Lee v. Early

• Decision Date: 01 March 1876
• Citation: 44 Md. 80
• Parties: ELEANORA L. LEE, Terre-tenant of JOHN T. EVERS-FIELD v. WILLIAM H. EARLY, use of NEALE, HARRIS & CO.
• Court: Maryland Court of Appeals

44 Md. 80

ELEANORA L. LEE, Terre-tenant of JOHN T. EVERS-FIELD v. WILLIAM H. EARLY, use of NEALE, HARRIS & CO.

Court of Appeals of Maryland

March 1, 1876

APPEAL from the Circuit Court for Prince George's County.

The facts of the case are sufficiently stated in the opinion of the Court.

Exception--The plaintiffs offered three prayers, the first and third of which the Court rejected, the second as follows, was granted:

2. If the Court shall find from the evidence that there had been paid to George Forbes, and the administrators of Benjn. Lee in money by C. C. Magruder, and in the proceeds of crops raised on said land, as much as would equal the amount of principal and interest due on the first mortgage, and that sums to that amount or more, were paid to them before the first sale made to S. H. Berry, under the decree offered in evidence, then such sums should be treated as payments made by the mortgagor, applicable to the first mortgage debt, and said mortgage should be treated as having been satisfied, and that lien extinguished before the said sale to S. H. Berry and no title to said land vested in Mrs. Lee under the subsequent sale to her, which would exclude the lien of the original judgment against John T. Eversfield set forth in the writs of sci. fa. in this cause.

The defendant Mrs. Lee offered five prayers, which the Court rejected. The fifth only, as follows, need be set out:

5. If the Court shall find from the evidence in the cause that the said John T. Eversfield executed the three mortgages offered in evidence, upon the real estate sought to be made liable in this case for the payment of the judgment upon which the scire facias issued, and that the said mortgages were not paid prior to the passage of the decree offered in evidence, and shall further find that a decree was passed in the cause of George Forbes vs. John T. Eversfield, in the Circuit Court for Prince George's County, sitting in Equity, for the sale of the said real estate to satisfy the said three mortgages offered in evidence, and that the defendant, Eleanora L. Lee, became the purchaser of a portion of the said real estate, under the said decree and order of resale offered in evidence, and that the said sale was duly reported to and ratified by the said Court, and that the said Eleanora L. Lee is in possession of the said real estate, and obtained title thereto under and by virtue of the said purchase under the said decree and order of resale, then the said real estate in the possession of the said Eleanora L Lee is not liable for the payment of the said judgment, and she is not a terre-tenant of the said John T. Eversfield, so as to entitle the plaintiffs to a fiat against her.

To the granting of the plaintiffs' second prayer and the rejection of the defendant's prayers the defendant excepted. The Court adjudged that a fiat be extended in such case against John T. Eversfield, as also against Eleanora L. Lee as terre-tenant of said Eversfield. From these judgments Mrs. Lee appealed.

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

Daniel Clarke and John B. Brooke, for the appellant.

The Court erred in granting the plaintiffs' second prayer. This prayer asserts the proposition that if the Court should find that the amount of money paid by C. C. Magruder to George Forbes, and the proceeds realized from crops raised on the lands prior to the first sale to Samuel H. Berry, which took place on the 30th of November, 1869, equalled the amount of principal and interest due on the first mortgage, then these sums should be treated as payments made by the mortgagor applicable to the first mortgage, and the mortgage should be treated as having been satisfied, and the lien extinguished before the sale to Samuel H. Berry, and no title to said land vested in Mrs. Lee, under the subsequent sale to her which would exclude the lien of the original judgment against John T. Eversfield, set forth in the writs of scire facias.

The rule of law applicable to payments will be found to be settled by the cases of Calvert vs. Carter, 18 Md., 73; Gwinn vs. Whitaker, 1 Har. & Johns., 754; McTavish vs. Carroll, 1 Md Ch. Dec., 160; Mitchell vs. Dall, 4 G. & J., 361.

Where a debtor pays money he has a right to make the application of the payment at the time of the payment.

By the statement and agreement upon which the decree was passed in the case of Forbes vs. Eversfield, the sum of $1520 was applied to the interest due on the three mortgages, and the Court had no right to make a different application, as was done by the prayer, of the said sum of $1520 to the first mortgage.

Applying the sum of $1520 to the interest due on the three mortgages in the relative proportions, as made by the agreement of the parties at the time when the payment was made, and as shown by the statement on which the decree was passed, and then applying all the amounts received from the proceeds of crops as contained in the auditor's statement down to the 30th of November, 1869, to the balance of interest due on the first mortgage and to the principal due on the first mortgage, it will be found by calculation that the first mortgage was not paid in full at the time of the sale. The only way in which the first mortgage can be shown to be satisfied as of the time of the sale on the 30th of November, 1869, is by applying the sum of $1520 and all the proceeds of crops sold up to November 30th, 1869, to the principal and interest due on the first mortgage, which is clearly erroneous.

Conceding that there was no agreement as to the application of the proceeds of crops at the time they were sold, and that there is no evidence to show that any application was made by either of the parties at the time, and that the law must make the application, it is insisted that where a party is indebted on three mortgages all of which are due, and payments are made which are not more than sufficient to pay the interest due on the said mortgages, the law will apply the payments to the interest due on all the mortgages before applying any of the payments to the principal of the first mortgage. See Gwinn vs. Whitaker, 1 H. & J., 754.

The principle of applying the payments to the oldest debt does not obtain except in cases where the interest is paid up on the whole indebtedness, and the law is called on to apply payments to the principal of several debts. Then the application of the payment is made to the oldest debt. Allstan vs. Contee, 4 H. & J., 351; Mitchell vs. Dall, 4 G. & J., 361.

The sum of $11,736 became due on decree, by the decree passed February 19th, 1863, and wherever a sum of money is due on decree or judgment, all payments made by the debtor, in the absence of express stipulation, are applied first to the interest on the same, and not to any part of the principal. Gwinn vs Whitaker, 1 H. & J., 754.

The ratification of the auditor's report, and accounts A and B, operated as an application of the payments made from the proceeds of crops--both by the legal effect of the ratification of the said report and accounts, and also by reason of the fact that the same not being excepted to, it was an adoption by John T. Eversfield the debtor, and Benjamin Lee's administrators, the creditors, of the application of the payments. Ducker vs. Belt, 3 Md. Ch. Dec., 13; White vs. The Okisko Co., 3 Md. Ch. Dec., 214.

The appellant's fifth prayer is based upon the statement of the mortgage debt made by the auditor, which showed that from the time of the decree, down to the date of the resale of the 23rd of February, 1872, to Mrs. Lee, applying all the payments first to the interest due on the three mortgages there never was a time when the first mortgage was satisfied or any part of the principal due on the same was paid. The authorities establish this mode of application of payments and proceeds of crops to be the correct one. The ratification of the auditor's report and accounts, without exception by either the debtor or creditor to this mode of applying the payments to the interest due and accruing on the three mortgages, was an adoption of this mode of applying the credits by the debtor and creditor themselves, and had the sanction of the Court which cannot now be disturbed. See Ducker vs. Belt, 3 Md. Ch. Dec., 13; White vs. The Okisko Co., 3 Md. Ch. Dec., 214.

If the Court found the facts set forth in the fifth prayer, then Mrs. Lee was not a terre-tenant of John T. Eversfield. Polk vs. Pendleton, 31 Md., 123.

William H. Tuck, for the appellees.

The theory of the plaintiffs' second prayer is, that if Forbes and the administrators of Lee, had, before the first sale to Berry, received from Magruder in money, and from the proceeds of crops, sums equal to or greater than the amount, with interest, then due on the first mortgage debt, then such sums should be treated as payments made by the mortgagor, applicable to the first mortgage debt, and that debt should be treated as having been satisfied, and the lien extinguished before that sale to Berry, and no title passed to Mrs. Lee under the subsequent sale to her, which would exclude the lien of the original judgments, confessed by Eversfield, before he gave the second mortgage.

The dates of the liens stand thus: The first mortgage was in April, 1853; the appellees' judgments were rendered in November, 1853, and the other mortgages in January and March, 1854. If the first mortgage was paid after the decree, but before the first sale, that lien was discharged, and the trustees had no right to sell the property to satisfy that debt.

The agreement as to the application of the crops, does not provide for the payment of the debt as ascertained by the decree, but "in part payment of a mortgage on said lands which was...