George v. Andrews

• Decision Date: 08 March 1883
• Parties: SAMUEL K. GEORGE v. R. SNOWDEN. ANDREWS and Mary Lee Andrews, His Wife.
• Court: Maryland Court of Appeals

60 Md. 26

SAMUEL K. GEORGE v. R. SNOWDEN. ANDREWS and Mary Lee Andrews, His Wife.

Court of Appeals of Maryland

March 8, 1883

Appeal from the Circuit Court of Baltimore City.

The case is stated in the opinion of the court.

The cause was argued before Miller, Stone, Alvey and Irving, JJ.

Richard M. Venable, for the appellant.

J Upshur Dennis and Charles Marshall, for the appellees.

Irving J., delivered the opinion of the court.

The questions in this case arise upon a bill for injunction to stay certain proceedings at law. The court below granted the injunction, and the plaintiff in the proceedings at law appealed. The principal facts essential to the determination of the controversy are undisputed, and the rest are established by proof. The principal contention is respecting the law applicable to them.

The facts are as follows. On July 31st, 1872, the appellees R Snowden Andrews and Mary Lee Andrews, his wife, executed a mortgage to Archibald George, upon certain premises on North Calvert street, in Baltimore City, belonging to Mrs. Andrews to secure the sum of $5000. This mortgage was afterwards in December, 1872, assigned by Archibald George to Samuel K. George, the appellant.

In October, 1871, John S. Meredith executed a mortgage to the appellant, upon certain premises, belonging to the mortgagor, upon North avenue, in Baltimore City, to secure the payment of $4000.

On November 4th, 1872, John S. Meredith and Andrews and wife exchanged properties, and Meredith conveyed the North avenue property to Mrs. Andrews subject to the mortgage from him to George; and Andrews and wife conveyed the North Calvert street property to Meredith subject to the mortgage from them to Archibald George, and which was the following month assigned to the appellant. In this exchange Meredith assumed and agreed to pay the mortgage debt upon the North Calvert street property, and Andrews and wife agreed to pay the mortgage debt of Meredith on the North avenue property. In addition to this undertaking on the part of Andrews and wife, they agreed to pay Meredith $3500 ""boot" for difference in value in the exchanged properties; and to secure that sum Andrews and wife executed to Meredith a mortgage for $3500 payable three years from date.

After this exchange, the interest notes, on the Calvert street mortgage debt, were given by Meredith to Samuel K. George, the appellant; and the interest notes upon the mortgage on the North avenue property were given by Andrews and wife to the appellant who collected the same, generally through his bank. When Meredith's mortgage on the North avenue property fell due, Andrews and wife secured indulgence for a while and then paid it off, taking a release under seal dated October 19th, 1875. When the $3500 mortgage to Meredith, on same property, from Andrews and wife fell due in July, 1875, it was extended for one year and then paid off. The appellant collected the interest, from Meredith, on the Calvert street mortgage until July, 1875, when the same became due. Then at the request of Meredith, and without consultation with Andrews and wife and entirely without their knowledge, for a bonus of $150 he extended the period for payment of that mortgage by Meredith for three years; taking interest notes from Meredith on the mortgage debt for that period and marking the principal note of Andrews and wife renewed for three years. When it again fell due, at Meredith's request and without the knowledge of appellees of this or former extension, it was again extended for a consideration of $50 for one year. Interest notes were again taken for the year's interest, and the principal note was again marked extended for one year. This mortgage, under the extension agreements became payable in July, 1879. Default then having been made, proceedings to foreclose were instituted, a decree was obtained and the property sold. After paying expenses the proceeds of sale did not pay the mortgage debt. About $1500 remained unsatisfied. To recover this deficiency a suit was instituted by the appellant against the appellees, upon the covenant in the mortgage given to Archibald George, which was assigned to the appellant as herein before stated. This was an instrument under seal and a bill in equity was necessary to secure to appellees the benefit of the equitable defense, supposed to result from the character of the dealings between the appellant and John S. Meredith, with respect to the mortgaged property on Calvert street.

In addition to the facts already stated, the bill charged that the appellant had full knowledge of the exchange of property made by the appellees and John S. Meredith, and of the undertaking of each, in that exchange, to pay the debt of the other to the appellant, resting on the property respectively transferred; and that he assented thereto. It also charges that the action of the appellant in extending the time for Meredith to pay the mortgage debt on the Calvert street house, first for three years and then for one year, was entirely without the knowledge or consent of the appellees, and without consultation with them or either of them; and that both the appellant and Meredith regarded the latter as the sole debtor for the $5000 resting on the Calvert street property, and that appellant and appellees acted during that whole period in their transactions on that understanding. It also charges that acting on that understanding, the appellees paid off the whole of the $3500 debt, created in the exchange and secured by mortgage on the North avenue property to Meredith; whereas if it had been intimated that they were in any wise to be held responsible for the debt on the Calvert street property, a sufficient amount of the $3500 debt to Meredith could have been kept back to meet the ascertained deficiency. The complainants then charge that they were released by the appellant George giving direct assent to their recited agreement with Meredith; but if they were not, still the appellant after the exchange could only look to them as securities for Meredith and that the giving time to Meredith without their consent, knowledge or acquiescence operated to release them. Injunction was accordingly prayed.

The appellant by his answer in effect, admitted the several allegations of the bill except the allegation of knowledge on his part of the exchange between the parties and the alleged arrangement by which each of his debtors was to become answerable for the other's debts to him, which he denies and also denies that he ever assented to the arrangement, or released or intended to release the appellees from liability for the debt on the Calvert street property. He avers that the transactions with Meredith for extension of time were managed entirely by Mr. Guest as his agent, and he denies he ever received any bonus for the same, or ever knew of it. He also avers that he has brought the suit for the benefit of John C. George, his cestui que...