Citizens' Sec. & Land Co. of Baltimore City v. Uhler

• Decision Date: 27 March 1878
• Parties: THE CITIZENS' SECURITY AND LAND COMPANY OF BALTIMORE CITY v. ERASMUS R. UHLER.
• Court: Maryland Court of Appeals

48 Md. 455

THE CITIZENS' SECURITY AND LAND COMPANY OF BALTIMORE CITY v. ERASMUS R. UHLER.

Court of Appeals of Maryland

March 27, 1878

APPEAL from the Circuit Court of Baltimore City.

This appeal was taken from an order of the Court below, ratifying an auditor's account. The case is stated in the opinion of the Court.

The cause was argued before BOWIE, STEWART, BRENT, MILLER, ALVEY and ROBINSON, J.

Samuel Snowden, for the appellant.

John M. Carter, for the appellee.

ROBINSON J., delivered the opinion of the Court.

The appellee borrowed of the appellant six thousand and eight hundred dollars, for ten years, and to secure the payment of this sum he executed two mortgages, by which he agreed to pay interest on said loan weekly during the continuance of the mortgages; and also a premium of twenty-five cents weekly on each of seventeen shares of stock, making nine and a half per cent. interest, and in addition to this interest, he agreed also to pay such fines and penalties as might be imposed upon him by the by-laws of the company.

The payments being in arrears, the mortgaged premises were sold on an ex parte proceeding in pursuance of sec. 782 of Art. 4, of the Code of Public Local Laws.

After the ratification of the sale, the appellee filed a petition disputing the amount claimed to be due by the appellant on the two mortgages, and prayed that the matter might be referred to the auditor with power to take testimony, in order that the precise sum due might be ascertained.

The case was referred, and proof was taken, and four accounts "B," "C," "D," and "E," were stated by the auditor.

Account "B," was stated according to the terms prescribed by the mortgages, and according to the views of the appellant.

Account "C," was stated in accordance with the decision in the case of the Baltimore Permanent Building and Land Society vs. Taylor, 41 Md., 409, in which the appellant was allowed the legal rate of six per cent. on account of the money loaned to the appellee, and this account the auditor states, shows, according to his opinion, the correct amount to which the appellant is entitled.

To account "C" the appellant excepted on the ground, among others, that the auditor had not allowed interest according to the terms of the mortgages.

Exceptions were also filed by the appellee to accounts "B," "D" and "E," for the reasons stated in the auditor's report, and for other reasons to be shown at the hearing, and prayed the Court to ratify account "C."

The Court rejected accounts "B," "D" and "E," on the ground of usurious interest allowed the appellant, and being of opinion that the transaction was a mere loan of money, to secure the payment of which the two mortgages were executed, ratified account "C," in which the appellant was allowed interest at the rate of six per cent.

It is now contended, that the question of usury was not raised by a special plea, nor was it relied on as a defence to the appellant's claim, and that the Court therefore erred in ratifying account "C."

It is true, a special plea of usury was not filed, but all the proceedings below; the proof before the auditor; the several accounts filed by him, and the exceptions thereto, and the opinion of the Court show conclusively, that the only question in dispute between these parties, was whether the mortgages were to be considered within the protection of the rule laid down in Robertson's Case, 10 Md., 397, and not liable therefore to objection on the ground of usury; or whether according to the decision in Taylor's Case, 41 Md., 409, they were usurious, and to be treated as mere securities for the payment of money borrowed

The mortgagee, now appellant, was not claiming the benefit of a statutory provision in regard to usury, and a special plea was not therefore necessary to raise the question. The fund was in a Court of equity for distribution, and the law not only declares that six per cent. shall be the legal interest but makes it unlawful to charge a higher rate, and if the proceedings show that the objection to the claim of the appellant was on the ground of usurious interest, it was the duty of the Court to disallow it,...