. 45.

Court of Appeals of Maryland.

June 12, 1940.

Appeal from Circuit Court, Baltimore County; William H. Lawrence, Judge.

Action by the Caroline Street Permanent Building Association No. 1 of Baltimore City against Bertie Rau Sohn and others, for declaratory judgment. From a decree dismissing the bill after demurrer was sustained to the amended bill of complaint, plaintiff appeals.

Demurrer sustained, but decree dismissing the bill reversed and cause remanded with leave to plaintiff to apply for permission to amend.

Argued before OFFUTT, PARKE, SLOAN, MITCHELL, SHEHAN, and DELAPLAINE, JJ.

H. Anthony Mueller, of Towson, and John C. Kump, of Baltimore, for appellant.

Joseph W. Starlings, of Baltimore (Charles B. Bosley, of Baltimore, on the brief), for appellees.

PARKE, Judge.

The appeal is from a decree which sustained the demurrer to an amended bill of complaint and dismissed it. The averments which the chancellor found did not show an equity in the plaintiff will be set forth with as much particularity as there is occasion.

The plaintiff is the Caroline Street Permanent Building Association No. 1 of Baltimore City, a body corporate under the laws of this State. The defendants are Bertie Rau Sohn and Louis Sohn, her husband, Doris H. Thursby and Albert H. Thursby, her husband. The original bill of complaint is not on this record, but the titling of the cause indicates that Doris H. Thursby as administratrix of Hattie Rau was first embraced as a party defendant although she has been dropped as a defendant in her representative capacity in the pending amended bill. The facts admitted for the purpose of the demurrer are that Hattie Rau and her husband, Henry Rau, owned the leasehold and fee simple estates in a parcel of land in the City of Baltimore which is known as No. 546 North Gay Street. On June 10, 1927, the owners borrowed of the plaintiff the sum of $3,200 and simultaneously gave to the plaintiff a mortgage lien on this property to secure the payment of the loan. The money thus obtained was used by the mortgagors to buy a fee simple lot of land in Baltimore County.

The mortgagors have been continuously in arrears since the making of the loan in the payment of dues, interest, taxes and ground rent, and sought and obtained the indulgence of the mortgagee in these defaults. On June 8, 1937, the mortgagors with the two defendants, Bertie Rau Sohn and Louis Sohn, her husband, executed a paper writing which was of this tenor:

"Agreement.

"This is to certify that I, Henry Rau, Husband, and Hattie Rau, Wife, give Bertie Rau Sohn and Louis Sohn, Husband and Wife, the House and Lot, and everything on it and in the house located at Triple Union Park "Rose Twins Shore Back River Baltimore County after we are both dead.

"Should we sell in the meantime we will pay them back all the money they put in it, Providing they pay the taxes and all repairs until our death.

"Henry Rau.

"Hattie Rau.

"Witness.

"J. Geo. Zschunki.

"Edw. A. Burris.

"We the undersigned, Bertie Rau Sohn and Louis Sohn, Husband and Wife, do hereby agree to the above agreement.

"Bertie Rau Sohn "Louis Sohn.

"Witness:

"J. Geo. Zschunki.

"Edw. A. Burris.

"Personally appeared the above parties and witnesses this 22nd day of June, 1937, and made oath in due form of law.

"Charles L. Solomon.

"Notary Public"

The property mentioned in this document is the Baltimore County lot which was bought with the loan obtained by the mortgage mentioned on the Baltimore City lot. At the time of the execution of the paper, Henry Rau and Hattie Rau, his wife, were indebted to the plaintiff on the mortgage loan with a large accumulated arrearages of dues, interest, taxes and ground rent, which with the principal debt, the said mortgagors were then unable to pay or to make any payments on account as they were also without resources to meet, in the ordinary course of business, their debts and obligations. The bill of complaint avers that under these circumstances the execution of the paper writing was in the prosecution of an attempt by Henry Rau and Hattie Rau, his wife, "to divest themselves of a valuable security to the detriment of" the plaintiff. The insolvent condition of the spouses continued unabated until the death of both mortgagors. The husband died first. Upon his death in November, 1937, the title to both properties vested absolutely and in severalty in his surviving wife, who died on February 22, 1938.

During their joint lives, Henry Rau and Hattie Rau, his wife, were in the exclusive occupancy and enjoyment of the Baltimore County premises from the time of its purchase until the death of the husband, when the wife took an absolute estate in fee simple in severalty as the surviving tenant. She continued to occupy and enjoy the exclusive possession of the property until her death. It was then that the defendants, Bertie Rau Sohn and Louis Sohn, her husband, and Doris H. Thursby and Albert H. Thursby, her husband, entered into possession and occupancy of the Baltimore County premises and remained there for a period of about six months when Bertie Rau Sohn claimed the ownership of the property under the quoted 'instrument of writing, but Doris H. Thursby nevertheless asserted as an heir at law and next of kin of Hattie Rau an interest as tenant in common of her real and leasehold estates.

On April 14, 1938, letters of administration on the estate of Hattie Rau were granted to the defendants, Doris H. Thursby and Bertie Sohn, who qualified, but Bertie Sohn was relieved of her duties as co-administratrix, and Doris H. Thursby has proceeded with the administration of the estate as its sole administratrix and is in possession of the personal estate of the said Hattie Rau for the purpose of administration. For several years before his death, Henry Rau had stopped paying anything on account of the mortgage indebtedness and interest, and his surviving wife paid nothing. The mortgage claim was filed against the estate of the wife, but neither the mortgagee nor any other creditor has been paid his respective claim. The mortgagee resorted finally to a foreclosure of its mortgage on the Baltimore City mortgaged premises. In these proceedings, the proceeds of sale applicable to the mortgage indebtedness, taxes due and in arrears and other charges left a deficit unpaid to the mortgagee of $1,323.06 as of February 2, 1939. Although demand has been duly made, this deficit has not been paid in whole or in part and, with interest, remains due and owing by the estate of Hattie Rau, deceased.

The bill of complaint further avers that Hattie Rau was at her death seized in fee simple of the improved Baltimore County lot and that the plaintiff has instituted the suit, as a creditor of the said Henry Rau and the said Hattie Rau, under the provisions of Sections 2 and 4 of Article 31A of the Public General Laws as enacted by Chapter 294 of the Acts of 1939 of the General Assembly of Maryland under the name of the Uniform Declaratory Judgment Act, for the purpose of having the chancellor construe the paper writing quoted of June 22, 1937, and declare the respective rights and interests of the parties concerned under all the facts and circumstances. In addition, the prayer for this specific relief is accompanied by the usual prayer for general relief.

The demurrer to the amended bill of complaint was rightly sustained. While the acting administratrix is charged with the possession of the personal estate of the intestate, Hattie Rau; and the indebtedness to the mortgagee in the amount as determined by the ascertained deficit arising under the foreclosure proceedings is shown to have been demanded and payment has not been made of it nor of other claims of the creditors of the intestate, it will, also, be perceived from the recital of the averments of the bill of complaint that an insufficiency of the personal estate of the intestate to discharge her debt due and owing to the plaintiff at the time of the intestate's death is not alleged. Unless the personal estate of the intestate be not sufficient to discharge all the just debts, the plaintiff has no right or claim to be enforced against the intestate's real estate, and, consequently, no equity. Thus, even if the paper writing of June 22, 1937, be valid and enforceable as a gift or contract, it is limited in its operation upon the intestate's personalty to the goods and chattels of the intestate's on the lot and in the house in Baltimore County, and the plaintiff could not be affected in any of its interests or rights as a creditor, unless the appropriation of such goods and chattels to the purpose of the paper writing would by such withdrawal, produce the effect of rendering the residue of the personalty insufficient to discharge the plaintiff's claim.

The failure of the amended bill of complaint properly to allege the insufficiency of the personal estate of the intestate to discharge its debt is accompanied by no relief prayed against the acting administratrix of the intestate, who is not made a party defendant of the amended bill. The amended bill of complaint purports to be brought pursuant to sections 2 and 4 of Chapter 294 of the Acts of 1939 of the General Assembly of Maryland. If it be assumed, for the present, that the subject matter is within the scope of Chapter 294, which is called the Uniform Declaratory Judgment Act, the omission by the pleader of the allegation of facts to show the inability of the intestate's personal estate to discharge the plaintiff's debt, and the failure to make the personal representative of the intestate a party defendant make the amended bill of complaint bad on the demurrer. Unless there be an actual controversy and the persons to the controversy made parties, the proceeding under the Uniform Declaratory Judgment Act may not be sustained. Acts of 1939, ch. 294, sec. 11....