Miller v. Horowitz

• Decision Date: 29 April 1937
• Docket Number: 2.
• Parties: MILLER v. HOROWITZ.
• Court: Maryland Court of Appeals

191 A. 906

172 Md. 419

MILLER v. HOROWITZ.

No. 2.

Court of Appeals of Maryland

April 29, 1937

Appeal from Circuit Court No. 2 of Baltimore City; Robert F. Stanton and Eugene O'Dunne, Judges.

Proceeding between John W. Henry Miller and Jacob Horowitz. From adverse orders, the former appeals.

Orders affirmed, and cause remanded.

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

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

Max Moshkevich, of Baltimore, for appellee.

PARKE Judge.

In the case of John W. Henry Miller, appellant, v. Adolph B Hirschmann, to the use of Jacob Horowitz, appellees, which was decided by this court and was reported in 170 Md. 145 183 A. 259, it was held that a purporting mortgage deed to Adolph B. Hirschmann of John W. Henry Miller's general legacy of a share in an estate of personalty, contingent on legatee surviving life tenant is not such a "chattel personal" within the statute authorizing decrees for sale of such chattels in Baltimore with mortgagor's assent, and the purchaser, Jacob Horowitz, at sale under such a decree acquired no title. (Code Pub.Local Laws 1930, art. 4, § 720). It was further decided that the purporting mortgage was not obtained by fraud and was given to secure a valid indebtedness from its maker to the grantee; and that the terms of the purporting mortgage are sufficient to transfer unto Adolph B. Hirschmann, and his assignee, Jacob Horowitz, a defeasible title to all the interest of Miller in the estate of his dead father as a security for the indebtedness of Miller to Hirschmann and his assignee under the terms of the purporting mortgage, and that the document in question is operative as an assignment and may be made effective in equity to the extent of the indebtedness secured in the distribution of the share of John W. Henry Miller in the trust estate of Jacob H. Miller, subject, however, to any paramount equities. In this manner, it was said, a court of equity protects and enforces in the appropriate proceedings the equitable rights and interests of all the parties concerned.

The appeal mentioned was taken in the foreclosure proceedings and the result of the decision was to set aside the sale there made and to compel the assignee to rely upon the purporting mortgage as an assignment of the legatee's interest. The appeal now at bar comes from two rulings against John W. Henry Miller, the legatee, in an equity cause in which the trust created by the will of Jacob H. Miller was in course of administration. Upon the petition of the executors and the trustees named by the will, the chancery court assumed on December 22, 1915, jurisdiction of the trust estate created by the testator. Since that time the trust has been administered under the supervision and control of chancery. The life tenant did not die until September, 1934, and the legatee survived her, and, so, the contingency has happened upon which he became entitled to receive his share. Jacob Horowitz claims that he is entitled, as the assignee of the purporting mortgage of the legatee to Adolph B. Hirschmann, to receive the legacy and, after the deduction of the indebtedness of the legatee to him as the assignee of Jacob Horowitz, to pay the residue of the legacy to the legatee. The legatee, however, maintains that he is entitled to his legacy without reduction, because the debt is, he argues, barred by limitations or is insufficiently proved for allowance in the account of the auditor. The chancellor rejected the contentions of the legatee by overruling the legatee's demurrer to the answer of the assignee and sustaining the latter's motion to strike from the record the plea of limitations filed by the legatee after the ruling on the demurrer. The legatee has appealed from the two orders of the chancellor which make these adverse rulings.

After chancery had assumed jurisdiction and was engaged in the administration of the trust and before the death of the life tenant, Hirschmann filed on April 23, 1917, in the cause a petition in which he alleged that as a holder of the purporting mortgage deed from John W. H. Miller, a cestui que trust in the cause, he was a proper party to the proceedings, and he prayed that the court pass an order making him such a party and grant him such other and further relief as his case might require. With this petition was a written agreement, over the signature of the legatee and his attorney, that the order be passed making the petitioner a party. On the same day, and because of this petition and the legatee's assent, the order was passed making the petitioner a party to the cause.

Since the legacy was contingent upon the legatee being alive at the death of the life tenant, the interest of the legatee was defeasible and did not become absolute until he became the survivor on the death of the life tenant. When death occurred in September, 1934, it required the trust to be terminated by a distribution of the trust estate. In anticipation of this distribution, Jacob Horowitz filed on October 27, 1934, a petition which recited that he was the assignee of the purporting mortgage deed of Hirschmann, and had thereby become entitled to be made a party in his place and stead. With this petition was filed the original assignment which was dated and acknowledged on November 4, 1919. The court immediately passed an order making the petitioner a party to the proceedings. After this there were various petitions filed and orders passed in connection with the pending controversy. Some of these were countermanded or revoked, and their recital is not necessary. The proceedings which control are those beginning with the petition of the legatee filed on March 23, 1936. By this pleading the legatee sets forth that the petition of Hirschmann, which was filed on April 23, 1917, was not prepared in accordance with article 16, § 141 of the Code of Public General Laws of Maryland because it was not accompanied by the mortgage as an exhibit; and, therefore, the order passed thereon making Hirschmann a party was not properly passed. Similarly, it is asserted that the order making the assignee Horowitz a party was error, since the petition of Horowitz, while filing the written assignment to him, failed to file the purporting mortgage as an exhibit.

The petition further shows that an account of the auditor was filed on November 14, 1934, in which was distributed a portion of the trust estate. The auditor distributed his one-seventh share to the legatee, subject to the operation of the purporting mortgage deed whose legal effect and the amount due thereunder the auditor stated he was unable to determine from the papers filed, and so suggested that the sum payable to the legatee "be excepted from the final ratification and the sum retained by the trustees until the mortgagee files appropriate pleadings and proof of claim." A few days thereafter Jacob Horowitz, in the belief that the deed to him as the purchaser in the mortgage foreclosure sale had granted to him all the interest of the legatee and that he was entitled to receive the whole thereof, filed a petition, with the deed as an exhibit, and obtained an order of November 16, 1934, directing that the trustees pay to Horowitz as purchaser all sums of money which the legatee would have been entitled to receive under the provisions of the will of Jacob H. Miller, and, also, directing that the auditor so amend his report and account, subject to all proper objection. On November 22, the legatee excepted to the reservation made by the auditor on the account filed on November 14, 1934, on the theory that there was no mortgage filed nor exhibit which would cause the trustees to withhold from the legatee any portion of the trust estate distributed under the audit. There were further proceedings which culminated in a stay until the validity of the foreclosure proceedings and the sale thereunder could be determined.

These proceedings resulted in a decree of the chancellor establishing the validity of the sale. An appeal was taken, but no bond was filed to stay the effect of the decree and the chancellor in the cause at bar gave effect to the decree confirming the title of Horowitz as purchaser to the entire interest of the legatee by passing on October 14, 1935, an order directing the auditor to amend his report and account so as to distribute the whole legacy in question to Jacob Horowitz and the trustees to pay out the money accordingly. As has been before stated, the decree in the foreclosure suit was reversed and the title of the purchaser was declared void by the decision of this court in the case of John W. Henry Miller v. Adolph B. Hirschmann, to the use of Jacob Horowitz, supra.

On this statement of the facts, the petitioner and legatee prayed that the orders previously passed adversely affecting the petitioner be rescinded and that he might have general relief. The chancellor passed an order directing an annulment of the orders of October 27, 1934, November 16, 1934, and October 14, 1935, unless Horowitz show cause to the contrary.

The amended answer to this petition admits the formal allegations but denies those of substance. The answer, also, admits that the orders of the chancellor of November 16, 1934, and of October 14, 1935, which directed that the whole legacy of Miller should be distributed and paid to Horowitz, are in effect, but denied that the court had relied solely upon the deed to Horowitz in passing these orders. The respondent avers that he depends for the establishment of his claim against the legatee's interest upon the assignment by way of mortgage executed by the legatee to Hirschmann on March 31, 1917, and by the latter subsequently assigned to Horowitz; and...