Eastern Shore Bldg. & Loan Corp. v. Bank of Somerset

• Decision Date: 15 May 1969
• Docket Number: No. 119,119
• Citation: 253 Md. 525,253 A.2d 367
• Parties: EASTERN SHORE BUILDING AND LOAN CORPORATION v. BANK OF SOMERSET.
• Court: Maryland Court of Appeals

Page 525

253 Md. 525

253 A.2d 367

EASTERN SHORE BUILDING AND LOAN CORPORATION v. BANK OF SOMERSET.

No. 119.

Court of Appeals of Maryland.

May 15, 1969.

James P. Bailey, Salisbury (Hearne, Fox & Bailey, Salisbury, on the brief), for appellant.

Alexander G. Jones, Princess Anne (Jones & Jones, Princess Anne, on the brief), for appellee.

Before HAMMOND, C. J., and MARBURY, BARNES, McWILLIAMS, FINAN and SINGLEY, JJ.

BARNES, Judge.

This appeal involves the question of whether or not a judgment creditor of one joint tenant of fee simple land may, after the conveyance of the land by both joint tenants to a purchaser for a valuable consideration, enforce its judgment against the land.

The facts are not in dispute. On July 10, 1963, Mamie A. Dize, unmarried, conveyed the subject property, located in Somerset County, to Otho L. Sturgis and William Richard Sturgis, as joint tenants and not as tenants in common. This deed was duly recorded among the land records of Somerset County. Prior to December 30, 1965, Otho, one of the joint tenants, made an application for a loan to the appellee, the Bank of Somerset, supported by a financial statement in which he listed as an asset the subject property, assigning $3500 as its value. Relying on the application, the appellee Bank made a loan to Otho secured by a confessed judgment note, dated December 30, 1965, in the amount of $1,823.76. The note was executed by Otho and was to be paid off in monthly installments. Otho defaulted in the payments provided for in the note and the appellee Bank obtained a judgment by confession against him which was duly recorded on the Civil Docket of the Circuit Court for Somerset County, on October 7, 1966.

On October 5, 1967, subsequent to the obtention of the judgment against Otho, he and William, without having executed any prior contract of sale, conveyed the subject property to William P. Hytche and Deloris J. Hytche, his wife and to William M. Pender and Minnie Lee Pender, his wife, in fee simple, for a consideration of $3500. On the same day, the Hytches and Penders executed a purchase money mortgage on the subject property to the appellant, Eastern Shore Building and Loan Corporation. Both the deed and the purchase money mortgage of October 5, 1967, were duly recorded among the land records of Somerset County.

The appellee Bank, having discovered the conveyance by Otho and William to the Hytches and Penders, caused a writ of fieri facias to be levied on the subject property by the Sheriff of Somerset County on November 3, 1967-approximately one month after the conveyance of October 5, 1967-directing the Sheriff to levy upon the undivided one-half interest of Otho conveyed or attempted to be conveyed to the grantees.

The appellant, purchase money mortgagee, was permitted by the Circuit Court to intervene in the execution proceeding as a party defendant. It thereafter filed a motion for summary judgment upon the ground that under the facts mentioned, the judgment against Otho was 'not a lien on the jointly owned interest of Otho L. Sturgis in the aforesaid property.' The appellee Bank subsequently filed an affidavit in opposition to the motion in which it maintained 'that it is the holder of a valid judgment lien against the joint interest of Otho L. Sturgis.'

The Circuit Court, after argument, filed a written opinion indicating that under the applicable Maryland law there was no reason why the judgment lien should not follow the interest of Otho into the hands of the purchaser and passed an order on May 20, 1968, denying the motion for summary judgment and entered a judgment against the defendants for costs. A timely appeal was entered from this order and judgment.

We have concluded that the trial court was in error in its ruling and will reverse the order and judgment of May 20, 1968.

Quite recently we considered in some detail the history, nature, incidents and Maryland law in regard to joint tenants in Alexander v. Boyer, Md.App., 253 A.2d 359 (September Term, 1968, filed May 14, 1969), and we need not repeat our observations in Alexander in the present case. The precise question presented in the instant case, however, was not specifically dealt with in the Alexander case.

Code (1957), Article 26, § 20 (1966 Repl.Vol.) provides that:

'Every judgment and decree rendered by any of the courts of law or equity of this State shall be and constitute a lien to the amount and from the date thereof upon all leasehold interest and terms for years of the defendants in land, except leases from year to year and leases for terms of not more than five years and not renewable, to the same extent and effect as liens are created by judgment upon real estate, and a certified copy of the docket entries from the clerk of the court where any judgment or decree is obtained, or judgment of any justice of the peace originally recorded, when recorded upon the judgment record of any other court in the counties of this State or the City of Baltimore, shall be and constitute a lien, from the date of its being recorded, upon the property of the defendant in said county or City of Baltimore, to the same extent as in the county or city where the said judgment or decree was originally obtained or justice's judgment originally recorded.'

In construing this provision of the Maryland Code, our predecessors have held that the lien of the judgment only attaches to the interest in land owned or held by the judgment debtor, himself, and is subject to the limitations, legal or equitable, to which that interest is subject at the time of the entry of the judgment. As Judge (later Chief Judge) Henderson, for the Court, aptly stated in Stebbins-Anderson Co., Inc. v. Bolton, 208 Md. 183, 188, 117 A.2d 908, 910 (1955):

'A judgment creditor 'stands in the place of his debtor, and he can only take the property of his debtor, subject to the equitable charges to which it was liable in the hands of the debtor, at the time of the rendition of the judgment.' Kinsey v. Drury, supra. This has been the law at least since the decision in Hampson v. Edelen, 1807, 2 Har. & J. 64. Except where modified by statute it is the rule in other states. See Note 87 A.L.R. 1505, and 3 American Law of Property, § 11.29. It is an application of the familiar doctrine of equitable conversion. Cf. Skinner & Sons' Ship-Building & Dry-Dock Co. of Baltimore City v. Houghton, 92 Md. 68, 86, 48 A. 85. The rule does not depend upon actual notice to the creditor, although it is argued that that was the factual situation in the Caltrider case, supra. '* * * a judgment creditor is not in the position of a bona fide purchaser, and his claim is subject to prior, undisclosed equities. 'He is neither in fact nor in law a bona fide purchaser, and must stand or fall by the real, and not the apparent rights of the defendant in the judgment. '' Kolker v. Gorn, 193 Md. 391, 398, 67 A.2d 258, and cases cited.'

See White...