Miller v. Hirschmann

• Decision Date: 19 February 1936
• Docket Number: 28.
• Citation: 183 A. 259,170 Md. 145
• Parties: MILLER v. HIRSCHMANN ET AL.
• Court: Maryland Court of Appeals

183 A. 259

170 Md. 145

MILLER v. HIRSCHMANN ET AL.

No. 28.

Court of Appeals of Maryland

February 19, 1936

Appeal from Circuit Court of Baltimore City; Joseph N. Ulman, Judge.

Suit by Adolph B. Hirschmann, to the use of Jacob Horowitz, against John W. Henry Miller. From a decree dismissing defendant's second amended petition for annulment of a mortgage and avoidance of a foreclosure sale, defendant appeals.

Reversed in part, affirmed in part, and remanded.

Argued before BOND, C.J., and OFFUTT, PARKE, SLOAN, MITCHELL, and SHEHAN, JJ.

Hartwell M. King and Murray MacNabb, both of Baltimore, for appellant.

Charles F. Stein, Jr., of Baltimore (Hennighausen & Stein, of Baltimore, on the brief), for appellee Adolph B. Hirschmann.

Albert J. Goodman, of Annapolis, for appellee Jacob Horowitz.

PARKE Judge.

Jacob H. Miller, a resident of Baltimore, died testate in 1915. After the payment of his debts and funeral expenses and a gift of his household furniture and chattels in his residence to Margaret E. Miller, his surviving wife, he devised and bequeathed all the rest of his real and personal property in trust for the use of his wife for life and for the purpose of accumulation and other uses until her death, whereupon the entire trust estate was to be divided, after charging every one of his seven children with specified sums as advancements, into seven equal parts, and every one of his seven children was to receive one of such equal shares, if living, and the child or children of a deceased son or daughter of the testator to take the share of the parent and, if any of the testator's children should die before the mother, without leaving a child or children surviving the share of the one so dying should fall into the corpus to be equally divided for the benefit of the survivors.

The trust was an active one, with the trustees charged to manage control, and maintain the trust estate, and they were empowered to sell, at either public or private sale, any of the trust property according to their discretion, and they were directed to invest the proceeds of sale for the benefit of the trust. The property of the testator given in trust consisted of real estate, ground rents, leasehold property, and money. Upon the termination of the life estate, the trustees were directed to divide the trust estate into seven equal parts, and to transfer these parts to the seven children, share and share alike, subject to the deduction from every share of the specified advancement made by the testator to every child. For the purpose of making this distribution, the trustees were given the power to sell any or all of the property in trust without first obtaining an order of court. The direction to divide the trust estate into seven equal parts, and that every one of the beneficiaries should receive share and share alike, in a trust where the corpus consisted of improved lots of land, ground rents, leasehold estates for years, and money on deposit, with a power of sale and a direction to reinvest the proceeds, was, as the court reads the testator's intention, an imperative direction to convert for the purpose of distribution; and the land and chattels real which constituted the corpus of the trust will, in equity, be considered as already converted into money before they are converted in fact. So the interest of the remainderman taking under the will is personalty from the death of the testator. Stake v. Mobley, 102 Md. 408, 411, 62 A. 963; Boyce v. Kelso Home, 107 Md. 190-195-196, 68 A. 550; Talbott v. Compher, 136 Md. 95, 100, 101, 110 A. 100; Read v. Md. Gen'l Hospital, 157 Md. 565, 569-570, 146 A. 742; Paisley v. Holzshu, 83 Md. 325, 330, 331, 34 A. 832.

One of the children of the testator, J. W. Henry Miller, executed on March 31, 1917, to Adolph B. Hirschmann an alleged mortgage deed for the purpose of securing the payment of the sum of $700 according to the tenor of the twelve notes which the mortgagor had executed and delivered to the mortgagee in that aggregate amount. Every one of the first eleven of these notes was drawn for the sum of $20, with interest, and payable successively at one to eleven months, and the twelfth note of the series was for $480, with interest, and payable twelve months after date. The mortgage purported to grant and convey unto the mortgagee, his heirs and assigns, in fee simple, in these words, "all the interest of the mortgagor in the property to which he is entitled under the will of his father, Jacob H. Miller, whether such property be real estate, leasehold estate or personal estate and whether it be the same property whereof his father died seized and possessed or whether it be the result of conversion or investment thereof; and the said mortgagor hereby directs the testamentary trustees in said will named, their survivors, survivor or successor to pay and deliver unto the said mortgagee all of said above named property without any further order, direction or assent from the said mortgagor." The mortgage then proceeds to state the probate of the will and its place of record. The mortgage deed is of the usual form to convey real estate, and, upon the default of the mortgagor, provides for the passage of a consent decree for a sale of the mortgaged property in accordance with chapter 123, §§ 720 to 732, inclusive, of the Acts of 1898, with amendments. Code of Public Local Laws (Flack) vol. 1, art. 4, §§ 720-731.

The mortgage was promptly recorded, and, on the petition of the mortgagee, which was filed on March 20, 1918, and which showed default on the part of the mortgagor, the circuit court of Baltimore city passed that day a decree for the foreclosure of the mortgaged property, and appointed a trustee to make the sale. The trustee did not proceed with the foreclosure, and, pending the proceedings, the mortgagee assigned, on November 4, 1919, his mortgage claim and deed to a Jacob Horowitz, and the foreclosure proceedings were thereupon entered to the use of the assignee. The mortgagee having no further interest in the suit, the trustee appointed to foreclose was relieved, and the court substituted another trustee to make the sale. The assignee of mortgagee filed on December 16, 1919, a statement of his mortgage claim, which embraced the principal debt ($700), interest thereon for 32 1/2 months ($113.75) and three insurance premiums ($101.25), amounting in all to $915.

The substituted trustee filed on December 19, 1919, a report that, after having given notice by advertisement, he did "attend on the premises and then and there sold to Jacob Horowitz for Twelve Hundred ($1200) Dollars." What he sold is not shown in the report found in the record, although an order nisi was passed, and the sale was finally ratified on January 20, 1920, but nothing further was done in the suit from that time until January 24, 1935. On this date, the mortgagor filed a petition in the cause assailing the original mortgage as fraudulent, and praying that it be annulled, and that sale and the subsequent papers and proceedings be avoided. The court required the mortgagee and his assignee to show cause why the relief sought should not be granted. This petition was followed by two amended petitions. The last amended petition was also severally demurred to and answered by the two respondents, but testimony was taken before the chancellor without the last demurrers having been heard. The chancellor dismissed the second amended petition against the two respondents, and the mortgagor appealed.

After reviewing the testimony, in the light of the circumstances, the court is of the opinion that these facts are established: The son and mortgagor, John W. Henry Miller, was in debt and in need of money in March, 1917, and he employed an attorney, Benjamin R. Powell, to secure a loan, which was to be used in part to pay a judgment. The security offered was the son's share in his father's estate. At the time, the son had adult and minor children. Adolph B. Hirschmann, a money lender, agreed to lend $700 on the security offered, after the two adult children had declined to bind their contingent interests by uniting in the mortgage deed. The mortgagor's testimony is that he executed the mortgage upon the understanding that the instrument would not be operative until his adult children had executed it; and that, when they refused, he believed the transaction had failed, as he had never received any part of the mortgage loan, and had no actual knowledge of the recording of the mortgage, and the subsequent foreclosure and sale, until after the death of the life tenant on December 17, 1934, and the procurement by the assignee and purchaser, Jacob Horowitz, of an order of court that the share of the son in the trust estate be paid to the said assignee and purchaser. The court, however, is convinced by the evidence that the mortgagor is mistaken, and that either he or his attorney, Powell, received the residue of the loan in cash after the then existing judgments against the mortgagor had been satisfied out of the proceeds of the mortgage loan. Furthermore, the record evidence, attested by his own signature and that of Powell as his attorney, makes clear that the mortgagor not only knew that the purporting mortgage was subsisting, but that he had assented to the mortgagee being made a party to the equity cause in which his father's trust estate was in course of administration.

On the facts as found, there is no basis for a...