Felgner's Adm'rs v. Slingluff
| Decision Date | 12 January 1909 |
| Citation | 71 A. 978,109 Md. 474 |
| Parties | FELGNER'S ADM'RS v. SLINGLUFF. SLINGLUFF v. FELGNER'S ADM'RS. |
| Court | Maryland Court of Appeals |
Cross-Appeals from Circuit Court of Baltimore City; Thos. Ireland Elliott Judge.
Bill by Ann M. Slingluff against Edward L. Felgner. Decree for complainant, and, Felgner having died, his administrators appeal, and complainant enters a cross-appeal. Cause remanded for further proceedings, without reversing or affirming.
Vernon Cook, for appellants.
J. Kemp Bartlett and William L. Marbury, for appellee.
Mrs Ann M. Slingluff filed a bill in equity against Edward L Felgner for an accounting for all sums of money received by him from a property previously owned by her, and prayed for a discovery and a decree in personam against him for such amount as may be found to be due her. The lower court decreed that he pay her the sum of $3,802.03 and costs, and, Mr. Felgner having died, his administrators were made parties defendant, and entered an appeal from that decree. A cross-appeal was entered by Mrs. Slingluff. On the 26th of September, 1899, Horace Slingluff, husband of the plaintiff, gave a mortgage, in which she joined, to Mr. Felgner for $22,000, on a property in Baltimore county called "Upton." Mr. Slingluff afterwards took the benefit of the bankrupt law, and on March 27, 1900, the mortgage was foreclosed, and the property purchased by Mr. Felgner. At that time large improvements which Mr. Slingluff had begun were incomplete, and the dwelling house was consequently in bad condition. Mr. Felgner agreed with Mrs. Slingluff that he would complete the repairs which were in course of construction, keep an account of the moneys expended thereon, and, when completed, would convey the property to her, who with her husband was to give Mr. Felgner a note secured by mortgage upon said property. The parties do not materially differ as to the terms of that agreement; the principal difference being that the plaintiff claims it was made before the foreclosure sale of March 27, 1900, and the defendant that it was made shortly afterwards. On May 1, 1901, a deed was executed for the property to Mrs. Slingluff, and Mr. and Mrs. Slingluff gave Mr. Felgner a mortgage of that date to secure a note for $30,495, payable three years after date and six interest notes for $913.85 each; one being payable every six months after date. The principal sum included the original mortgage of $22,000, the repairs made by Mr. Felgner amounting to $4,896.74, the costs of the foreclosure proceedings $687.40, including a fee of $500 to Mr. Dillehunt, who was the attorney who made the sale, and $2,367.90 interest to May 1, 1901, which, together with an adjustment of taxes, $17.97, amounted to $30,495.01. We do not understand the correctness of those sums to be questioned, but the plaintiff claims that there should have been a credit of $1,400 for rent received from David Hutzler, which will be referred to later. As additional security, Mr. and Mrs. Slingluff agreed to assign to Mr. Felgner an endowment policy of insurance issued on the life of Horace Slingluff for the sum of $5,000, which at the time, by reason of certain accumulations, had a cash value of something over $7,000. The Slingluff also agreed to furnish the dwelling house, to provide a gardener, and do what they could towards securing a good rental. The object of this was to get the property in a condition that would enable them to dispose of it to the best advantage, in order to pay off the mortgage and have some surplus for the benefit of Mrs. Slingluff, which she claims it was agreed she should have. The insurance policy was assigned to Mr. Felgner, but the trustees in bankruptcy of Mr. Slingluff made a demand for it, and after some litigation the matter was finally compromised by dividing the value of the policy, which resulted in Mr. Felgner receiving $3,574.15. Mr. Slingluff, who represented his wife, and Mr. Dillehunt, who represented Mr. Felgner, who was his father-in-law, practically agree as to what that agreement was, excepting Mr. Slingluff claims that the rents for 1900 were to go to Mr. Felgner, while Mr. Dillehunt contends that the payment of rents to him was to begin with those of 1901. The rents were derived from the property during the summer season. Mr. Slingluff rented the property to David Hutzler for the summer of 1900 at $1,400, to Louis Hamburger for the summer of 1901 at $1,400, and to Levi Greif for the summer of 1902 at $1,200, and Mr. and Mrs. Slingluff expended money and time with a view to making the property attractive to purchasers.
There were a number of interviews between Mr. Slingluff and Mr. Dillehunt, and considerable correspondence passed between them, some of which will be hereafter referred to; the letter of October 11, 1902, bearing more particularly on the agreement that Mrs. Slingluff was to have the surplus, over and above the claims and expenses of Mr. Felgner, out of a sale of the property. On February 24, 1903, a deed was executed by the Slingluffs to Mr. Felgner for the property embraced in the mortgage, which was duly delivered to Mr. Dillehunt, but he put it in his safe and never recorded it. On April 17, 1903, Mr. Dillehunt, as assignee of the mortgage, reported a sale of the property under the power of sale to the circuit court for Baltimore county, in which report he states that he sold the property on April 8, 1903, to Mr. Felgner for $24,000. That sale was in due course ratified by the court, an auditor's report was filed and ratified, and the deed was made by Mr. Dillehunt, assignee, to Mr. Felgner on May 13, 1903. Both Mr. and Mrs. Slingluff deny any knowledge of that foreclosure sale until-the matters connected with this suit were placed in the hands of Mr. Bartlett, who, they allege, first told them of it, and they claim that they supposed the deed which they executed had passed the title to Mr. Felgner, subject to the agreement which they say then existed. Before this bill was filed Mr. Felgner had sold part of the property to Charles D. Fitzgerald for $27,500 (as we understand the amount), and the balance to the Western Maryland Railroad Company for $5,812.50, and the plaintiff claims that the purchase money received, the insurance money, and rents more than paid Mr. Felgner, who she alleges was compelled to give her the surplus under the agreement. The defendant denies there was any surplus, but contends that if there was, the foreclosure proceedings preclude any recovery. The first question, therefore, to be determined by us is the effect of those proceedings.
1. We cannot agree with the counsel for Mrs. Slingluff that there was a merger by virtue of the deed of February 24, 1903. A sufficient answer to that contention is that before the deed was made, to wit, on October 31, 1902, the mortgage had been assigned to Mr. Dillehunt. While he undoubtedly took the assignment subject to all equities existing between the mortgagor and mortgagee, the legal title was transferred to him, and hence there was no merger by reason of the deed to Mr. Felgner. The general rule is that "in order for the mortgage to be extinguished by the union of titles of the mortgagor and the mortgagee, such titles must unite in the same person at one and the same time." 20 Am. & Eng. Ency. of Law, 1068. Even when a mortgagee acquires the equity of redemption in his own name, it does not necessarily follow that the mortgage becomes merged and extinguished, but it depends upon the intention of the mortgagee; and, when it is for his benefit to do so, the presumption is that he intended to keep the mortgage alive. Id., 1064; Poke v. Reynolds, 31 Md. 106.
2. But notwithstanding there was no merger, and assuming for the present that there was an agreement that the surplus derived from the sale of the property was to go to Mrs. Slingluff, which we will consider later, was the effect of the foreclosure proceedings such as the defendant contends for? It cannot be doubted that the doctrine of res adjudicata applies to a mortgage foreclosure proceeding, such as this, as it does to other judicial proceedings, and of course the proceedings taken in reference to the foreclosure of the mortgage cannot be attacked collaterally. Again we must differ from the position taken by the counsel for the plaintiff that, inasmuch as Mrs. Slingluff had no title at the time of the foreclosure, the sale passed no title. The statute expressly provides that "all such sales, when confirmed by the court and the purchase money is paid, shall pass all the title which the mortgagor had in the said mortgaged premises at the time of the recording of the mortgage." Section 11, art. 66, Code Pub. Gen. Laws 1904. If that were not so, and it only passed the title which the mortgagor had at the time of the foreclosure, the mortgagor could deprive the mortgagee of the security by selling the property. The case of Queen City Bldg. Ass'n v. Price, 53 Md. 397, cited by the plaintiff, involved an altogether different question. There it was held that the supposed power of sale was invalid, and hence the sale and the subsequent proceedings were void. It was there said that "the mortgage stood as if no power of sale had been inserted in it," but in this case there is no question about the validity of the power of sale; and, if it could no longer be exercised by reason of the deed, the objection should have been made in the foreclosure case, or if the plaintiff was kept in ignorance of it, by reason of the conduct of the mortgagee, a bill of review, or some appropriate proceeding in that court, was the proper remedy, if it be necessary to have that sale set aside.
3. But is that necessary under the circumstances of this case? The plaintiff is not contending that title to...
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