Hall v. Jack

• Decision Date: 05 March 1870
• Citation: 32 Md. 253
• Parties: AMASA C. HALL v. WILLIAM JACK, Surviving Partner of JOHNSTON, JACK & CO. GEORGE A. COX v. THE SAME.
• Court: Maryland Court of Appeals

32 Md. 253

AMASA C. HALL v. WILLIAM JACK, Surviving Partner of JOHNSTON, JACK & CO.

GEORGE A. COX v. THE SAME.

Court of Appeals of Maryland

March 5, 1870

The cause was argued before BARTOL, C.J., STEWART, MILLER and ROBINSON, J.

Henry Stockbridge, for the appellant, Hall.

It is impossible to do justice and equity in the cause before the Court, unless Hall is permitted to come in as a party defendant to protect and defend his interest as involved in the cause. It is his right to avail himself of the rule which is well settled and uniform, that all persons having an interest in the objects of a suit, have a right to be, and ought to be made parties. Calvert on parties in Equity, 11, &c.; Hunter on Suits in Equity, 14; Story's Equity Pl. sec. 72, &c.; Cooper's Eq., 33.

If the mortgage, the payment of which is restrained by the injunction in this case, had been formally assigned to John F. McKenzie before the institution of this suit, he (or his assignee, if he had assigned,) would have been a necessary party, and no decree would have bound him or deprived him of the right to collect the mortgage debt unless he had been made a party. If the assignment were unknown to the complainants when they filed the bill, it would have been necessary for them to have taken such steps as would have made him a party as soon as that interest in him was ascertained. Story's Eq. Pl., sec. 189 &c.; 1 Dan'ls Ch. Pr., 253, &c.

The notes being negotiable, when they were endorsed and passed over to McKenzie, the mortgage passed with them without any formal assignment. Langdon vs. Keith, 9 Verm., 299; Johnson vs. Hart, 3 John. Ch., 322; Lawrence vs. Knapp, 1 Root, 248; Terry vs. Woods, 6 S. & M., 139; Blair vs. Bess, 4 Blackf., 539; Green vs. Hart, 1 John. R., 580; Clark vs. Levering, 1 Md. Ch. Dec., 178; Ohio L. I. & T. Co. vs. Winn & Ross, 2 Md. Ch. Dec., 25.

Whether the complainants knew of the assignment by the mortgagees before the filing of the answer of A. M. and M. L. White or not, they were then advised that, prior to the filing of the bill, the mortgagees, by the transfer of the mortgage debt, had assigned the mortgage itself, and at the time of filing of the bill had no interest in it whatever. It was essential then to the validity of the proceedings at the time of the filing of the bill, that John F. McKenzie should be made a party.

Not having been made a party, the transactions between him and Hall, both strangers to the suit, cannot be affected by its pendency, and Hall has all the rights which McKenzie had at the time the suit was instituted. All the authorities cited to show that litigants may, and courts will, disregard alienations made pendente lite, refer to cases where the alienor was in fact a party to the suit. Then it is reason, and of course law, that the vendee is bound by a decree against his vendor. But it is otherwise, if the alienation is before suit brought.

William Daniel, for the appellant, Cox.

The appellant, Cox, in his answer, first raised the question of jurisdiction, by asserting that, an appeal having been taken in the cause, and an approved bond given, the Court could not proceed further in the premises until a final adjudication by this Court; and, secondly, that the allegations of the petition were not sufficient to entitle the complainants to relief, (even if the Court were competent to give it,) because it was not stated or attempted to be shown that the mortgaged property was not sufficient to pay off both mortgages, with interest, but, on the contrary, the defendant (this appellant) alleged, and subsequently proved, that the property was more than ample for both purposes; that the money in question could not be more safely or profitably invested, and that, in addition to the security on the property, this debt was amply secured by the bond given in the appeal from said decree; he insisted, therefore, that it would be inequitable and unjust to him to force a sale of his property under these circumstances, or require him suddenly to raise so much money, and thereby subject him to great inconvenience. Thirdly. He tendered himself ready and willing to pay as soon as it should be legally determined to whom he should pay.

The Court, however, passed an order on the 10th of May, 1869, requiring the defendant to bring into Court, within thirty days, the money then due upon said mortgage, amounting to about $6,270; from that order this appeal was taken, and notice given of an intention to dispute the former decree, or orders passed in the case.

Upon taking an appeal and giving an approved appeal bond, the operation of all orders or decrees in chancery, are stayed. Code of Pub. Gen'l Laws, Art. 5, secs. 23, 33 and 35; Act of 1864, ch. 322.

A Court having parted with the record cannot proceed to execute it. Gelston vs. Hoyt, 3 Wheat., 304.

After an appeal is taken, and an appeal bond executed and approved, no step can be taken in the cause which by any possible contingency can prejudice the appellant. Ohio Life Ins. and Trust Co. vs. Winn and Ross, 4 Md. Ch. Dec., 254, 266, 267 and 270.

But conceding the Court below had jurisdiction in the premises, there was not such a case made by the petition as to justify its action. Courts will not order a sale by decree, or otherwise interfere, unless it will subserve some useful purpose or be of some advantage. There was no allegation that the property was not sufficient to pay all incumbrances, but, on the contrary, proved amply so to be, and that the money was well and productively invested, & c. Bruce, et al. vs. Levering, 23 Md., 288, 294 and 295; Williams vs. Savage Manuf. Co., 1 Md. Ch. Dec., 327.

The appeal in this cause was properly taken from the order of the 10th of May, 1869; and the previous decree of the 24th of June, 1868, may also be reviewed thereunder. This last order is essentially different from that of the 24th of June. The one was to bring in money to be distributed in accordance with said decree; the latter to bring the money into Court to await the issue of this suit, &c. Code of Pub. Gen'l Laws, Art. 5, sec. 22; Dugan, et al. vs. Gittings, et al., 3 Gill, 138; Ware, et al. vs. Richardson, 3 Md., 505.

Wm. Reynolds, Jr., and Thos. Donaldson, for the appellee.

The Court below refused to grant the prayer of the appellant, Hall, to be made a party, and by its decree declared the gift of personal property from White to his wife to be void as against the complainant and other creditors who were such when said gift was made, and directed the defendant, Cox, to bring into Court the money which then was or thereafter might become due upon the notes, mentioned in the proceedings, as they should respectively mature, to be applied under the Court's direction, &c. From this decree the appeal of Hall was taken.

The appeal should be dismissed, because Hall, not being a party to the cause, had no right to take an appeal from the decree passed therein.

The right of appeal depends entirely upon the statutory provisions in relation thereto, which, so far as regards appeals from final decrees passed by Courts of Equity, are found in section 20 of Article 16 of the Code of Public General Laws, which section, as amended by the Act of 1864, ch. 156, provides that "an appeal shall be allowed, &c., by any one or more of the persons, parties to the suit, &c." Therefore, no person not a party to the suit has a right to appeal. Hall never was a party to the proceeding in which was passed the decree sought to be appealed from by him. He applied to be made a party, but the Court refused his application.

But even if Hall had a right to appeal from the order overruling his petition to be made a party, or from the decree, upon the ground that such an order, whereby his rights were prejudiced, had been previously passed, the Court below was right in over-ruling his application to be made a party to the cause.

1st. Because even if all the allegations in his petition were true, they did not disclose sufficient grounds for making him a party. Any person purchasing property pendente lite, though for a valuable consideration, and without notice of the suit, is affected in the same manner as if he had actual notice, will be bound by the decree or judgment, and need not be made a party to the suit. Hall, in his petition, did not allege that he purchased prior to the institution of these proceedings. He admitted that he did not pay over the money and securities given for the notes, until the mortgage was actually assigned to him, and he was very careful not to let the date of this assignment of the mortgage appear. 1 Story's Eq. Jur., sec. 406; Inloes' Lessee vs. Harvey, 11 Md., 524; Bishop of Winchester vs. Paine, 11 Vesey, 197; Gaskill vs. Durdin, 2 Ball & Beatty, 169.

2d. Because even if the facts alleged in the petition of Hall were sufficient to entitle him to be made a party, if true, there is no evidence in the cause to prove them, and Hall has never taken any steps to produce such evidence, although, from the circumstance of the payment of the interest note which fell due June 25th, 1867, being stopped by injunction, he must have had actual notice of these proceedings from that time, nearly eleven months before his petition was filed in the cause. Cook vs. Mancius, 5 Johns. Ch. Rep., 89.

On the Appeal of George A. Cox:

Cox had no right to appeal from the order of the 10th of May, 1869, directing him to bring into Court, the balance due on the mortgage notes, within thirty days.

1st. Because the decree passed June 24th, 1868, more than ten months before the date of the order sought to be appealed from, directed the said Cox "to bring into Court the money which was, is or hereafter may become due upon the notes mentioned in the proceedings,...