Johnson v. Hambleton

• Decision Date: 15 July 1879
• Citation: 52 Md. 378
• Parties: MARY J. JOHNSON v. SAMUEL HAMBLETON, Trustee, and Others.
• Court: Maryland Court of Appeals

52 Md. 378

MARY J. JOHNSON v. SAMUEL HAMBLETON, Trustee, and Others.

Court of Appeals of Maryland

July 15, 1879

Appeal from the Circuit Court for Talbot County, in Equity.

The case is stated in the opinion of the court.

The cause was argued before BARTOL, C.J., BRENT, MILLER, ALVEY and IRVING, JJ.

Wm. Shepard Bryan, for the appellant.

John H. Handy, for the appellees.

Irving J., delivered the opinion of the court.

This cause comes up on the appeal of Mary J. Johnson, from the decision of the Circuit Court for Talbot County, ratifying and confirming the sale and report of Samuel Hambleton trustee, under a decree of said court passed in a cause wherein Thomas Ridgaway is complainant, and the appellant and others are defendants. A proper understanding of the questions raised by the exceptions to the sale, and before us for review, requires a brief recital of the facts of the case. On the 26th of June, 1866, Robert D. Johnson executed a mortgage to Thomas Ridgaway, of the City of Philadelphia, on certain land in Talbot County, to secure the payment of $2200. On the 27th of June, 1866, the said Robert D. Johnson made another mortgage to one Margaretta M. Flanagin, wife of James S. Flanagin, to secure the payment of a bond of $8000, which was conditioned for the payment of $4000, which bond and mortgage were assigned to the Easton National Bank, as collateral security for a note of James S. Flanagin and others, for $7000. Sundry other mortgages were executed, bearing date either the same day as the Flanagin mortgage, or subsequent thereto; and finally the said Robert D. Johnson, in 1875, conveyed his ultimate equity of redemption to the appellant, Mary J. Johnson. The mortgage to Ridgaway, which was the senior lien, falling due, he filed his bill in said court for sale to pay his claim, and all the junior lien-holders were made parties defendants, and so also were Robert D. Johnson, the mortgagor, and Mary J. Johnson, the grantee of the land subject to the said mortgages. The Easton National Bank was made a party, as assignee of the Flanagin mortgage. All these parties, defendants, were duly brought into court, and all answered admitting the facts of the bill and liens set out, except Robert D. Johnson and Mary J. Johnson, and against them an interlocutory decree was passed. Testimony was regularly taken and the case went to final decree, and Samuel Hambleton was appointed trustee to make sale of the mortgaged property. The mortgage debt ascertained by the decree, was not paid, and the trustee made sale and reported his sale to the court. It was ratified nisi; and on exceptions being filed to the final ratification, proof was taken; and on hearing the court overruled the exceptions, and ratified the sale, and from that order of the court this appeal was taken.

Some of the exceptions in the record do not appear to have been relied on at the hearing below, and certainly have not been pressed in this court, so that our attention will be confined to those exceptions which have been presented to and relied on in this court. Properly considered they may be resolved into two exceptions, which we will examine. First, it is contended that the decree did not authorize a sale of more than enough land to pay the complainant's mortgage claim and costs; that the land was divisible into parts, and the trustee should have divided it, and sold in parcels; and that the appellant's interests, as the grantee of the land, have been prejudiced by the trustee's neglect to so divide and sell it.

This exception is based on the language of the decree, and on the decision of this court in Boteler v. Brookes, 7 G. & J. 143. The decree provides as follows, "that unless the defendants shall on or before the 23rd of February next, pay to the complainant, or bring into this court to be paid, the sum of two thousand and two hundred dollars, with interest thereon from the 26th of June, 1875, together with the costs of suit, to be taxed by the Clerk of this court, the mortgaged premises in the proceedings mentioned, or so much thereof as may be necessary for the purposes, be sold." It is urged that the language "so much thereof as may be necessary" is restrictive so as to limit a sale to so much as was needed to pay the claim on which suit was instituted; and that, although all the junior lien-holders are made parties, and all their claims were overdue and unpaid, and the decree directs the sale to be made "clear and discharged of all claim," they may have on the property, inasmuch as they have not made their answers in the nature of cross-bills, and the decree has made no special provision for their payment, the trustee could only sell enough to pay that claim and no more, and therefore the sale of the whole which has been made by the trustee ought to be set aside and another sale ordered. The answers of the parties are noted in the record as having been filed, but they are not set out in full, so that we do not know in what precise form they have admitted the allegations of the bill and assented to a decree. But if they did not formally pray payment of their mortgages respectively, the admission of the allegations of the bill, which alleged their claims as unpaid, and submission to a decree could not be regarded as other than a submission of their rights to the protection of the court. That the junior lien-holders were proper parties to the suit cannot be questioned in the light of the numerous decisions of this court on that subject. At the last term of this court, in Harris v. Hooper, 50 Md. 547, the authorities are all reviewed and collated, and the court says "it is generally proper to make them parties, with a view to a final settlement of the rights of all the parties in interest." The reason assigned is that there may be an end of suits or to prevent a multiplicity of suits. All authorities agree that when they are made parties they are concluded by the decree. By the very terms of this decree their interests are directed to be sold, and if their right to redeem is cut off by the sale, equity requires that their rights shall be protected in the distribution of the proceeds of sale. As junior mortgagees they have no interest save in the equity of redemption, which is sold under the decree, and is represented by the surplus proceeds of sale, after paying the first incumbrancer, who, in this case, is the complainant. The better practice would undoubtedly be, to refer especially in the decree to the junior lien-holding defendants, and to provide, in so many words, for their payment out of the surplus proceeds of sale. But the omission to do so ought not to be held as prejudicing their rights. Assuming the whole property necessarily sold because of indivisibility, when all the claims were before the court, and their holders parties defendants, it could hardly be regarded as necessary for special petitions to be filed, after sale, to entitle the junior lien-holding defendants to a distribution of the...