Owens v. Graetzel

• Decision Date: 21 January 1926
• Docket Number: 110.
• Citation: 132 A. 265,149 Md. 689
• Parties: OWENS v. GRAETZEL.
• Court: Maryland Court of Appeals

132 A. 265

149 Md. 689

OWENS v. GRAETZEL.

No. 110.

Court of Appeals of Maryland

January 21, 1926

Appeal from Baltimore City Court; Duke Bond, Judge.

Action by Effa A. Owens against G. Clem Graetzel. Judgment for defendant, and plaintiff appeals. Affirmed.

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT DIGGES, PARKE, and WALSH, JJ.

James Morflt Mullen, of Baltimore, for appellant.

Frank Driscoll, of Baltimore, for appellee.

PARKE J.

The action in this case is the sequel of the decision by this court in the appeal of Effa A. Owens v. G. Clem Graetzel decided on July 22, 1924, and found reported in 126 A. 224 146 Md. 361, 39 A. L. R. 943. Effa A. Owens and Harry Hazlip borrowed of G. Clem Graetzel on August 1, 1923, the sum of $3,200, and secured its payment by a mortgage deed of assignment granting a leasehold property in Baltimore city. The mortgagors gave their promissory note for the indebtedness, bearing even date with the mortgage, and payable two years after date, with interest payable quarterly on the 1st days of August, November, February, and May. On the execution of this mortgage, prior liens on the property and claims were discharged out of the loan, including an item of $48 for three months' interest in advance on the new mortgage loan, and the residue paid by check to both mortgagors, although it appears that the money ultimately was received by the appellant. The mortgage deed of assignment contained the usual provision in the prevalent form of city mortgages for a consent decree and a sale in the event of any default by the mortgagors in the performance of their covenants under the mortgage.

On November 8, 1923, a petition was filed by Graetzel in equity, with the original mortgage as an exhibit, praying for a decree of sale for the purpose of foreclosure; and on the same day a decree was passed appointing George H. Leimkuhler trustee to sell. After the trustee qualified by bonding, the sale was made to Mildred B. Whiting for $4,050, and so reported to the court on December 6, 1923; and five days later Mrs. Owens excepted to the ratification of the sale. The exception was heard, after the respective parties had taken testimony in open court, and on February 11, 1924, the exception was dismissed and the sale was ratified. On the appeal the court reversed the decree ratifying the sale because the advertisement was defective in running for 20 days, excluding both the day of its insertion and the day of the sale, when the notice should have been published for 3 clear weeks; and because there had been no default in the performance of the conditions of the mortgage deed of assignment.

The mortgagee contended, and the lower court so held, that the interest was payable quarterly in advance, and therefore on November 1st there was a default in the payment of the interest which was not then paid. This court decided that, although the mortgagors paid the first quarter's interest in advance and although the language was susceptible of the mortgagee's construction, yet, as the mortgagee had prepared the mortgage deed, its ambiguous terms should be taken most strongly against the mortgagee, and therefore the ambiguous terms would not be construed to require the payment of interest quarterly in advance. As a result of this reversal, the chancellor on September 23, 1924, rescinded his former ratification of the sale, and declared the sale void, and directed that the trustee account for and report all this collections during the lawsuit.

On October 14, 1924, Effa A. Owens, one of the mortgagors, brought an action for damages against the mortgagee, G. Clem Graetzel. In the form finally assumed by the declaration at the trial of the case there were four counts. The first count is in case on the theory that the institution of the premature foreclosure proceedings was in the nature of a malicious prosecution, having been "falsely and maliciously instituted and conducted." The second and third counts are for a trespass quare clausum fregit; and the fourth count is in case and its gravamen is the institution of the premature foreclosure proceedings "willfully, wantonly, maliciously and in willful disregard of the rights of the plaintiff."

At the time of the execution of the mortgage to the appellee, the appellant did not have title to the leasehold property, as she had conveyed it to Harry Hazlip by deed of assignment bearing date on July 21, 1923, and recorded two days later. The same property was reassigned to her by Harry Hazlip on August 15, 1923, but this instrument was not recorded. The appellant did not occupy the premises, but collected the rent from her tenant in possession, who had paid the rent to October 20, 1923. The subsequent rentals were collected by Alvin R. Whiting, for George H. Leimkuhler, the trustee, who accounted for them when the sale made by him was set aside; and, pending the outcome of the litigation, the later rent has also been collected, pursuant to an order of the chancellor, by Alvin R. Whiting, a trustee to sell the property under a second mortgage foreclosure proceedings. Nothing has been paid by the appellant on the interest or principal of the indebtedness, nor has she paid the taxes, nor the ground rent on the premises falling due half yearly on December 1st and June 1st. The appellant was not dispossessed of her property by the appellee. Her tenant remained until January 5, 1924, when she left. At this time there was unquestionably a default under the terms of the mortgage in the payment of the ground rent, and therefore the mortgagee was entitled to possession and to collect the rents. Ahern v. White, 39 Md. 422; Com. Bldg. Ass'n v. Robinson, 45 A. 449, 90 Md. 615, 618, 619; Lowe v. Convention, etc., 35 A. 87, 83 Md. 409, 413; Richardson v. Balto., etc., R. Co., 42 A. 938, 89 Md. 126, 129; Wootton v. White, 44 A. 1026, 90 Md. 64, 68, 78 Am. St. Rep. 425; Walker v. Cockey, 38 Md. 75, 78, 79; Brown v. Stewart, 1 Md. Ch. 88, 94; Clark et al. v. Abbott et al., 1 Md. Ch. 474, 478; Booth v. Balto. Steam Packet Co., 63 Md. 39; Barron v. Whiteside, 43 A. 825, 89 Md. 448, 460, 465.

The appellant had no cause for complaint if the appellee had been in possession, and she certainly cannot complain if a trustee, and officer of the court, was in possession by virtue of his duties and in their discharge secured a tenant in the place of the one who went away, and collected the rents and accounted for them and is accountable for the manner in which he discharged his trust. Young v. Omohundro, 16 A. 120, 69 Md. 424, 430; Booth et al. v. Balto. Steam Packet Co., 63 Md. 39, 43, 44. In no sense can it be said that these facts would justify a recovery in an action for a trespass quare clausum fregit. Poe's Pleading (Tiffany Ed.) § 246. The court did not gather that the appellant greatly relied upon this form of trespass, but that his principal basis for the appeal was that what was complained of constituted a malicious prosecution for which a civil action would lie. The pleadings are quite involved, and disregarding the question of the legal sufficiency of the four counts of the declaration, and of the various subsequent pleadings until the issue was reached, we shall consider if the evidence, without reference to the pleadings, was legally sufficient to entitle the appellant to a recovery, because this is the one substantial question on the facts of this record.

It is generally recognized that at common law an action would lie for the prosecution of a civil action maliciously and without probable cause, even if no special damage were inflicted on the defendant therein other than the expense of making his defense. However, the statute of Marlborough, 52 Hen. III, gave to the defendant who had prevailed in a civil action maliciously prosecuted not only his costs but also his damages, and thereby granted to the successful defendant a remedy in the very action in which he was maliciously prosecuted, instead of leaving him to seek redress in another independent action. The effect of this statute was to supersede the subsequent action for the malicious prosecution of a civil suit, unless there was a wrongful arrest of the person, or seizure of property, or other special injury which would not necessarily result in all suits prosecuted to recover for like causes. 19 Am. & Eng. Ency, of Law (2d Ed.) pp. 651, 652, et infra.

Actions for the malicious prosecution of civil suits are not encouraged, because public policy requires that parties may freely enter the courts to seek redress and relief and to enforce their rights, and that this may be done without the peril of a suit for damages in the event of an unfavorable judgment by jury or judge. If this were not the case, a large proportion of unsuccessful civil actions would be followed by suits for malicious prosecution, and so there would be a piling of litigation on litigation without end. Experience has, moreover, demonstrated that the payment of costs, incident to the failure to maintain the suit, is commonly a sufficient penalty and the fear of the burden of making the payment ordinarily is sufficient deterrent to unfounded actions. Gore v. Condon, 39 A. 1042, 87 Md. 368, 375, 40 L. R. A. 382, 67 Am. St. Rep. 352; Wilmer v. Placide, 111 A. 822, 137 Md. 107, 116; Bartlett v. Christhilf, 14 A. 518, 69 Md. 219, 228; Clements v. Odorless Excavating, etc., Co., 10 A. 442, 13 A. 632, 67 Md. 461, 605, 1 Am. St. Rep. 409; Rieger & Co. v. Knight, 97 A. 358, 128 Md. 189, 193, 196, L. R. A. 1916E, 1277; McNamee v. Minke, 49 Md. 122, 134; Smith v. Michigan Buggy Co., 51 N.E. 569, 175 Ill. 619, 629, 630, 67 Am. St. Rep. 242.

While it is recognized that the appellate courts of the jurisdictions in...